In a landmark decision for local housing, the Reno City Council adopted an ordinance on October 8, 2025 allowing accessory dwelling units (ADUs) citywide where single-family homes are permitted. The move culminates a policy effort that City Council initiated in 2023 and aligns with Nevada Assembly Bill 396 (AB 396), the statewide directive for large jurisdictions to legalize ADUs.
Quick Definition: What’s an ADU?
An ADU is a smaller, independent home on the same lot as a primary residence—sometimes called a casita, backyard cottage, garage apartment, or in-law suite. See the bill overview for a plain-language summary here.
Why Now? The State Backdrop (AB 396)
- State requirement: AB 396 (Chapter 365, 2025) requires qualifying cities (including Reno) to authorize ADUs via local ordinance. If a city didn’t adopt by January 1, 2026, ADUs would be allowed on any residential parcel “without restriction.” (AB 396 text)
- Process improvements: AB 396 also calls for an expedited review and appeal process for ADU applications. (LegiScan summary)
Key Rules in Reno’s ADU Ordinance
Based on the City’s action and same-day reporting, ADUs in Reno must meet the following baseline standards:
- Size & height: The ADU must be smaller and shorter than the main house. (KRNV/MyNews4 recap)
- Minimum lot size: Allowed on lots of at least 5,000 sq. ft. (KRNV/MyNews4)
- Parking: At least one off-street parking space on the lot is required. (KRNV/MyNews4)
- Where allowed: Ordinance applies in residential zones where single-family homes are permitted. (KOLO (April 25 preview))
- Short-term rentals (STRs): In September, Council removed a proposed 28-day minimum rental term from the ordinance and indicated STR rules would be handled separately. Final adoption on Oct. 8 did not add a 28-day rule back in. (Nevada Current; This Is Reno)
For official forms, timing, and any design or setback specifics as the City publishes them, monitor the City’s update page and meeting highlights here.
Timeline Recap
- 2023: Council initiates the ADU code-change process and public outreach. (City of Reno)
- September 11, 2025: Council votes unanimously to advance the ADU measure, strips a proposed 28-day rental minimum. (Nevada Current)
- October 8, 2025: Final adoption of the ADU ordinance. (City of Reno; KOLO; KRNV/MyNews4)
What This Could Mean for Reno’s Real Estate Market
For Homeowners
- New income paths & flexibility: ADUs create options for long-term rentals or multigenerational living.
- Potential value premium: Even “ADU-ready” lots (≥5,000 sq. ft. with feasible layouts) may attract buyer interest.
- Site/design trade-offs: Height subordination, parking, utilities, and setback compliance can influence feasibility and cost.
For Investors
- Lot selection matters: Parcels just above 5,000 sq. ft. may see increased competition and pricing.
- Value stacking: A permitted second unit can improve cash flow and exit value without multifamily zoning.
- STR uncertainty: With the 28-day minimum removed from this ordinance, watch for a separate City STR policy that could shape ADU rental strategy.
Market-Wide Effects
- Gentle density: Expect incremental supply gains rather than rapid transformation.
- Shifting buyer preferences: Listings that highlight ADU potential may stand out.
- Implementation: Uptake depends on construction costs, permitting timelines, contractor capacity, and rental demand by submarket.
Next Steps for Interested Owners
- Verify your lot size, zoning, and any neighborhood/overlay constraints.
- Consult an architect or design-build firm experienced with small-footprint homes.
- Model project costs vs. expected rent; include utilities, sitework, fees, and contingencies.
- Track City implementation resources and guidance as they’re published (City highlights).