Your Kid Will Never Be Able to Move Out—Or Will They?

You're Kid Will Never Be Able to Move Out—Or Will They?

For many parents, the thought of their adult children never leaving home can be both a blessing and a concern. With skyrocketing housing prices and a competitive rental market, it’s no wonder young adults are struggling to achieve financial independence. But what if the idea of multigenerational living wasn’t a last resort, but rather a smart financial strategy? Enter the Accessory Dwelling Unit (ADU)—a powerful tool that can help your kids not just survive, but thrive financially.

The Reality of Today’s Housing Market

It’s no secret that homeownership is becoming increasingly difficult for younger generations. Down payments, high mortgage rates, and cost-of-living expenses create massive barriers to financial independence. According to a 2023 report from the National Association of Realtors, the median home price in the United States is now over $400,000, making homeownership nearly impossible for many first-time buyers. Additionally, Pew Research found that in 2022, 50% of young adults (ages 18-29) were living with their parents, the highest rate since the Great Depression.

Beyond homeownership, the rental market isn’t much better. The U.S. Census Bureau reports that median rent prices have increased by over 20% in the last five years, making it harder for young adults to save for a home or other financial goals. Many find themselves either living at home longer than expected or spending a significant portion of their income on rent with little left to save. But what if there was another way?

ADUs: The Multigenerational Advantage

Instead of viewing an ADU as just an extra structure on your property, think of it as a pathway to financial freedom for your child. With an ADU, they can live independently while still benefiting from the support of family. Here’s how:

1. Living in the ADU: If you already own a home and add an ADU, your child can move into the unit while paying reduced rent or contributing to household expenses. This allows them to save money, build credit, and work toward homeownership without the financial strain of high rent elsewhere. A study by the Urban Institute found that young adults who live at home and save aggressively for five years can accumulate enough for a down payment on a starter home.

2. Generating Passive Income with an ADU: For those who prefer to remain in the primary residence, renting out the ADU presents an opportunity to generate passive income that can be used strategically. Whether the rent money is allocated toward paying off student loans, saving for a future down payment, or reinvesting into further property improvements, an ADU can provide significant financial relief. According to the Joint Center for Housing Studies at Harvard University, homeowners who rent out an ADU can reduce their overall mortgage burden by up to 30%. This model allows young adults to remain in a familiar setting while building financial independence, an option that wasn’t widely available before ADU-friendly zoning laws.

Buying a Property with an ADU: A Smart Investment

Another great option for young adults looking to build wealth is purchasing a property with an ADU. Instead of struggling to afford a single-family home, they can take advantage of a property that already includes an income-generating unit. Here’s how this strategy can work:

1. Offsetting Mortgage Costs: By renting out the ADU, homeowners can significantly reduce their monthly mortgage payment, making homeownership far more feasible. Studies show that rental income from an ADU can cover up to 50% of mortgage expenses, making it a strategic investment for young buyers.

2. Building Long-Term Wealth: A property with an ADU appreciates in value over time, providing homeowners with increased equity and financial security. According to a Zillow report, homes with ADUs appreciate at a faster rate compared to traditional single-family homes.

3. Providing Housing Flexibility: If life circumstances change—such as needing to care for aging parents or accommodating a growing family—an ADU provides a built-in housing solution without requiring an expensive move.

Investing in a home with an ADU is an excellent way for young adults to enter the real estate market, generate passive income, and establish financial stability early in life.

The Massachusetts Advantage: ADUs By Right

If you live in Massachusetts, recent legislative changes have made it easier than ever to take advantage of ADUs. The new housing bill passed in 2023 allows ADUs by right, meaning homeowners no longer need to go through complicated zoning approvals to build an ADU on their property. This new law is a game-changer for families looking to create affordable, flexible housing options while maximizing their property’s value.

Key benefits of the new ADU-friendly laws in Massachusetts include:

• Faster approval process – No discretionary special permits required for most ADUs.

• More affordable construction – Less red tape and legal fees.

• Boosted property values – ADUs increase home equity and provide rental income potential.

With these policy updates, homeowners in Massachusetts have a unique opportunity to support their families financially while contributing to the region’s housing supply. Whether you’re helping your child establish independence or setting them up for financial success through rental income, ADUs are an increasingly viable option in the area.

Redefining Independence

In many cultures, multigenerational living is not only common but seen as a smart financial decision. In fact, the Pew Research Center found that in 2021, 25% of U.S. adults ages 25-34 lived in multigenerational households, compared to just 9% in 1971. The shift is driven not only by economic factors but by a growing recognition of the benefits of shared resources, childcare assistance, and emotional support.

Instead of pushing for full independence the moment a child turns 18, embracing an ADU setup allows for a gradual and strategic transition to financial stability. The reality is, financial independence isn’t about moving out—it’s about building wealth and long-term security. ADUs create an environment where young adults can reduce expenses while still taking on financial responsibilities, giving them a head start on homeownership and wealth-building.

Final Thoughts

The idea that your kid will never move out may seem daunting, but with an ADU, it’s actually an opportunity rather than a setback. Whether they live in it, their parents rent it out to be able to help them with a down-payment on a starter home, or they develop one themselves, ADUs provide a flexible and financially sound solution to the housing crisis. Instead of struggling to make ends meet in an overpriced rental market, your child can leverage an ADU to create stability and eventually achieve true financial freedom.

With the new ADU laws in Massachusetts, now is the perfect time to explore how ADUs can benefit your family. If you're interested in learning more about how ADUs can support your family’s financial future, contact Evolve ADU today—let’s build a smarter path to independence together from Today to Move-In Day.