With housing prices soaring, accessory dwelling units (ADUs) have become increasingly popular in California. For renters, they can be a more affordable option. For homeowners, they can generate rental income or host friends or family separately but within reach. If the ADU trend has gotten you thinking about building one, you might be wondering, “How much does an ADU cost in California?” In this article, you’ll learn about the many factors that go into answering this question.
Research from the UC Berkeley Center for Community Innovation found that the average cost to construct an ADU in California is $250 per square foot. These findings also showed that the average total cost to build an ADU is $150,000. However, this cost can vary greatly depending on the below factors.
Just as ADU requirements vary across the state, so do the costs of building a unit. Below are the prices you can expect to pay for an ADU in some of California’s major cities. Each of these prices is an estimate and can vary based on your preferences and the scope of your project.
The cost of permits to build an ADU varies greatly across the state. In parts of the Bay Area, for example, permit fees can cost around $6,000. If you want to build an ADU in Los Angeles, the cost of your permits can range from $1,800 to $8,000. In San Francisco, you’ll pay a permit fee equal to between six and nine percent of your construction costs. San Diego permit costs generally start at $5,000.
You may have noticed that all the ADU costs listed so far are estimates or ranges. That’s because even when ADUs do have fixed prices (as with Spacial’s volumetric modular units), construction costs can remain variable. The below 12 factors underlying these variable costs can help you set a realistic budget.
The cost of building an ADU can greatly depend on the housing market in your location, any green requirements you must adhere to, and availability of labor to build the ADU. As a result, the $150,000 national average can look quite different in areas with lower cost of living or higher cost of living (HCOL), among other challenges.
Each square foot you add to your ADU increases your costs – perhaps more so than any other factor. On average, new ADUs in California are 615 square feet, with state code mandating a minimum of 150 square feet. This range gives you plenty of flexibility to decide how large or small you want to build your ADU, assuming you have the space for it on your property. The amount you want to spend may prove to be your deciding factor.
Some types of ADUs are more expensive to build than others. For example, a detached ADU (DADU) – a unit entirely separate from the main house – is typically the most expensive. You’re essentially constructing a brand-new standalone home, albeit a smaller one. Attached ADUs are connected to the existing structure, so there’s one fewer wall to build. As a result, your construction costs may be lower.
A garage conversion or basement conversion ADU can be affordable on the construction front, but you’ll need to factor in appliances and utilities. Some garages and basements aren’t fully equipped for either, but both are necessities for ADUs. Adding utilities and appliances to these spaces can increase your ADU project costs. Another factor to consider is the structural stability of the walls and roof, and shape of the concrete slab. If they are in poor shape, or require additional structural bracing, it could be more expensive to upgrade a garage than to build a detached ADU.
ADUs fall into one of two categories: prefabricated (commonly known as “prefab”) units or traditionally framed (or stick-built) units. Prefab units are built either partially or entirely offsite in a factory and shipped to your property for installation. Some prefab ADUs, including Spacial models, are volumetric modular units that get installed in one piece directly on your lot. Stick-built units, on the other hand, are built from the ground up on your property.
Because a prefab ADU is essentially a prepackaged structure, you’ll have a better idea of how much your ADU will cost upfront. The only variable left will be construction costs. Otherwise, prefab units’ bulk construction fixes their price.
If you prefer something more customizable, a stick-built unit can fit the bill, but your building costs will likely balloon. Instead of working from a fixed plan, along the way, you might decide you want a larger kitchen sink or a sliding glass door. Each choice you make can increase your costs, whereas offsite construction units are consistent in size and inclusions, thus limiting their costs.
The construction process can also introduce cost variables. When you build an ADU on-site, there’s always the possibility of unexpected setbacks or obstacles. All these barriers can contribute to higher construction costs. Prefab units undergo consistent offsite construction that eliminates unexpected problems and keeps your costs in line with original estimates.
A prefab ADU will almost always be less expensive than a stick-build, but some prefab units are easier to install on-site than others. Some prefab units come together panel-by-panel in your backyard, whereas others get craned into place as one whole, complete unit. In the latter case – which includes Spacial’s volumetric modular units – your unit will arrive with all its appliances, drywall, and interior finishes ready to go. It’s the most affordable arrangement possible.
The contractors who oversee your construction will often charge in dollars per square foot. These prices typically vary depending on the company you hire and your location. ADU contractors in the San Francisco Bay Area, for example, typically charge around $329.17 per square foot. If you’re hiring a manager to oversee your project, you should plan to pay an additional fee for their service.
Your ADU must go into place on a part of your lot fully prepared to receive it. Likewise, you must pour a concrete foundation for your ADU to bear your unit’s weight. The costs of clearing space on your property, preparing the concrete, and laying the foundation can range between $10,000 and $15,000. It’s also baked into your costs if you choose a turnkey service provider like Spacial.
Your ADU should have all the appliances you’d find in a standard house. If you’re building your ADU, you can choose your appliance types and brands. Doing so gives you some control over how much money you’re spending on your unit.
If you choose Spacial to build and deliver your ADU, the cost of appliances is already included in your unit’s price. Your ADU will be delivered to your property with all the energy-efficient appliances you need. Your refrigerator, oven, cooktop, washer and dryer, and other appliances and systems come ready to go, lowering your costs.
Without proper city and county permits, you can’t build your ADU. Government agencies typically charge fees when they issue these permits, and these costs can vary. The complexity of your project may be the biggest influence on how much you’ll pay for your permit.
Including certain design elements in your unit can maximize your space and make your ADU appear larger and more spacious. Features such as skylights, extra storage spaces, and eye-catching focal points can give your space a cleaner, larger appearance. However, these features can come at additional costs to the standard price of an ADU.
Whether you’re thinking of using your ADU as a granny flat, a rental unit, or something else, your space should always be accessible. You can add a wheelchair ramp to your unit’s entrance or alter the height at which your appliances sit. You can also widen your hallways and ditch sharp corners for curved pathways. Or you can build an ADU large enough so a wheelchair can easily maneuver around the floor space. These customizations can be as worthwhile as they are expensive, so you should keep them in mind as you craft your budget.
Your unit will need all the essential items you typically find in a standard home. That means furniture for your living area, a bedroom set, and a dining table, for example.
You have primary control over the costs of furnishing your ADU. You might choose to use standard amenities in your unit or go for a more luxury look with higher-priced pieces. Or you can let an ADU design and installation firm do all the work – that means ADU building and furnishing. For example, here at Spacial, we can furnish your home on your behalf through our West Elm partnership.
If you plan to rent out an ADU for either short-term or long-term use, some property owners will form an LLC to take advantage of running the ADU as a business. This can help you take advantage of certain tax benefits.
Expenses related to ADU construction, repairs, and maintenance can be a tax write-off that helps lower the financial burden over time. With an LLC, you can also depreciate your ADU – and classify that depreciation as a tax-deductible expense – over the course of 27.5 years.
There’s also the matter of property taxes, which you may think would be sent soaring as a result of adding an ADU. However, California’s Proposition 13 keeps your property taxes from rising dramatically with the value of your property.
Additionally, your home’s value won’t be reassessed when you add an ADU. Instead, your ADU’s value will be assessed separately. The proposition also ensures your tax rate won’t exceed one percent and caps increases at no more than two percent every year.
So many factors that can influence your ADU construction costs – it’s a lot to keep track of. With Spacial, you can keep your costs low while offloading project management to an expert ADU design and installation firm.
At Spacial, we’ll handle all your ADU plans and permits. We’ll also prepare your site and foundation as we construct your unit offsite to save you time and backyard commotion. We’ll also install a near-finished unit in one piece – the only step left is furnishing it, which we’ll also handle. We make adding an ADU to your property much more affordable and hassle-free. Contact us now so we can start bringing your ADU vision to life.