ADU Financing Explained: Why Banks Won't Lend on Accessory Dwelling Units (ADUs) | Southern Urbanism Founder Aaron Lubeck

About this episode

Michael is joined by Aaron Lubeck, a Durham designer, builder and developer, and the author of Green Restorations. Aaron has spent his career on the kind of small scale infill housing that used to be ordinary and is now unusually hard to build, and he writes and teaches on zoning reform and incremental development. They get into why duplexes and small lot homes stopped being normal, and why the obstacles are rarely the ones people assume. Zoning codes that have grown from a booklet into something closer to a library. Backyard homes that stall on financing rather than construction cost, because there is no lending product built for them. Rate lock-in keeping existing owners in place and pushing new building further out. Aaron also makes a case for thinking about all the property in a city as a mutual fund that every citizen holds a stake in, argues the trades are among the safer careers as AI reshapes white collar work, and shares the positioning advice he credits to Monte Anderson: find your farm, and if others know more than you, shrink it. His blunt advice to anyone working in the industry is to read the zoning code. He says he is shocked how few people have.