Accessory Dwelling Units in Arlington: Design That Pays

Thinking about adding an accessory dwelling unit to your Arlington home? With the right plan, an ADU can create flexible living space and a new income stream. You want clarity on rules, costs, and design choices that actually pay you back. This guide covers what you need to know in Arlington, from zoning and permits to smart layouts, financing, and timelines. Let’s dive in.

Why ADUs can pay in Arlington

Arlington’s high housing demand and strong rents make ADUs a compelling option for many homeowners. In high-value metros like ours, ADUs often command competitive rents and can boost long-term property value. Still, every property is unique, so a simple pro forma with local rent comps and real construction bids is essential before you commit.

Know the rules before you design

Arlington permits accessory dwellings inside the main house, attached to it, or in a detached accessory building when allowed by zoning. An ADU must be a complete, independent unit with a kitchen and bath under the same ownership as the main house. Start with the county’s official guidance for eligibility, submittals, and process on the Accessory Dwelling Permit page. Review Arlington’s ADU rules and permit steps.

Zoning and owner occupancy

• Eligible zones include single-family districts such as R-20, R-10, R-8, R-6, R-5, R-10T, R-15-30T, and R-2-7. Confirm your zoning before you budget.
• The owner must live in either the main dwelling or the ADU as a primary residence. This is an ongoing condition tied to your permit.

Size caps and where they apply

• For ADUs above a basement, size is limited by the main home: up to 35% of combined area, capped at 750 sq ft; or up to 45% and 500 sq ft if the main dwelling is under 1,000 sq ft.
• ADUs wholly within a basement are not bound by that specific cap. They must meet building code and fit within the basement footprint. See county guidance for details.

Detached buildings and older garage conversions

• New detached accessory buildings created after May 18, 2019 face limits: up to 1½ stories or 25 feet, with typical footprints capped at 560 sq ft in R-5/R-6 and 650 sq ft in most other single-family districts. Exterior stairs to a second-floor ADU cannot face the street.
• Converting a detached accessory building that predates May 18, 2019 can be easier. You can often convert by interior alterations without changing the footprint or height, which can save time and money.

Parking and short-term rental rules

• You must maintain your lot’s existing off-street parking spaces. Lots with no spaces may qualify if you add a space or if a county parking survey shows your block is less than 65% parked.
• If you plan to host short-term stays in your primary residence or a detached ADU, you need an Accessory Homestay Permit plus business and tax registrations. Read the county’s Accessory Homestay overview.

Historic district review

If your property is in a Local Historic District and your project includes exterior changes, you must secure a Certificate of Appropriateness before building permits. Early design coordination saves time. Learn about the CoA process.

Choose the ADU type that fits your lot and budget

Selecting the right ADU type is your most important cost and ROI decision.

• Basement conversion: Often the best value because you reuse structure and utilities. Typical projects run about $80,000 to $175,000 depending on conditions. See national ADU cost ranges.
• Garage conversion: Strong ROI potential if the structure is sound, especially for older garages. Roughly $60,000 to $150,000 with scope and upgrades driving cost. Explore garage conversion cost drivers.
• Attached addition: More flexibility in layout and light. Often $75,000 to $300,000 depending on size and finishes. Compare typical ranges.
• New detached ADU: Highest cost but offers privacy and rent potential. In high-cost markets, many 400 to 800 sq ft builds run about $140,000 to $400,000+. Prefab options can help control cost. Review common detached ADU costs.

Costs in the DC and Northern Virginia region often trend toward the high end of these national ranges. Build a realistic contingency for utilities, site work, design/engineering, and permit fees.

Design moves that boost rent and ROI

Smart design helps you attract better tenants, reduce vacancies, and control lifecycle costs.

Plan flexible layouts within size caps

Prioritize open living areas and efficient kitchens over formal dining. In small footprints, use multi-function furniture and built-in storage. For basements, plan for code-compliant egress, ceiling height, daylighting, and moisture control.

Light, privacy, and quiet

Natural light, a separate entry, and neutral finishes increase marketability. Invest in sound separation if the ADU shares walls or floors with the main home. Acoustic assemblies reduce noise transfer and improve retention. See county tips for designing successful ADUs.

Systems and finishes that lower operating costs

Energy-efficient HVAC, LED lighting, and heat-pump water heaters cut utility costs and support higher net income. Choose durable, low-maintenance materials that meet tenant expectations without over-improving. If you consider separate metering or special utility setups, confirm rules with the county and providers. Review related county guidance.

If you plan to host short-term stays

Design for turnover: easy-clean surfaces, secure keyless entry, simple parking instructions, and a posted safety and evacuation plan. Remember that short-term hosting requires an accessory homestay permit, annual renewal, and tax registration. Check the homestay rules and renewals.

Financing paths for ADUs

You have several ways to pay for an ADU. Options include cash, HELOC, cash-out refinance, renovation loans, and construction-to-permanent loans. Many owner-occupants use a renovation loan that looks at the home’s as-completed value.

• Fannie Mae HomeStyle Renovation can finance ADU construction as part of a purchase or refinance. Learn about HomeStyle Renovation.
• FHA 203(k) may work for some ADU scopes depending on lender policy. Ask your lender whether ADUs are eligible under their guidelines.

Most renovation loans require contractor bids and a project schedule. Underwriting practices vary, so work with a local lender experienced with ADUs.

Taxes, fees, and insurance

• Permit fees: Plan for zoning review, building and trade permits, and possible impact fees. Arlington updates fee schedules periodically. Review current fee schedules.
• Transient Occupancy Tax: If you host short-term stays, you must register and collect/remit Arlington’s TOT. As of May 1, 2021 the county rate is 8.25 percent. Read the county’s TOT and business license guidance.
• Property assessment: Adding an ADU can increase your assessed value and taxes. Ask the county or a tax advisor how your plan may affect assessments before you build.

What a payback could look like

A garage conversion that costs around $100,000 and rents for about $1,800 per month produces roughly $21,600 in gross annual rent. After financing, taxes, insurance, utilities, maintenance, management, and vacancy, the net yield will be lower. Your return depends on your specific site, construction cost, rent level, and whether you choose short-term or long-term leasing. Use typical cost ranges to build your pro forma and refine it with local rent comps.

For a broader context, research from the Terner Center shows many ADUs are built for under $200,000 in high-cost states and can achieve market-competitive rents, which supports the concept of ADUs as a viable investment in strong markets. See the Terner Center’s ADU analysis.

Timeline and next steps

Most projects move through a similar path:

1. Confirm eligibility. Verify zoning and existing conditions. Schedule a pre-submission conversation with the Zoning Division to discuss parking, historic review, and potential DES fees. Start at Arlington’s ADU page.
2. Prepare plans and apply. Submit your Accessory Dwelling application through Permit Arlington. The county targets about 30 days for the ADU zoning review after a complete submission.
3. Secure building permits. After ADU approval and recordings, apply for building and trade permits. Inspections occur during construction; you will need a Certificate of Occupancy to rent.
4. Plan your operations. If hosting short-term stays, obtain an accessory homestay permit and set up your business license and TOT account before listing.

Typical timelines: 2 to 8 weeks for pre-submission and design, then about 30 days for ADU zoning review after acceptance. Conversions often take 2 to 6 months to build; new detached units commonly take 6 to 12 months or more. Build in room for survey, historic review, weather, and supply chain delays.

Common pitfalls to avoid

• Overbuilding or ignoring size caps that trigger redesigns and delays.
• Skipping a parking plan or assuming the block will pass a parking survey.
• Underestimating utility upgrades, drainage, and site work.
• Designing without soundproofing between units.
• Assuming short-term rental income without permits or TOT compliance.

The bottom line

With the right plan, an ADU in Arlington can deliver flexible living space and a path to long-term value. Focus on compliance, pick the ADU type that fits your lot and budget, and design for light, privacy, durability, and low operating costs.

If you want a clear, calm path from idea to impact, let’s talk about value, rent comps, and your timeline. Connect with Brittanie DeChino to align your ADU strategy with your broader home and investment goals.

FAQs

What types of ADUs are allowed in Arlington?

• Arlington allows interior, attached, and (in limited cases) detached accessory dwellings that meet zoning, size, parking, and owner-occupancy rules; start with the county’s ADU page for eligibility.

How big can an ADU be in Arlington?

• Above-basement ADUs are limited to 35 percent and 750 sq ft (or 45 percent and 500 sq ft if the main home is under 1,000 sq ft), while basement ADUs follow building code and footprint.

Do I have to live on the property if I build an ADU?

• Yes, the owner must occupy either the main dwelling or the ADU as a primary residence as an ongoing condition of approval.

What are the parking requirements for an ADU?

• You must maintain existing off-street spaces, and lots without parking may need to add a space or pass a county parking survey showing the block is under 65 percent parked.

Can I use my ADU for Airbnb in Arlington?

• Short-term rental hosting requires an Accessory Homestay Permit plus business license and Transient Occupancy Tax registration, with annual renewal and occupancy limits.

How long does it take to permit and build an ADU?

• Plan 2 to 8 weeks for design, about 30 days for ADU zoning review after a complete submission, and 2 to 6 months for conversions or 6 to 12+ months for new detached builds.

What fees should I expect beyond construction costs?

• Budget for zoning and building permits, possible impact fees, inspections, utility upgrades, and if short-term hosting, business license and TOT obligations.

How can a real estate advisor help with my ADU plan?

• A local advisor can help you understand resale and rental potential, provide rent and sale comps, and align your ADU plan with your broader home or investment strategy.