More and more people are considering having an ADU designed and built for their property, and one of the primary questions they have is how much does an accessory dwelling unit cost to build? People like you want to know how to start budgeting for ADU projects whether they are living on Bainbridge Island outside of Seattle, in Portland, OR, or down in Los Angeles, California. ADU Cost is one of the most common questions we get and we will do our best to outline the areas that impact ADU budgets below.

The problem with googling “ADU Cost”

A quick search on google for cost of construction can lead to a wide range in estimates, and most of them are not realistic, especially for ADUs. Having worked on over 60 ADUs to date we have designed everything from simple 500sf projects on flat lots to larger 1000sf ADUs on tricky sloped sites. We have a good sense of the cost ranges for these projects and what factors impact the final price. We will do our best to outline how to set your budget and then will give a breakdown of ADU costs from a recent project that you can use as starting point to build your budget.

But first, let’s discuss cost per square foot numbers and why you shouldn’t use this is a way to develop a budget for ADU projects.

Many resources on the internet, some contractors, and many clients use cost per square foot as a basis to develop a budget for residential projects. I want to urge you not to use this as a metric to analyze your ADu budget. Although this can work if you have your numbers correct, we find that it can be very misleading for budgeting an accessory dwelling unit compared to a full custom home. The main problem has to do with scale.

Just like a large home, ADUs have all the expensive parts needed to live - a functional kitchen, bathrooms, plumbing and electrical systems, windows, doors, excavation and utility work, plus design costs and permitting fees. On a large home these costs get spread out over the larger square footage and cheaper space to build, like bedrooms and living rooms. A good way to think about it would be that the cheaper rooms like bedrooms and living rooms subsidize the more expensive rooms like kitchens and bathrooms plus utility connections, etc. ADU floor plans don’t have this advantage since they are limited in size.

Not all square footage is the same cost. A bedroom is just empty space with blank walls, a couple of windows perhaps, some flooring, and a couple of doors. This is relatively cheap to build. A kitchen on the other hand has all the walls and floor, but more lighting, appliances, counters, cabinets, plumbing work, more complicated electrical, etc. It is much more expensive to build. Where a bedroom may be $150/sf a Kitchen is more like $400 or $500/sf. This means that going from a 700sf to an 800sf project can actually bring your cost per square foot down considering both have a kitchen and a bathroom. The 800sf ADU spreads those costs out over an additional 100sf.

With ADUs being so small, they don’t have the extra square footage to spread the base costs out like a larger home does. A $200,000 five hundred square foot ADU would have a cost per square foot of $400. Where a $600,000 two thousand square foot home would only be $300/sf.

The point here is that we encourage people to develop a budget and then work to design something to hit that total project number. The size of the unit is less of an impact on final cost than the form, site conditions, materials, and systems selected. Start your project knowing that the base cost of building an ADU will be about $200,000 and then the decisions you make with your design team will impact what the final cost ends up being. Our advice is usually that ADUs come in between $200,000 on the low end and $500,000 on the upper end. We have seen some luxury ADUs in the Bay Area and Los Angeles even exceed $500,000.

How Much Should You Budget For Your ADU Project?

ADUs have three main costs to build into your budget: design fees, permitting fees, and construction costs.

ADU Design Cost

For a custom designed ADU you can expect that the design cost will be between 10-20% of your total project costs. These would include the cost of an architect or designer, structural engineer, surveyor, and other consultants that may be needed. Although most people decide they want a custom designed ADU that is specific to their needs, aesthetic taste, and responds to the unique character of their property, it is possible to save on the design cost by starting with a pre-designed ADU plan set. If you are trying to bootstrap a project and reduce costs as much as possible this could be a good way to go. We sell ADU floor plans of our past projects for those looking to save time and money. Shop for a floor plan design that works for you here: Modern ADU Floor Plans

ADU Permitting Cost

Permitting fees can vary greatly from city to city, but in Portland, Oregon you can expect that the permit fees for a detached ADU would be between $6,000 and $14,000, potentially more if you are going to use the ADU as a short term rental like Airbnb or VRBO. The big range here has to do with water service and whether you will have to upgrade the water meter for the property and/or add a new water meter for the accessory dwelling unit. If you are able to simply tie in to the existing water and sewer service of the main house you would fall on the lower end of the range. However, you may want to chose to install a new water meter if you will be using the ADU for rental income, so you can pass on the water utility bill to the tenants.

ADU Construction Cost

Construction cost is the big variable and depends on the site conditions, project size, design complexity, and the selection of materials and systems. We find that with today’s construction costs building an ADU, even smaller simpler projects on flat sites, will come in at $200,000 or more. That is sort of the baseline price, and the cost can go up from there depending on some of the variables mentioned above. Building an ADU can be complicated and we don’t advise taking shortcuts to save cost.

Although $200,000 is achievable for a nice but simple ADU, in our experience, most clients decide to add features that drives the cost up from that baseline. Whether it is nicer windows, higher performing systems, nicer interior finishes, high-end appliances, or premium materials, there is almost always a decision that is made where the clients balance the quality vs price and decide to upgrade the design. For this reason, we say that the average price of an ADU is about $250,000 in the Portland market. In places like the Bay Area or Seattle the average cost for an ADU is closer to $350,000 or more. On the higher end of the scale, if you are looking for a premium luxury ADU with the top of the line systems and appliances, high-end materials, and a premium design, you can look to spend $400,000 to $500,000 or even more.

Keep in mind that these construction cost estimates are for the construction only. On top of the construction costs needed to build the ADU, there would be the 10-15% in design fees and $6,000 to $14,000 in permitting fees. When you build your budget and talk to your design team about the project costs, make sure to be clear what the costs of construction are and what the total project costs are. $200,000 in construction costs probably means a total ADU project budget of closer to $240,000.

Accessory Dwelling Unit (ADU) Construction Cost Breakdown:

To give you a sense of how the construction budget gets to those ranges, below we have broken down a budget for a 790 square foot ADU we designed in the Cully Neighborhood in NE Portland. This ADU is being used to generate rental income and the couple who built it plan to move into the ADU when their kids leave the house. It was designed for aging-in-place with all necessary living functions on a single level.

Below is a rough construction cost breakdown for a 790 square foot sustainable ADU that was built in the summer of 2015 in Portland, OR (we’ve inflated pricing below to reflect an average 6% construction cost increase per year since that time). This design has a few unique elements that are reflected in the cost breakdown. The design includes a high performance envelope - typical wall construction with standard batt insulation walls & roof per code, plus an additional 2” of continuous exterior insulation on all the walls, and an additional 3” of continuous exterior insulation added to the roof, plus a fully insulated slab. We also designed it to have radiant floor heating with an on-demand hot water system. There was also a couple of unique custom windows that are significantly more than standard windows would be - however they were important to the design and function of the spaces.  

Finally, this breakdown is for the construction costs and doesn't include Architectural or Structural Design Fees. The design fees vary depending on the complexity and size of your project. We recommend budgeting about 10-15% on top of the construction cost for design fees, $6-14k for permitting, and we always recommend budgeting another 10% as a contingency fund to cover any unexpected costs that may come up.

Permits: $12,000
This includes the current Portland SDC Waiver. Typically permitting fees for an ADU fall around $6-$14k. This project came in at the higher end due to the fact we had to upgrade the water supply line & meter size due to the amount of plumbing fixtures in the main house and ADU combined.

Excavation: $15,000
Around a 650sf slab area including the exterior decks. Also included excavation for a couple landscaping retaining walls on the property.

Concrete Work: Footings & Retaining Walls: $28,000
This includes work needed for the ADU plus a couple of retaining walls that were designed as part of the surrounding landscaping.

Concrete Slab: $8,000
The interior exposed concrete slab and finishing for the floor of the main level. This was poured as a separate slab from the foundation footings.

Framing and Sheathing: $25,000
Typical 2x6 stud wall construction, 2x12 roof joists, supporting structural posts and beams. The large exposed glulam beam in the center of the project was around 30’ long to span the length of the living space.

Siding: $12,000
Horizontal fiber cement siding with vertical tongue & groove cedar siding at the front entry and back patio, as well as a cedar soffit under the eaves.

Roofing: $15,000
Standing seam metal roof

Windows and Doors: $15,000
2 custom windows (including a complex window that wraps the corner of the kitchen), 3 skylights, 8’ front door with sidelite, 8’ two panel sliding door, and three large vinyl sliding windows.

Plumbing: $25,000
Includes radiant floor heating installation and an on demand hot water system. Plumbing fixtures, sump pump, fire protection sprinklers & installation.

Electrical & Fixtures: $20,000
Electrical panel, electrical wiring, outlets and switches, lighting fixtures, and installation labor.

Insulation: $12,000
Roxul batt insulation in walls and ceiling stud cavities per code, plus an additional 2” of continuous exterior polyiso insulation on all walls, 3” of continuous exterior polyiso insulation added to the roof, and a fully insulated slab on grade. (This amount of insulation is well above code requirements and is close to passive house standards. With some solar panels this ADU could easily achieve net zero energy. )

Sheetrock (Drywall): $10,000
Drywall, mudding, taping, sanding

Interior Doors: $2,500
2 standard doors, 1 pocket door and 3 closet bi-folding doors

Paint - Exterior: $5,500
One color, no accent or trim color

Paint - Interior: $8,000
One color throughout the interior.

Trim Work: $5,500
1x4 painted MDF base trim, plus clear coated fir window sills

Cabinets: $6,500
IKEA kitchen cabinets and some custom casework in laundry and bathroom

Countertops: $1,500
Ikea wood countertops material and install labor

Tile: $7,000
Kitchen backsplash and shower - materials and labor

Staircase: $3,500
Off the shelf spiral staircase kit

Flooring in Loft: $3,500
Pre-finished solid White Oak, about $8/sf plus misc. materials and install labor

Cable Railing: $3,500
Off the shelf system

Appliances: $7,000
Stovetop, oven, vent hood, dishwasher, garbage disposal, refrigerator, washer, and dryer

TOTAL: $251,000
Includes all materials, labor and contractor fees.

The budget above is fairly typical for ADUs we have worked on over the years. And it is important to point out that this wasn’t a high-end or luxurious project. There were a few places where the clients made decisions to invest more to get the result they were looking for. For instance we had some custom windows, skylights, and radiant floor heating. The rigid insulation was also an upfront cost but will pay itself back through lower energy bills for the lifetime of the project. Meanwhile, the rest of the project was pretty standard materials and systems and in some places we used cheaper than normal elements, like the Ikea kitchen. Overall, we think this is a good starting point for most people who want a high-quality, nicely designed accessory dwelling unit in Portland, Oregon.

Important Note:
Every site is different and the conditions can greatly impact cost. Excavation and concrete work costs can vary greatly depending on the topography and of the site and other conditions (is it sloped? lots of trees? poor soil conditions? Does it need extra soil removal or backfill?). Ease of access to the location of the ADU can also add costs (are there fences that need to be removed and rebuilt? Can machinery get to the location to excavate or deliver materials? will a crane rental be required?). Material selections and other design decisions you and your designer will make throughout the process will also have a big impact on cost. The outline above is a good starting out point but I guarantee your project will end up being different.

If you have any questions don't hesitate to reach out. We are always happy to talk about the unique aspects of your project and talk through your goals and ideas for a sustainable Accessory Dwelling Unit.