ADUs in the Lake Tahoe Basin (2025 Update): Incline Village & Crystal Bay Rules Explained

Accessory Dwelling Units (ADUs) have become one of the most powerful housing and wealth-building tools in Northern Nevada, and in 2025, the Lake Tahoe Basin finally saw meaningful progress.

Why ADUs Matter in the Lake Tahoe Basin

Washoe County, in coordination with the Tahoe Regional Planning Agency (TRPA), adopted updated ADU standards under the Tahoe Area Plan. The goal: increase long-term housing options while preserving Tahoe’s environmental protections.

If you own property in Incline Village or Crystal Bay, this update materially changes what may be possible on your lot. Below is a clear, parcel-level breakdown of what’s allowed, what’s changed, and what it means for homeowners and investors.

Lake Tahoe has faced a long-standing housing shortage, particularly for:

• Local workforce housing

• Long-term renters

• Multigenerational households

• Aging in place

Historically, ADUs were difficult to build due to large minimum lot sizes, strict coverage limits, and restrictive development standards. The 2025 update is designed to unlock more housing without encouraging short-term rentals or overdevelopment.

This is one part to a housing solution—not a tourism expansion.

2025 ADU Rules in the Tahoe Basin (Washoe County Side)

1. ADU Size Is Now Based on Lot Size

If the primary use of the property is residential, ADU size is determined by parcel size:

Lots 1 acre or larger

• ADU may be:

  • Up to 50% of the main dwelling, or

  • 1,500 square feet

• Whichever is smaller

Lots under 1 acre

• ADU may be up to 1,200 square feet

This is a major change for Incline Village, where many parcels are under one acre but can now support meaningful ADU development.

2. Parking Is Still Required (and Often the Limiting Factor)

All ADUs must provide:

• At least one additional off-street parking space

• Parking may be tandem

• Parking is in addition to the primary residence requirement

In Tahoe, parking feasibility is often the first make-or-break test when evaluating an ADU.

3. Detached ADUs: Reduced Setbacks for Small Units

For detached ADUs, added flexibility exists:

If the ADU is:

• Under 500 square feet, and

• 12 feet tall or less

It may be built:

• As close as 5 feet from side and rear property lines

This creates new opportunities for:

• Backyard cottages

• Workforce housing

• Family units on constrained lots

4. TRPA Rules Still Apply (Tahoe Is Still Tahoe)

While zoning is more flexible, all ADUs must comply with TRPA regulations, including:

• Land coverage limits

• Site coverage calculations

• Setback standards (unless reduced for qualifying ADUs)

• Environmental review

• Defensible space requirements

• Septic or sewer capacity approvals

In practice, coverage and septic capacity often determine feasibility—even when zoning allows an ADU.

What the 2025 ADU Update Really Means

ADUs Are Easier, But Not Automatic

This update removes major barriers, but every property still requires a parcel-specific analysis.

ADUs Are NOT Short-Term Rentals

ADUs in the Lake Tahoe Basin cannot be used as STRs. These rules are strictly aimed at long-term housing.

Best Use Cases for Tahoe ADUs

• Long-term rental income

• Workforce housing

• Multigenerational living

• Increasing property value and utility

• Creating future resale flexibility

Every home is an investment, and ADUs are becoming one of the most powerful tools in the Tahoe market.

Should You Explore an ADU on Your Tahoe Property?

If you own property in Incline Village, Crystal Bay, or elsewhere in the Washoe County portion of the Lake Tahoe Basin, this is the best ADU environment in years.

That said, success depends on:

• Parcel size and land coverage

• Parking layout

• Septic or sewer capacity

• TRPA compliance

• Construction cost vs. long-term rent

Next Steps: Parcel-Level ADU Feasibility Review

Before assuming an ADU will work—or dismissing it—it’s critical to analyze the property address by address.

I can help with:

• Zoning + TRPA review

• Rough build-cost vs. rent analysis

• Long-term income and value impact

Frequently Asked Questions: ADUs in Washoe County’s Lake Tahoe Basin

Are ADUs allowed in Incline Village and Crystal Bay?

Yes. ADUs are allowed on residential properties in Incline Village and Crystal Bay, subject to Washoe County zoning and TRPA regulations.

What is the maximum ADU size in the Lake Tahoe Basin?

• Lots 1 acre or larger: Up to 50% of the main home or 1,500 sq ft (whichever is smaller)

• Lots under 1 acre: Up to 1,200 sq ft

Do ADUs in Tahoe require parking?

Yes. At least one additional off-street parking space is required, which may be tandem, in addition to parking for the main residence.

Can an ADU be used as a short-term rental in Tahoe?

No. ADUs in the Tahoe Basin cannot be used as short-term rentals. They are intended for long-term housing only.

Can I build a detached ADU close to the property line?

Yes—if the detached ADU is under 500 sq ft and 12 feet tall or less, it may be built as close as 5 feet from side and rear property lines.

Does TRPA regulate ADUs even if Washoe County allows them?

Yes. All ADUs in the Tahoe Basin must comply with TRPA land coverage limits, environmental standards, setbacks, and development rights.

Do septic systems affect ADU approval?

Absolutely. Septic capacity and health district approval are often the primary limiting factor and must be evaluated early.

Is building an ADU worth it in the Tahoe market?

For many owners, yes—especially for long-term rental income, workforce housing, multigenerational living, and increasing property utility and resale value. Every property requires a parcel-specific feasibility review.

Not sure if an ADU is feasible on your property?

Tahoe ADU rules are more flexible than they’ve been in years, but success depends on parcel-level details. I can help you understand what’s possible, what’s not, and what paths make the most sense—without guesswork.

Reach out to discuss your property and options and get clarity before spending time or money on plans. Reach out on the form below.