This story was originally produced by the Concord Monitor. NHPR is republishing it in partnership with the Granite State News Collaborative.
Marcia Regan was seven months pregnant when she and her husband, John, moved into their home on Woodman Street in 1983. They never left.
Now both retired and in their seventies, the Regans love Concord. They like being a stone’s throw from Concord High School, frequenting the downtown coffee shops and taking their twelve-year-old border collie, Millie, for walks on the trails. They know it’s time to start making plans for the future, but don’t want to leave.
“We knew we were going to get older, and we need a place that would be more compatible with getting older,” John said.
The Regans’ house, built in 1953 and expanded over the years, has multiple sets of steep stairs inside. They started looking at renovations, but there was no easy way to change the layout. They could build an apartment, but under previous city rules, it needed to be attached to the house. Their contractor, Erik Jones, who’d helped them build an addition years ago, wasn’t sure it had the bones for that – and it would be expensive.
Then, this past fall, Jones suggested the idea of a tiny home. State law had changed the rules, and a separate granny flat would now be allowed in Concord. The Regans pivoted.
If they follow through, they hope to construct a relatively large unit, at two bedrooms and around 950 square-feet, that will be built off of their garage and out into much of their backyard. Eventually, one of their two grown children could move in – either to the main house or the flat – getting a foothold in the downtown housing market.
More New Hampshire news:
- NH extends deadline for expired car inspections until April due to ongoing lawsuit
- 'A wrecking ball of chaos.' NH school leaders worry Republican open enrollment bill will upend their budgets
The Regans aren’t the only ones exploring this option.
Heightened interest in secondary dwellings in New Hampshire started well before the new state law. The Southwest Region Planning Commission ran a design challenge in 2024 in an attempt to connect homeowners with architects to envision new dwellings on their property.
Planner Chloe Gross said her organization only planned on a handful of people signing up to be case studies. Instead, they received 75 inquiries. Buzz about in-law units, officially known as accessory dwelling units, was spreading.
“The new law has definitely changed the landscape, for sure,” Gross said. “We’ve been hearing a lot about that from the planning perspective of how this could impact towns, like long-term and short-term development, and what kind of people are going to build these ADUs, and where?”
Other states, from California to Maine and Massachusetts, have recently passed similar laws.
Backyard tiny home construction boomed in California following its legalization, representing 20% of new housing units in 2024, according to state data. In Massachusetts, growth has been more restrained, according to an analysis by the Boston Globe, as a patchwork of local regulations has continued to make design and permitting relatively complicated and expensive – exactly the kind of hoop-jumping New Hampshire’s statewide legalization was designed to reduce.
Permitting, design and construction still takes months, so it’s too early to decisively say that a bloom of granny flats is coming to New Hampshire. The capital region, so far, paints a mixed picture.
The Monitor sent inquiries to every municipality in Merrimack County as well as other central New Hampshire cities about the number of accessory dwelling unit permits issued over the last three years. Eight responded.
Interest and awareness of granny flats as an option is on the rise, and some towns are issuing more permits for in-law units, either attached to a main house or as a tiny home, than they have in years.
The scale of actual growth, so far, is modest, but the new law has helped pave a new lane in the construction industry. Lenders are developing new financing programs and contractors with accessory dwelling unit-specific business models are entering the market.
The Regans are at the nexus of this growing market. They’ve attended seminars put on by Merrimack County Savings Bank about funding. Jones, their contractor, has joined with a friend, designer Braydon Tuscher, to form Granite State ADU, a spinoff of their independent ventures designed to specifically meet the emerging in-law unit demand.
For people looking to put an in-law unit on their property, though, the availability of infrastructure and the cost of building remain fundamental hurdles. In this way, the expansion of these tiny homes in New Hampshire follows a similar trajectory to new housing in the state as a whole. Removing regulatory barriers only goes so far.
Salisbury first allowed granny flats in 2014, though until the new law was passed, those looking to build them still needed a special permit.
“Our little town was ahead of the curve,” said April Rollins, Salisbury town administrator. Conversations about the need for workforce housing were ramping up at the time, she said, and “the writing was on the wall.”
Nevertheless, only two granny flats have been permitted in Salisbury despite a decade since they were legalized, one in 2015 and one in 2025. Both, Rollins said, are for younger adults looking to enter the local workforce and not move away to find a rental.
Infrastructure, like expanding the septic system, and the cost to install it, according to Rollins, were the likeliest reasons why so few in-law units were built, even though the door had been open for so long. Since Salisbury residents have private water and sewer, adding capacity in the town’s rocky soil is a pricey endeavor.
“Septic systems are not easy here,” she said.
Bow was an outlier among the responding towns, seeing a relative boom after it changed its rules in 2024 to allow granny flats.
Only one in-law unit had been permitted in Bow in 2023 and then another in 2024. Last year, following the town’s rule change, eleven of them were given the go-ahead.
Bow changed its rule because, “people were asking,” said Community Development Director Karri Makinen. “There was clearly an interest, so we thought we might relax things.”
Bow might be seeing such a relative boom in granny flats because lot sizes are larger than in more densely populated areas, like parts of Concord, Makinen noted. The public sewer and water network near Bow Junction is more robust than in more rural towns.
“It also could be socioeconomics,” she added. “Construction is not cheap right now. You have to be able to afford to build anything.”
At more than $161,000 per year, the median household income in Bow is roughly double that of Concord.
Lifting local regulations around tiny homes – or any other type of construction – helps streamline the process, but it doesn’t change the fact that building a secondary unit can cost upwards of $100,000 or more.
At Merrimack County Savings Bank, the change in state law led to a new loan program aimed at those looking to build accessory dwelling units.
“We saw that the house bill was at the forefront of things and we thought, ‘what can we do to create a little bit more access for folks?’” said Garry Cornelius, vice president of residential mortgage sales.
The law change, in places where granny flats were already allowed, may be serving as a kind of advertising for tiny homes as an option. But as interest gained groundswell, financing solutions aimed at more traditional home construction weren’t accommodating.
The bank’s ADU Loan Program operates as a second lien construction loan. It’s a commonly used strategy for major home renovations that doesn’t require the homeowner to refinance their original mortgage.
“This topic just kept coming up, coming up, coming up. People were wanting to build ADUs, and the traditional financing vehicle for that has been a first mortgage,” said Jaime Frederes, senior vice president and residential lending officer. Losing a good interest rate in search of a housing solution, for many customers, “it just wasn’t a possibility. It didn’t make sense.”
As the bank spreads the word about this program, Cornelius has noticed how high costs and low availability in the housing market are nudging people towards in-law units.
Cornelius grew up in South Africa, where backyard tiny homes were commonplace. His grandparents lived in a granny flat in his parents’ backyard, he noted. It was just something people did, he said.
The U.S. hasn’t historically leaned on multi-generational living, he said, as ample housing supply and open space made downsizing or upgrading more approachable. The current housing crisis is changing things.
“Our downsizers don’t have anywhere to go, our young professionals don’t have anywhere to go,” Cornelius said. “Someone who’s making a good salary coming out of college, but maybe has student loans, they can’t afford a $5,000 mortgage. Then, for downsizers, there’s nowhere to go that’s cheap enough. They don’t want to get another 30-year mortgage. If they sold their home, they would be probably paying a higher cost than they are right now.”
While relatively expensive, building a granny flat is still a more approachable option, he added, especially if banks create the right financing tools.
Merrimack County Savings Bank is also seeing more clients seeking a granny flat from the get-go as they build their home. These are typically midcareer adults, Cornelius said, anticipating a future need.
As for the Regans, they’re still kicking the tires.
Many details still need to be figured out if they move forward.
“How would we do it, whether we stay in the house and offer ADU to one of the kids, or we go to the ADU and they take the house,” John Regan said. “But if we do this, it’s not to have them take care of us, but it’s really to enhance the property value.”
“I think it’ll work,” Marcia Regan said. “But you don’t know.”
As they both laughed, John quipped, “Could say the same thing about when we got married.”