Evaluating Accessory Dwelling Units in Small- to Medium-Sized Cities

Evaluating Accessory Dwelling Units in Small- to Medium-Sized Cities

This article is part of a series discussing the current research activities of the Affordable Housing Research and Technology Division within the Office of Policy Development and Research.

The Office of Policy Development and Research (PD&R) is funding a 24-month study with Lehigh University to identify zoning reforms and financial tools to incorporate accessory dwelling units (ADUs) into existing housing on single-family zoned parcels in small- to medium-sized U.S. cities. An ADU is compact, self-contained secondary housing on the same lot as an existing single-family home. Lehigh's team of architects, city planners, political scientists, urban designers, and public health practitioners is partnering with the city of Bethlehem, Pennsylvania (COB), and Community Action Lehigh Valley (CALV) to evaluate the inclusion of ADUs as more affordable alternatives to alley houses.

The study has several objectives: determining how certain regulatory reforms can lead to increased housing choice for low- to moderate-income households; identifying which reforms (the ordinances themselves or complementary elements such as design guidelines, preapproved plans, or financial incentives) have successfully produced affordable rental units; determining the consequences of reforms that allow for ADUs; and identifying emerging best practices in ADUs programs and how to best align them with existing subsidies and financing mechanisms to increase affordability while expanding community uptake.

Project results are expected to provide information and data that policymakers can use to reform COB's local zoning code, especially during upcoming conversations about the city's existing zoning ordinance and the changes that the city must implement to address its shortage of affordable housing.

Background

With approximately 75,000 residents, COB was for many decades the center of steel production in the Lehigh Valley. After the decline of the steel industry, the city, unlike many postindustrial American cities, shifted its economy toward education, health care, the arts, culture, and tourism, resulting in minimal blight but limited vacant land for development. At the time the present research study was crafted, COB was beginning to revise the local zoning code after conducting a comprehensive housing strategy study in 2023. That study showed strong market-rate competition for available land and indicated a rental vacancy rate of less than 2 percent, which exacerbated the housing supply shortage and resulted in rent increases of approximately 57 percent. The current study will occur in two phases and is expected to be completed over 24 months (March 1, 2024, to March 1, 2026).

The project's first phase involves a thorough review of COB's 2023 comprehensive housing strategy along with comments on the report from the community and city officials. The review will help the research team identify the community residents' view of the most pressing housing needs and their ideas, perceptions, and expectations about how to address those needs. The research team also will analyze local zoning history, synthesize information and case studies on comparable cities with ADU reforms and implementation programs, and formalize the project's collaborative partnership by forming a steering committee with representatives from Lehigh University, COB, CALV, and other key community stakeholders. The research team will coordinate with CALV to conduct an Alley Field Survey, which will collect parcel-level data on land use, lot size, lot coverage, zoning (such as single-family, multifamily, or high-density), housing conditions, and costs in COB, Northampton, and other areas in Lehigh County. The team will also collect data on available federal, state, and local government subsidies and incentives for affordable housing; their impact on the development of affordable housing, and the cost to owners and renters. The results of the analysis will help identify appropriate and acceptable locations for the placement of an ADU on each property; ADU design types and size; local, state, and federal subsidies; and implementation strategies available to support affordable ADUs. COB will issue a request for proposals (RFP) to hire a zoning consultant for the zoning revisions services.

The project's second phase involves working with the hired consultant to finalize the zoning ordinance revisions based on the findings of the first phase. The researchers will synthesize the results of the qualitative and quantitative analyses from both phases into documents for broader dissemination, including traditional scholarly publishing, public-facing reports, and educational literature.

Study Status

Review of COB's 2023 Comprehensive Housing Strategy

The team has completed the review of the 2023 comprehensive housing strategy and the comments that both COB officials and the residents have submitted. The review improved researchers' understanding of residents' views and perceptions of the housing crisis. The information also helped the research team develop ideas and solutions that address the residents' concerns.

Alley Field Survey

The research team surveyed every property along COB's more than 50 miles of alleys. The survey identified and photographed existing alley houses, and the team mapped the field survey data. This dataset and map clarified the mix of uses on city alley blocks (residential units, garages, parking pads, or yards) and how different types of alleys overlap with different zoning districts, urban densities, and urban forms.

The research team summarized the data from the alley surveys, which classified more than 8,100 alley-facing properties and identified 919 existing alley houses. These properties were summarized to generate "alley types" common to COB's different neighborhoods, which included a mix of alley houses, parking pads, and garages. The research team mapped these alley types, and a group of architecture students drew and modeled them to show how ADUs would integrate into the existing homes.

The Alley Field Survey is complete. The Alley Field Survey analysis and the review of the 2023 comprehensive housing strategy helped determine the best locations for ADUs and highlight which of those locations require zoning amendments to allow their development. The analysis also addressed situations in which funding gaps will require subsidies to incentivize this type of development, and the scale of those gaps. It showed how much of the city's land is either restricted to single-family use or covered by single-family detached homes even if the zoning allows units of greater density, the type of ADUs that best address housing needs, and the most effective mix of ADUs for COB.

Local Zoning History

The research team also scanned, reviewed, summarized, and archived boxes of historic zoning documents to tell the story of zoning in the city – in particular, how the evolving ordinance has addressed ADUs over the past 100 years. A summary of that story highlighted how the city placed explicit limits on ADUs in 2012. The analysis explained historic land-use patterns and local accessory uses and provided historic context when discussing the project with the public. Through the archival process, the city's zoning documents and maps now are digitized and therefore more accessible and useful for future projects. The historical review helped identify where ADUs should go into a formal RFP for work updating the city's zoning ordinance to allow ADU additions.

Small Cities ADU Ordinance and Comparable Municipality Study

As of August 2025, the project team is still working on the small-city ADUs best practices study, which includes a compilation and analysis of ADU ordinances in small cities across the country, as well as interviews with nine selected case study cities (Savannah, Georgia; Boise, Idaho; Raleigh, North Carolina; New Haven, Connecticut; Minnetonka, Minnesota; Amherst, Massachusetts; Ann Arbor, Michigan; Spokane, Washington; and Appleton, Wisconsin). The research team has identified a list of roughly 380 small- to medium-sized (populations less than 500,000) American municipalities that have discussed and debated ADUs ordinances, a list that includes every state. First, the project team is currently surveying zoning ordinances in these cities. As part of this survey, team members assessed elements of 314 ordinances (out of roughly 380) that address ADUs. Preliminary analysis of the results showed that 54 percent of these ordinances include a requirement for vehicle parking spaces, 60 percent require the primary residence to be owner occupied, 61 percent require the primary residence owners to file special permits or follow special processes to have ADUs approved, and 65 percent regulate the aesthetics of ADUs. Second, the team will develop in-depth case studies of 12 cities selected based on their particular regulations, regions, and planning contexts. The team is currently interviewing officials from these cities. Findings and lessons from these cases will help inform the work of the zoning consultant, who will be providing text for mark-ups of the COB's zoning ordinance.

At the end of the second quarter of 2025, the Lehigh team had assembled the steering committee and held three meetings. COB had selected a consultant team to revise the COB zoning ordinance, and the research team has been working directly with the zoning consultant to write new zoning recommendations using the results of the analysis of COB's 2023 comprehensive housing strategy, the results of the Alley Field Survey analysis, and the small cities ADU best practices review.