Durham Launches Pilot Program to Build Affordable Accessory Dwelling Units

The city is offering homeowners loans to add small rental units on their properties to boost housing affordability.

Apr. 8, 2026 at 9:19pm

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A brightly colored, high-contrast silkscreen print of a small, modern accessory dwelling unit (ADU) repeated in a tight grid pattern, conceptually representing Durham's efforts to address housing affordability through creative solutions.Durham's innovative ADU pilot program aims to create more affordable housing options by empowering homeowners to add small rental units to their properties.Durham Today

The city of Durham, North Carolina is launching a new pilot program that will allow homeowners to build accessory dwelling units (ADUs), also known as tiny homes, on their single-family properties. Under the program, homeowners can receive loans of up to $80,000 at a 2% fixed interest rate for 30 years to construct the ADUs, which they must then rent to tenants earning no more than 80% of the area median income. The city is committing $1.75 million toward the construction of approximately 20 ADUs, with the goal of increasing the city's affordable housing stock.

Why it matters

Durham has seen a significant increase in home prices and housing costs in recent years, driven by population growth and an influx of higher-income residents. This has put pressure on existing residents and made it difficult for many to afford housing in the city. The ADU pilot program is one of the city's strategies to address this affordability crisis and provide more options for lower-income residents.

The details

Under the ADU pilot program, homeowners can apply for loans of up to $80,000 at a 2% fixed interest rate for 30 years to build small rental units on their single-family properties. In exchange, they must agree to lease the units to tenants earning no more than 80% of the area median income for the duration of the loan. The units are expected to be around 300 square feet in size. Tenants will be selected through a tiered lottery system that prioritizes lower-income applicants and those who have lived in Durham for at least 10 years.

  • The city is committing $1.75 million toward the construction of approximately 20 ADUs, with completion expected within the next two years.
  • The ADU pilot program is part of the city's broader "Forever, Home Durham" affordable housing initiative, which is backed by a $95 million bond referendum and an additional $65 million in existing city and federal funds.

The players

Samuel Gunter

Executive Director of the North Carolina Housing Coalition, who explains that the influx of higher-income residents in Durham has put significant cost pressure on existing residents.

Topher Thomas

Founder of Coram Houses, which is partnering with the city on the ADU pilot program. He notes that the program is "just one small piece of the puzzle" in addressing affordable housing challenges.

Sarah Viñas

Housing and Neighborhood Services Director with the City of Durham, who describes the ADU program as a "creative solution to deliver small scale affordable housing and bring a mix into neighborhoods."

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What they’re saying

“$80,000 is typically not enough to build a house, so we have designed a model that we hope we can build for $80,000 that's 300 square feet.”

— Topher Thomas, Founder, Coram Houses

“It's a creative solution to deliver small scale affordable housing and bring a mix into neighborhoods that may be include housing that is at a higher price point.”

— Sarah Viñas, Housing and Neighborhood Services Director, City of Durham

“Everyone is expecting a silver bullet to come along. If we do this one thing, that thing is going to fix all of our problems. What I would say on the ADU front is that absolutely is going to be a piece of this.”

— Samuel Gunter, Executive Director, North Carolina Housing Coalition

What’s next

The city is currently accepting applications from homeowners interested in participating in the ADU pilot program. Tenants will be selected through a lottery system, with applications also now open.

The takeaway

The ADU pilot program is a creative and multi-faceted approach by the city of Durham to address its affordable housing crisis. By providing homeowners with financial incentives to add small rental units, the city aims to increase the overall supply of affordable housing options for lower-income residents. While not a silver bullet, the program is one piece of Durham's broader strategy to make housing more accessible and equitable for all.