Rental conversions in Houston

A new detached accessory dwelling unit cost $160,2191 in Houston in the 2025 Cost vs. Value report, under the $166,4062 national figure; we found no credible Houston price for converting a garage instead. The local factor is that Houston has no zoning: the city allows larger garage apartments, but only where a subdivision's deed restrictions don't prohibit them, so your restrictions decide first.

Calls are recorded. One independent company that handles rental conversions in the Houston area answers.

Updated October 12, 2026

Illustration of a two-story garage apartment at the back of a deep lot behind a 1930s cottage in an older Houston neighborhood, with an outside wooden stair to the upper unit, a window unit replaced by a mini-split and a gravel drive along the side of the house.
Illustration

What a new unit costs in Houston

The 2025 Cost vs. Value report prices a backyard cottage built from scratch, priced here for Houston beside the national average:

MeasureHoustonU.S. average
Accessory dwelling unit (new detached build), job cost$160,2191$166,4062
Accessory dwelling unit (new detached build), resale value$58,9151$68,6562
Accessory dwelling unit (new detached build), cost recouped at resale37%141%3

A Houston ADU costs a bit less to build than the national figure, and buyers credit an even smaller share of it at sale. The case for building one rests on years of rent or on housing family, not on resale.

How much of Houston rents

Renter share and median gross rent from the Census Bureau:

MeasureCity of HoustonHarris County
Occupied homes that are rented58%445%4
Median gross rent, per month$1,3615$1,4015

Most occupied homes inside the city are rented, a larger share than across the county, while median rent is close on both sides of the line. Price a small unit against rents on your own street rather than either median.

What Houston already has

The Census Bureau counts homes by the number of units in the building:

MeasureCity of HoustonHarris County
Homes that are single-family detached houses43%657%6
Homes in buildings with two to four units7%65%6

Fewer than half the homes inside the city are detached houses, and small two- to four-unit buildings are a modest slice. A garage apartment adds a unit without changing the house, which is why it is the usual route here.

How old the houses are

For a landlord, the decade the house was built decides whether federal lead rules apply. Census year-built shares:

MeasureCity of HoustonHarris County
Homes built before 198047%737%7
Homes built 2000 or later30%736%7

EPA's lead renovation rule generally doesn't cover homeowners working on their own pre-1978 homes, but it does apply if you rent out all or part of your home.8 Inside the city nearly half the houses predate 1980, so assume the lead-safe rules apply to a conversion of an older garage or house until testing shows otherwise.

Building cost beside home value

Lenders size a construction loan from what the property is worth. Census medians for owner-occupied homes:

MeasureCity of HoustonHarris County
Median home value (owner-occupied)$277,8009$276,6009

A detached unit at the Houston price is more than half the median home value in the city or the county. Talk to a lender about how an appraiser will count the unit before you commit to plans.

Permits

Houston has no zoning map to check, so start with the subdivision's deed restrictions; the city's second-dwelling-unit rules in its development code apply only where those restrictions allow a unit. A detached unit can be up to a set size, with parking tied to its size. Building one, or converting an existing garage into living space, goes through the Houston Permitting Center with plan review, energy code compliance and separate trade permits pulled by licensed contractors. Renting the unit for stays shorter than a month also needs a city short-term rental registration.

  • Houston's Livable Places changes to Chapters 42 and 26 of the city code, effective November 27, 2023, allow second dwelling units to be larger, with parking based on unit size, where deed restrictions do not prohibit them.10
  • Houston's Livable Places guide describes a second dwelling unit, also called an accessory dwelling unit or garage apartment, as a detached unit allowed on a single-family residential lot, typically above a garage or in a separate structure from the main house, and no larger than 1,500 square feet.11
  • In Houston, a second dwelling unit needs one additional parking space if the main house does not meet the parking requirements or if the unit is between 1,001 and 1,500 square feet, and where feasible it should take access from an alley.11
  • Houston's residential remodel permit covers the remodel or conversion of an existing house or an addition, requires plan review, and stays valid for six months.12
  • Plans for a Houston residential remodel permit must show prescriptive compliance with the 2015 International Energy Conservation Code or include a REScheck or IC3 compliance report.13
  • Houston issues trade permits only after the building permit, to a master electrician licensed by TDLR, an air conditioning contractor with a TDLR Class A or B license, or a master plumber licensed by the Texas State Board of Plumbing Examiners, each registered with the city.14
  • Houston defines a short-term rental as a dwelling unit, or any portion of one, rented or offered for rent for less than 30 consecutive days, and it is unlawful to operate, rent, lease or advertise one in the city without a valid certificate of registration.15

Checked October 12, 2026

Before you hire

Texas doesn't license general contractors, so ask for the license numbers of the plumber, electrician and HVAC contractor on your job and check them with TDLR or the State Board of Plumbing Examiners.

How to check a contractor's license in Texas

Talk to a pro who handles rental conversions in Houston

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Check the deed restrictions first

The City of Houston's Legal Department notes that some cities regulate land use through zoning laws, while Houston enforces the land use restrictions created by residents.16 In Houston, deed restrictions can be enforced by a property owner in the subdivision, a homeowners association or civic club, or, for some restrictions, the City Attorney, and the written restrictions may be found in a plat, a deed, a separately filed instrument or amendments to them.16

Under state law and Sections 10-551 through 10-555 of the city code, the City of Houston can sue to enforce certain deed restrictions in subdivisions inside the city: limits on how property may be used, building setbacks, the size of a lot or the size, type and number of structures on it, a structure's orientation, and certain fences that need a building permit.17 If your restrictions limit the lot to a single-family residence, a second unit may be ruled out whatever the city code allows, so get a copy of yours and read the use and setback clauses before paying for plans.

Houston's Livable Places changes to Chapters 42 and 26 of the city code, effective November 27, 2023, allow second dwelling units to be larger, with parking based on unit size, where deed restrictions do not prohibit them.10

Building a garage apartment

Houston's Livable Places guide describes a second dwelling unit, also called an accessory dwelling unit or garage apartment, as a detached unit allowed on a single-family residential lot, typically above a garage or in a separate structure from the main house, and no larger than 1,500 square feet.11 In Houston, a second dwelling unit needs one additional parking space if the main house does not meet the parking requirements or if the unit is between 1,001 and 1,500 square feet, and where feasible it should take access from an alley.11

The Houston Planning Department's ADU|HOU program offers a free set of preapproved building plans for second dwelling units, a design book of schematic designs, and videos on the basics, the steps to build one and how to finance it.11 Starting from a preapproved plan can shorten design, though the company still has to fit it to your lot, your drainage and your floodplain status.

Cost vs. Value's ADU job is a new one-story, 660-square-foot detached unit on a slab, with a bedroom suite, a bath with walk-in shower, a kitchen, a mini-split heat pump, a stacked washer and dryer, and a paved parking space.18 A unit over a garage keeps more of the yard, but it adds a stair and second-floor framing that cottage does not have.

Turning a garage into living space

Converting an attached or detached garage into a room or small apartment is a remodel in the city's eyes. Houston's residential remodel permit covers the remodel or conversion of an existing house or an addition, requires plan review, and stays valid for six months.12 Plans for a Houston residential remodel permit must show prescriptive compliance with the 2015 International Energy Conservation Code or include a REScheck or IC3 compliance report.13 A garage was not built as a cooled room, so expect insulation, a window and a way to cool the space to be part of the job.

The 2021 IRC requires at least 5/8-inch Type X gypsum board or equivalent between a garage and habitable rooms above it, and does not allow any opening from a garage directly into a sleeping room.19 The 2021 IRC requires at least one egress door for each dwelling unit, reached by a continuous path that does not pass through a garage, and opening to a public way or a yard or court that leads to one.19 If the house is in a floodplain, ask how the floodplain office will treat a garage floor that becomes living space before you design around it.

Renting by the night

Houston defines a short-term rental as a dwelling unit, or any portion of one, rented or offered for rent for less than 30 consecutive days, and it is unlawful to operate, rent, lease or advertise one in the city without a valid certificate of registration.15 Houston's short-term rental certificate of registration costs $275 a year and is valid for one year from the date it is issued.15

To register a Houston short-term rental, the host supplies identification, an emergency contact, links to every listing, proof of hotel occupancy tax remittance or registration (not needed for Airbnb-only listings), the owner's authorization or a current lease, and completion of a human trafficking awareness course.20 A Houston short-term rental must post its certificate of registration inside the front entrance and post the names and phone numbers of emergency contacts, who must respond to an emergency within one hour of being notified.15

Starting January 1, 2027, the City of Houston will begin notifying platforms to remove short-term rental listings that lack a certificate of registration.20 Violating Houston's short-term rental ordinance carries a fine of $100 to $500 for each violation, and each day a violation continues counts separately.15 Deed restrictions can also limit short stays, so check them as well.

Lead, alarms and a way out

A landlord who does renovation work on pre-1978 rental housing personally needs both EPA firm and renovator certification; a landlord who hires the work out needs neither, but the firm must be Lead-Safe Certified.21 Before a renter signs a lease for most pre-1978 housing, federal law requires the landlord to disclose known lead-based paint and hazards, share available records, hand over EPA's Protect Your Family From Lead pamphlet and include a Lead Warning Statement.22

The 2021 IRC requires smoke alarms in each sleeping room, outside each separate sleeping area and on every story including basements, interconnected within each dwelling unit so that one sounding sets off all of them.19 When work that needs a permit is done, the 2021 IRC requires each dwelling unit to get carbon monoxide alarms as required for new homes, with exceptions for exterior work and plumbing.19 Ask the company to mark every alarm on the plans and show the exit path from each bedroom.

A unit for a parent

HUD's research office describes an ADU as compact, self-contained secondary housing on the same lot as an existing single-family home.23 More than one in four adults 65 and older fall each year.24

For a parent, a ground-level unit beats an apartment up a garage stair. Ask for a curbless shower, a wide entry with no step and a lit path from the main house. NAHB's Certified Aging-in-Place Specialist (CAPS) credential trains remodelers in home modifications for aging in place.25

What happens when you call

The number on this page connects you, on a recorded line, to one independent company that handles rental conversions in the Houston area. The unit, the permits and the price are between you and them.

We're paid for the call. You pay us nothing, and we never call or text you. How we make money

After you're connected

Before the final payment, get the paperwork Texas requires. When the owner makes final payment on a Texas residential construction contract, the original contractor must sign and deliver an affidavit stating that the bills for the job have been paid.26 In Texas, every written proposal, invoice or contract for plumbing must show the name and license number of the responsible master plumber.27 Check a Texas license

Questions people ask

Can I build a garage apartment in Houston?

Often, if your deed restrictions allow it. Houston's Livable Places changes to Chapters 42 and 26 of the city code, effective November 27, 2023, allow second dwelling units to be larger, with parking based on unit size, where deed restrictions do not prohibit them.10 Houston's Livable Places guide describes a second dwelling unit, also called an accessory dwelling unit or garage apartment, as a detached unit allowed on a single-family residential lot, typically above a garage or in a separate structure from the main house, and no larger than 1,500 square feet.11

Do I need to register a short-term rental in Houston?

Yes, for stays under a month. Houston defines a short-term rental as a dwelling unit, or any portion of one, rented or offered for rent for less than 30 consecutive days, and it is unlawful to operate, rent, lease or advertise one in the city without a valid certificate of registration.15 Houston's short-term rental certificate of registration costs $275 a year and is valid for one year from the date it is issued.15

What does a backyard unit cost in Houston?

The 2025 Cost vs. Value report put a new detached unit in Houston at $160,2191, with 37%1 of that recouped at sale. A unit over a garage, a long utility run or work in a floodplain raises the price.

Who will I talk to when I call?

One independent company that handles rental conversions around Houston; we don't build anything. A Houston building permit can be bought by the owner, an agent or a contractor, and it is issued to the owner no matter who applied or paid; the city doesn't license or register general contractors.14

Sources

Page updated October 12, 2026. How we source our numbers

  1. Zonda / Journal of Light Construction, Cost vs. Value 2025, Houston, TX. Released 2025. Houston, TX (Cost vs. Value market). Industry source.
  2. Zonda / Journal of Light Construction, Cost vs. Value 2025, national. Released 2025. United States. Industry source.
  3. Zonda / Journal of Light Construction, Cost vs. Value Report 2025, Virginia Beach, VA. Released 2025. United States. Industry source.
  4. U.S. Census Bureau, American Community Survey 2020–2024 5-year, table B25003. Released January 29, 2026. Houston city, Texas, Harris County, Texas.
  5. U.S. Census Bureau, American Community Survey 2020–2024 5-year, table B25064. Released January 29, 2026. Houston city, Texas, Harris County, Texas.
  6. U.S. Census Bureau, American Community Survey 2020–2024 5-year, table B25024. Released January 29, 2026. Houston city, Texas, Harris County, Texas.
  7. U.S. Census Bureau, American Community Survey 2020–2024 5-year, table B25034. Released January 29, 2026. Houston city, Texas, Harris County, Texas.
  8. U.S. Environmental Protection Agency, Lead Renovation, Repair and Painting Program. Released June 17, 2026. View source.
  9. U.S. Census Bureau, American Community Survey 2020–2024 5-year, table B25077. Released January 29, 2026. Houston city, Texas, Harris County, Texas.
  10. City of Houston Planning & Development Department, Livable Places: Chapter 42 & 26 Development Incentives. No publication date. View source.
  11. City of Houston Planning & Development Department, Livable Places User Guide. Released December 2023. View source.
  12. City of Houston, Houston Permitting Center, Residential Remodel Permit (HPWCODE1135). No publication date. View source.
  13. Houston Permitting Center, Residential Remodel Permit. No publication date. View source.
  14. City of Houston, Houston Permitting Center, Permits Submittal Overview (annual workshop presentation). Released November 19, 2024. View source.
  15. City of Houston, Ordinance adding Article XXIII (Short-Term Rentals) to Chapter 28 of the Code of Ordinances. Released April 16, 2025. View source.
  16. City of Houston Legal Department, Deed Restriction Enforcement (presentation to the Quality of Life Committee). Released August 15, 2024. View source.
  17. City of Houston Legal Department, Deed Restrictions. No publication date. View source.
  18. Zonda / Journal of Light Construction, Cost vs. Value project description: Accessory Dwelling Unit. Released September 23, 2025. View source. Industry source.
  19. International Code Council, 2021 International Residential Code, Chapter 3 Building Planning. Released 2021. View source. Industry source.
  20. City of Houston Administration & Regulatory Affairs Department, Short-Term Rentals. No publication date. View source.
  21. U.S. Environmental Protection Agency, RRP frequent question: landlords of pre-1978 apartments. Released November 12, 2025. View source.
  22. U.S. Environmental Protection Agency, Real Estate Disclosures about Potential Lead Hazards. Released May 27, 2026. View source.
  23. U.S. Department of Housing and Urban Development, PD&R, PD&R Edge: Evaluating Accessory Dwelling Units in Small- to Medium-Sized Cities. Released January 8, 2026. View source.
  24. Centers for Disease Control and Prevention, Facts About Older Adult Falls. Released September 4, 2026. View source.
  25. National Association of Home Builders, Certified Aging-in-Place Specialist (CAPS). No publication date. View source. Industry source.
  26. Texas Legislature, Property Code chapter 53, Mechanic's, Contractor's, or Materialman's Lien. No publication date. View source.
  27. Texas Legislature, Occupations Code chapter 1301, Plumbers. No publication date. View source.
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