Despite Legalization, Massachusetts ‘Backyard Homes’ Still Lag Behind Projections

Once a rare sight in the Bay State, ADUs (accessory dwelling units) are taking hold in Massachusetts, albeit at a slower pace compared to many other states.

According to a Boston Globe report, the state has received only 884 applications for ADUs across 170 communities during the first half of 2025 and at least 550 approvals. The state cautions, however, that undercounts may occur due to nonresponsive municipalities.

Massachusetts' 2024 ADU law, part of a housing bond package, broadly legalizes accessory dwelling units on most single‑family lots, but by‑right approval is limited to units under 900 square feet. Boston is excluded from that by‑right provision.

Industry voices say interest and demand for ADUs are rising. Manufacturers like Backyard ADUs and Mod-Tech Homes have been expanding activity and generating more sales leads, even as actual construction remains hampered by regulatory complexity and higher costs.

The Boston Globe also reported on the challenge of local permitting, which remains a bottleneck. Even within the statewide by‑right framework, communities can impose reasonable restrictions and interpretations, such as setbacks and connection requirements, that extend timelines and raise costs.

The Boston Globe cites one example of a permitting challenge. In Chelmsford, for example, homeowner Farokh Karani was denied a permit for an ADU next to his house earlier this year because he wanted to build a second driveway to access the additional unit. Chelmsford's ADU ordinance does not permit a second driveway.

Financing gaps, in particular, remain a significant hurdle. Unlike California or New York, Massachusetts lacks broad ADU financing programs, though some Cape Cod banks have offered targeted ADU loans. In addition, the state is exploring financing products to spur construction.

Industry advocates are calling for statewide financing support and more streamlined permitting to unlock broader ADU adoption and help address the housing shortage.

Modular ADUs can start at around $190,000, but they often run $250,000 or more. Larger custom units can cost $400,000 to $500,000, and rising construction costs are worsening affordability concerns.

“Modular lets us build homes for people at an extraordinarily low cost, compared to what it costs to build a typical home,” said Paul Townsend, co-owner of the small modular housing development firm Mod-Tech Homes in Hingham. “But that doesn't mean it isn't still a huge expense.”