Some cities and states have long restricted the construction of accessory dwelling units, or ADUs—also known informally as in-law apartments or granny flats. Typically, an ADU has its own kitchen, living area, and a separate entrance. It can be a standalone structure or a converted basement or attic, but it shares utilities with the primary house. But recently, HUD released some new guidelines about ADUs, including how appraisers analyze ADU market rent.

Hal's guest Tobias Peter, co-director of the American Enterprise Institute Housing Center, wrote a detailed report about ADUs, with case studies on how ADU regulation affects real estate and rental markets in Seattle, Portland, and LA. In this episode, Hal and Tobias discuss that report and the current public debate about whether easing restrictions on ADUs could help alleviate the nation's housing shortage and soaring housing costs.

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