Why ADUs & Costs Matter in San Diego

How Much Does It Cost to Build an ADU in San Diego?

Building an ADU in San Diego typically costs $200,000–$450,000+, averaging $375–$600 per square foot, depending on factors like the design process, building plans, site conditions, and permitting process. Beyond construction itself, costs are shaped by permitting fees, utilities and infrastructure upgrades, and compliance with zoning regulations. Working with a local ADU design-build company ensures your project management team accounts for these variables upfront.

Cost by size examples:

• 400 sq. ft. studio: ~$160,000
• 750 sq. ft. 2-bedroom: ~$300,000–$350,000
• 1,200 sq. ft. 3-bedroom: $450,000+

For homeowners weighing costs against returns, an ROI calculator can help visualize potential rental income compared to loan payments. As Maxable notes, “The cost to build an ADU in San Diego starts at about $350 per square foot.”

Smaller ADUs can cost more per square foot—fixed expenses like permits, design, and utilities don’t scale down with size.

Key Factors That Influence ADU Costs

Several elements contribute to the overall cost of building an ADU in San Diego. Understanding these helps homeowners anticipate where budgets are most impacted during the design process and permitting process.

• Land & site preparation: Costs for grading, demolition, or leveling can add significantly if your lot has slope or older structures that need removal. Even basic site prep like soil testing, soil compaction, and a permanent foundation can run $10,000–$25,000.
• Utilities: Connecting water, sewer, HVAC systems, and electricity usually ranges $15,000–$30,000. Costs rise if your ADU requires a main panel upgrade, additional plumbing engineering, or if the unit is far from existing utility lines.
• Labor & materials: Construction labor and materials typically make up the majority (50%+) of the budget. Rising lumber prices, supply chain issues such as Chinese imports, and demand for energy efficiency upgrades like solar panels or fire sprinklers continue to affect the bottom line across Southern California.
• Design decisions: Homeowners choosing custom layouts often spend $7,500–$15,000 on architectural, structural engineering, and electrical engineering plans, whereas using pre-approved city building plans can lower design costs and speed up permitting.

“The larger your accessory dwelling unit is, the cheaper your cost per square foot — the first 400 sq. ft. are the most expensive.” — Caitlin Bigelow, Maxable

Site conditions and utility hookups often drive unexpected costs—evaluate your lot’s grading, soil, and distance to utility lines early.

Types of ADUs and Their Cost Differences

The type of ADU you choose has one of the biggest impacts on overall cost. Each option comes with different construction requirements, building permits, and zoning requirements that homeowners need to consider.

• Detached ADU: These are standalone self-contained residential units built in the backyard, requiring a permanent foundation, full utility hookups, and the most labor. In San Diego, detached ADUs typically cost $300,000+ because they involve full-scale construction and detailed site planning with your building team.
• Attached ADU: Sharing at least one wall with the primary home, these units are often more cost-efficient. Attached ADUs usually range from $200,000–$300,000, depending on layout and finishes. They may require additional mechanical engineering to integrate HVAC and plumbing with the main house.
• Garage conversion: Often the most affordable choice, this option reuses existing walls, slab, and roof. A garage conversion usually costs $150,000–$200,000, provided the garage is in good condition. In some cases, homeowners explore building above a garage, which can add costs but maximize lot space.
• Fee savings callout: Thanks to California’s SB 13, ADUs under 750 sq. ft. are exempt from development impact fees, saving homeowners thousands on Permitting and Fees for both detached builds and garage conversions (Monte Sereno California).

ADU Price Per Square Foot in San Diego

One of the most important cost trends for homeowners to understand is that larger ADUs generally cost less per square foot than smaller ones. That’s because every ADU requires fixed expenses like permits, design, a kitchen, and a bathroom — costs that don’t scale down just because the unit is smaller.

Most San Diego ADUs average $375–$600+ per square foot, with smaller studios at the higher end of that range and larger 2–3 bedroom units at the lower end.

Average Cost Per Square Foot by ADU Size

Cost Breakdown of an Average ADU

Building an ADU in San Diego involves a mix of soft costs (permits, design) and hard costs (construction, materials, utilities). Here’s a typical budget breakdown:

Hidden Costs Homeowners Overlook

Even with a well-planned budget, many San Diego homeowners are surprised by additional expenses that arise during ADU projects. Accounting for these in advance helps prevent financial stress and keeps the financing plan on track.

• Landscaping and exterior work: Restoring or upgrading yards, driveways, or fences after construction often adds $5,000–$15,000. These costs are frequently underestimated in a cost calculator or early estimates.
• Damage repairs from utility trenching: Running sewer, water, and electrical lines to the ADU may disrupt existing landscaping, driveways, or patios. Extra repairs and restoration can also trigger reviews tied to building regulations and fire code requirements.
• Higher-end finishes and appliances: Premium tile, cabinets, countertops, or appliance packages can significantly increase overall expenses. Finish choices alone can push a project budget up by 20–30%, especially when factoring in supply chain shifts like Canadian lumber costs.
• Contingency fund: Experts recommend setting aside about 10% of the total budget ($15,000–$25,000 for most ADUs) to cover unforeseen issues such as soil problems, structural changes, or unexpected code upgrades. This extra buffer helps avoid project delays and ensures compliance with California’s evolving building regulations and California Law.

Always budget 10% for hidden expenses—soil conditions, trenching repairs, and finish upgrades are the most common surprise costs.

Permits, Regulations, and Fee Waivers

• Permitting avg.: In 2025, San Diego ADU permit and plan check fees typically range between $6,500 and $21,000, depending on unit size, type, and scope.
• Fee waivers (impact fees): Under California’s SB 13, development impact fees are waived for ADUs 750 sq. ft. or smaller.
• Size limit: State law allows up to 1,200 sq. ft. for detached ADUs in most jurisdictions, though some cities may impose stricter limits.

Always review zoning requirements and permitting fees early—unexpected delays in approvals can add thousands to your ADU project.

Financing Options for ADUs in San Diego

• SDHC ADU Finance Program: Homeowners within the City of San Diego who meet moderate-income criteria may access construction-to-permanent loans up to $250,000 along with free technical assistance for design, permitting, and construction. Rents on these ADUs must remain affordable for 7 years. (SDHC)

Note: For Fiscal Year 2025, no new funds are currently allocated, but remaining FY 2024 funds may still be available on a first-come, first-served basis.

• Home Equity / HELOC / Cash-Out Refinance / Construction Loans:
  Many homeowners use their home equity through HELOCs or cash-out refinancing to fund the ADU construction without refinancing the entire mortgage. Others prefer construction-to-permanent loans that convert into longer-term financing once the ADU is built.

Payment Examples

Let’s run hypothetical examples for a $250,000 ADU loan at different rates/terms. These are illustrative:

ROI — Is Building an ADU in San Diego Worth It?

For many homeowners, ADUs in San Diego represent both a steady stream of rental income and a long-term property value boost.

• Rental income potential: Average ADU rents in San Diego range from about $1,900 per month for a studio to as high as $3,600 per month for a three-bedroom unit. This cash flow can often cover or exceed financing payments, making ADUs a self-sustaining investment.
• Property value appreciation: A Porch.com study cited by NAR found that homes with ADUs sell for 35% more on average than comparable homes without them. This makes an ADU a strong long-term equity play in addition to generating income.
• Case study example: In Encinitas, a 1,000 sq. ft. ADU cost roughly $398,000 to build, but the unit rents for about $3,882 per month. With that rent covering financing and operating costs, the project demonstrates how San Diego homeowners can achieve positive cash flow almost immediately.

Prioritize durable finishes and efficient layouts—ADUs designed with rental income in mind maximize ROI and long-term property value.

San Diego vs. Other California Cities

• Statewide median cost: According to UC Berkeley’s Implementing the Backyard Revolution report, the median construction cost of an ADU statewide is ~$150,000, or about $250 per square foot. (ADU California)
• Bay Area median cost: In the same report, ADUs in the San Francisco Bay Area cost a median of $177,500, which works out to roughly $329 per square foot. (ADU California)
• San Diego context: Because labor and materials costs in Southern California are higher, ADU projects in San Diego tend to be at the upper end of the California spectrum. Local builders often quote ranges like $300,000+ for detached units, reflecting the premium for SoCal construction markets and tighter labor supply.

In short: San Diego ADUs typically cost more per square foot than the state median, and often align more closely with Bay Area costs — despite the difference that Bay Area has more extreme land or permit constraints. If you see a San Diego ADU quoted at $400/sq ft or more, it’s not out of line considering local market pressures.

San Diego’s ADU costs trend higher than the state median—labor, materials, and energy-efficient upgrades like solar panels drive the difference.

Prefab vs. Traditional ADUs

Many homeowners assume that prefabricated (prefab) ADUs are always cheaper, but the true cost often ends up quite close to that of traditional construction once all factors are included.

• Prefab perception: Prefab units attract buyers with promises of lower upfront labor and factory efficiencies. Some providers advertise base unit costs in the $90,000 to $180,000 range before site work or delivery fees. (Better Together Builders notes “Prefab ADUs: $90,000–$180,000” for California)
• Reality: Once you factor in shipping, crane costs, site prep, foundation, utility connections, permitting, and assembly, final costs often approach those of stick-built ADUs. Autonomous warns that delivery, utility connections, and site work are significant hidden costs in prefab builds.
• Tip: Always get full quotes for both prefab and traditional builds for your specific lot and design before deciding. What seems cheaper at first glance may not end up being so once all on-site variables are included.

Prefab ADUs may look cost-effective, but once site work and connections are factored in, traditional builds often provide better long-term value.

Conclusion

Building an ADU in San Diego is a big investment, but the payoff in rental income and property value can be substantial. Partnering with Better Place Design & Build means you’ll have a trusted local team handling everything — design, permits, and construction — with transparent pricing and proven results. If you’re ready to turn your ADU plans into reality, Better Place is here to make the process seamless and stress-free.

Choose a design-build company that handles everything from permits to project management—streamlined workflows protect your budget and timeline.