Chapter 10: The Cost to Build A Cottage in the Backyard
Your costs should be divided up between Soft Costs and Hard Costs.
These include all service and permitting fees such as Architect Fee, Financing Fees, Building Permit Fees and Utility Hookup Fees. For a complete list of both hard and soft costs and one of our examples from the Bay Area, see the construction cost table in the 2019 Guide To Building an ADU.
Utility Hookup fees are one of the most important soft cost items to budget for and to understand up front. Make sure to do your homework and find out what the sewer, water or electric hookup fees are in your area. In Contra Costa County, the sewer hookup fee from the Contra Costa Sanitary District is about $3,000 for a 650sqft ADU. If you need a sewer ejector pump, it is an extra $2,000.
As of February 2019, the Contra Costa Water District(CCWD) is now requiring all new ADU’s to have a water meter. The water hookup fee can be waived if you have an existing detached structure and are not adding square footage to the footprint of your house (i.e. garage conversion, basement conversion etc.). We were quoted $21,600 for the total hookup fee where $11,600 is due up front at the time of the permit. A new home costs about $32,000 for the water hookup fee so at least the fee is discounted for ADU’s. The CCWD has options to work with homeowners to finance about half of the cost over 2 years at 3%. In addition, you have to plan well in advance as you have to pay the fee and wait about 12-15 weeks for CCWD to get out to your street and perform the work.
You will work with a contractor to come up with your Hard Cost Budget. The cost of building your ADU is dependent on many factors like quality of finishes etc.
Examples of conditions that would add cost to your hard cost budget are: flood plain, drainage issues, sloped lot, higher level finishes, special requirements like elevators, excessive demo work, tree and/or arborist issues, excessive excavation and demo issues, existing sewer lateral repair work, flat roof, vaulted ceilings etc.
The following is a Konhoff Company hard cost estimate example:
Hard Cost Estimate Example (750sqft ADU in Contra Costa County)
Job Site Prep: $1,500
Window Allowance: $3,000
Electrical Fixtures: $750
Plumbing Fixtures: $1,500
Interior Trim: $11,000
Cabinet Allowance: $6,500
Countertops Allowance: $4,000
Appliance Allowance: $2,400
Paint Interior: $4,500
Tile Prep and Install: $6,500
Paint Exterior: $1,100
House Keeping: $2,200
Contractor Profit: $10,000
Additional Tax Assessment
You should call up your county tax assessor and see if you can get an idea of how they will re-assess your property after your ADU is built. The general consensus is that your property value will increase by the amount of work that you perform. For example, if your budget for your project was $150,000, your property tax basis will increase by approximately that same amount. This means you should take very good notes and document the cost of your ADU in the event your tax assessor is aggressive and assigns a higher value to your project. In this case, it is helpful to have your project costs well documented.
The 2019 Guide to Financing & Building an ADU - Full eBook
How to finance, plan, and determine if your Accessory Dwelling Unit / Granny Flat is a good investment. This guide will share tips on how to analyze your project as an investment and give you tools you need to run the numbers like a professional developer. You will gain valuable knowledge on the feasibility of your project and what hidden costs to look for when determining your budget.
The 2019 Guide to Building an ADU in California
(Including Financing Options)
For homeowners who want to make the smartest investment when building a backyard cottage, granny flat, accessory dwelling unit, or garage apartment.