How Much Does an ADU Cost in the Bay Area?

ADUs (Accessory Dwelling Units) are a great way to add liveable square footage to your property. For people looking to care for aging parents or who want a detached home office, this is a viable option. But how much does an ADU cost in the Bay Area? Here’s what you need to know.

Now if you’ve lived through the COVID-19 pandemic and survived rising mortgage rates and inflation shortly after COVID, then you already know that these numbers are estimates and depend on your location in the Bay Area and are subject to change. These are just ballpark figures to give you an idea of what an ADU could cost in the Bay Area and what to expect as you proceed with building these amazing small backyard homes.

Let’s start off by sharing that an ADU is just that: a small backyard house. We’ve talked to a lot of people who guesstimate that an ADU can be purchased for around $50,000 and that is just not the case. An ADU will start at around $235,000 for a 380 square foot studio and can easily go up from there based on size, materials used, and how the backyard needs to be prepped. This is also NOT a shed or a mobile home. This is a real home complete with drywall, insulation, electricity, plumbing, a modern kitchenette, quality bathroom fixtures, and more. So let’s break down ADU costs in the Bay Area:

1. The unit itself – To begin, it helps to know the average price per square foot to build in your location. According to HomeAdvisor.com, the average cost per square footage in California to build a “best standard home” (which is between “average standard home” and “luxury standard home”) is $400. Home Advisor shares, “The average price to build a home in California is $500 per square foot. This will get you a modest home in a decent location.” This means that your 380 square foot home could cost around $152,000 to $192,000. Since we’re talking about just the structure itself, this doesn’t even include the cost of land which also varies greatly by where you’re building. HomeAdvisor also states that just a ½ acre can cost anywhere from $50,000 to $1 million. Fortunately with an ADU, you’re building on the property where your primary residence already exists so you can avoid this major expense. This will drive down your ADU cost in the Bay Area.
2. Permits – The costs of permits are different depending on where you live, but you can expect to pay somewhere between 5-18 percent of the total budget for your project.
3. Prepping the space – An ADU is different from a tiny home in that an ADU will sit on a permanent foundation while a tiny home can be on wheels or a non permanent base. This means that the land will have to be prepped and a foundation poured to ensure that your ADU is safe and secure. A foundation for a 380 square foot unit could run around $25,000 plus additional costs if trees and bushes need to be cleared or if you had an old shed that needs to be demolished. 
4. Electrical and plumbing – A tiny home can be off the grid and run on solar and have an eco toilet and rain water to avoid plumbing hookups. However, since an ADU is a complete house, the electrical and plumbing will be tied into the existing home systems. Again, for a 380 square foot home, the electrical and plumbing ADU cost in the Bay Area could potentially run you around $18,000 to set up the home (inside and out). 
5. Shipping costs – ADUs are usually prefab homes that come from a warehouse. This cuts costs for you because you’re not paying an architect to design a unique home and you’re not buying expensive one-of-a-kind cabinetry or other custom features. However, your unit will need to be shipped on a truck which can cost around $10,000. 
6. Up and over – Once the ADU arrives at your home, the company has to get these giant puzzle pieces to the designated location in your back or side yard. The best way to do this is to lift it up and over the existing home. The crane usage runs around $20,000.
7. Other factors – So let’s round it out and say we’re at about $275,000. Here are a few other things that may be added to the bill:
   1. Upgrades – Your ADU company will show you options for cabinet colors, flooring options, tile, and more. Many times they’ll present you with a good, better, and most expensive option. This depends on your tastes and budget. 
   2. Landscaping – This is also based on your backyard condition and style. If you live on a hill, complicated excavating may be involved.  

After all of that, is an ADU worth it? YES! First of all, you can’t buy a studio unit in Concord, CA but you can add one to your backyard. You can’t even buy a one bedroom home in Concord because they pretty much don’t exist. So let’s talk about purchasing a two bedroom home. The California Association of Realtors® says that in January 2023, the average cost was $475,000. A two bedroom ADU starts around $275,000, you don’t have to purchase land AND it’s brand new! If you rent it out, it could potentially pay for itself! 

Are you thinking about adding an ADU to your backyard? Call ADU Warehouse today to discuss how much an ADU costs in the Bay Area and what that would look like for your unique situation. Even better, ADU Warehouse partners with reputable lenders that can share with you financing options so that you can choose what works best for you. Additionally, their real estate specialist partners can give you a new property valuation with the ADU on it and can share with you the cost of rent and how you can generate this passive income. Call us today to learn more! (888) 540-0238