Type of construction: converting existing space, like a garage, is typically less expensive than new construction. For a garage conversion, the “hard costs” of construction (labor and materials) often range from $250-350/sqft, while for new construction, hard costs tend to range from $350-450/sqft.
This is because an ADU conversion reuses the foundation, walls, and roof of an existing structure, rather than building an entirely new structure. Also, an ADU that’s new construction is typically required to install solar panels, while ADU conversions aren’t subject to this mandate. While installing solar panels will reduce your electricity bills, the upfront cost of solar panels ranges from $10,000 to $20,000.
Finally, remember the cost of a garage conversion is very dependent on the quality of its foundation. Old or cracked foundations will need reinforcement. Our budget calculator accounts for this by estimating a +/-20% hard cost range between the Low, Medium, and High estimates (we estimate a +/-15% hard cost range for new construction).
ADU size: naturally, larger ADUs cost more to build. However, larger ADUs have a lower cost per square foot compared to smaller ones. This is because every ADU, regardless of size, has a kitchen, HVAC system, and appliances, and larger ADUs spread these fixed costs over more area. To reflect this, the budget calculator’s Medium Estimate forecasts hard construction costs at $350/sqft for the first 500 square feet, and then $300/sqft for additional square footage.
Sloping: it’s easier and less expensive to build an ADU in a flat, spacious backyard. Sloped lots often require grading, soil compaction, and/or a retaining wall to provide foundational support and prevent drainage issues. Also, it can be harder to bring equipment and materials to a site on a slope, since the site may lack a wide, straight driveway or open side yard for easy access. Our budget calculator assumes that design and hard construction costs will be 25% higher for an ADU project on a sloped lot.
Additionally, your budget should account for soft costs and contingency.
Soft costs relate to project planning, and typically include:
- Boundary survey: This is a type of land survey that outlines the boundaries of a specific parcel. This proves that a property is in compliance with zoning regulations and local government ordinances, and confirms your ownership of the parcel.
- Designs and permitting fees: These are a full set of architectural plans (for example, a floor plan, designs, etc.) and permit application fees. When you apply for a permit, your city may charge you fees associated with new construction (such as a school district fee and energy surcharge). These fees vary from city to city.
- Structural engineering report: This report confirms that your building plans meet the state's building code and safety requirements.
- Title 24 energy calculations: This is a report that estimates the ADU's energy usage and confirms that the plans meet the state's energy efficiency requirements for new construction.
Contingency is an amount of money set aside to cover any unexpected costs that can arise throughout a construction project. We recommend that you budget a construction contingency equivalent to at least 10% of projected hard costs. Rising materials costs and supply chain delays are unfortunately common these days, and planning for some cost escalation will help you to be fully prepared for your ADU project.
Got any questions that weren’t answered here? Reach out to us for a free consultation with an ADU expert.