Grandmother is building a tiny home in son’s backyard when current house became a financial drain

A Montana grandmother felt that her current home was draining her finances, so she decided affordable ADU homes would be the best option.

When Sylvia and her husband discovered they were expecting their first grandchild in 2018, they moved from Arizona to Missoula, Montana, to be near their family.

By early 2019, they had settled into a four-bedroom house near their one-year-old grandson.

In recent years, however, Sylvia, a former administrative assistant from California, became financially stressed.

After her husband fell ill and passed away in 2022, her expenses increased.

Despite having paid off her house, rising costs for insurance, property taxes, and maintenance have become a burden, according to Business Insider.

Her home insurance jumped from $890 in 2019 to nearly $1,500 last year.

Additionally, she’s struggling with higher grocery prices and feels her 3,000-square-foot house is too large.

“Owning my home is going to drive me to the poor house,” said Sylvia, 71.

Last year, Sylvia’s son and daughter-in-law proposed that she build a small, separate home in their backyard.

They believed this accessory dwelling unit (ADU) would be cheaper than buying another house. They would provide Sylvia with a smaller, more manageable home close to family as she ages.

Sylvia and her other two kids agreed to choose affordable ADU homes, so they hired an architect and contractor.

Sylvia signed a contract for $274,000 to build a 600-square-foot, one-bedroom home with a vaulted ceiling, a large front porch, and a back deck, all painted to match her son’s house.

“It’s going to be real pretty,” Sylvia said. “I’m hoping it’s the last place I live.”

Sylvia will pay for the ADU in cash, with completion expected by December.

She also plans to sell her current house, which she bought for $315,000 in 2019 but is now valued at $718,000 due to rising home prices in Montana.

ADUs, also known as “granny flats” or “casitas,” are a great option for older people who want a smaller, easier-to-manage home close to family.

More cities and states are now allowing and encouraging affordable ADU homes construction to increase the number of cheaper home options.

“This was the most viable option for me,” Sylvia said. “I don’t think I would be able to buy a home for $274,000.”

Affordable ADU homes were not permitted in Missoula until about ten years ago and are still banned in many U.S. neighborhoods.

Despite support for tiny homes in some states, local groups and officials often make building backyard ADUs difficult.

Missoula began promoting ADUs in 2013 and made further changes in 2020. This year, the city council agreed to increase the maximum size of ADUs and relax some rules.

The state government is promoting more ADU homes to boost affordable housing.

Last year, Montana’s legislature passed a law requiring cities and towns to allow ADUs on single-family lots.

However, a judge blocked the law and other pro-housing measures before they took effect, siding with homeowners who felt more housing would change their neighborhoods.

The state has since appealed the decision to the state supreme court.

Older homeowners are dealing with rising housing costs nationwide. Insurance premiums have surged by an average of 21% from May 2022 to May 2023 due to worsening climate issues and higher construction costs.

Repairs are also pricier because of a shortage of workers and increased material costs.

According to a Harvard report, the percentage of homeowners aged 55 and older spending over 30% of their income on housing and utilities rose from 30% in 2001 to 45% in 2022.

In Montana, a severe housing shortage has driven home prices. At the same time, rising property taxes and insurance costs make it hard for many homeowners to manage their payments.

Beverly Dashnaw, a HUD-certified housing counselor in Helena, recently said that elderly and disabled people are struggling because living costs and inflation are rising while their income remains the same.

Sylvia is lucky to take advantage of her home’s increased value without buying another house in a difficult market.

She enjoys living in Missoula, where she can use free city buses to reach the library, where she volunteers, and the pickleball courts, where she plays regularly.

“This is a small town, I love it,” she said. “It’s easy to get around, and I know my way around.”

Here’s a beginner’s guide to investing in affordable ADU homes: