Orlando homeowners can now get up to $10,000 in cash rebates — plus rebates on permit and impact fees — to build accessory dwelling units on their properties and rent them as workforce housing, after city council on Monday approved a new citywide incentive program.
The ADU Incentive Program is one of three interconnected affordable housing items on the February 23 consent agenda. The other, Orlando Unlocked Open Door, targets 300 vacant lots in Parramore with builder incentives and up to $45,000 in buyer down payment assistance. Together they represent the city’s most direct push at the “missing middle” — residents who earn too much for traditional affordable housing but are priced out of a market where the median single-family home tops $415,000.
Two tiers of incentives
The program creates two levels of support for homeowners interested in building ADUs — sometimes called granny flats, in-law suites, or backyard cottages.
Tier One is for everyone. The city will solicit pre-approved ADU plans through a competitive process, creating a library that any Orlando homeowner can purchase at a fixed price. Because the plans would be pre-reviewed for code compliance, permitting would be streamlined. The solicitation is expected to open in April and will accept all design types — attached, detached, and garage conversions, a city spokesperson said.
Tier Two kicks in for homeowners who rent their ADU to someone earning at or below 120% of Area Median Income — $126,480 for a family of four, or $88,560 for a single person. Those homeowners would receive:
- Up to $10,000 toward construction costs (homeowner must invest at least $10,000 of their own)
- A rebate on building permit fees (typically $450 to $1,050 per ADU)
- A rebate on impact fees (typically $1,300 to $3,100 per ADU, with a maximum of $3,345)
The homeowner must lease to a qualifying renter for at least 12 of the first 24 months after receiving the rebate. The city must pre-approve construction line items before work begins.
Funding and timeline
The Affordable Housing Initiatives Fund has $1.5 million that will be split between this program and the Orlando Unlocked program, the spokesperson said. The Permit Fee Rebate Pilot Program has about $600,000 in its current balance. The city acknowledged the exact number of units the funding can produce is difficult to estimate because both programs draw from the same pool.
A third agenda item extends and modifies the existing permit fee rebate pilot to cover projects under both new programs, pushing the expiration from September 2026 to the end of 2027. The fiscal impact of that extension is $429,287.
If approved today, the design solicitation is expected to open in April with pre-approved plans available on the city’s website within three to six months. Tier Two incentives would launch in summer 2026. The program runs through the end of 2027 or until funds are exhausted.
The bigger picture
Orlando currently permits one ADU per lot in all residential and mixed-use residential zoning districts. ADUs can be attached, detached, or converted from existing garages. Short-term rentals under 30 days are restricted.
The city’s program follows a broader national trend. At least 18 states have passed laws allowing homeowners to build and rent ADUs, with 11 adopting those laws in just the past four years, according to the Mercatus Center at George Mason University. Orange County already operates Ready Set Orange, a similar program offering pre-designed ADU floor plans for unincorporated areas.
Updated Feb. 24, 2026: Updated to reflect city council approval on Feb. 23.
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