Building an ADU in Derry, NH: The 2026 Deep Dive

Yes — you can build one accessory dwelling unit, attached or detached, by right in Derry's residential districts. Derry is unusual among New Hampshire towns in that it actually rewrote its ADU ordinance after the 2025 state law took effect: the Town Council approved a substantial amendment to Zoning §165-25 on November 18, 2025, effective December 19, 2025.

That makes Derry a genuinely interesting case study. Many towns' posted ordinances still predate the new law entirely. Derry did the work — deleted its biggest illegal restriction, matched its size limits to the state's, and cleaned up sloppy language. And yet even this fresh, post-law rewrite still keeps a few provisions on the books that state law overrides. If a town that just revised its ordinance can't fully catch up, imagine what the posted PDFs look like in the towns that haven't touched theirs at all. That's exactly why our town guides read every ordinance side-by-side with the statute.

Here's the full picture for Derry.

What does state law guarantee before Derry says anything?

Since July 1, 2025, RSA 674:72 (amended by House Bill 577, 2025 Chapter 197) requires every NH municipality to allow one ADU — attached or detached — by right wherever single-family homes are permitted. No special exception, no variance, no conditional-use permit for the ADU itself. You still need a normal building permit, and reasonable local standards (setbacks, lot coverage, septic, building and fire code) still apply.

The statewide floor also says towns can cap ADU size but never below 750 sq ft, can require at most one extra parking space (your choice of on-site or off-site), can't require the occupant to be family, can't limit the unit to one bedroom, can't force you to share the main home's electrical service, and must allow a garage conversion even if the garage doesn't meet current setbacks. The full statewide breakdown is in our NH ADU law guide.

What did Derry's December 2025 rewrite actually change?

The November 18, 2025 amendment (effective December 19, 2025) is the newest version of Derry's ADU ordinance, and it fixed real problems:

• The detached-ADU ban is gone. Derry's pre-2025 ordinance flatly prohibited converting a free-standing accessory structure — a detached garage, say — into an ADU. That directly conflicted with the new law's detached-by-right mandate. The Town Council deleted that prohibition outright and added a new clause: one ADU per lot, "which may be attached or detached." The ordinance now defines "detached unit" explicitly.
• Conversions of existing structures are protected. The rewrite explicitly lets you convert an existing structure — including a detached garage — even if it doesn't meet today's setbacks or lot-coverage rules.
• Size limits now match the state framework. An ADU must be no less than 750 sq ft and no more than 950 sq ft of living space (the cap was raised from 800). Note that the 750 sq ft minimum is Derry's own choice — state law sets a floor on caps, not a minimum unit size.
• A standalone ADU lot-area requirement was removed. The old ordinance conditioned an ADU on the lot meeting the district's minimum area; the rewrite dropped that as an ADU-specific requirement.
• The one-building-per-lot rule doesn't block you. Derry's code carves ADUs out as an explicit exception.

Credit where due: Derry closed its biggest conflict on its own initiative. That's a real town win, not a trap.

Which districts allow ADUs in Derry?

ADUs are listed as a by-right permitted use — not a special exception — in Derry's residential districts, including its medium- and high-density residential zones, with the lower-density districts incorporating the same use list. If your neighborhood is zoned for single-family homes, the state guarantee applies regardless.

What are Derry's core ADU rules right now?

• How many: one ADU per lot, attached or detached.
• Size: 750 to 950 sq ft of living space; rooms must meet residential building-code minimums.
• Bedrooms: no more than two.
• Owner-occupancy: required — but the owner may live in either the main house or the ADU. That matches the state rule that the owner picks which unit.
• Parking: one additional off-street space.
• No condo split: the ADU can't be converted to separate ownership or further subdivided once created.
• Setbacks: normal district setbacks apply to new construction; conversions of existing structures are exempt from setback and lot-coverage nonconformity, as noted above.

Where does Derry's ordinance still conflict with state law?

This is the part the town's own page won't tell you. Even after the December 2025 rewrite, four provisions still read tighter than the state framework. On the first three, state law controls where they conflict; the fourth is a genuine gray area.

• Parking location. Derry's ordinance says the one extra space must be off-street on your property. RSA 674:72 says the added ADU space may go on-site or at a legally dedicated off-site location, at the property owner's discretion. The town can require the space; it can't dictate where it goes.
• Entrance choice. Derry softened its interior-door clause in the rewrite but didn't fully fix it: the language still reads as if a shared interior door, when present, must serve as the primary means of entry for an attached ADU. State law says a municipality shall not limit your choice of ingress and egress — shared or separate entrance, your call.
• Build-together timing. Derry's own updated definitions section now says an ADU "may be constructed at the same time as the principal dwelling unit" — matching state law. But the operative permit clause still says an ADU may only be created "in an existing single-family detached dwelling." That's a contradiction inside Derry's own ordinance. State law resolves it in your favor: you don't have to build the house first and retrofit later.
• Design continuity. A clause requiring the ADU's design to "maintain continuity" with the primary dwelling may or may not exceed what state law permits — towns can only hold an ADU to the aesthetic standards they apply to a regular single-family house. This one is genuinely unsettled; if it becomes the sticking point on your project, it's a question for a NH land-use attorney.

What does it cost to build an ADU in Derry?

A typical New Hampshire ADU runs $275,000–$400,000+ depending on design — a detached garage conversion sits at the lower end of the effort scale, a new detached cottage at the upper end. For context on why families do it anyway: NH assisted living commonly runs $70,000–$100,000+ per year according to commonly cited industry surveys, so a $300k build housing a parent can pencil out fast — and a 750–950 sq ft unit is a genuinely rentable size in the Derry market. If you'd finance it, a HELOC, cash-out refinance, or construction loan are the usual routes, and some lenders will count projected ADU rent toward qualifying — ask a local lender who knows ADUs.

How does Derry compare to its neighbors?

Derry's post-law rewrite puts it ahead of most of Rockingham County, where many ordinances haven't been touched since before July 2025. If you're comparing towns, start with Londonderry, Chester, and Hampstead — each has its own plain-English breakdown in our guides.

Derry did most of the homework; state law fills in the rest — and every gap it fills, it fills in your favor.