Now that ADUs are permitted in California for homeowners in every county, you may be wondering if building an ADU would be possible for you.

ADU stands for “Accessory Dwelling Unit,” which is a secondary residence or structure on your property. This structure must function on its own as a dwelling, but it wouldn’t have a separate address. 

Sometimes referred to as an in-law suite, granny flat, or duplex - ADUs are becoming more and more common (where they’re legal) because of the lack of affordable housing on the market.

Financing the construction of an ADU, while a significant barrier, is not the only hurdle faced by homeowners seeking to add an ADU to their property in California.

How much does an ADU cost? 

Homeowners struggle with proposing ADUs that meet their local planning department’s requirements, obtaining the necessary permits, and finding an honest and reliable construction team. 

However, those who have constructed ADUs note the benefits that these units provide; for example, creating a source of supplemental rental income or providing multigenerational housing.

Grandma can have her own independent space, your college graduate that moved back in can get some alone time, or you can use it as a space for AirBnB or rentals.

But before you begin planning your ADU build, you’ll need to know some of the biggest challenges that homeowners face when constructing ADUs and how you can solve them with ease and get on your way to your brand new ADU.

1. Approval Process & Permitting Fees

One of the biggest challenges that homeowners face with building ADUs is government approval and permitting. 

Overall, 50% of homeowners found it difficult to build their ADUs to their city/county’s development standards. Many people struggle with the length and complexity of the permitting process, and feel like their jurisdictions impose unnecessary red tape in the permitting process. 

Even architects struggle to navigate through the different departments’ requirements. 

Unlike other home renovation projects, ADUs have much more stringent legal requirements that have to be met and reviewed by your local municipality. 

Not only that, because they’ve only been allowed as of recently in California through the SB-9, some municipalities continue to be hesitant with the approval process and might drag their feet. 

So, knowing that most people find this difficult, these are the steps you must take to have a smooth approval process: 

1. Don’t get flip with the permitting department

At the end of the day, your local jurisdiction requires permits for ADUs to keep people safe. It would be scary to build something with a high risk of it falling apart and hurting someone. Their goal is not to make your life harder, even if it might seem like that. 

So try to make the department your best friend while advocating for yourself at the same time. 

2. Don’t file for permits at the last minute

While not every process takes this long, it can take more than six months to get ADU permits approved by your local authority. We don’t mean to scare you, we just want you to be realistic. 

If you’re all set to go to build your ADU and are hoping to submit your permit request at the last minute and get started, you may want to reset your expectations. 

3. Prepare every item on your county’s ADU permit checklist

Your county website should lay out instructions for you and your builder to read before submitting a permit. Usually, they’ll have a checklist of all the documents you’ll need, as all the rules your ADU plans need to follow if you want them to be approved. 

For example, this is the San Jose County ADU checklist.

Bonus tip: Certain items on the checklist may require some extra work. For example, if your property is in a landslide zone, you’ll need to obtain a Geohazard clearance from public works to submit with your application.

4. Review your building plans with your contractor to make sure they fit the requirements

Although we’d hope your contractor is deeply familiar with the ADU permit process in your county, ADUs are a new trend and have only just become possible in many areas. They may also be in the dark about some requirements.

So, sit down with your contractor’s plans and your county’s requirements, and make sure the plans include everything.

Bonus tip: Even better, review the plan requirements BEFORE your contractor creates the plans to make sure your vision aligns with what’s possible and you don’t have to change anything later.

5. Submit your application/meet with your local jurisdiction to review the application

If you’ve done the work in advance, your application should be approved and/or this meeting should go well. 

If you missed some details, your application will get denied and you’ll have to start over.

Unfortunately, in counties with more vague guidelines, you may not even be aware of a problem with your build until submitting your application.

Bonus tip: Call or meet with the permitting department to ask questions before you submit your application if you’re unsure. Even better, see if there are any local FB groups or forums where you can ask to see if others have been through this before and have advice.

So to summarize, it’s important that you and your contractor are deeply familiar with all the local guidelines and follow them to a T, have all the necessary paperwork and submit it correctly.

2. Design Constraints

Another challenge that homeowners face with ADUs is design constraints. Hidden design regulations or standards can halt progress immediately. 

Unlike a kitchen renovation or addition project, ADUs are fully new builds that require a lot more architectural and engineering expertise. While a kitchen reno is fully inside of your home and within your purview, things that are outside on your property could affect other people. 

To make sure that your design won’t get flagged, here’s what you need to look out for:

Pre-Approved Plans

Under the Standard Plan Program, plans are designed by private licensed architects, and engineers to accommodate various site conditions.

Plans are then reviewed and pre-approved for compliance with the Building, Residential, and Green Codes. 

When an applicant selects an approved Standard Plan, staff will review site-specific factors for your property, including compliance with the Zoning Code and foundation requirements.

In certain counties and states, you can find a listing of several ready-to-go blueprints that have already been through the approval process. 

(If you want to make changes to these, make sure you still consult with your architect.)

But even if you use a pre-approved plan, you’ll still need to watch out for these potential problems: 

Lot, setback, or height limits 

If your local jurisdiction has no ordinance regulating ADUs, then you can build up to 1200 square feet, 16 feet high, with four-foot side and rear yard setbacks - and there are no requirements based on Floor-Area-Ratios (FAR), lot coverage, open space, or minimum lot size, according to the UC Berkeley Center for Community Innovation.

If your property is in a jurisdiction with its own ADU ordinances, the regulations can limit you to 850 sq ft (or 1000 sq ft if the ADU has 2+ bedrooms) and it can impose requirements based on Floor-Area Ratios (FAR), lot coverage, open space and minimum lot size. 

But there is a “statewide exemption ADU” where you can build an ADU up to 800 square feet, 16 feet high, and with four-foot side and rear yard setbacks, and it should be exempt from the FAR, lot coverage, open space, and minimum lot size requirements.

Photo credit: Modative

Utility connections

ADUs access sanitary sewer and water service by connecting to the main sewer and water service of the primary residence, so you’ll need to make sure that the design coordinates with your main sewer and water service so that you don’t need to move the location.

Water and sewer connections are accessed through the basement of the primary residence. 

ADUs connect to existing electrical service through a new meter, allowing the unit to pay for its own electricity.

Parking Requirements 

Parking requirements for ADUs cannot exceed one parking space per unit or bedroom, whichever is less. 

These spaces may be provided as tandem parking on a driveway. Guest parking spaces aren’t required for ADUs under any circumstances.

3. Obtaining Financing & Cost of Construction

According to a survey from the UC Berkeley Center for Community Innovation

(24%) of homeowners surveyed cited paying for the cost of construction as a top challenge associated with constructing their ADU


(5%) struggled to obtain financing for their projects

This is quite astounding, considering the fact that the homeowners in this survey are more affluent than the typical Californian homeowner. 

Overall, 62% of homeowners depended wholly or partially on cash savings, or money from a friend or a relative, to finance their new ADU.

Cost of construction

While in this survey the majority of homeowners paid for their ADU without a loan, this isn’t realistic for the average person. 

An ADU can cost anywhere from $30,000 to $400,000, and most people aren’t able to save that kind of money or borrow it from a family member. 

So how can you afford an ADU? 

Obtaining Financing

There are several different ways to finance an ADU. You can read about them more in detail through that link, but generally, we’d recommend a RenoFi Loan.

Sometimes homeowners struggle to use traditional loan options like HELOCs, personal loans, or other renovation loans because it’s difficult to borrow the full amount you’ll need. 

If you’re curious about how much you can borrow with a RenoFi Loan, click the big red button below to get an estimate in 90 seconds or less.

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