By Zachary J. Sullivan, attorney, Fletcher Tilton PC
Just over a year ago, Massachusetts passed the Affordable Homes Act of 2024 (G.L. c. 40A, § 3), amending the preexisting Zoning Act and expanding housing opportunities across the state with the goal of addressing the affordable housing crisis. A central piece of the new law is the statewide legalization of accessory dwelling units (ADUs). Also known as “granny flats” or “in-law suites,” ADUs are small, self-contained apartments that can be created within, attached to, or detached from a single-family home. By allowing ADUs “by right,” the law eliminates the need to apply for costly and time-consuming special permits and removes barriers like owner-occupancy requirements. The goal is to give homeowners more flexibility, create space for multigenerational living, and open new rental options, while ensuring municipalities cannot use zoning to unreasonably restrict ADUs. For contractors and builders, this innovative law creates a potential new market to capitalize on smaller-scale residential projects.
Under the new statute, an ADU must be:
1. a complete living unit, including sleeping, cooking, and sanitary facilities;
2. located on the same lot as the primary home;
3. equipped with a separate entrance; and
4. limited in size to the lesser of 900 square feet or 50% of the main dwelling’s gross floor area.
Municipalities may enforce additional “reasonable” limits, such as setbacks, height restrictions, parking rules, and septic compliance, but they cannot prohibit ADUs outright or impose requirements that make them impractical. The statute goes further by expressly prohibiting certain local restrictions, including owner-occupancy mandates and excessive parking requirements. In short, homeowners across the commonwealth now have a clear legal pathway to add ADUs, provided they comply with applicable building and health codes.
A year into implementation, however, the focus has shifted from legalization to execution. When Governor Maura Healey advanced the ADU provisions, her administration projected that the law could generate between 8,000 and 10,000 new units over five years—a meaningful, if incremental, response to the state’s estimated 200,000-plus-unit housing shortage. Early data suggests, however, that while adoption is underway, production has been slower to scale than anticipated. As of the first half of 2025, the state reported over 1,000 ADU applications, with hundreds approved. While this reflects real progress, it also highlights that removing zoning barriers alone does not immediately translate into widespread development, particularly when compared with states like California that have experienced a more rapid ADU boom.
In response, the administration has begun focusing on the practical barriers that continue to limit ADU construction:
- The state has committed $10 million to a homeowner assistance initiative aimed at helping property owners navigate the process, from feasibility questions and site planning to utilities and permitting.
- The state has launched a statewide design challenge to generate standardized, replicable ADU plans that will be made publicly available, reducing architectural costs and helping homeowners better conceptualize potential projects.
- Through MassHousing, the state is introducing a reduced-rate loan program offering up to $250,000 for detached ADUs and $150,000 for attached units, targeted at low- and moderate-income homeowners to address the significant up-front costs of construction.
Despite these efforts, friction remains at the local level. Although municipalities are required to allow ADUs by right, they retain authority to impose “reasonable restrictions,” and in practice, these can vary significantly from one jurisdiction to another. Builders and contractors have reported that differences in local requirements—such as dimensional controls, infrastructure connections, and permitting processes—can create uncertainty, delay, and added costs. Recognizing this, the administration has indicated it is studying these remaining barriers, suggesting that additional legislative or regulatory refinements may be forthcoming as part of a next phase of ADU policy.
While the new ADU market is appealing, contractors must also be careful not to overlook their potential obligations under the home improvement contractor (HIC) statute, G.L. c. 142A. The HIC statute governs contracts for residential construction work on existing owner-occupied residences with four or fewer units when the work exceeds $1,000. Accordingly, where an ADU is constructed within or attached to an existing residence and the property is owner-occupied, c. 142A will likely apply. It remains less clear whether the statute applies to the construction of a new, detached ADU on a lot with an existing residence, and contractors should consult counsel or other qualified professionals when evaluating those scenarios.
Failure to comply with c. 142A can expose contractors to significant liability, including treble damages, attorney’s fees, administrative penalties, and potential loss of HIC registration. To mitigate this risk, contractors should ensure that all written HIC contracts comply with the statute.
The bottom line for contractors is that the legalization of ADUs represents a significant and growing opportunity, but one that is still maturing. The commonwealth has taken the critical first step of removing zoning barriers and is now actively working to address the financial, logistical, and administrative challenges that remain. As these additional supports take hold, ADU development is likely to accelerate. Contractors who proactively position themselves in this space, while maintaining strict compliance with applicable legal requirements, will be well positioned to take advantage of what is shaping up to be a steadily expanding segment of the residential construction market in Massachusetts.