Do Cave Creek, Fountain Hills, and Carefree allow casitas and ADUs?

Cave Creek, Fountain Hills, and Carefree allow casitas and guest houses, but mostly as space for your own household and guests, not as separately rentable accessory dwelling units (ADUs). The reason is population. Arizona's ADU mandate, A.R.S. 9-461.18, "applies to a municipality with a population of more than seventy-five thousand persons." All three towns sit well under that line, so the state does not force them to allow rentable ADUs. Each town keeps its own zoning rule instead. Cave Creek allows detached accessory living quarters only in its large-lot Desert Rural zones. Fountain Hills and Carefree allow guest houses but bar renting them on their own.

So a backyard casita is legal in all three towns, but what you can do with it is narrower than in Phoenix or Scottsdale. Below is each town's actual rule and what it means for your lot.

Why the state ADU law does not bind these towns

These three towns are exempt from the state ADU mandate because each has fewer than 75,000 people. The 2024 state law that opened backyards to ADUs limited its reach. The statute is explicit that "this section applies to a municipality with a population of more than seventy-five thousand persons." Cave Creek (roughly 5,000 people), Fountain Hills (roughly 24,000), and Carefree (roughly 3,700) all fall far below that threshold.

That exemption matters because of what the state law would otherwise require. In a covered city like Phoenix or Scottsdale, the town must allow at least one attached and one detached ADU. It cannot demand extra parking. It cannot set rear or side setbacks over five feet. And it cannot ban renting the unit as long-term housing. None of those protections apply by force in Cave Creek, Fountain Hills, or Carefree. Each town is free to allow second units, restrict them, or forbid renting them. All three have made their own choices, and as the rules below show, each landed in a different place. That is exactly why you cannot assume the Phoenix or Scottsdale answer carries over to a small town next door.

The practical takeaway is that your town's local code controls, not the statewide ADU floor. A casita that would be a freely rentable unit one zip code over may be limited to family and guests here. You have to read the specific town ordinance, and you may need an approval the larger cities can no longer require. These three towns also tend to value low density, dark skies, and desert character, which is part of why each chose to keep tighter rules when the state gave them the option. For the broader map of which places are covered, see which Arizona cities are required to allow ADUs.

Cave Creek: detached living quarters only in Desert Rural zones

Cave Creek allows detached accessory living quarters, but only on its large Desert Rural (DR) lots, not in its standard Single Residence zones. The town's zoning ordinance, effective December 16, 2024, lists "detached accessory living quarters, accessory buildings, and associated accessory uses" as allowable in the DR zone. The Single Residence zone is different. There the code states plainly that "detached accessory living quarters are not allowed."

The zoning split is the key fact. Cave Creek restricts detached accessory living quarters to the Desert Rural zones. Those are large lots. Minimum lot sizes run from 43,000 square feet up to 190,000 square feet, which is roughly one to over four acres. So whether you can build a detached casita in Cave Creek depends on which zone your lot sits in. A large desert acreage parcel may qualify. A standard Single Residence lot cannot add a detached living unit at all. The code even lists detached accessory living quarters among the uses that are "restricted to the Desert Rural (DR) residential zones," alongside corrals and barns, which tells you the town views them as a rural, large-lot use.

A few other Cave Creek limits shape the project. Every lot is held to "one (1) principal residential dwelling unit per lot of record." An accessory living unit must sit within the buildable area on the same parcel. Building height in the DR zone caps at two stories and 25 feet. DR lots must also keep a 12-foot native habitat corridor undisturbed inside every property line, which protects desert scenery and limits where you can place a structure. Confirm your exact zone and lot size with the Town of Cave Creek before you plan a casita, because the Single Residence versus Desert Rural line decides the whole question.

Fountain Hills and Carefree: guest houses you cannot rent

Fountain Hills and Carefree both allow guest houses, but neither lets you rent the guest house on its own. The difference from a true ADU is the rental line. In Fountain Hills, the zoning ordinance defines a guest house as "living or sleeping quarters within an accessory building for the sole use of occupants of the premises, guests of such occupants or persons employed on the premises." It then adds that "such quarters shall not be rented, and/or otherwise used for income producing purposes." A guest house there is also not counted as a principal building. Only one single-family dwelling is allowed per lot of record. So the guest house is treated as part of your home, not as a second household you can lease out.

Carefree draws the same line a different way. Its town code allows guest houses and accessory buildings. But it states that accessory buildings "may not be leased, subleased, or rented separate and apart from the main building." It also bars renting the main building apart from its accessory building. In other words, the two have to be leased together as one property or not at all. Carefree also caps accessory-structure height. The code allows "no part of any accessory structure" to "rise more than sixteen (16) feet above its design grade." That 16-foot limit is lower than the height a true ADU could reach in Phoenix or Scottsdale, which keeps Carefree guest houses modest in scale. So a Carefree guest house can house family and visitors, but it cannot become a stand-alone rental.

The bottom line for both towns is consistent. You can build a casita or guest house for your own use and your guests, and it can have a bedroom and bath. It can hold visiting family, an aging parent, or a home office. What you cannot do is treat it as an income unit leased to a separate tenant who has no tie to your household. That is the exact freedom the state ADU law grants in the larger covered cities, and it is the exact freedom these smaller exempt towns have chosen to withhold from owners. If rental income is your goal, confirm the current rule directly with the Town of Fountain Hills or the Town of Carefree, since a town can choose to loosen its code over time. For the rules in the larger cities nearby, see the ADU and casita rules in Phoenix and the ADU and casita rules in Scottsdale.

The Jematell Homes approach

Setbacks, overlays, and ADU rules shape our design work from day one. Every project is different, so we will confirm the specifics for your parcel and budget with you directly.

Sources

• Town of Cave Creek: Ordinances and Guidelines (Zoning Ordinance, Chapter 2 Residential Zones)
• A.R.S. 9-461.18 (Accessory dwelling units; municipalities; population threshold)
• Town of Cave Creek: Planning and Zoning
• Town of Carefree, Arizona Code of Ordinances
• Town of Fountain Hills: Planning and Zoning