ADU (Addition Dwelling Unit) in Santa Cruz

An Accessory Dwelling Unit or ADU is a self-contained housing unit built on your property that serves as a second house. These units which are more commonly known as “granny units” were initially built with the sole purpose of providing accommodation for family members.

ADUs can take many shapes and forms. They can be an addition to a house, a second story built on top of a garage or even a conversion of a garage. The City of Santa Cruz stipulates that an ADU require a kitchen, bathroom and sleeping quarters and can therefore be a space which is separate from the main living space (such as a basement) or a stand-alone unit like a cottage.

With the increased cost of living and sky-high interest rates, ADUs have gained popularity over the past few years within Santa Cruz as they can be used to provide housing to family members or even rented out for a secondary income. From teenagers wanting a space of their own or elderly parents wanting to stay close to home, an Accessory Dwelling Unit is a great way to keep families close together and allow everyone to feel like they have a place of their own.

If you can invest in building an ADU it is also a nice way to earn an extra monthly income. According to the University of Santa Cruz Housing Statistics, the average cost of a 1-bedroom apartment is just under $3000 and a 2-bedroom apartment would on average be rented out for $3500. Renting out your ADU could bring in considerable cash flow and would make a great investment.

One of the conditions of building an ADU on your property is that the homeowner must occupy either the main house or the ADU. The ADU is also only permitted for long-term housing solutions and is not allowed to be used for short-term holiday rentals.

Santa Cruz California was one of the first Californian cities to legalise ADUs more than 30 years ago. Back then the rules were extremely restrictive which meant few ADUs were being built. To be exact, only 83 ADUs were built in Santa Cruz between 1986 and 2002. Since the rewrite of the code, it has been recorded that there are on average 24 new units being built per year.

How large can an ADU be?

If you are based in the city and are building a detached ADU, you can build up to 10% of your property size with a maximum allowable ADU of 1200 square feet. If you are planning on building an attached ADU, you can build up to 50% of the size of the main house, provided that it does not exceed 800 square feet.

How long will it take to build my ADU?

Although these timelines are not set in stone, the design phase of an ADU normally takes between 3 to 6 months, depending on the size and complexity. You should then allow an average of 4 months to obtain the necessary approval and permits. Construction on an ADU can take about 6 months for garage conversions and roughly about 8 months for small stand-alone units.


Here is a guideline on some basic cost expectations:

Initial costs:

$20 000 for planning and department fees

$5000 – $15 000 – water and sewage costs – dependant on whether it can be shared with the main house.

$8000 – electrical costs

$15 000 – $30 000 – architectural plans, structural engineering and soils report

Building costs

$100 000 – $200 000 for garage conversions – depending on size and complexity

$250 000 – $650 000 for stand-alone units – depending on size, finishes and accessibility

Additional Dwelling Units generally have a higher cost per square foot than homes since they are smaller and therefore offer fewer economies of scale. They also do require two of the most expensive rooms to build to be included – a kitchen and bathroom.

For budget-conscious consumers, a garage conversion is usually the most affordable way to build an ADU. These often make great investments as well as they are easy to rent out.

Provided you opt for simple designs, and affordable and long-lasting finishes, stand-alone ADUs can be kept to a minimum if planned properly.

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