Wealthy Americans are building smaller luxury homes in grounds of their existing mansions for very practical reasons

Rich Americans are ditching their mansions and opting to build luxurious smaller homes for an easier lifestyle.

Accessory Dwelling Units (ADUs) are all the rage on the West Coast where homeowners have built them to save money on upkeep, pass down their big houses to their children or even make some money by renting them out.

Unlike a tiny house - which is portable - ADUs are built to code and set on a solid foundation with separate spaces for living and sleeping, with fully plumbed bathrooms and kitchens.

Seattle couple Leesa Wright and Ben McAllister built an ADU just 12 feet behind their 1906 Craftsman house to have some extra space for guests and to rent out, but ended up falling in love with it.

'We originally thought we were going to live in the front house, until we finally walked into this one,' Wright told The Wall Street Journal.

A Seattle couple's 775-square-foot ADU called the 'Alley Cat' (pictured) cost $300,000 to build and has double-height ceilings, four skylights and metal siding

Leesa Wright (left) and Ben McAllister (right) built the Alley Cat 12 feet behind their 1906 Craftsman house but fell in love with it and moved in

Their 775-square-foot ADU called the 'Alley Cat' cost $300,000 to build and has double-height ceilings, four skylights and metal siding.

Wright's favorite part of the Alley Cat is their bathroom which features a wet-room shower and massive bathtub. 

'When you only have one bathroom, you can get the best tile, the best fixtures, the best windows,' Wright said. 

The couple recently made a profit selling the Alley Cat for $675,000 and their main house separately for $686,000. 

Sheri Koones, author of About ADU: The Perfect Housing Solution, said she was inspired to write her book because so many people kept expressing their interest in building ADUs and making them their homes.

'It's not a pool house, It's a place for people to actually live,' Koones told the Journal.

'A lot of people told me that they were going to put higher-end finishes in [their ADU] even if they were going to rent it, because they might live there themselves.'

California, Washington and Oregon have lifted restrictions that make it easier for homeowners to build the houses.

Data from the California Department of Housing and Community Development show over 31,000 homeowners applied for ADU permits in 2023, up from 7,000 in 2018. 

Bruce Johnston, 83, grew tired of tending to his four-bedroom, 2,929-square-foot house in Berkeley, so he and his husband decided to build an ADU just 60 feet from their home.

'As soon as I began to see the house erupt from the ground, I got tremendously excited, a mix of wonderment and disbelief, just that this was where I was going to be,' Johnston told the Journal.

Unlike a tiny house - which is portable - ADUs (pictured) are built to code and set on a solid foundation with separate spaces inside

Data from the California Department of Housing and Community Development show over 31,000 homeowners applied for ADU permits in 2023, up from 7,000 in 2018 (pictured generic ADU)

'I feel like I'm living in some rich dude's penthouse.'

Johnston's daughter and her partner moved into the main house, and he moved into the $1.2 million, 849-square-foot ADU.

'As I moved into my mid-70s, I really didn't want to do that anymore. But I thought, 'What can I do?' I love the neighborhood—and I didn't want to leave the house. I've lived there for so many years,' Johnston said.

His new smaller house is set on a concrete slab foundation, has floating roof supported by earthquake-proof steel columns, a patio and viewing deck, a countertop that divides the kitchen and living space, as well as a free-standing fireplace that divides the living space and bedroom.

Their new homes features luxurious finishes including all of their cabinets which are custom designs from Italy.