Impossible to tell as not enough info. Where would the addition go? Where would the ADU go? Is there enough room for set backs with either and zoning?

Strat by figuring out what the reason is for this. Realtives moving closer to you or needing care when closer. I seems you are in a town or city so you begin with the rules for where you live . If you are on town sewer usually not a big issue but septic a big deal to add bathrooms. Just too little info for even a guess . From what I see of the plot an ADU needs permission to even consider since most places have max sq footage of living space for plots .

I would recommend an ADU if your local codes allow it.

My sister lives in a small separate apartment in my nephew's home. Has a separate entrance but there is an interconnecting door. At times it's not separate enough. Every family needs privacy. Having the distance of a backyard can be a great buffer.

I also believe the ADU adds to the value of the property. Can be an in-law unit or one to house a kid back from college who needs a space apart from mom and dad.

agree to think about who will be living there - assuming the ADU will also need a kitchenette and living space?

both options sound so so expensive, with so many stressy unknowns… any creative options like siblings sharing a bedroom or creating additional living space in the garage? Moving might be more cost effective, especially if you can find a well maintained ugly duckling

Your lot is small, where would you even put an ADU without it being super-cramped in the back, no view to speak of from the main house if you put another structure back there. Would be a total turn-off for me if I were a potential buyer. Unless you convert that little shed or whatever that's already there -- that would be better than three structures on this small lot.

Regardless, you need to check with city hall first to see what the zoning ordinances are and what is/isn't allowed. There might be max sq footage for houses, no ADUs, etc etc but that's for you to do your homework at the local level.

ADU’s are limited to a small % of the original home size. So are additions. You can only create so much impervious surface on a lot. You can’t cover the whole lot with ”house”.

Your best bet is likely sell and move to the much bigger house, as you are not going to get that much expansion out of that location. Not unless you move out for a year+ to add another floor. $$$$$$$ for that option, if even allowed. There are height restrictions too.

Is “given enough land” actually in the picture here? Did you buy the lot behind you, or next to you? If not, you need to not waste your time on this. Find land and build a new bigger house, or just find the existing bigger house that doesn't need a 900K+ giant red tape adventure.

This totally depends on where you live. Do you have any underutilizes or unfinished space in the existing home? If so adding a suite there would be easier most likely than a whole other building. Here, in Vancouver lane way homes are super popular and can be built on many lots, even small ones. Cost to build is high per square foot though.

Once you get the estimates, include the cost of selling and buying something already large enough for your purpose.

Not enough info and detail. But, beyond this forum, a local architect can lead you through the variables and opportunities/limits, with helpful input from real estate brokers and builders.

• Setbacks, FAR, and zoning regulations will provide some direction. Sometimes ADU zoning has beneficial setbacks (closer to property lines).
• Neighborhood and region also, if ADU's are common, zoning-friendly, or on the other hand if small housing stock are commonly added on or teardown potential.
• If it's for expanding the family with kids, then an addition is appropriate. Out or up is a variable.
• If it's for moving in aging parents, it depends. That could be Integral with your lifestyle, so just a Bedroom Suite addition, vs semi-independent (attached ADU with kitchenette/living) or fully independent living (detached ADU with full kitchen/laundry/entrance).
• If it's for future rental potential, detached ADU seems appropriate.
• If "two rooms" includes a Family Room, answer is obvious.
• If "two rooms" includes offices, a future-flexible detached ADU can work for that.
• If "two rooms" is beds/bathrooms to make bedroom suites to move into another level of house value, then obviously addition.

@Mark Bischak, Architect - I'm tired today - so, I had to read the first two lines of your comment twice. 😂 If I would have scrolled down and saw the last part of your comment, it would have been obvious - but it was "off screen" when I initially read your comment.

So funny.

Almost always the "addition" but like @Mark Bischak, Architect said I could be wrong

Why: utilities, especially sewer... where is it going?

If the addition is connected most utilities can connect thru the roof line or under ground (sewer). Sewer can go thru the house to the closest toilet IF the existing line is deep enough for the grade required, otherwise it has to find the sewer tap or be pumped.

"I may not always be right, but I am never wrong"

(a referee told me that once)

And again we wait. I guess your thanksgiving was in here so maybe next week we will get answers

Mark my brother had a shirt it said Once I was Wrong but I was mistaken . Sorry just waitng for some answers form the OP

BOTH are "more expensive" since neither looks that possible on that lot. A lot of paid initial study by an expert is required here.