Today we’re digging into a regulation change close to home for us that may have a positive impact on local residents’ ability to add a short term rental unit onto their existing property.

The City of Durham recently approved an initiative called Expanding Housing Choices, which hopes to encourage the construction of what has been coined “the missing middle housing.” The new zoning regulations allow smaller lots and more types of housing in areas of the City that were previously zoned for mostly single family houses. These changes have been met with hurrahs from some and boos from others, but one change that almost everyone has embraced is the simplification of rules regarding accessory dwellings and structures.

Whether you want to build a rental apartment, a unit for an elderly parent, a short term rental for an AirBnB, or a space that can transition back and forth between these uses over time to accommodate your family’s changing needs, the new streamlined rules mean now is the time to act. Among the many changes to the regulations, the most significant is the simplification of the size of accessory dwellings, which were previously limited to 30% of the primary structure, but are now allowed to be as big as 800 square feet. This makes for a nice sized one bedroom or a super efficient two bedroom unit and applies regardless of whether you are building a stand alone structure or an addition to your home.

The City’s new openness to accessory dwelling units includes supporting both prefab tiny houses, kit houses, and custom built structures. Of course, the most important rule here is to make sure they meet building code.

In order to have a little fun and entertain the planner in me, I took a stab at designing a stand alone unit based on the new regulations for a friend. We analyzed her property and how her existing home is situated, and opted to plan for a 480 sf one-bedroom kit house as an accessory dwelling unit in her backyard. I love the design of this cutie, which can be purchased at Houseplans.com. It has a porch, which here in the south is just mandatory. It tucks nicely in the corner of the yard, leaving plenty of space and private areas for both homeowners and guests. The plan includes a designated parking space for guests, which I recommend painting on the driveway for clarity, and a separate path to the rear of the house and directly to the front door of the guest house. The interior layout is perfect for a short-term rental, with a nice sized bathroom, ample kitchen, separate bedroom and living room that could accommodate a pull out sofa for extra sleeping area and more income.

The next step will be to find a builder and get some quotes on construction costs. Then we’ll follow the steps from our “To STR or Not To STR” article to see if adding this house would be a financially responsible decision. The goal for my friend would be to be able to cover the costs of the monthly loan payments required to build the accessory unit with the income from the unit, while also allowing enough flexibility to block out dates when family and friendly come to visit. We’re really curious to see how this will turn out!


We offer consulting services for folks in any stage of short term rental development. Contact us if you need support with:

  • Identifying potential locations
  • Understanding/adhering to zoning regulations
  • Developing budgets
  • Coordinating with architects/builders to oversee construction
  • Decor & color choices
  • Operations planning
  • Marketing & communications
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