Facts about Accessory Dwelling Units (ADUs)

Affordable, Age-Friendly, Low-Impact Housing

On February 9, 2021 Mayor Driscoll filed an affordable accessory dwelling unit (ADU) Ordinance for the City Council to consider. The full text of the proposed ordinance can be found here. Below are answers to frequently asked questions about the proposed affordable ADU ordinance.

At the bottom of this page there is a link to the presentation given at the March 30, 2021 joint public hearing of the Salem City Council and Salem Planning Board regarding the proposed Ordinance. A recording of the hearing can be found by clicking here.


What is an accessory dwelling unit?

An accessory dwelling unit is an independent residential living area that is on the same property as a larger, primary dwelling. Accessory dwelling units go by many names, including but not limited to: “in-law suite” “second unit” “granny flat” “basement apartment” “garage apartment.” You can find out more about ADUs at this state website or this website from the AARP.


How is the accessory dwelling unit affordable?

The proposed ordinance prohibits accessory dwelling units from be rented for more than 70 percent of the fair market rent limit for Salem, based on bedroom size, as determined by the United States Department of Housing and Urban Development (HUD). The fiscal year 2021 fair market rent and the rent maximum is shown in the table below.



One bedroom

Two Bedroom

Fiscal Year 2021 Fair Market Rent (FMR) Limit




70% of the Fair Market Rent 





Where can I find what the fair market rent is for Salem? How often is the fair market rent adjusted?

HUD adjusts the fair market rent annually. The current fair market rents can be found here: https://www.huduser.gov/portal/datasets/fmr.html.


How does fair market rent compare to area median income?

The Area Median Income (AMI) is the midpoint of a region’s income distribution – half of families in a region earn more than the median and half earn less than the median. Salem is within the Boston-Cambridge-Quincy region. The 2020 median income for this region is $119,000. The proposed rental limit is similar to what the rental maximum would be for households who earn 60% of the area median income, as shown in the table below.



One bedroom

Two Bedroom

60% of the Area Median Income




70% of the Fair Market Rent 





What is the tax exemption and why is it proposed?

The tax exemption is a modest reduction of the annual property taxes. The tax reduction is based on valuing the affordable accessory dwelling unit as a bedroom rather than an accessory unit. To receive the tax exemption, homeowners will need to apply for it on an annual basis.


Why is the tax exemption proposed?

The tax exemption is proposed because the rent control law prohibits requiring rent to be set below fair market rent unless the landlord is able to be subsidized in some way. The tax exemption is an incentive that would subsidize the landlord and thus enable the ordinance to require a rental maximum.


Why is the tax exemption not included in the ordinance?

The tax exemption requires a separate process from the ordinance. For a tax exemption to become adopted it must be approved by the City Council and it must receive approval from the State legislature. The City has recently gone through this process to allow for a tax exemption for qualifying seniors, which was passed by the Legislature in December of 2020. Creating tax exemptions for affordable housing has been done in other communities, including Lincoln, Wellfleet and Provincetown. The tax exemption measure was filed with the City Council in conjunction with the ADU ordinance, and can be found here.


What zones are an ADU allowed in?

The proposed ordinance would allow ADUs in the RC, R1, R2, R3 and the NRCC zoning districts.


Where on a lot is an ADU allowed?

There are a few options for where an ADU can be created:

  1. Within the primary home (e.g., a basement)
  2. Attached to the primary home (e.g., an addition to the home)
  3. In an existing detached accessory building (e.g., a garage).


How is an existing detached accessory building defined?

The detached building is considered existing if it was built with a permit before the adoption of the amended ADU.


How tall can a detached ADU be?

An ADU in a detached structure cannot exceed 18 feet in height.


How many ADUs are allowed on a lot?

Each lot is limited to one ADU.

Does an ADU have size limitations?

Yes. The ADU cannot exceed 900 square feet and per health code requirements must be at minimum 350 square feet.


How many bedrooms can the ADU have?

The ADU cannot have more than 2 bedrooms.


Is a parking space required for the ADU?

If the ADU is half a mile or less from the MBTA train station or an MBTA bus stop, measured with a straight line, it does not require a parking space. A map that shows the half mile distance from the MBTA bus stops and train station can be found here. If the ADU is more than half a mile from the MBTA train station or bus stop, it requires one off street parking space. The parking required for the principal house cannot be counted towards the ADU’s parking requirement.


Can the ADU be rented?

Yes. However, short term rentals are prohibited. A measure to prohibit the use of ADUs for short term rental was filed with the City Council in conjunction with the ADU ordinance, and can be found here. Also, the owner must live on the property. The owner could live in the primary home and rent the ADU, or the owner could live in the ADU and rent the primary home. Either are allowable.


Could the ADU be turned into a condominium and be sold separate from the primary home?

No. The ADU can never be sold separately from the primary home. Also, utilities for the ADU and the primary home are required to be on a single service (electric, gas, water and sewer).


What kind of permit is required to build an ADU?

That depends on where the ADU is located on the lot and whether the structure is in compliance with the principal dwelling unit’s dimensional standards. Here is a breakdown of each alternative:

adu chart