The passage of a sweeping state housing law in 2022 was intended to standardize and encourage the construction of more accessory dwelling units, or ADUs, throughout Maine. 

Some viewed these smaller units as a potential solution to the state’s housing crisis, a gentler increase in density marketed with a cheaper price tag.  

But there has yet to be a proliferation of ADUs like some expected or hoped, in part because of a wide disparity in how communities are leaning in, or leaning away, from the trend.

Some cities and towns have actively incentivized construction with policy changes and targeted programs, with mixed results. In many more towns, the discussion hasn’t reached them.

WHO IS INCENTIVIZING

The Midcoast Council of Government (MCOG) saw ADUs as an important tool to address the housing shortage, and with funding from the state, it formed one of the most proactive incentive programs in the state. 

Partnering with Bangor Savings Bank and three municipalities — Rockland, Bath and Brunswick — MCOG launched the program in the fall of 2025. 

The three communities were chosen because they were more urban and had the infrastructure necessary to build ADUs and increase density, but the goal of the program is to share results with the state and hopefully expand it statewide, Alexis Mann, director of housing policy for MCOG said. 

Interested residents are eligible for a $10,000 incentive grant through a home equity loan or construction loan.

There was funding for 10 units and by March, five people had enrolled. Not huge numbers but Mann considers that a success.

City planner Elias Kann said Rockland has been out front on ADUs and other housing solutions, even before the passage of LD 2003. It has eliminated density restrictions and launched outreach efforts to educate residents.

Now, Kann said, “the distinction between an ADU and an additional unit in terms of regulation really starts to blur or even disappear.”

Rockland, like many Maine communities, is aging, and younger people are staying at home far longer. Some are considering ADUs as a more affordable way for the parents or children of property owners to move in with them, Kann said. 

A big reason for the interest in ADUs by municipalities is because they provide a soft increase to density, he said, which is more palatable to communities that have traditionally restricted density with single-family zoning. 

“ADUs are really just the first step in the direction of encouraging housing growth,” Kann said.

Portland has also embraced ADUs during the past five years, making its zoning regulations more flexible to spur development. 

“We think this is a cool idea,” said Matt Grooms, the deputy planning director. 

Historically, it was onerous to build an ADU in Portland, he said. There were strict rules about where they could be located, and the city predominately favored units in existing structures. 

But the city recognized a need for more housing a few years ago, and ADUs seemed like a reasonable tool, he said. 

When the city updated its land use code in 2020, it also made it easier to pursue an ADU. Interested parties no longer have to go through the Zoning Board of Appeals process. They just need a building permit.  

Qualifying lots could have up to two ADUs, and the city made it easier for these accessory units to hook up to sewage lines, Grooms said.

Between 2010 and 2019, there were an average of less than three ADU permits issued per year. After the land use regulations and zoning changed, the number of permits per year climbed into the double digits.

The city further reduced barriers in 2024 with another code update that removed the requirement that one of the units on the lot had to be owner-occupied, and it created more flexibility around dimensions.

“We’ve been trying to make it as simple and straightforward as possible,” Grooms said. 

A non-owner occupied ADU can now be used as a short-term rental for up to five years after the building is completed. It then has to be placed on the waitlist or registered as a long-term rental.

After these changes, the number of ADU permits doubled, and in 2025, there were 40 approvals, more of than half of which were associated with one development, Stroudwater Commons.  

“It’s been a fairly dramatic shift,” Grooms said. 

SHIFTING EXPECTATIONS

Not all cities have seen a boom in ADU construction. 

Bangor, the state’s 3rd biggest city, has issued only 15 permits since it put in an allowance for ADUs in 2019. 

Anne Krieg, the director of community and economic development, said she’s heard from residents that high construction costs and the time it takes to get a return on investment makes them out of reach.

There’s a greater market, she said, for tiny home parks, which have higher density allowances, because individual property owners can make more money with more units. One was just completed, another was just permitted and there’s been interest from two other property owners, Krieg said. 

The city is still trying to incentivize ADUs to diversify housing stock. It updated policy to allow these units to be located on multifamily lots and function as short-term rentals. 

A couple months ago, it also included two pre-approved designs, a one-story and two-story option, on the city website, with the hopes of reducing the cost to prepare plans. Each design includes detailed floor plans and renderings and provides specific plans for the roofing, framing and position of doors and windows.

But as of March, no one had filed a permit for these designs, Krieg said.  

Municipal leaders and staff are looking into other ways to spur affordable housing, contemplating creating a fund in this year’s budget to help cover some of the construction costs for an additional unit. 

Even with grants and funding, however, ADU development is not simple.

Auburn had one of the first programs meant to help residents add ADUs to their properties in Maine, but the effort was unsuccessful due to the complexity of the state and federal funding involved, according to Glen Holmes, the city’s director of business and community development.

The city received funding in 2022 from the Maine State Housing Authority and the American Rescue Plan Act (ARPA) with the goal of building 15 ADUs. The program would have provided up to $30,000 per unit for qualified residents, Holmes said.

There was some interest in the program, but because it included federal funding, there were too many hoops for residents to jump through, Holmes said.

“It’s not as easy as it seems, because like anything, it’s going to take time,” he said. “Overcoming some things like insurance and mortgages … that have been ingrained in our society for decades, it takes time.”

More recently, Holmes has seen other communities make progress with similar programs, and the city is interested in participating in future programs for ADU development as it continues to find ways to address the housing crisis. 

AN ONGOING CONVERSATION

Other municipalities have struggled to convert interest into construction. 

Last fall, the state spoke with organizations and communities that also used federal rescue act funding for ADU programs, and many municipalities said the programs backfired and failed, said Mann with Midcoast Council of Governments. The construction process became too expensive and complicated, and residents weren’t able to complete the projects. 

“What we heard across the board was that it really turned into a bit of a nightmare on all sides,” Mann said.

A lot of towns have not directly incentivized the construction of ADUs, and municipalities are experiencing mixed results. 

In Waterville, for example, code enforcement director Dan Bradstreet said there hasn’t been a lot of discussion or debate. There are only three ADU permits or certificates of occupancy in the entire city, and before 2023, there were none.

Municipal staff in Saco held information sessions about changing requirements and put together a guide in partnership with Age Friendly Saco, but it didn’t actively promote or incentivize construction. The number of permits has stayed about the same throughout the past few years. 

Scarborough has seen a steady number of ADUs built since 2003, thanks to a straightforward policy, planning director Autumn Speer said. There are around 200 ADUs in Scarborough, with 10 to 12 new ones each year. 

The town doesn’t offer any incentives, but Speer said more and more people have expressed interest, even as others worry about growth. A few months ago, Scarborough created a brochure and a page on the town’s website to help answer the increasing number of questions they’ve received. 

Necessity is driving that increase, she said.