222 Backyard Homes in Seven Years. Now a Veto Threat.
Montgomery County has permitted 222 accessory dwelling units since 2019. That's it. Two hundred twenty-two, in a county with more single-family lots than I could count in a lifetime of open houses. Now the County Council wants to make ADUs easier to rent, the County Executive says he'll veto it, and a statewide deadline that forces every Maryland county to allow them just came and went. If you own, buy or sell a single-family home, accessory dwelling units in DC and Maryland are about to matter more than they used to. Here's the math, minus the politics.
What Happened: The Accessory Dwelling Unit Fight in DC and Maryland
An accessory dwelling unit (ADU) is a second, smaller home on the same lot as a single-family house: a basement apartment with its own entrance, an over-the-garage unit, or a backyard cottage. Three things happened in the last few weeks:
- Montgomery County Bill 41-26, from Council President Natali Fani-González and Councilmember Andrew Friedson, would drop the rule that the owner must live on the property to rent out an ADU. It would also waive certain county fees if the owner rents the unit at a price affordable to households earning 65% or less of area median income for at least 10 years. Seven other councilmembers have signed on (Montgomery County Council).
- County Executive Marc Elrich said on Oct. 14 that he would veto it, calling it "bad policy." His argument is that it could shrink the supply of homes people can buy. The council needs six votes to override, and it has overridden every Elrich veto so far (The Baltimore Banner). The committee work session is Monday, Oct. 26.
- Maryland's HB 1466 required every county and city with zoning power to adopt a local law allowing ADUs on single-family detached lots by Oct. 1, 2026 (Maryland Department of Planning). That date has passed.
Accessory Dwelling Units in DC and Maryland: County by County
Montgomery County Homes
The county made ADUs much easier to build in 2019, and the result is still about 32 a year on average. Why so few? Look at the price tag. Montgomery Planning puts a detached ADU at about $300,000 to build and an attached one at $150,000 to $200,000 (Montgomery Planning). County permit and license fees for a detached unit add up to roughly $3,950 over 10 years. That's real money, but it's about 1.3% of the build. Meanwhile, the resale market is loosening: in September, active listings were up 27.2%, pending sales were down 17.7%, and the median price was $610,000 (+1.8%) per Maryland REALTORS.
Washington, DC Real Estate
DC has allowed accessory apartments by right in most residential zones since its 2016 zoning rewrite, and its rules have required the owner to live in one of the two units. That's the same owner-occupancy idea Montgomery County is now debating. With DC's median at $660,000 (down 2.9%) and close to six months of supply in September, a rowhouse with a legal, licensed basement unit is a real advantage when buyers are doing the math on every dollar.
Prince George's County Real Estate
Prince George's set up an ADU task force in 2025, and its compliance bill, CB-74-2026, was moving through the council's committee in September. I couldn't confirm a final vote as of today, so treat the details as pending. The median price was flat at $450,000 in September, with about 3.7 months of supply.
Charles County Real Estate
Charles County moved early. The commissioners unanimously passed Bill 2026-06 on July 7, allowing one ADU per lot in any zone that allows single-family detached homes and dropping the off-street parking requirement. Staff told the Planning Commission on Oct. 5 that fewer than a dozen applications had come in, along with dozens of phone calls (Southern Maryland Chronicle). Septic rules in rural areas remain the big hurdle. Homes there took 39 days to sell in September, up from 25.
Anne Arundel County Housing Market and Harford County Homes
Both counties are covered by the same state law. Neither had a big ADU headline this month, so the takeaway is simple: if you're buying a single-family home here, ask the county what's allowed on that lot before you assume anything. Anne Arundel homes still sold in about 15 days in September; Harford's pending sales were down 21%.
What It Means for Buyers
An ADU can turn a house into a house plus income, or a place for a parent, or a first apartment for a 24-year-old who is not moving out any time soon. But run the numbers first. At today's 7.40% average rate (Freddie Mac), borrowing $175,000 for an attached unit costs about $1,212 a month in principal and interest. Borrowing $300,000 for a detached cottage costs about $2,077. A year ago, at 6.27%, those were $1,080 and $1,851. If the rent you expect doesn't clear that payment plus taxes, insurance and upkeep, it's a hobby, not an investment. Start with my guide to buying a house.
What It Means for Sellers
If you already have a legal, licensed ADU, say so loudly in your listing and have the paperwork ready. If it's an "unofficial" basement apartment, be careful how you market it, because buyers and their lenders will ask. Before you list, go through my 4 questions to ask before selling, and get a real number on what your home is worth.
Dan's Take
This is my interpretation, not news. Both sides are partly right. Elrich is right that investors could buy houses with ADUs. The sponsors are right that the owner-occupancy rule scares off people who might move someday. But the chart that matters most is the second one: when a backyard cottage costs $300,000 and money costs 7.4%, waiving a few thousand dollars in fees won't unleash a building boom either way. Financing is the real bottleneck. Facts over feelings. Math over emotion.
Final Takeaway
One action item: if you own a single-family home in Montgomery County, watch the Oct. 26 committee session, then price out an ADU on your lot with real quotes before you form an opinion. The answer is in the spreadsheet, not the press release.
Frequently Asked Questions
Can I build an ADU in Maryland?
State law (HB 1466) required every Maryland county and city with zoning power to allow ADUs on single-family detached lots by Oct. 1, 2026. Each jurisdiction still sets its own size, setback, permit and utility rules, so check with your county.
Do I have to live on the property to rent out an ADU in Montgomery County?
Under current law, yes: either the main house or the ADU must be your primary residence to get a rental license. Bill 41-26 would remove that requirement, but it hasn't passed, and the County Executive has said he'd veto it.
Does an ADU add value to my home?
A legal, licensed unit can make a home more attractive to buyers who want rental income or room for family. But a detached unit can cost around $300,000 to build in Montgomery County, so the value has to be weighed against the cost and the financing.
Thinking about buying a home with an ADU, or selling one? Let's run your numbers together.
Dan Wheeler | Keller Williams Capital Properties
Contact Dan · What's My Home Worth? · Schedule a Call · (301) 806-3179
Sources: Montgomery County Council (Sept. 16, 2026); The Baltimore Banner (Oct. 17, 2026); Montgomery Planning ADU fee memo (Sept. 1, 2026); Maryland Department of Planning; Southern Maryland Chronicle (Oct. 9, 2026); Freddie Mac PMMS (Oct. 15, 2026); Maryland REALTORS and Bright MLS September 2026 data. Payment figures are illustrative principal and interest only, not loan quotes. This post is for general information and is not legal, tax or financial advice.
