They built tiny homes for their parents, couldn’t afford nursing homes

Over the last few years, Linda Barton watched as her mom and stepdad progressively shifted from active 80-year-olds to, in her words, “children.” Her mom with dementia became unable to take care of herself, while her stepfather, whose health has also declined, “acts like he’s 6 years old.”

The commute to see them, which was an hour each way from work, wore her down, and she didn’t want them to move in with her because of space constraints. She did the next best thing: move them into her yard.

Barton, 55, and her husband bought a tiny home for $37,000 in their part of Texas, outside Houston. After months of installing a septic system, an electrical line, an entrance ramp, and indoor essentials, her parents moved in. A year later, they purchased another tiny home for her father-in-law on their property for $43,000.

They’ve hired caregivers for their three parents at rates below assisted living, making caregiving more manageable. Still, it’s not a perfect solution. Barton said she’s “drowning” in caregiving bills because neither Medicare nor hospice has provided much financial relief.

“If we don’t pay for caregivers, we end up sacrificing work when they need something,” Barton said. “It’s exhausting, and we fear we won’t live to see our own retirement due to the stress.”

Caregiving costs have skyrocketed in recent years. Instead of emptying their wallets to pay for pricy rooms in nursing homes, Americans like Barton are building tiny houses, renovating sheds, and buying trailers as housing options for their aging loved ones who need full-time care.

With construction costs typically ranging from $100,000 to $300,000, not including expenses such as hiring an architect, setting up utilities, or obtaining construction permits, these accessory dwelling units require a significant investment. But the cost of even one year in a nursing home can be comparable: The service and insurance company CareScout found that annual private room costs in nursing homes rose from $111,000 to $130,000 between 2022 and 2025.

ADUs for caregiving have boomed in popularity

When Shalini Karnani Bonjour’s father died in 2024, she moved her aging mother from Michigan to California to be closer to her family. At first, Bonjour, 50, considered renting an apartment for her mother or moving her into a senior-living community, but neither option was ideal.

Instead, Bonjour’s family bought a home in the Coachella Valley with plans to build an ADU in the backyard where her mother can live independently. The $475,000 project is pricey, but more affordable than buying a larger home in the area.

Although it was the family’s best option, Bonjour, 50, said, “The whole process has been difficult because there are so many things to manage. You’re trying to keep the project affordable, keep your neighbors happy, and stay on track.”

ADUs have become increasingly popular in California, attracting the attention of politicians and housing advocates to ease the state’s housing crisis. Rachael Reiner, director of pre-construction and project management at the Bay Area-based ADU company Villa, told Business Insider that ADUs have become especially popular among multigenerational households. 75% of Villa’s sales so far in 2026 have been for that purpose, many for caregiving purposes.

“The California housing market is so competitive and expensive, so for many families, finding a larger home or a second home within budget simply isn’t realistic,” Reiner said. “Building an ADU on an existing family property can allow these families to stay rooted in a neighborhood that they already know, without changing schools or their routines — especially for an aging family member, a routine can be so important.”

An emotional decision

Sometimes, the decision to build an ADU to care for a loved one is driven by emotional rather than financial factors.

Lena Koropey decided to build an ADU in her Long Island backyard to allow her mother, who has later-stage Alzheimer’s, to age in place. Once the two-bedroom, one-bathroom, 750-square-foot home is completed, the plan is for Koropey to move into the backyard so her mother and her full-time live-in caregiver can stay in the main house.

The plan isn’t cheap — a full-time live-in caregiver from the firm she hired costs between $520 and $550 per day, and her ADU is estimated at about $450,000 — but Koropey said it will be worth it.

“Having everyone on the same property is enormously valuable,” Koropey, 48, told Business Insider. “You can’t really put a price on that sense of community, the bond of family, or the ability to support one another.”

Despite the cost cutting from these “granny flats,” most of the over a dozen people Business Insider interviewed said navigating the permitting process was a hassle. Some mentioned burdensome costs they hadn’t anticipated. A few were wary of installing an ADU for fear of reducing their property value, while others regretted it after their loved ones moved out shortly thereafter.

“ADUs are helpful for certain situations where the care need isn’t that great, or where somebody in the house has time to provide that greater care,” Mildred Warner, a professor of city and regional planning at Cornell University who has studied ADUs, said. “There are other situations where it makes more sense to have people in older-adult apartment complexes.”

Some families told Business Insider that because the ADU permitting process was so complex, they decided to build a house on a separate property. After nearly a year of trying to build an ADU, James Richard Cornell, 63, decided to build his mom a house on his property from scratch. Between 2013 and 2014, he obtained a permit, cleared the foundation, and installed plumbing, flooring, and siding. The 1,000-square-foot home cost about $110,000, and his mom paid for 90% of it. His mom has since moved into his main home following a vascular dementia diagnosis.

“Nursing homes are awfully expensive, and I promised her years ago that I would take care of her until her final days,” Cornell said. “She’s done so much for me, so it’s fitting that I return it.”

Removing the burden

In recent years, lawmakers in several states have introduced bills to make ADUs easier to build. In North Carolina, Rep. Vernetta Alston co-sponsored legislation requiring local municipalities to allow at least one ADU on lots with single-family homes. She told BI that, if it becomes law, the bill would be a meaningful way to help families who need more care options.

“I know all too well what it’s like to live in this sandwich generation, where you’re working and caring for kids and caring for older adults in your life,” Alston said. “It would certainly be my hope that it could have an incredibly positive impact on people’s lives and on their ability to afford all the basic needs for themselves and those that they love.”

As Alison George’s mother grew doubtful she could live alone, George, 52, decided to move to a home with a guest house in Raleigh. After $45,000 in renovations, George moved her mom into the guest house and became her primary caregiver.

At the time, her mom could take care of herself, but as her Alzheimer’s condition worsened, George increasingly took time off from work to care for her. She was inconsistent with taking medication and struggled to maintain her social life.

While the arrangement worked for a few years, her mother’s condition worsened, and she moved into an independent living facility, then memory care in 2021. By 2025, her mom’s care was $7,800 monthly, and as George’s savings dwindled, she moved her into a Medicaid facility. The tiny home sits empty on George’s lawn.

“Looking back, I recognize her declining steps, though at the time, I may not have wanted to admit that was what was happening,” George said.