Accessory dwelling unit. ADU for short. If you are looking at property in Bloomington or Bedford, Indiana and that term keeps coming up, here is what it means and what your options are. An ADU is a second, smaller home on the same lot as your main house: a converted garage, a finished basement apartment, or a small standalone cottage in the backyard.

Thinking about adding one to a property you already own, or buying a property specifically to build one? Call or text me at (812) 360-3863, or visit LesaMillerRealEstate.com. I can help you figure out whether a specific lot supports it.

Can You Build an ADU in Bloomington, Indiana?

Yes. Bloomington has allowed ADUs by right in most residential zoning districts since 2017, meaning a property owner generally does not need a special hearing to build one under the city's Unified Development Ordinance. The city expanded flexibility and simplified the review process in 2020, and in 2021 the city council removed the requirement to notify neighbors within 300 feet before construction.

As of October 2023, the city had approved 30 ADUs since the program started in 2017. Bloomington has also contracted with eight local architects to create 12 pre-approved ADU designs, and it runs an interactive website that helps property owners check eligibility, estimate fees, and connect with a designer.

What About Bedford and Lawrence County?

Bedford and Lawrence County do not have a published citywide ADU ordinance the way Bloomington does. That does not mean an ADU is automatically off the table on a specific property. It means the local zoning and building department is your first call, not your last one, before you get attached to a floor plan.

This is one more piece of a pattern worth knowing if you are comparing the two markets. Bedford already stands out as a hidden option for families relocating to south-central Indiana, partly because it gives buyers room to make decisions like this without Bloomington-level competition for every lot.

Why Buyers Ask Me About ADUs

The buyers who ask me about ADUs usually fall into three groups: people planning ahead for an aging parent, people with an adult child who needs a place close by but not under the same roof, and people who want a rental unit to help cover the mortgage. All three reasons hold up. The mistake I see is skipping the zoning question and going straight to floor plans and contractor quotes.

That is especially true in a designated conservation or historic district, like Bloomington's Cottage Grove conservation district, where extra rules can layer on top of standard zoning. It is also worth thinking through before you commit to a specific property type in the first place. If you are still weighing a condo against a house, especially for a college-adjacent purchase, buyers comparing a condo or a house near IU face a related version of this same question: what does this lot let you do.

ADU Rules: Bloomington vs. Bedford and Lawrence County

If you are weighing a property because of its ADU potential, in Bloomington or Bedford, send me the address and I will help you figure out what is possible before you make an offer. Call or text (812) 360-3863, or visit LesaMillerRealEstate.com.

Frequently Asked Questions

What is an ADU?

ADU stands for accessory dwelling unit, a smaller second home on the same lot as your main house. It can be attached, like a converted garage or basement apartment, or detached, like a standalone backyard cottage.

Do I need a permit to build an ADU in Bloomington?

Yes. Even though ADUs are allowed by right in most residential zoning districts, you still need to go through the standard building permit process with the city.

Does Bedford, Indiana allow ADUs?

Bedford and Lawrence County have not published a citywide ADU ordinance the way Bloomington has. Check directly with the local building department before you plan around one.

Can an ADU help with rental income or housing a family member?

It can. Buyers ask me about ADUs most often for aging parents, adult children, or rental income. Zoning is the first conversation to have, not the last.