Have you looked at your East Side backyard and wondered if it could do more for you? You are not alone. Many South River City and East Austin homeowners are adding small, well-designed homes on their lots to create flexibility, family space, or steady income. In this guide, you will learn what counts as an accessory dwelling unit, what matters on a typical East Side lot, the rules to verify with the City of Austin, and a practical checklist to start with confidence. Let’s dive in.
What an ADU is
An accessory dwelling unit is a secondary home on the same lot as your main house. It has its own kitchen and bathroom and can stand alone or connect to the primary structure. In East Austin you will often see:
- Detached ADUs, like a backyard cottage or carriage house
- Attached ADUs, such as an addition with a separate entrance
- Garage conversions that become independent living spaces
- Smaller “junior” or efficiency units inside the existing footprint
People use ADUs in three common ways. Some rent them out to a long-term tenant for income. Others use them for multi-generational living, keeping family close with privacy. Many also use them as a studio, guest suite, or home office when not rented.
Why ADUs fit East Austin
East Austin and Greater South River City have many small lots with rear alleys. That layout can make ADUs easier to place and access. A cottage facing the alley can have its own entry and parking, which helps you protect your front yard and daily routine.
Alley access can also simplify utility routing in some cases and support a more private living arrangement for you and your residents. Be aware that some alleys are narrow or carry utility easements that affect placement. Early due diligence will save time.
Site and lot factors to check first
Before looking at finishes or floor plans, focus on the land itself. The physical realities of your lot will drive feasibility and cost.
Lot layout and alleys
Small or irregular lots limit where you can place an ADU while meeting setbacks. An alley can be a major advantage because it may allow a separate driveway and entry without cutting through the front yard. If the alley is narrow, has access issues, or includes an easement, you may need to adjust your design or approach.
Lot size, shape, and coverage
The City controls how much of the lot you can cover with structures and paving. If you are already close to the limit, you might need creative solutions like permeable paving or a smaller footprint. Irregular shapes or grade changes can add retaining walls or drainage measures.
Utilities and meters
- Water and sewer: You may share your existing service or install a new meter. Each route has different fees and permitting steps. The location of sewer mains matters. A main in the alley can simplify a connection. Long runs can add cost.
- Electric: Separate metering can help with tenant billing but depends on service capacity and equipment placement. Austin Energy will advise on what is allowed at your site.
- Gas: If you want gas service, confirm availability and routing.
- Stormwater: New roofs and paving add impervious cover. The City may review drainage and require mitigation like on-site detention or permeable surfaces.
Contact Austin Water and Austin Energy early. Verifying capacity, meter options, and any required easements up front will keep your timeline on track.
Trees and environmental overlays
Mature trees on the East Side are often protected. Design around them whenever possible. Removing a protected or heritage tree can trigger mitigation or delays. If your property lies within a watershed or other environmental overlay, expect additional limits on site design and coverage.
Rules to verify in Austin
Austin regulates ADUs through its Land Development Code and related guidance. Requirements change over time. Confirm all standards with City of Austin Development Services before you design or build.
Zoning and where ADUs are allowed
ADUs are allowed in many single-family zones. Historic districts, neighborhood conservation areas, or specific overlays can change the rules. Your parcel’s zoning sets the baseline for what is possible.
Setbacks and placement
ADUs must respect front, side, and rear setbacks. Detached cottages usually bump up against side and rear limits first. Corner lots or properties within historic overlays may have unique requirements. Alley-facing garages or driveways may be treated differently than front-facing ones.
Size and unit types
The City limits ADU size and height, and sometimes ties limits to lot size or the main house. Detached units, attached units, and junior units often have different caps. Do not rely on general rules. Verify the current numeric standards for your parcel.
Impervious cover and site coverage
Roofs, driveways, and walkways count toward impervious cover. If you are near the limit today, plan for permeable paving, smaller footprints, or landscape changes. The City may require drainage strategies to handle added runoff.
Parking requirements
Some ADU policies reduce or waive parking, especially when alley access exists or the lot sits in an infill area. Requirements can change with zoning, use, and location. On narrow lots or in historic areas, alternatives or variances may apply. Verify with Development Services.
Historic and neighborhood overlays
Historic districts or properties with protected status require review. Design, materials, height, and massing may face stricter standards. Engage with Historic Preservation staff early if your parcel is affected.
Short-term rentals and occupancy
Austin’s short-term rental rules are specific and have evolved. Many single-family areas limit STRs or require registration. An ADU used for long-term rental is treated differently than an STR. Confirm what is allowed for your address before you plan on short-term rental income.
How homeowners use ADUs
An ADU is a flexible tool. Clarify your primary goal up front, since it influences design and approvals.
Multi-generational living
An ADU can keep loved ones close while maintaining independence. Consider a single-level plan, wider doors, and a step-free entry for aging in place. Separate entrances and some acoustic separation help everyone feel at ease.
Long-term rental income
A long-term lease can create steady income to offset your mortgage or taxes. Decide whether you want separate meters for utilities. Plan for a proper lease, maintenance, and insurance that reflects landlord use. Confirm any local rental registration requirements.
Short-term rental considerations
If you are thinking about a short-term rental, verify current rules for your zoning and any overlays. Registration, occupancy, and location limits may apply. Build a plan that works even if STR rules change.
Taxes and appraisal
An ADU is an improvement that the local appraisal district will consider when valuing your property. This can increase your assessed value and property tax bill. Rental income is taxable. Discuss depreciation and deductions with a CPA. ADUs are usually not separate tax parcels unless you pursue a legal subdivision.
Feasibility checklist
Use this list to validate what is possible before you invest in design work.
- Zoning and parcel status
- Confirm that your lot allows an ADU. Identify any overlays or historic designations.
- Setbacks and buildable envelope
- Map the buildable area after front, side, and rear setbacks.
- Impervious cover capacity
- Calculate current impervious cover and remaining room. Consider permeable options.
- Alley access and easements
- Measure alley width and condition. Identify any utility easements or vacations.
- Utilities and meter strategy
- Ask Austin Water about water and sewer capacity and meter options. Confirm electric service and potential meter placement with Austin Energy. Check gas availability.
- Trees and landscape
- Note protected or heritage trees that may dictate the building footprint.
- Parking and access
- Verify parking obligations or exemptions. Plan how residents will access and park.
- Historic or neighborhood approvals
- If applicable, outline the required review process and submittals.
- Use intent and regulatory path
- Long-term rental, multi-generational, or STR. Document what is allowed for each.
- Budget and financing
- Build a rough budget including construction, permitting, and utility extensions. Note any variance or mitigation costs.
- Taxes and insurance
- Estimate property tax impact and adjust insurance for rental use if needed.
Recommended next steps
- Verify zoning and overlays using City resources and the Land Development Code.
- Contact Development Services or request a pre-application meeting for parcel-specific guidance.
- Coordinate with Austin Water and Austin Energy to confirm service capacity, meter options, and any easements or fees.
- If you are in a historic or conservation area, speak with Historic Preservation staff about design and review steps.
- Engage an architect or designer experienced with East Austin ADUs and order a site survey.
- Walk the site with a contractor to flag grading, foundation, and drainage items and to refine costs.
- Evaluate financing options such as a construction loan or a cash-out refinance with a lender familiar with ADUs.
- If you plan to rent, consult a CPA about tax planning and consider a property manager.
- Submit permits through Development Services and prepare for inspections and utility coordination.
Costs and timelines, realistically
ADU costs and schedules vary widely based on site constraints, utility needs, design, and materials. Historic districts, tree protection, and drainage work can add time. The most reliable way to set expectations is to pair a site survey with a concept plan and get preliminary contractor pricing. Build in time for permitting and utility approvals.
How Lander Peerman can help
Adding an ADU is part real estate strategy, part development process. You deserve a guide who understands both. Our team brings a design-first mindset and practical development know-how to help you evaluate highest-and-best use, align scope with zoning and overlays, and connect with architects, builders, and lenders who work in East Austin every day. We also leverage Compass tools to help you prepare, market, and maximize value when it is time to refinance, lease, or sell.
Ready to explore an ADU on your East Side lot? Schedule a private consultation with Lander Peerman to map your options and next steps.
FAQs
What qualifies as an ADU in East Austin?
- An ADU is a secondary home with a kitchen and bath on the same lot as your main house, which can be detached, attached, a garage conversion, or a smaller junior unit.
Are ADUs allowed on my South River City lot?
- Many single-family lots allow ADUs, but zoning, overlays, and historic districts can change the answer, so verify with City of Austin Development Services.
How big can my ADU be in Austin?
- The Land Development Code sets size and height limits that vary by zoning and unit type, which you should confirm for your specific parcel before design.
Do I need separate water and electric meters?
- You can often share or separate services, but capacity, meter placement, and costs depend on Austin Water and Austin Energy review for your address.
Can I use an ADU for Airbnb or short stays?
- Austin’s short-term rental rules are specific and change over time, so confirm the current STR requirements for your zoning and any overlays before planning.
Will an ADU raise my property taxes?
- Yes, an ADU is an improvement that the appraisal district considers when valuing your property, which can increase your assessed value and tax bill.
What if I have protected trees on the lot?
- Protected or heritage trees can limit placement or require mitigation, so plan your footprint around them and check with City staff early.
Do alleys make ADUs easier in East Austin?
- Often yes, since alleys can allow separate access, parking, and utility connections, though alley width and easements can add constraints that you must verify.