Assembly Bill 365 aims to facilitate the construction and use of accessory dwelling units (ADUs) across Wisconsin by mandating that local governments with zoning ordinances permit at least one ADU on each parcel designated for single-family or multi-family residential use. The bill prohibits local governments from imposing additional fees (beyond standard building permit fees), specific dimensional or design requirements for ADUs that do not apply to single-family homes, additional parking requirements based on the existence of an ADU, and the necessity for separate utility connections for ADUs. Furthermore, it allows local ordinances to limit the size of an ADU to no more than 75% of the existing single-family dwelling's square footage.

Additionally, the bill declares any covenants or restrictions that prevent or unreasonably limit the construction or use of ADUs as void and unenforceable. Homeowners associations are also restricted from imposing such limitations unless necessary for public health and safety. The legislation reflects a legislative intent to counter private laws that inhibit the development of ADUs, thereby promoting housing availability and affordability in the state.