In-Law Suites/Granny Flats vs. A-B Units in Austin

In-law suites, also called granny flats, ADUs (Accessory Dwelling Units), and backyard cottages, are increasingly popular in Austin. Additionally, Austin has embraced an alternative housing model designed to increase density without losing the single family home “character” of neighborhoods. This is achieved by created an condo regime on a single lot, which allows for two detached single family homes to be constructed and have separate owners on the same lot that previously had only one house, one owner. Overall this provides flexibility for multigenerational living or on-site rental income. Here’s an in-depth look at where these options are built, their costs, and how they shape Austin’s real estate market.

Where Are In-Law Suites and A-B Units Built?

In-Law Suites & ADUs: These are common in areas like East Austin, South Austin, and neighborhoods with smaller lot sizes or progressive zoning. ADUs are often added as backyard cottages or converted garages.
A-B Units: Found in neighborhoods with high land demand like Holly, East Austin, Zilker, Bouldin Creek, Hyde Park, and Travis Heights, A-B units split single-family lots into two detached homes under a single HOA but the HOA usually exists on paper only and has limited authority over the homeowners. The larger home (Unit A) typically sits at the front, while the smaller home (Unit B) is in the back. Occasionally this will be presented as a duplex with a shared wall but may still allow for separate ownership of each unit.

How Much Do They Cost?

In-Law Suites:

Construction costs range from $150,000 to $400,000, depending on size and finishes. Prefabricated models may lower costs.
Homes with existing in-law suites are typically 20–30% more expensive than comparable properties without them.

A-B Units:

A-B units are a pricier but efficient use of space:

Unit A (Front Home): A larger home with 3–4 bedrooms, typically priced at $900,000 to $1.2 million.
Unit B (Back Home): A smaller, detached home with 2 bedrooms, usually priced around $500,000 to $800,000, depending on location and finsihes.
Together, the cost for both units (remember, they have to be purchased separately) often exceeds $1 million.

Can They Be Bought as Standalone Structures?

In-Law Suites & ADUs: These cannot be sold independently of the main property due to zoning laws, as they are secondary structures.
A-B Units: Each unit can have a separate owner because they are classified as condos. This setup makes A-B units a unique solution for multigenerational families or those seeking rental income opportunities.

Will Austin Allow More ADUs and A-B Units in the Future?

Austin is pushing zoning reforms to promote higher-density housing:

For ADUs: Reduced lot size requirements and relaxed parking mandates make building secondary structures more accessible.
For A-B Units: While popular, they require larger lots to accommodate two homes, which limits their proliferation to specific neighborhoods.

These efforts reflect the city’s aim to increase housing availability without compromising livability.

Please send me a request to get set up on a private client search targeting these properties. Browse general listings here. Pro Tip: if you see “Unit A” or “Unit 1” in the address of a property, that almost always indicates that it is a condo regime.