The backyard ADU (accessory dwelling unit) market is booming. Homeowners across the country are desperate for affordable housing solutions, and they’re willing to build on their own land to get it.
For shed builders, this should be the easiest pivot in the world. You already know how to construct a quality structure. You have the skills, the equipment, and the reputation. So why aren’t more shed builders capitalizing on this?
The answer is zoning.
THE REAL BOTTLENECK
Here’s what most shed builders don’t realize: building an ADU isn’t the hard part. The hard part is getting permission to build it. Zoning compliance is the invisible wall between a shed builder and a completely new revenue stream.
Most shed builders spend their careers building within clear, simple rules. You build a shed, you drop it on a pad, you move on. But ADUs live in a completely different regulatory universe. Every jurisdiction has different rules about where ADUs can be placed, how large they can be, setback requirements, occupancy limits, and utility connections. What’s legal in one county is illegal 30 miles away. And if you get it wrong, the whole project stalls.
This is where most builders hit a wall.
They don’t deal with zoning every day. They’re not familiar with municipal code. They don’t know how to read a zoning map or submit a variance request. So, they either walk away from the opportunity entirely or they stumble through the process and waste time and money on projects that should never have been approved in the first place.
YOU HAVE AN ADVANTAGE YOU DON’T KNOW ABOUT
Here’s the thing: you’re already uniquely positioned to win in this market. Your shed-building expertise translates directly to ADU construction. What’s missing isn’t building skill — it’s zoning navigation. And that’s a learnable, solvable problem.
Over the last four years, we’ve built and successfully permitted nearly fifty backyard ADUs across the country—from Miami, Florida, to Michigan’s Upper Peninsula. Every single jurisdiction had different zoning requirements. Every single one required us to navigate municipal code, variances, setback requirements, and local permitting nuances. And we got every single one right.
Beyond our own projects, we’ve also consulted with municipalities like Grand Rapids and Cincinnati on rewriting their zoning codes to allow ADUs. When cities realized how important ADUs are to their communities, they came to us to help reshape their regulations. That national experience—both in the field and in the policy room—taught us exactly what to look for when entering a new jurisdiction. We’ve built checklists, created blueprints, and developed processes that work regardless of where the project lives. We navigate zoning complexity at ease because we do it every single day.
For us, it’s routine. For most builders, it’s a roadblock.
THE BUILDERS WHO MOVE FIRST WILL WIN
The market opportunity is real. The builders who figure out zoning first will own this space. They’ll be the ones homeowners call. They’ll be the ones building ADUs while their competitors are still decoding municipal code.
In our next article, we’re walking you through exactly how to navigate zoning like a pro—the framework, the checklist, and the roadmap that’s worked for us across 50 jurisdictions. If you’re ready to turn your shed-building skills into ADU revenue, that’s where the real action starts.
ADU Terminology 101
In the industry, we use multiple terms for different types of builds. However, municipalities classify them all as ADUs. Here are some common terms defined.
ADU (Accessory Dwelling Unit): This is under 400 square feet, not on a trailer but on skids. It’s a one-bedroom, one-bathroom, or a studio with a bathroom. In many zoning ordinances, they will classify an ADU as a carriage house, a tiny house on wheels, and a unit that is secondary to a dwelling. In the industry, as builders, we use the ADU term.
THOW (Tiny House On Wheels): This is built on a trailer that is under 400 square feet and is ANSI certified and classified as a traveling trailer. It’s 8 feet, 5 inches wide, so it can travel down the road.
Park Model: This is typically 12-feet wide and over 400 to 500 square feet. They are also ANSI certified. This is built on a trailer, but the wheels come off, and it is installed as a fixed build. Lots of RV parks and resorts put these in because they are larger.
Prefab/Modular: Small units built off-site, typically under 1,000 square feet. These are considered BOCA (building officials and code administrators) and require a building permit, and they sit on a foundation and are classified as a dwelling.
All of the above require inspections to local code. If shed builders are out there building but not getting inspected, that is when they will get into trouble.
