DC Structures
Why ADUs Are Booming in Arizona
Whether you live among the desert landscapes of Tucson, the urban energy of Phoenix, or the pine-covered mountains of Flagstaff, the state of Arizona offers a diverse and promising environment for homeowners interested in building long-term value through an accessory dwelling unit (or ADU). As one of the most ADU-forward states in the country, Arizona passed landmark legislation in 2025 requiring cities with populations over 75,000 to allow accessory dwelling units—opening the door to new rental unit possibilities and expanded living options for thousands of homeowners with guest house plans in mind.
At DC Structures, we offer a refined line of prefabricated ADU models designed for efficiency, customization, and durability in Arizona’s varied climates. Whether you’re envisioning a backyard cottage, tiny home, guest suite, or rental-friendly casita, our team is here to help you design and build a high-performance accessory dwelling unit that enhances your property and fits seamlessly into your Arizona lifestyle.
Our ADU Kits
From the sun-baked deserts of Tucson to the red rock vistas of Sedona and the evergreen forests of Flagstaff, Arizona’s stunning landscapes create endless opportunities for beautiful, well-designed accessory dwelling units. Our prefab ADU designs provide a streamlined, customizable option for homeowners looking to add rental income, guest housing, or a dedicated studio space with storage, features, and aesthetic details that fit their needs and lifestyle.
Sitka
SitkaCrafted for backyard use, whether as a guest suite, artist studio, or creative workspace, our Sitka ADU Kit offers limitless flexibility within a compact framework.
Average Cost to Build an ADU in Arizona
Arizona has experienced significant population growth over the past decade, driven by incoming residents from higher-cost states and by professionals, retirees, and remote workers seeking greater affordability and quality of life.
While this influx has contributed to rising home prices in cities like Phoenix, Tucson, and Flagstaff, tiny homes and accessory dwelling units remain an attainable and cost-effective investment for homeowners looking to expand their living space or generate long-term rental income. According to Angi’s List, the average cost to build an accessory dwelling unit ranges from $60,000 to $285,000, with garage or basement conversions typically falling on the lower end and detached, custom-built ADUs landing on the higher end of the spectrum.
At DC Structures, we advise Arizona homeowners to expect turnkey project costs of three to five times the price of their design and materials package, depending on factors like site conditions, builder services, house finishes, and desired layout. For a more precise estimate, we encourage you to reach out for a free, detailed quote that takes your room plans, architecture, and site characteristics into consideration.
Arizona ADUs
Permitting, Zoning & ADU Regulations in Arizona
Arizona’s new statewide ADU legislation, effective in 2025, requires cities with populations over 75,000 to allow at least one accessory dwelling unit on single-family lots. The state defines an ADU as a self-contained living unit with its own sleeping area or bedroom, bathroom, and kitchen or kitchenette located on the same parcel as a primary residence. While this legislation establishes the baseline right to build an accessory dwelling unit, individual cities and counties still determine the specific standards for size, height, placement, and architectural design of tiny homes, guest houses, and rental units.
Municipalities such as Phoenix allow ADUs up to 1,000 sq. ft. or 75% of the primary residence, whichever is less, and permit up to two ADUs per lot (with the option for a third on parcels larger than one acre). Smaller municipalities may adopt similar standards voluntarily. Because requirements vary across Arizona, homeowners should review their local jurisdiction’s ADU ordinance for detailed information on permits, size limits, height restrictions, and zoning guidelines.
ADU Incentives, Grants & Financing in Arizona
While Arizona has taken major steps to expand ADU development statewide, city-level incentives are still evolving. One standout example is the City of Tempe, which recently received the 2025 AARP Community Challenge Grant to advance affordable, sustainable, and accessible housing through its ADU Design Challenge. As part of the initiative, designers and architects can submit innovative, code-compliant accessory dwelling unit plans that support the city’s housing goals. Ten winning designs will receive $2,000 and be added to Tempe’s standard plan library, providing homeowners with access to pre-approved accessory dwelling unit designs that streamline permitting and reduce overall project costs. As metro areas continue to grow and demand for flexible housing rises, ADUs represent an increasingly valuable solution and practicality for homeowners looking to enhance their property, generate income, and support Arizona’s broader housing strategy.
Best Cities & Counties to Build an ADU in Arizona
Arizona’s landscape ranges from the dense forests of the northern high country to the iconic red rock region of Sedona and the expansive desert of the south, making it an exceptional state for building an accessory dwelling unit with strong rental and long-term value potential. While most Arizona cities benefit from the state’s new ADU legislation, the following regions stand out for their supportive policies, flexibility, strong economies, and rental demand:
Tempe
With its upcoming standard plan library of innovative, code-compliant ADU designs, Tempe is paving the way for accessible, affordable ADU construction that streamlines permitting and reduces design costs for homeowners.
Phoenix
A major hub for aerospace, defense, education, and healthcare, Phoenix offers strong long- and short-term rental demand thanks to top employers and Arizona State University.
Tucson
Tucson’s 2022 pilot program provided up to $20,000 to low-income households for casita construction, and the city remains a strong rental market due to the University of Arizona and year-round visitor activity.
Whether you’re in a thriving metro or a scenic rural community, ADUs in Arizona offer versatile, high-value solutions that support both homeowner goals and the state’s broader housing needs.
DC Structures
ADU Project Gallery
How ADUs Can Boost Property Value in Arizona
Arizona has experienced exceptional growth over the past decade, with new families moving in from higher-cost states like California and fueling strong demand in both the home-buying and rental markets. As a result, the average home price in Arizona now stands around $420,000, nearly double what it was ten years ago—and with continued growth in metro areas like Phoenix and Tucson, that number is expected to keep rising.
Because ADUs can increase property values by up to 30%, many Arizona homeowners could see gains of $100,000 or more simply by adding an ADU to their lot. Beyond added equity, strong rental demand—paired with average rents of roughly $1,975 per month—means an ADU can generate more than $100,000 in supplemental income in just five years. Whether used as a rental dwelling unit, guest house, or family housing, ADUs are a smart, high-impact investment in Arizona’s booming housing market.
Start Your Arizona ADU Journey
Ready to bring your accessory dwelling unit project to life in Arizona? Whether you’re in the heart of Phoenix, tucked into the forests of Flagstaff, or surrounded by the desert beauty of Tucson, our team is here to guide you from design to delivery. We offer high-quality prefab ADU models engineered for Arizona’s diverse climates, along with expert support to help you navigate the permitting process, customization, and construction with confidence.