Reality Check

ADU Cost Breakdown

There are multiple line items that make the total ADU cost. It starts with pre-construction costs. Those include design costs, engineering costs, permit costs. Construction costs have a longer list – from foundation all the way to cabinet and appliances installation.

Our proposals typically contain about 30 line items. If you are not on a spending spree with your ADU, it is important to make sure every line item makes sense.

ADU Design Cost

Sometimes your property shape drives custom design. In this case it may be worth to pay $20,000 or more for the plans prepared by the licensed architect. More often than not, you can get away with one of pre-designed plans, created by architects for other clients and tested in the field.

ADU Architect cost

If you have set your heart on working with an architect, here are the architects who have really embraced the ADU movement. Check the works of Inspired ADUs, Jennifer Kretschmer, Jessica Resmini and Todd Jersey.

If you are on a budget or at least looking to get value for money, let us check if you need a licensed architect for your ADU. You may also move forward with an ADU design team – an architectural designer and a structural engineer.

Cost for ADU Plans

ADU blueprint plans are priced separately by the architects and designers, however they are often included in the cost of a prefab ADU.

ADU Permit Cost

Permit costs are issued by the local jurisdiction – your City’s or County’s Building Department. You are charged ~$1,500 at the start of the process for plan check. At the time of approval the jurisdiction will issue the remaining plan check and permit fees plus inspection fees, street impact fees, record management fees, and even a Tech Enhancement fee if you are in Oakland. Some fees are waived if your building is less than 500 or 750 sq ft.

ADU Fee Structure

Here are the items you may expect to see when you get the invoice from your city or county: application fee, inspection fee, plan check fee, address fee. Some cities may charge bedroom tax and tech enhancement fee (hello, Oakland). Smaller ADUs won’t be charged school fees. Utilities may charge additional fees for new connections.

Cost for ADU Permit

Here are the recent examples from three Bay Area cities for ADUs under 350 sq ft. Los Altos: $7,900. Menlo Park: $6,700. Oakland: $8,400.

ADU Cost to Build

Cost of adding ADU differs between SoCal and NorCal. Actually, ADU cost differs in Bay Area too. One of our least favorite Pandora boxes is the charges from a utility company for connecting the ADU to water and sewer. A Los Gatos client has recently been charged ~$8,000. EBMUD invoiced an Oakland client $17,000.

ADU Foundation Cost

After receiving the plans from the architect or designer, your structural engineer runs structural calculations and designs foundation. Depending on foundation of existing house and soil conditions, your foundation can be a traditional slab, stem foundation or piers and beam foundation.

ADU Framing Cost

Framing cost includes lumber material and labor. Your structural engineer will also call out shear walls and fasteners. If you are in a fire hazard zone or you were required to have a fire rated wall, you will be advised to use flame resistant material instead of traditional OSB or plywood.

ADU Material Cost

After the framing is done, it is time for an insulation and drywall crew. Insulation value has been identified in your energy efficiency report. The architect may have called for regular batt insulation or a more expensive spray insulation. This is based on a trade off between size of studs and rafters and R value of the batt. It often makes sense to pay more for insulation to leave more space inside the house.

ADU Electrical Cost

You will be surprised how many electricians calculate their proposal based on number of outlets, switches and lights. You will be even more surprised, that these costs are often less than the cost of the underground wire that leads from the main panel to the new backyard home in the back. There are several items that can impact the electrical costs: timely upgrade of the main panel (200 Amps min) and informing your electrician on the model of appliances to be installed. This may have a huge impact on both time and budget.

ADU Plumbing Cost

Is there anything less sexy than talking about sewer lines when you meet people for the first time? Yet, this is something any ADU expert has to do as this is the biggest source of surprises. Will there be enough slope to avoid installation of a pump? Is the existing sewer line to main 4 inch to accommodate additional usage? Or is the property on septic? And that is a completely different story that can add thousands of dollars to your budget.

ADU Kitchen Cost

Finally, the cost a homeowner can control – IKEA or custom made cabinets? Base cabinets only with shelving or base and top cabinets? Butcher’s block countertop or a quartz one?

ADU Floor PLan 500 sq ft is a sweet spot

Is ADU a good investment?

Legally permitted ADU, built well and on a reasonable budget, is a good investment.

Legally permitted means you have applied for a building permit and, after the construction, had it finaled by the building inspector. Built well – means built with materials of good quality and by an experienced crew. Reasonable budget means that whatever you have spent on the ADU has a chance to get reflected in the property value.

Three homes in place of one

The legislation passed by California in January 2020 made it possible to add more livable space to a current single family home. You might be surprised by the number of options this law has opened for an average homeowner, who has become a real estate developer overnight.

These options include newly constructed detached or attached ADU and conversion of existing space (garage or basement). You are allowed to build up to 1200sf. This is your living space #2. As an additional option, you may convert existing square feet into a Junior Accessory Dwelling Unit. This makes it your living space #3. Spread your family out or rent out.

Challenges with financing

The challenge with some new financing solutions is that the homeowner misses out on the lion share of the income and/or property appreciation. Your financing partner might be offering you $300/mo income on the ADU, while if you were able to finance it yourself, your net income could be $850/mo.

ADU size matters

Accessory Dwelling Unit is a small house. It needs utilities and foundation as much as your main house, but has less footprint to spread the costs over. Hence we always encourage you to build max possible.

Trenching for utilties costs the same whether it is for a 200sq ft ADU, 500sq ft ADU or 1200 sq ft ADU. This is the type of fixed cost that makes per square foot costs ridiculously high for smaller ADUs.