They’re Trying to Build Tiny Homes to Help Needy Families—So Why Did Their City Council Ban ADUs in Response?

Alex Pepin thought he was following all the rules when he submitted his application to build an Accessory Dwelling Unit, or ADU, on his family’s property in Blaine, MN.

The city had just passed an ordinance allowing ADUs to be closed, and he had gotten help from city staff in submitting his documents. He even drew the site plan himself.

This project has many benefits: Alex will build more houses in a country that is crying out for affordable housing. This group could one day house her elderly in-laws or her growing children. In addition, Alex’s work with the homeless would benefit from it—he had the idea to create this unit to help families coming out of homelessness.

“We thought it could do a lot of good things—taking care of the family, taking care of people outside of it,” Pepin told Realtor.com® in an exclusive interview. “Then we entered the planning commission and submitted an application.”

Instead, Pepin’s planned ADU sparked controversy in his neighborhood, and led to an uproar that ended with the Blaine city council banning ADUs outright. What should have been a simple construction project had turned into the latest chapter in America’s affordable housing crisis: Everyone wants more, until next door.

It’s a real estate tool that people love—in theory

The United States needs affordable housing. The lack of supply has helped make home ownership more expensive for many. But the question remains: Where is this house going?

ADUs are one possible solution. Sometimes called granny flats, detached ADUs, second homes located on the same lot as an existing single-family home.

An ADU can be attached to a home or detached, allowing for more privacy and flexibility in its layout and design. ADUs have been floated as a solution to the housing crisis from New York to California and everywhere in between.

General support for “more housing” and “walkable neighborhoods” is one thing, but efforts to create them are often stymied by local government, which can come under pressure from homeowners to prevent more housing from being built around them, which can affect their home values ​​or change the neighborhood.

A good neighbor with a plan

Pepin and his wife, both Minnesota natives, moved to Blaine in 2013 and have lived in their current home for the past 10 years. For some neighbors, according to Pepin, that still makes them “newcomers” to an area where others have lived for decades.

An environmental engineer, Pepin is also deeply involved in non-profit work through his church, especially helping families out of homelessness. For years, Pepin’s nonprofit organization, Ten Thirty House, has worked in partnership with a local network of nonprofit organizations and used a gifted home in nearby Minneapolis as supportive housing for homeless families.

When things became more difficult to support families far away, Pepin began to explore the idea of ​​an ADU in his area. In 2019, Blaine passed legislation allowing the construction of ADUs. Pepin saw this as a possible solution.

“If you look at the full life of this building, my parents might move there for a few years, and the kids might be out of college.” At some point, because housing is so expensive, maybe one of our kids will buy a primary residence, and my wife and I will move into an ADU. It is quite possible that this will primarily be a family unit in the long run,” explained Pepin.

“In the future it would serve as affordable housing for the needy.”

When the neighbors find out

Pepin’s problems began when he submitted his application to the city’s planning commission in the spring of 2025. Although initially the city employees he worked with were supportive of the project, things changed when the city issued a public notice to those who were within a certain distance of the work.

“It was like we were trying to do something really bad,” Pepin recalled. “I shared a little with one of our neighbors – that we are Christians, we feel called to take care of people, and this is one of the ways to help families get out of homelessness, but it couldn’t have been tested very well.” That neighbor then broadcast.”

Neighbors began a campaign against the project, including writing letters to the city council and planting signs in their yards expressing their opposition. Pushback, Pepin said, was primarily from longtime residents. Although he received support from some neighbors, especially those with elderly parents or children approaching adulthood, opposition was fierce.

“One of the things that ended up being posted on the opposition’s doors was something like this: ‘Reject Pepins’ backyard homeless shelter for drug addicts.’ That was not even close to the truth,” said Pepin.

Although the planning commission still forwarded the application to the city council, local pressure continued to mount until the application was ultimately rejected. Some council members have since said their opposition stems from concerns that companies might buy properties in Blaine, build ADUs, and rent them out—something never allowed under the original law.

When the request was denied, Pepin quickly submitted his request for the sole purpose of using an ADU for his family, but the city again denied him and placed a moratorium on the construction of ADUs until a decision was reached about what to do going forward.

Enter the Institute for Justice

After the denial, the Pepin family wasn’t sure what to do next. What had happened to them didn’t feel legal, but hiring a lawyer to fight the city would likely cost tens of thousands of dollars.

Fortunately, their case went public and caught the attention of the Institute for Justice, a national law firm focused on protecting the rights of individuals, including property rights, and protecting them from government abuse. IJ filed suit against the city of Blaine.

“What’s happening in Blaine is really a microcosm of a lot of issues that affect zoning and land use law,” it said. Joe Gaya lawyer for the Institute for Justice. “If you have a proposal that’s subject to a public hearing requirement, and that proposal is related or perceived to be related to affordable housing, it’s more likely to generate public opposition and be controversial.”

The IJ says Blaine wrongly denied Pepin’s request, which Blaine should have approved under the law, and that the city did so unconstitutionally, because the denial was based on an objection to the idea of ​​who would live in the ADU.

Gay says the Pepins case is no different—he’s seen the same game change elsewhere, where small, affordable homes draw opposition not from zoning concerns but from questions about who gets to move in.

“The point is that zoning exists to manage the land, not the people,” he said. “These types of decisions, based on perceived housing needs instead of how that home will be used, are not only illegal. They are wrong, and they are not beneficial, and they are a big part of the reason why we have an affordable housing crisis.”

Before building, study the room

Pepin’s experience illustrates a truth real estate experts say most homeowners don’t expect: Following the rules isn’t always enough.

“In tough markets like this, I don’t think about it like ‘what does the code allow?’ and more about ‘how does this city make decisions?'” he said Whitney HillCEO and founder of Snap ADU in San Diego. “Before investing in full plans, we often bring a basic site plan and key control questions to the planning staff to check how it will be received, especially for projects that involve a gray area up to the definition.”

Hill also notes that ADU regulations vary greatly by state. In California, statewide guidelines set limits on where local authorities can go under them.

But in states that don’t have this type of relief, homeowners are subject to local property law, which, as Pepin discovered, can change under their feet.

The city’s response: Ban it completely

While Pepins’ legal battle continued, Blaine’s city council reached its conclusion. On March 16, 2026—a year after first denying Pepin’s request—the council voted to completely ban the city’s enclosed ADUs.

“When the ADU ordinance was created in 2019, the council’s intent was to provide a new option for alternative residences,” said a City spokesperson. Ben Hayle in a statement to Realtor.com “After careful consideration, the council has decided that adding an additional detached dwelling to a single-family lot changes the character of the property that was originally intended for single-family residences. After much discussion the current council decided to make changes to the ADU ordinance, and those changes were approved earlier this week.”

For now, that means no detached ADUs will be built in Blaine. Attached ADUs are still legal, but Pepin says that option didn’t work for her home based on her home’s layout and other building requirements.

His case is still ongoing despite the council’s decision.

“We don’t see it as affecting our charges,” said Gay. “We remain focused on protecting the rights of the Pepins, especially their constitutional rights. It is a shame that going forward, everyone in Blaine has lost this useful tool to use their property.”

If the Pepins win their case, they will likely be the only home in Blaine allowed to build a detached ADU.

“What I have said before is that this is not really our issue, it is for the people who need affordable housing and have no say in this,” said Pepin. “Those people have barriers. They need affordable housing. But whenever anyone tries to build it, the neighbors get upset. It’s not directly stated, but the root of it is: ‘I don’t want the kind of people that affordable housing will bring to this area.’ Those people don’t have a voice in any of these allegations, and we want to give it to them.”