Accessory Dwelling Unit (ADU) Rules for Derby, VT

ADU State Law

What can you build in Vermont?

• –Vermont Housing Improvement Program – ADU (VHIP-ADU) Grants up to $50,000 toward creating an ADU in an existing or new structure. Administered by the Department of Housing & Community Development. More info
• –24 V.S.A. § 4412(1)(E)–(F) – Guarantees one by-right ADU.
• –24 V.S.A. § 4303(38)(A)–(B) – Definition of "accessory dwelling unit" (size limit & wastewater clause).
• –24 V.S.A. § 4414(4)(E) – Caps local parking requirements (added by Act 47, 2023).
• –By-right entitlement – Every municipality must permit one ADU on an owner-occupied single-family lot located in a district where residential dwellings are allowed.
• –Structure types – Internal, attached, or detached units are allowed. Conversion of an existing detached non-residential building (e.g., garage) cannot be held to stricter standards than a house conversion.
• –Size cap – The larger of 30 % of the home's habitable floor area or 900 sq ft. (Local bylaws may be less restrictive.)
• –Dimensional & review standards – The ADU (and its host house) is subject only to the same setbacks, height, lot-coverage, and ordinary permit reviews that apply to a single-family home in that district. No extra conditional-use review may be imposed just because it's an ADU.
• –Parking – A municipality may not require more than one space per dwelling in areas served by municipal sewer and water.
• –Wastewater capacity – The lot must have adequate septic or sewer capacity.
• –Minimum number – Statute guarantees at least one ADU; towns may allow additional units or larger sizes if they wish.
• –Hazard overlays – The statewide mandate does not override bylaws adopted for flood-hazard or fluvial-erosion areas (24 V.S.A. § 4424). A town may deny or condition an ADU in those overlays.
• –Short-term rentals – Municipalities may regulate short term rental use of ADUs.