Texas ADU Laws 2026: Complete Guide to Building Accessory Dwelling Units in Houston, Dallas, Austin, and San Antonio

Texas cities have increasingly embraced accessory dwelling units (ADUs) as solutions to housing affordability challenges, though regulations vary dramatically by city. Understanding your specific city's ADU requirements is essential for successful development.

This comprehensive guide covers ADU regulations, costs, and strategies for Texas's four largest cities: Houston, Dallas, Austin, and San Antonio, plus statewide considerations for building granny flats and backyard cottages.

What Are ADUs in Texas?

Accessory dwelling units—also called granny flats, in-law units, backyard cottages, or secondary units—are self-contained residential dwellings on the same lot as a primary residence.

Common ADU Types in Texas

Detached ADU:

• Separate structure from main house
• Maximum privacy
• Typically 400-1,200 sq ft
• Most expensive option

Attached ADU:

• Addition connected to main house
• Shares wall with primary residence
• Integrated utilities
• More cost-effective

Garage conversion:

• Convert existing [garage to living space](/blog/heloc-for-garage-conversion)
• Maintains garage footprint
• Most affordable option
• Fastest to complete

Above-garage apartment:

• Second-story addition above existing garage
• Popular in urban areas
• Good use of vertical space
• Maintains parking

Texas Statewide ADU Considerations

Texas doesn't have statewide ADU regulations—rules are set at the city level, creating significant variation across municipalities.

Property Rights and Deed Restrictions

Key Texas considerations:

HOA restrictions:

• Many Texas HOAs prohibit ADUs
• Review CC&Rs carefully before purchasing or building
• Some older neighborhoods have expired deed restrictions
• Restrictive covenants enforced through civil lawsuits

Municipal utility districts (MUDs):

• Common in suburban Houston and other metro areas
• May have additional restrictions
• Impact fees and utility capacity considerations

Deed restrictions:

• Private deed restrictions common in Texas
• May prohibit ADUs even if city allows
• Research title thoroughly
• Some restrictions expire after time periods

Texas Building Code

Texas follows modified International Residential Code (IRC):

• Adopted with state amendments
• Local jurisdictions may have additional requirements
• Energy code compliance (IECC)
• Accessibility considerations

Utility Connections

Water and sewer:

• Separate meter typically not required
• Can share with main house
• Check with local utility provider
• May require capacity verification

Electric:

• Check with local utility
• Separate meter may be optional or required depending on city
• Panel capacity considerations

Houston ADU Regulations

Houston has relatively permissive ADU regulations compared to other major Texas cities.

Basic Requirements

Eligible properties:

• Single-family residential lots
• Minimum lot size: 3,500 sq ft (typical)
• Zoning allows residential use

Unit size:

• Maximum: 1,200 sq ft OR 40% of main house, whichever is greater
• Minimum: No minimum specified
• Two bedrooms maximum (in most cases)

Lot coverage:

• Maximum 60-65% total lot coverage (main house + ADU + other structures)
• Varies by zoning category

Setbacks:

• Rear: 5 feet minimum
• Side: 5 feet minimum
• Front: Must be behind front building line of main house
• Alley: 3 feet minimum

Height:

• Maximum 35 feet (typical residential)
• May vary by zoning district
• Two stories allowed in most areas

Parking:

• One off-street parking space required for ADU
• Must be shown on site plan
• Driveway approach may be required

Houston ADU Process

Step 1: Verify deed restrictions and HOA rules

• Title company can research deed restrictions
• Review HOA documents
• Confirm no private restrictions

Step 2: Design and plans

• Hire architect or designer
• Ensure compliance with zoning and building code
• Site plan showing setbacks and parking
• Floor plans with dimensions

Step 3: Submit building permit

• Houston ePlan system online
• Submit complete plan set
• Site plan
• Structural calculations (if required)
• Energy code compliance documentation

Step 4: Plan review

• Typical review: 2-4 weeks
• Respond to comments if needed
• Resubmit corrected plans

Step 5: Permit issuance

• Pay permit fees
• Receive approved plans
• Post permit on site

Step 6: Construction and inspections

• Schedule inspections at required stages
• Foundation, framing, rough-in, final
• Final inspection and certificate of occupancy

Timeline: 4-8 months typical from design to completion

Houston ADU Costs

Construction costs:

• Detached ADU: $150,000-$300,000 (600-1,200 sq ft)
• Garage conversion: $60,000-$120,000
• Cost per square foot: $250-$300/sq ft average

Permitting and fees:

• Building permit: $1,500-$5,000 (based on valuation)
• Impact fees: Limited in Houston
• Plan review: Included in permit fee
• Inspections: Included

Houston ADU Benefits

Rental income potential:

• Inner Loop: $1,200-$1,800/month
• Heights/Montrose: $1,400-$2,200/month
• Energy Corridor: $1,000-$1,500/month
• Suburban areas: $900-$1,400/month

Property value increase:

• Typical increase: 15-25%
• Strong rental market demand
• Desirable for multigenerational families

Austin ADU Regulations

Austin has some of the most progressive ADU regulations in Texas, with continuous updates to increase housing supply.

Basic Requirements

See our complete California ADU guide for comparison—Austin's rules share some similarities.

Eligible properties:

• Any single-family residential lot
• No minimum lot size required (major change from previous rules)

Unit types allowed:

• One detached ADU
• One attached ADU
• One internal ADU (within main house)
• Can have multiple types on same lot

Unit size:

• Detached: Up to 1,100 sq ft
• Attached: Up to 1,100 sq ft OR 50% of main dwelling, whichever is larger
• Internal: Up to 1,100 sq ft

Setbacks:

• Rear and side: 5 feet minimum
• Front: Behind main house
• Alley: 5 feet minimum

Height:

• 15 feet maximum (one story appearance)
• 25 feet if designed as clearly subordinate to main house

Parking:

• No parking required for ADU (major advantage)
• Unless in specific overlay districts

Owner-occupancy:

• Currently not required (suspended through 2030)
• May return in future—monitor regulations

Austin ADU Process

Streamlined approval:

• Ministerial approval (no discretionary review)
• 60-day approval timeline mandated
• Online application through Austin Build + Connect

Pre-approved plans:

• City offers free pre-approved ADU plans
• Faster approval
• Reduced design costs
• Download from city website

Process:

1. Design plans (or use pre-approved)
2. Submit online building permit application
3. 60-day review (faster if using pre-approved plans)
4. Address comments if any
5. Permit issued
6. Construction and inspections
7. Certificate of occupancy

Timeline: 3-6 months with pre-approved plans, 6-10 months custom design

Austin ADU Costs

Construction costs:

• Detached ADU: $200,000-$350,000 (600-1,100 sq ft)
• Garage conversion: $80,000-$150,000
• Cost per square foot: $300-$350/sq ft average (high due to Austin market)

Permitting:

• Building permit: $2,000-$6,000
• Impact fees: Reduced or waived for ADUs under 750 sq ft
• Water/wastewater: Limited fees for ADUs

Austin ADU Benefits

Rental income potential:

• Central Austin: $1,500-$2,800/month
• East Austin: $1,400-$2,200/month
• South Austin: $1,400-$2,200/month
• North Austin: $1,200-$1,800/month

Strong demand:

• University of Texas students
• Young professionals
• Tech workers
• Housing shortage drives demand

See our Austin short-term rental guide if considering STR use (note: ADUs cannot be STRs <30 days in Austin).

Dallas ADU Regulations

Dallas has made significant strides in permitting ADUs, especially in recent years.

Basic Requirements

Eligible properties:

• Single-family residential lots
• Minimum lot size varies by zoning (typically 5,000-7,000 sq ft)

Unit size:

• Maximum 1,200 sq ft OR 50% of main dwelling, whichever is less
• Two bedrooms maximum

Lot coverage:

• Maximum 50% total lot coverage (varies by zoning)
• Includes main house + ADU + other structures

Setbacks:

• Rear: 5 feet minimum
• Side: 5 feet minimum (one side), 8 feet opposite side
• Front: Behind main house building line

Height:

• 24 feet maximum typical
• Varies by zoning district

Parking:

• One off-street space required for ADU
• Shown on site plan
• Driveway standards apply

Owner-occupancy:

• Owner must occupy either main house OR ADU
• [Homestead exemption](/blog/homestead-exemption-guide) verification

Dallas ADU Process

Step 1: Verification

• Confirm zoning allows ADUs
• Check lot size meets minimum
• Review deed restrictions and HOA rules

Step 2: Design and site plan

• Hire architect or designer
• Site plan showing setbacks, parking, structures
• Elevation drawings
• Floor plans

Step 3: Submit application

• Online through Dallas Development Services
• Complete plan set
• Site plan
• Structural calculations (if required)

Step 4: Review

• Plan review: 4-6 weeks typical
• Respond to comments
• Resubmit if needed

Step 5: Permit and construction

• Pay permit fees
• Construction
• Required inspections
• Certificate of occupancy

Timeline: 6-10 months total from design to completion

Dallas ADU Costs

Construction costs:

• Detached ADU: $160,000-$280,000 (600-1,000 sq ft)
• Garage conversion: $70,000-$130,000
• Cost per square foot: $250-$280/sq ft average

Permitting:

• Building permit: $1,500-$4,000
• Plan review: Included
• Impact fees: Varies by location

Dallas ADU Benefits

Rental income potential:

• Uptown/Oak Lawn: $1,400-$2,200/month
• East Dallas: $1,200-$1,800/month
• North Dallas: $1,100-$1,700/month
• Suburban areas: $900-$1,400/month

Market demand:

• Growing city with strong job market
• Rental demand high
• Multigenerational housing trend

San Antonio ADU Regulations

San Antonio has expanded ADU allowances to address housing needs.

Basic Requirements

Eligible properties:

• Single-family residential lots
• Minimum lot size: 7,000 sq ft (typical)
• Varies by zoning district

Unit size:

• Maximum 1,200 sq ft
• Cannot exceed size of main dwelling

Setbacks:

• Rear: 10 feet minimum (or existing, whichever is less)
• Side: 5 feet minimum
• Must be behind front building line of main house

Height:

• 24 feet maximum (varies by district)
• Two stories allowed in most zones

Parking:

• One off-street space required for ADU
• Must meet driveway standards

Owner-occupancy:

• Owner must reside on property (main house or ADU)
• Verified through homestead exemption

Design standards:

• Compatible architectural style with main house encouraged
• Materials and colors should complement

San Antonio ADU Process

Process:

1. Pre-application meeting (optional but recommended)
2. Design plans meeting code requirements
3. Submit building permit application
4. Plan review (4-6 weeks)
5. Address comments
6. Permit issuance and pay fees
7. Construction and inspections
8. Certificate of occupancy

Timeline: 6-10 months typical

San Antonio ADU Costs

Construction costs:

• Detached ADU: $120,000-$240,000 (600-1,000 sq ft)
• Garage conversion: $60,000-$110,000
• Cost per square foot: $200-$240/sq ft average (lower than other major Texas cities)

Permitting:

• Building permit: $1,200-$3,500
• Fees generally lower than Austin/Dallas
• Impact fees vary by area

San Antonio ADU Benefits

Rental income potential:

• Downtown/Southtown: $900-$1,400/month
• Alamo Heights: $1,000-$1,600/month
• Stone Oak: $950-$1,400/month
• Suburban areas: $750-$1,100/month

Affordability advantage:

• Lower construction costs than other major Texas cities
• Lower property taxes than Austin
• Good ROI potential

Texas ADU Financing Options

[Home Equity Line of Credit](/blog/best-heloc-lenders-2026) (HELOC)

Best for: Most flexible financing option

Terms:

• Borrow against home equity
• Interest-only draw period
• Rates currently 7-10%
• Access funds as needed during construction

HonestCasa offers competitive HELOC rates for Texas ADU construction.

[Cash-Out Refinance](/blog/cash-out-refinance-guide)

Best for: Low existing mortgage rate, need large lump sum

Terms:

• Replace existing mortgage with larger loan
• Access difference in cash
• Fixed rate options
• Single monthly payment

Considerations:

• Only makes sense if current rate is similar to new rate
• Refinancing costs (2-3%)
• Extends loan term

[Construction Loan](/blog/construction-loan-guide)

Best for: Building from ground up

Terms:

• Short-term loan for construction phase
• Interest-only during construction
• Funds disbursed in draws as work progresses
• Convert to permanent loan or pay off at completion

Typical terms:

• 12-18 month term
• Higher interest rates (8-12%)
• Detailed budget required
• Inspections before draws

Personal Loan

Best for: Smaller ADUs or garage conversions

Terms:

• Unsecured financing
• $50,000-$100,000 typical max
• Fixed rate and term
• Fast approval

Considerations:

• Higher interest rates (10-18%)
• Lower loan amounts
• Shorter terms increase monthly payment

FHA Title 1

Best for: Smaller improvement projects

Terms:

• Up to $25,000
• No equity required
• Fixed rate
• Limited to smaller projects

ADU Design Considerations for Texas Climate

Heat Management

Essential features:

• High-efficiency HVAC (14 SEER+ minimum)
• Proper insulation (R-30+ attic, R-13+ walls)
• Energy-efficient windows (Low-E coating)
• Adequate shade (covered porches, trees)
• Light-colored roofing materials
• Ceiling fans in all rooms

Energy savings:

• Lower utility bills
• Improved comfort
• Essential in Texas heat

Outdoor Living Space

Highly valued in Texas:

• Covered patio or porch
• Ceiling fans on porches
• Outdoor kitchen potential
• Fire pit areas
• Landscaping for shade

Benefits:

• Extends living space
• Increases rental appeal
• Outdoor entertaining

Storm Considerations

Hurricane zones (coastal areas):

• Impact-resistant windows and doors
• Reinforced roof connections
• Proper drainage
• Flood elevation requirements (if in flood zone)

Tornado risk (North Texas):

• Safe room or shelter consideration
• Reinforced construction
• Impact-resistant materials

Water Management

Texas drought considerations:

• Drought-tolerant landscaping
• Efficient irrigation (drip systems)
• Rainwater harvesting potential
• Native plants

Drainage:

• Proper grading away from structure
• Gutters and downspouts
• French drains if needed

ADU Property Management

Renting Your Texas ADU

Setting rent:

• Research comparable ADU/small home rentals
• Consider location, finishes, amenities
• Include utilities or separate billing
• Adjust for market conditions

Marketing:

• Zillow, Apartments.com, Facebook Marketplace
• Local university housing boards (near campuses)
• Craigslist
• Word of mouth

[Tenant screening](/blog/best-property-management-software-2026):

• Rental application
• Credit check (minimum 600 score recommended)
• Income verification (3x rent)
• Employment and rental history
• Background check

Texas Landlord-Tenant Law

Key requirements:

• Written lease agreement
• Security deposit limit: No state limit, but must be reasonable
• Security deposit return: 30 days
• Required disclosures (lead paint, mold, smoking policy)
• Entry notice: Reasonable notice (typically 24 hours)

Eviction process:

• 3-day notice for non-payment
• Justice court eviction proceedings
• Must follow legal process

Fair Housing laws apply:

• Cannot discriminate based on protected classes
• Familiarize yourself with requirements

Property Management Option

Professional management:

• Typical fee: 8-10% of monthly rent
• Handles tenant screening, rent collection, maintenance
• Best for out-of-town owners or busy landlords
• Research local ADU-experienced managers

Tax Implications of Texas ADUs

Property Taxes

Reassessment:

• ADU construction increases property value
• Triggers reassessment of property
• Property taxes increase based on added value

Example:

• Current assessed value: $350,000
• ADU adds $150,000 value
• New assessed value: $500,000
• Tax rate: 2.5% (combined city/county/school)
• Annual tax increase: $3,750

Texas property tax considerations:

• Relatively high property tax rates (2-3% typical)
• No state income tax offsets this
• Factor into ADU financial analysis

Homestead Exemption

Main residence homestead:

• Homestead exemption applies to combined property (main house + ADU)
• School district exemption: $100,000 minimum
• County/city exemptions: Varies
• Age 65+ additional exemptions

Owner-occupancy preservation:

• Renting ADU doesn't affect homestead
• Must occupy main house or ADU (city-specific)

Rental Income Taxation

Federal income tax:

• Rental income fully taxable
• Deductible expenses: repairs, maintenance, insurance, property tax (proportional), depreciation
• Depreciate ADU structure over 27.5 years

Example:

• ADU construction cost: $180,000
• Depreciable basis: $165,000 (excluding land)
• Annual depreciation: $6,000

No state income tax:

• Texas advantage: no state income tax on rental income
• Federal tax still applies

Comparing Texas Cities for ADU Investment

Best for ADU investment:

• Houston: Flexible regulations, no owner-occupancy requirement
• Austin: Highest rents, no parking requirement, strong demand
• Dallas: Balanced regulations, strong rental market
• San Antonio: Lowest costs, good ROI potential

Conclusion

Texas cities offer diverse ADU opportunities, each with distinct regulations and market dynamics. Houston and Austin provide the most permissive regulations, while Dallas and San Antonio require more careful navigation of zoning and lot requirements.

Before building an ADU in Texas:

1. Research your specific city's regulations thoroughly
2. Verify no HOA or deed restrictions prohibit ADUs
3. Obtain accurate cost estimates from local contractors
4. Analyze rental market and potential income
5. Secure appropriate financing
6. Work with experienced local professionals

Whether you're seeking rental income, multigenerational housing, or [property value appreciation](/blog/best-cities-appreciation-2026), ADUs offer compelling opportunities in Texas's growing cities. With proper planning and execution, your ADU can provide decades of value and flexibility.

For homeowners considering financing options for ADU construction, HonestCasa offers specialized HELOC solutions designed for home improvement projects throughout Texas.

Related Articles

• California ADU Regulations: Complete 2026 Guide
• ADU Building Guide: Planning Your Accessory Dwelling Unit
• Austin Short-Term Rental Regulations 2026
• [Houston [Real Estate Investment](/blog/dscr-loan-fix-and-flip) Guide](/blog/houston-real-estate-investment-guide)
• HELOC for Home Improvements: Complete Financing Guide