What is an ADU?
ADU stands for Accessory Dwelling Unit. It is an additional, self contained housing unit that is secondary to the main residence. ADU’s are sometimes referred to as “Granny Units” or “Mother-In-Law units” since many ADU’s were initially constructed to provide housing for family members. They can take many forms. In some cases, an ADU can be attached as an addition to the house, or as a second story over a garage. The garage itself may be converted to an ADU or the ADU may occupy a basement. An ADU can be a section of the main house that is separated from the main living space, or an ADU can be a stand-alone unit like a small house or cottage. The City of Santa Cruz only requires that an ADU have a kitchen, bathroom, and place to sleep.
How is an ADU different than a duplex?
An ADU is limited in size and is smaller then the main residence, and the owner must reside in either the ADU or the main house.
Why would I want to build an ADU?
An ADU can provide a separate living space for family, a home office, or a rental, among many other uses. Many people in the city have a hard time making their mortgage due to the high cost of living in Santa Cruz. Converting a garage or building a new ADU, and then renting it, is one way to make added income while adding value to your property at the same time. If you don't have the savings in the bank, the project can be financed with a loan, and then rent can easily cover the new monthly payments.
Here is an example of how an ADU can make you money:
You have a garage in the back of your property with alley access that doesn’t get much use. We come out and give a bid for converting the garage into an ADU. We agree to build the ADU for $75,000. You don't want to dip into your savings, so you decide to get a loan from a bank for $75,000, at 4.5% for 30 years, which works out to be a monthly payment of $380. We build the ADU and then you rent it for $1,000 per month. After considering the small increase in property tax and insurance, you have a net gain of $550 per month! At the same time, your property value has risen by at least $75,000!
How large can my ADU be?
If your lot is 5,000-7,499 square feet, you can build up to 500 square feet. If your lot is 7,500-10,000 square feet, you can build up to 640 square feet. If your lot is 10,001 square feet or larger, you can build up to 800 square feet.
*new rules in the City of Santa Cruz allow ADU’s to be 10% of lot size, for example 700 square feet for a 7,000 square foot lot.
How do I find out the size of my lot?
How much will it cost?
The cost to build an ADU varies widely. A garage conversion can be relatively inexpensive, while a custom, stand alone, ADU is more expensive. Here is a breakdown of some basic costs.
- $6,000-25,000 for Planning and Building Department fees, depending on the size of the ADU and if it is a conversion or new ADU
- $4,000-15,000 for water, sewer and fire sprinkler connection, depends on whether the existing services can be shared or if new services need to be tapped in at the street
- $1,000-4,000 for PG&E hookup and panel upgrade, depends on if new service is required or if the main house service can be shared
- $4,000-20,000 for architectural plans and engineering. Garage conversions may not require very large plan sets, while stand alone ADU’s require structural engineering and a soils report
- $30,000-130,000 for garage conversions, depending on the condition of the existing garage
- $150,000-300,000 for stand alone units, depending on size, site, accessibility, finishes, and building department requirements
* A note on cost: If you have a tight budget, a garage conversion is the most affordable way to build an ADU and it has the best return on investment if used as a rental. If this is not a possibility, costs can still be kept to a minimum by doing a simple design and using low cost but durable finishes. During the planning process, we give free consulting on how to keep costs down and quality up!
How long will it take to build?
From the start of the design phase to completion of the ADU, larger projects usually take about one year. Garage conversions take an average of 8 months. It may take more or less time depending on the complexity of the project and the time of year the process is started. Usually the design phase takes 2 months and permitting takes another 2 months. The actual construction period ranges from 4-8 months, depending on complexity and scope of the project.
How can I finance building an ADU?
There are many ways that people finance constructions costs. We recommend talking with your current mortgage lender about credit available to you. Lighthouse Bank is one of the best banks in town for construction loans.
Who can live in the ADU?
Anyone can live in your ADU. Or you can use it as an office. The City of Santa Cruz does require that the owner either live in the ADU or the primary dwelling on the property. The other dwelling can be rented.
Can I rent the ADU?
How much can I rent the ADU for?
The University of Santa Cruz Housing Services latest statistics have studio apartments renting from $675 -$1200, and one bedroom units renting from $1075 – $1800. The actual rental cost for your unit will vary.
I don’t live in the City of Santa Cruz.
The information on this page is for residents within the City of Santa Cruz only. If you live outside the city limits and are interested in building an ADU, call us about the guidelines specific to your property location. The County of Santa Cruz has a “secondary unit” plan for building ADUs that could work for you.
Can I see an ADU that Santa Cruz Green Builders has built?
Where should I start?
The first step is to see if you can build an ADU on your property.
Visit our Do I Qualify page to see if an ADU is right for you.
Then the next step is to visit the County of Santa Cruz Planning Department to see if there are any special restrictions that would keep you from building- be sure to have your property address and/or APN# with you. At this point you can also call us and we can do this step for you. We are also happy to come out to your property to look at your lot configuration, setbacks, and other buildings, to see if your lot can accommodate an ADU.
Once your property is deemed acceptable for an ADU, it is time to do the design. You can use one of the City’s pre approved ADU designs (which need some updates and engineering) or you can start from scratch and create your own design. We have architects that we recommend or you can bring in your own architect or designer. Regardless of who you use, it is important that the property owner, builder and architect all work together on the design. This ensures an efficient building process that is kept on budget and results in a much better finish product. The next step is to find a builder. And that is where we come in!