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Happy Sunday.

A growing number of American homeowners are now property developers without buying any land: the law changed what they may build in their own backyard.

Inside today: the customer that change created, what they spend, and three businesses that sit before and around the build rather than inside it.

Look at this for ten seconds before you read on.

Google Trends for "ADU", United States, weekly, over the five years to 26 September 2026: searches have roughly doubled. The median week over the first twelve months of the window scored 37, the median over the last twelve months 80. Interest stayed above 90 from mid-May, reached 100 in July 2026 and sits at 77 now. This is not a spike. It is a steady climb that follows the law, state by state.

An ADU, or accessory dwelling unit, is a small second home on the same lot as an existing house: a backyard cottage, a converted garage or an apartment over it, with its own kitchen and entrance. Americans also call them granny flats or casitas.

What changed is permission. California began removing barriers with SB 1069 and AB 2299, signed in 2016 and in effect from 1 January 2017; between 2016 and 2022, according to California YIMBY, 83,865 ADUs were permitted, and by 2022 nearly one in five new homes produced in the state was an ADU. Washington's HB 1337, passed in 2023, requires cities and counties to allow two ADUs on every lot zoned for a single-family home inside urban growth areas, caps their impact fees at half of the main home's, and bans parking requirements within half a mile of a major transit stop.

Two years ago the rules were spreading, but the process was slow and most projects were custom. Since then, more states have followed, pre-approved plan libraries such as Los Angeles' Standard Plan Program have cut design time, and Washington's HB 1345, in force since June 2026, lets counties allow one detached ADU on rural parcels outside urban growth areas. The customer now has permission, a standard design and a reason to build. What they lack, as far as I can tell, is experience.

Before: a homeowner whose backyard was a backyard.

Now: a homeowner holding a buildable lot, a legal right to build and an economic reason to, with no idea how to run a construction project. What they already spend, some examples. Abodu sells prefab backyard homes in California at fixed all-in prices from $298,800 for a studio to $498,800 for its largest model, permits included. San Jose's own building permit fees for an ADU, from 10 August 2026, are $3,291 up to 750 square feet and $5,103 from 751 to 1,200. In Los Angeles, a builder's guide puts a garage conversion at $120,000 to $150,000 and a detached unit at $150,000 to $400,000 (Greatbuildz, July 2026). It is a one-off purchase.

A backyard is no longer a backyard. For many owners it is the cheapest developable land they will ever have, and it is already theirs.

For building, no. Prefab companies with fixed prices and builders with years of projects already own that layer in California.

For everything before the build, mostly yes. The laws are still widening, Washington's cities are only now becoming bound by HB 1337, and in most cities nobody has written down how to get an ADU through that department. The one thing to watch: as more cities publish standard plans, the permit step gets easier, and the fee for doing it shrinks with it. Search interest has also cooled from its July peak, though it still sits far above where it was five years ago.

1. LotCheck. Customer: the curious homeowner who does not yet know if their lot qualifies. Problem: finding out means paying an architect before knowing there is a project. Solution: enter an address and get a feasibility report: allowed or not, buildable footprint, cost range, likely rent. Free to the homeowner, paid for by referrals to builders. Why one person can start it: states and many cities publish their ADU rules, so the report can be built city by city from a desk before any software exists. First step: produce ten reports by hand for one city and see how many owners ask for the next step.

2. PermitPath. Customer: homeowners and small builders with a design and no permit. Problem: approval is the step that stalls, and each month of delay costs rent and financing. Solution: done-for-you permit management, from application to permit in hand. Why one person can start it: it needs knowledge of one building department, not capital, and the method repeats: a playbook per city built from that city's published checklist, fee schedule and standard plans. Much of it is online filing. First step: shadow or interview two local expediters and map one department's review process.

3. Casita List. Customer: the homeowner choosing a builder for the first time. Problem: a first-timer cannot tell a competent builder from a good website. Solution: a small, vetted list of ADU builders in one metro, with completed projects and real prices, paid by commission on closed projects. Why one person can start it: ten carefully vetted builders are enough to begin. First step: visit five completed ADUs in one city and interview their owners.

If you're a paid subscriber, on Tuesday you'll get which layers pay and which are traps, PermitPath worked through with hours, and the thing that could make it smaller than it looks.

Business Tools I Use

Google Trends. Where every curve in this newsletter starts. Free.

Ahrefs. Search volumes and competition behind the numbers I quote.

Beehiiv. The platform this newsletter runs on.

Gumroad. Where I sell my digital products.

Hostinger. Hosting for the blog.

Ian

Every exploding graph creates an economy. Our job is to find it before everyone else does.