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C. Size of ADUs Many local governments have adopted minimum and maximum sizes forADUs. The Model Local ADU Ordinance recommends eliminating minimum -size limits since the basic requirements for a living space (kitchen, bathroom, living/sleeping space) and the housing market will establish a minimum size. In expensive housing markets the success of micro -apartments of less than 300 square feet and the proliferation of tiny homes on wheels demonstrate that there is demand for very small units. At the other end of the scale, limits on the maximum size prevent the construction ofADUs that could be home for families of three or more persons. An accessory dwelling unit may be any size, provided the proposed unit's total square footage is less than the primary dwelling's and other requirements are satisfied. For situations in which the existing residence is very small, local governments might consider authorizing ADUs up to 800 square feet when the primary dwelling is smaller than that size. Burlington, Vermont, takes a different approach to this issue, it allows accessory dwelling units to be 30% of the gross square footage of the house or 800 square feet, whichever is greater. 36 ■ Introduction to Lot Coverage, Setbacks, Height, Bulk and Floor Area Ratios Lot coverage, setbacks, height and bulk (floor area ratio) limits are adopted primarily to address the appearance (the "built character") of neighborhoods. (There are some fire safety aspects to setbacks.) Cities with steep terrain apply additional or modified requirements that address vertical proximity as well as structural safety. Local governments use a number of methods to regulate the size and location of buildings (residences and other structures) to achieve aesthetic goals and assure a minimum amount of undeveloped land. These methods are limits on the proportion of a lot that is used as a site for permanent structures ("lot coverage"); the setback from the property lines; and height and floor area ratios that establish the maximum square footage of residential structures based on a percentage of the total lot area. These limits are often used in various combinations, sometimes as alternative standards. For example, setbacks alone without a separate lot coverage limit can effectively create a lot coverage maximum. The failure of some ADU ordinances to result in the production of ADUs can be traced back, in part, to these requirements, especially the unintended interaction between those regulations. Before adoption of these requirements forADUs, local governments may benefit from analyzing the combined effect of these regulations on a representative set of lots in each zone. In addition to determining whether the effect is to make it physically impossible to build a detached (or attached) ADU on some lots, the local government should estimate the return on investment on that portion of the lots where ADU construction is allowed. This will provide some idea of the strength of the potential market incentive forADU construction. However, the analysis needs to reflect that the homeowners building ADUs are often considering both a market return and nonmarket returns. For example, assume the desired ADU is intended to meet the needs of an older relative with mobility limitations. A 500-square-foot structure would be small but sufficient. But if the overlapping regulations on lot coverage and setbacks mean the structure would need to have two stories in order to provide 500 square feet of living space, then this kind of structure might generate a good rental return but would not meet the needs of the intended resident. 37 1 HARP - Accessory Dwelling Units: Model State Act and Local Ordinance