Check out how affordable it is to build an ADU. At Cottage we help break down the soft costs for you and have made a guide with 2 parts to check out! (Part 1/2)
Updated May 07, 2021
In talking to many Bay Area homeowners, we have found that it is surprisingly hard to figure out what an ADU will cost before you’ve already committed to a project, paid thousands for architectural designs, and pulled your permits.
We’ve created this guide to transparently share all the components of costs that go into building an ADU. Costs can be divided into hard costs (labor and materials related to construction) and soft costs (all of the other expenses related to the construction project). We're starting this guide on ADU costs with soft costs first since they tend to come before a single nail has been hammered. We'll cover the hard costs in our next post.
Cottage's process will inform you of the costs for your project before you commit a penny to building your ADU. Click the "Get Started" button at the top right-hand corner for a free consultation and estimate — otherwise, read on to learn more about the soft costs for your ADU, or check out Part 2 here on the hard costs of building your ADU.
The Soft Costs of Building An ADU
Planning & ADU Eligibility
Before starting to build your new construction ADU, granny flat, backyard cottage, or in-law suite, you will need to determine your eligibility to build an ADU on your property, which means matching up your unique property characteristics with ever-changing local and/or county regulations.
Careful—many ‘ADU experts’ and prefab ADU companies will charge $1,000 or more for a site visit. Cottage helps homeowners like you determine your ADU eligibility free of charge; our team of ADU experts has seen multitudes of California Bay Area backyards in SF and beyond, and we can help you determine what size, shape, and design works best for your property and needs. There are plenty of different types of ADUs to choose from including a detached ADU, an attached ADU, and junior ADUs (JADUs).
Now that you know what and where on the property you can build, you will need to define exactly what you want your ADU to look and feel like with the help of an architectural designer. The industry standard is 10-15% of project value/budget; in our experience, architectural designers in the Bay Area generally charge between $20,000-$30,000 in fees for designing an ADU.
In addition, many architects do not specialize in designing accessory dwelling units. This is especially true given how recent the ADU boom has been. Furthermore, even architects that specialize in ADU design will often have little knowledge of how much cost they are adding to a project with their design choices on your behalf, making it difficult to understand exactly how much moving this wall or that bedroom is until months down the road once the general contractor looks at the plans.
In contrast, Cottage's in-house Design Studio specializes in ADU design and value engineering, saving you time, money, and headache down the road. During the initial design stages, that means helping guide initial design decisions and finishes that have an impact on the cost of your ADU from floor plan and ceiling height to electrical panels, shower plumbing, and drywall insulation. And later on in our design development process, we put together the full architectural set for your design to submit to the city for building and planning review for your permit.
Consultants & Specialists
As a part of putting together the full architectural plan set to submit to the city, your architectural design will need to work with an assortment of consultants and specialists. This can add additional unforeseen construction costs to your project.
Make sure you know what is included in your designs and what is not — some architectural designers do not provide internal elevations with their standard build costs and/or cap the number of hours that they will work on your project before they start billing hourly.
All ADU projects will require the base level of consultants, subcontractors, and specialists:
Structural Engineer: for framing and load bearing calculations for your ADU unit
Title 24 Energy Consultant: for energy efficiency and impact analysis
Boundary/Site Surveyor: for establishing the official boundaries and space of your property, including property lines, distances, and existing structures
Typically, these costs can range anywhere from $8,000-$12,000 for your project. However, because Cottage specializes in ADU construction, we unlock bulk project pricing for these consultant fees, saving you thousands of dollars. Because we include these costs and manage these necessary experts as a part of our ADU building costs, you can rest assured that we have you covered.
Additionally, some more complex projects may require additional specialist-provided documentation for unique conditions or based on city requirements:
Geotechnical/Soils Report: for projects with significant slope, flood zone, or pool infill concerns
Grading & Drainage Plan: for projects requiring significant drainage oversight for flooding
Arborist Report: for projects involving protected tree removal, trimming, or root protection requirements
Fire Prevention Plan: for projects requiring fire sprinklers and/or other fire measures
In cases where these additional specialists are needed, Cottage passes along the fees at cost to the homeowner and often at a discount thanks again to our bulk prices through our network of consultants and specialists. At the same time, we also manage the requesting and obtaining of these additional reports as needed as a part of our A-to-Z ADU process.
City Planning & Permitting
Once you have a set of completed designs in hand and ready to submit to the city, there are additional hoops left to jump through.
While some municipalities do split reviews between the Planning Department and Building Department, almost all charge a fee upfront for the planning and building departments to review them. The first out-of-pocket fees come with your submission to your local Planning Department, which is generally less than $1,000. Here are some example planning and zoning review fees in the Bay Area:
Palo Alto: $407
East Palo Alto: $464
San Bruno: $925
Los Altos: $595
Los Altos Hills: $400 for pre-application meeting; $1,500 for administrative review of projects taller than 16 ft. or with a basement.
Once you have answered all comments from the local Planning and Building Departments and are ready to pull your permits, you will be charged your local Building Permit fees. Typically, the calculation of these fees is based on project valuation and can range between $2,000 and $10,000, and this ranges from city to city. In addition, some municipalities charge fixed fees for ADUs, but this is the exception, rather than the rule:
San Mateo: $2,819, regardless of size
Albany: $1,123, regardless of size
Redwood City: $3,882 for a garage conversion or up to 400 sq. ft.; $4,597 for 401-600 sq. ft.; $4,955 for 601+ sq. ft.
Next, you will also have to file a deed restriction at the County where you pledge not to sell the ADU as separate from the main home. As of 2020, that fee generally comes out to about $100 to $200.
Finally, if your ADU is greater than 750 sq. ft. in size, some municipalities will also charge Impact Fees. These fees were originally intended for new single-family home construction; you can think of these fees as a way a city can offset the costs of the new housing's "impact" to public services, such as the additional strain on the local school district, utilities, and public parks.
For ADUs above 750 square footage, the fees are generally proportional to the size of the ADU in relation to the size of the main house. In some cities, these impact fees can quickly become quite significant and can range from $5,000 to $25,000 for a 1,200 square foot detached accessory dwelling unit apartment.
Cottage passes along all city and/or county fees at cost, with no additional charge to you. We also do the up front research before completing the ADU plans of determining what the estimated costs might be to the best of publicly available knowledge.
What's Next for my ADU?
Once you've cleared all the hurdles for the soft costs of your ADU, you're ready to proceed with actually building the new unit—choosing appliances, lighting fixtures, closets, tile countertops, and other aesthetic choices to make your backyard home feel like a real home. Whether you're intending for your ADU to be your primary residence or planning rentals to make additional rent income, each step of the ADU building process is of the utmost importance.
At Cottage, we believe in providing you with a tailored, up front cost estimate before you commit to your ADU project. Click the "Get Started" button below to get a Free Consultation and Estimate Today!