ADU Permit Cost: What Impacts Permit Fees

An accessory dwelling unit may be exempt from many of the ADU fees if it occupies less than 750 sq. ft. That is due to the fact that smaller ADUs do not have a significant impact on the environment or the neighborhood.

However, owners of larger ADUs may face substantial fees, reaching $20,000. These fees typically comprise sewage connection costs, blueprint review expenses, building permit fees, school impact fees, and more.

In an effort to promote ADU construction, local authorities in many regions have implemented regulations aimed at lowering or banishing these fees. If you want to learn about what constitutes the total project cost and how to avoid unexpected expenses, please read this article further.

ADU Cost in California

When people first think about ADU costs, they usually imagine construction costs. In fact, the overall cost of an accessory dwelling unit includes two essential parts:

• Hard Costs

These costs are all ADU construction costs, including labor, site preparation costs, costs of materials, costs of utility development (e.g., installation of HVAC systems), interior costs, and other fees that have something to do with physical construction.

Site preparation involves leveling the ground or removing wires, rocks, and the roots of old trees from under the ground. These expenses add to the construction cost, which encompasses foundation and wall building, installing doors and windows, roofing, and connecting the construction to utilities.

Hard costs also include painting walls and other interior trim, installing cabinetry, lighting fixtures, appliances (ovens, dishwashers, washing machines), bathroom fixtures, etc.

• Soft Costs

So, what are the soft costs involved in the ADU construction? Architectural costs, engineering costs, property taxes, building permits, insurance costs, and other costs that result from ADU buildings but have no direct connection to construction.

The architectural design cost is the cost of creating a detailed blueprint for your ADU. The average architectural cost may be as much as 10–15% of the total cost of the project. Besides architects, you’ll need to receive professional advice from engineers who calculate dimensions, energy professionals who determine the energy efficacy of the ADU, and many more. This is a consulting cost. Last but not least, permitting costs are a big expense.

To learn more about building an ADU, you can apply to your local planning department or to a professional ADU company.

ADU’s Total Cost: Types of Fees

As we established, the total construction cost is more than just the cost of the building. It encompasses a variety of hidden costs involved in the preparation stage and the permitting stage. For instance, before the construction process begins, you may need some grading for your site or other site preparation costs.

Another big portion of hidden fees are fees associated with the permitting process. They include:

• Plan Check Fees

Accessory dwelling units are smaller homes constructed according to building codes. So, when building an ADU, you have to ensure its physical structure and location meet safety, feasibility, legality standards, and zoning rules. For this purpose, you need detailed ADU plans, including room layouts, dimensions of objects, and materials used for the interior.

Preliminary plan check fees are money paid for the assessment and examination of the architectural and design plans at an early stage. The plans also undergo necessary refinements to achieve city standards.

• Impact Fees

Cities impose such charges for various impacts caused by your new building. They are part of ADU permit fees, and you typically pay them before issuance of the permit.

For instance, every new residential building puts a strain on the local sewer system, adding waste that needs withdrawal. Another example is water supply. Each new house uses water resources in a particular community, which increases the need for developing and maintaining water distribution networks. These fees go to fund community services.

• Permit Costs

When the blueprint of your dream ADU is ready comes the ADU permit application process. At this stage, you submit finalized building plans to the city. ADU permit applications mandate permit fees. Once you have paid them, you can commence the construction.

Physical vs. Electronic Submissions

You can deliver the ADU plans for obtaining building permits in different ways. The easiest way is to send them via electronic means. Some cities allow digital plan submissions, which significantly simplifies the ADU process.

Physical plans require collecting, proper scaling, and then printing. When you show up in person, you’ll need to pay extra for document preparation. It’s also way slower than digital submission.

Building Permit Fee: Overall Sums

The permitting process is an inalienable part of any ADU project. The rules for obtaining permits vary depending on the city, county, and state, creating certain problems for ADU owners. Thus, before building an ADU, you need to familiarize yourself with the local ordinances of your particular place of residence.

Homeowners typically incur total fees ranging from $8 to $12 per sq. ft. This way, if you build a 1000-square-foot ADU, your ADU costs will include around $10,000 in permit fees. However, this rate is severely dependent on the city. If you’re building in a city with a dense population, the total sum can be higher.

ADUs under 500 sq. ft. are exempt from some impact fees, while ADUs located in coastal zones may require additional fees for coastal development impact fees (they may reach more than $15,000). To plan your ADU project effectively, you should be aware of all city fees required for your particular ADU design.

Factors Affecting the Size of Fees

Accessory dwelling units vary depending on numerous characteristics, catering to all sorts of owner’s needs. Some of them are small, intended for grown children or remote work, while others are larger and equipped with extra comfort amenities aimed at alluring wealthy renters.

This extensive variety leads to a wide range of fee amounts that local governments may impose on ADU owners. These are factors that can influence the fee amount:

1. Local ordinances. Jurisdictions may just have different fees for such reasons as the severity of the issue with housing shortages, population density, or local economic factors;
2. ADU dimensions. Bigger ADUs always require larger fees because they cause more strain on local infrastructure and services;
3. ADU type. Detached attached ADUs, ADU conversions, and JADUs may have varying fees based on specific permit requirements due to the complexity of the design;
4. Customized designs and extra amenities. Whether you add a pool that escalates permit costs or solar panels that can reduce permit costs, especially in some jurisdictions, design considerations can influence the overall amount of ADU fees;
5. Reviews and inspections. In some cases, properties require consultations to discuss the feasibility of elaborated designs with the California Department of Housing and Community Development. Also, your ADU may need additional inspections or plan revisions to identify non-compliance with local regulations. These all increase permit fees;
6. Impact on the infrastructure. If building an ADU necessitates changes to existing infrastructure (sewer system, plumbing, electrical system, etc.), you may have to pay extra permit fees to make up for the substantial effect on public services.

All of these factors can cause an increase or decrease in potential ADU permit fees. However, it’s essential to learn ways to avoid at least some of the fees.

Fee Waivers

Fee waivers are reductions in the fees that can take place during the permitting process. They intend to ease the financial burden for homeowners and simplify the process of constructing ADUs. Fee waivers may cover building permit fees, impact fees, city fees, and miscellaneous fees that homeowners usually have to pay.

According to SB13, California state has waived impact fees for dwellings below this size of 750 sq. ft. because an ADU project of such size does not influence the surrounding area that much.

Homeowners who receive fee waivers get a great chance to achieve substantial savings. But to do so, you need to meet certain criteria. These involve:

• a family member or caregiver of a tenant with low income must live in an ADU for a prolonged period of time;
• completion of forms and notarizing waivers.

Note that not every jurisdiction offers such waivers, so you’ll need to conduct your own research if you want to cut ADU costs significantly.

Obtaining Waivers for ADU in California

Since fees can range from several thousand dollars to several tens of thousands of dollars, the possibility of waiving some of them has a serious effect on the feasibility of an ADU building for many property owners.

But how exactly do you get waivers that help reduce ADU costs in California? There are several steps you’ll need to undertake:

1. Fill out the forms for fee exemption that this particular location demands;
2. Get the form notarized if required;
3. Send the forms to the local authorities for assessment;
4. Furnish extra records that contain information about the occupant, if it’s a family member or a caregiver, or provide financial details to prove low-income status;
5. Send them a whole set of building plans during the stage of plan checking;
6. Before commencing the building, schedule the initial consultation with the municipality to learn more about the scope of fee exemptions.

To acquire waivers that lower ADU expenses in California, you need to complete and submit the forms mandated by your municipality together with supplementary documentation and present building plans.

Transparency of Fees

It’s important to know that cities levy fees proportionate to the ADU size. Thus, if you’re choosing between a 750-square-foot ADU and an 800-square-foot ADU, opting for the smaller one may be wiser. It’s even better if it’s a 749-square-foot ADU because such ADUs are exempt from certain impact fees.

City councils put efforts into preventing unexpected fees that pose obstacles to ADU building growth. That is why contractors disclose this information to property owners at the earliest stages of ADU planning. Costs are also key factors that affect the final homeowner’s decision about ADU design and layout.

Prudent decision-making, proper budget planning, and minimizing the likelihood of unexpected financial mishaps are all reasons to learn more about ADU fees.

Frequently Asked Questions — FAQ

How much is a permit for an ADU in California?

The actual cost of an ADU permit in California varies in the large spectrum from around $7,000 to $20,000. This difference is due to the fact that all accessory dwelling units are different. Firstly, the smaller the ADU, the more moderate its permit fee. The key factors also include ADU location, ADU design (need for complex structural changes), the need to connect an ADU to utilities, etc.

What is the cheapest way to build an ADU in California?

The most cost-effective ADU type is a garage conversion ADU. A garage conversion does not require a large initial investment because the frame of your accessory dwelling unit is a pre-built, non-residential structure. Another cost-effective solution is prefabricated ADUs. This ADU comes to your site pre-assembled and saves on planning costs.

How much does an ADU add to the property value?

The exact sums vary depending on numerous factors, including the characteristics and desirability of an ADU, as well as the characteristics of your estate market. However, in some cases, a new accessory dwelling unit can add up to 20–30% to your property value.

How much does an ADU increase property taxes in Sacramento, California?

Building an ADU on your property, you may expect a rise in your property taxes. Since an ADU typically adds extra square footage, upgrading and improving your property, the increase may be from minimal to 25%. Yet, an ADU in California is still a good investment because an ADU project offers lots of financial benefits to balance the losses.

How much rental income can I generate from my ADU?

The most popular reason for building an ADU is rent. Belonging to affordable housing options that are gaining popularity, ADUs work as the perfect temporary shelter for small families, single parents, young specialists, retirees or students, tourists, or business travelers. You can earn from $1,000 to $2,000 per month, depending on your ADU’s popularity, size, and amenities.