‘Next Gen’ Townhomes Add ADU-Style Suites for Multigenerational Living

Homebuilders are adjusting to the growing needs of families. Whether its aging parents or property owners looking to make extra money, it's about convenience.

The latest Profile of Home Buyers and Sellers report by the National Association of Realtors® reveals that multigenerational dwellings made up 17% of home purchases last year, representing an all-time high.

Last year, more than a third of homebuyers cited "cost savings" as the main reason for buying a multigenerational home, up from 15% in 2015, according to the NAR report.

"There has been a greater interest in multigenerational living over the last few years as people are living longer and housing has gotten more expensive," says Cara Ameer, real estate broker at Coldwell Banker Vanguard Realty in Florida.

"Combining resources always helps with purchasing power and affords more house and space—so buyers really respond enthusiastically to properties that have ADUs or in-law suites."

Homebuilders are taking note of this trend, and building townhomes that fill this need.

"Because there isn't a lot of current availability for multigenerational housing in the resale market, new construction townhomes that have those layouts are the most popular way people purchase homes for themselves and their parents," says real estate broker Samantha Sousa of Sousa Valley Real Estate in Tulare, CA.

 "There's a huge need in my market for these mini suites or ADUs, and a few builders are jumping on that style."

'Next Gen' suite

Lennar builds townhomes starting at $417,990 with a "Next Gen" ADU-like suite, which is an attached private suite with its own separate entrance, living room, kitchen, bedroom, and bathroom.

Next Gen offers unique floor plans that accommodate the diverse needs of families without sacrificing comfort or privacy.

According to Lennar, families across the nation have numerous ways that they use the Next Gen Suite—including accommodating aging parents, adult children returning from college, and special-needs family members.

"We originally developed these plans to be flexible for multigenerational families, but our homeowners have used them for everything from home offices to yoga studios to homeschooling classrooms," Joy Broddle, Lennar Las Vegas division president, tells Realtor.com®. "The uses go on and on. These homes provide privacy and independence while also promoting togetherness."

The Next Gen floor plan is known as "a home within a home."

"Because of the demand and success of the layout, we worked to develop a Next Gen home in a townhome floor plan so that we can offer this across all price points and locations," says Broddle.

Ameer says her clients have responded favorably to the Next Gen layout.

"It allows everyone to live comfortably under one roof, yet have their own space," she says.

Townhome in Washington, DC

A newly renovated townhome in Washington, DC, is on the market for $1,699,000 and has a built-in ADU that the listing says can cut your mortgage payments in half.

"The lower level is a legal rental unit with a Certificate of Occupancy and front and back entrances," the listing touts. "It features a full kitchen, living and dining space, a bedroom, and a luxe bath. Perfect for a high-end rental, in-law suite, or guest space. Incredible opportunity for passive income!"

The property is ideal for house-hacking—when you rent out one or more parts of your home to cover the cost of your mortgage, or even make a profit.

“I've had many clients this year that want to live on their own, but the only way they can do that is if they find somebody to rent out the basement in the home," real estate agent Sherry Lynn Westhues of ReeceNichols in Kansas City, MO. "They have to rent out a portion of the home in order to afford it, but they do generally seem to be happy doing it.”

According to Seamus Nally, CEO of TurboTenant, townhomes with ADUs on the lower level are more common in higher-populated metropolitan areas such as Washington, DC.

"These are the kinds of places where not only is the population high, but the lack of space for yards or new housing is significantly limited," he says. "Lower-level ADUs in townhomes thus become some of the best or only options for ADUs due to those logistics."

Big Mouth House in Seattle

This month, a townhome at the Big Mouth House in Seattle with a lower-level accessory dwelling unit sold for $1,125,000.

"The lower level offers built-in bike storage plus a fully equipped ADU with kitchenette and washer/dryer," the listing said.

Although the ADU connects to the interior of the townhome, it also features a dedicated entrance. That makes it ideal for use as a guest room, workspace, bonus family area, or a potential rental unit.

"The ADU on the lower level certainly felt like a value add for interested buyers," says the listing agent, Lauren Essl at Compass in Seattle. "A fully independent ADU with its own separate entrance within a townhome is a unique feature I have not seen frequently in our city. It was such a smart, intentional detail by the architects."

This townhome has been featured in publications like Dwell and Arch Daily, and was the winner of the 2019 AIA Seattle Award of Honor.

"The potential for rental income or multigenerational living gives the homeowner so many options for their property," says Essl. "I'd love to see more townhomes with this feature."