Houses with accessory dwelling units are in demand on Long Island, experts say

Jackie Dunphy, a real estate agent with The Corcoran Group in East Hampton, converted her two-car garage into a living space for her mother 15 years ago. After applying for a permit with the building department, hiring a contractor and completing her periodic check-ins with the Town of East Hampton, she was able to move her mother into the accessory dwelling unit.

Interest in properties like this has spiked on Long Island.

An accessory dwelling unit (ADU) is an additional, smaller living space on the same property as a primary residence, that can either be its own separate structure, attached to the home or converted from a garage, basement or attic. Hopeful buyers are starting to search for properties with ADUs (or the potential to build one) while house-hunting on Long Island, experts say.

This trend has traveled nationwide, according to the Zillow Consumer Housing Trends Report of 2025.

55%

of prospective homeowners are

more likely to buy

a house if there's

an existing ADU

according to Zillow.

54%

are more likely to buy in an area where

ADUs are allowed by local law.

Several local experts have weighed in on the topic recently.

"A lot of buyers now are looking for a renovated home with a basement with an outside entrance, because they're typically renting out those spaces now," Perry Pappas told Newsday in December, adding that he saw the interest in ADUs increase last year. Pappas is a real estate agent with Coldwell Banker in Oceanside.

Sometimes banks will qualify properties with garage conversions, backyard cottages or basement apartments "as if they were a multifamily house, and they're using that projected rental income to help buyers qualify," Pappas said.

Peter Elkowitz, president and CEO of the nonprofit Long Island Housing Partnership, told Newsday in January that ADUs can offer another stream of income, therefore, "we have to be much more creative in how we look at using our homes these days," he said.

We have to be much more creative in how we look at using our homes these days.

— Peter Elkowitz, Long Island Housing Partnership president and CEO

Jeff Stineback, a real estate agent with Compass in Huntington, said there has been a recent "spike in curiosity and interest" in homes with ADUs on Long Island.

"There are some clients that are always going to look for that, where that's the No. 1," he said. "Maybe they have extended family, or maybe they're looking for that rental income. And some people are just open to it; I've found that more, as well, given the costs are a little higher. People are now just fully open to supplementing their mortgage through that."

As for East Hampton, ADUs are a "highly desirable product in a low inventory," said Dunphy, who lives and works there.

Making ADUs even more accessible in the area would help keep residents there, she added, because "like everywhere else, we're in a real critical situation out here with the lack of affordable housing."

Dunphy said there has been an increase in demand for properties like this in East Hampton ever since prices shot up during COVID.

The Plus One ADU Program is described as "an initiative to create and improve ADUs across the state," according to the New York State Homes and Community Renewal website. The Long Island Housing Partnership assists in the application process for the grants, which are offered in Towns such as Huntington and Riverhead. The grants aim to help low and middle-income families, and go up to $125,000.

There's not all that many homes with mother-daughters or ADUs across the iIsland. So in essence, they're somewhat rare...

— Jeff Stineback, Compass agent

For buyers that may not have a ton of cash on hand, "the easiest thing is finding a high ranch or a split level that sort of automatically offers the possibility for a second unit, or may already have it," Stineback said.

While Stineback warned that creating an ADU out of a separate structure can take time due to obtaining permits, he said having a space to rent out is a great way to mitigate housing-related costs, as they continue to rise.

"The value is good, too," he said. "There's not all that many homes with mother-daughters or ADUs across the Island. So in essence, they're somewhat rare, and I feel like they will always be desirable because of that potential supplemental income."