ADU Pricing in San Diego - What you need to knowJuly 1st, 2022
If you made it this far, it is safe you assume you are seriously considering adding an accessory dwelling unit onto your property. And, like any responsible property owner, you are probably pretty curious about how this decision will affect you financially. There are a number of factors that go into pricing an ADU.
What factors affect ADU prices?
ADU costs can be divided into six main categories: design & engineering, site work, vertical building construction, permits & fees, solar, and additional site-specific costs. You can learn more about these types of costs on our ADU costs page, as the rest of this article covers how we handle pricing ADUs.
Why are ADU prices volatile?
Many of the cost elements are highly susceptible to change based on market dynamics, especially in the post-COVID era of supply chain irregularities and labor shortages. Sharp increases in building costs, as well as a shortage of materials, has been plaguing nearly every industry since the spring of 2020. We’re facing unprecedented volatility. This is a very unique position, and one that few industries have ever experienced.
Additionally, we are also experiencing unprecedented demand for accessory dwelling units due to favorable state regulations & changes in the way families wish to live. There is simply not enough capacity to serve this need to build ADUs, both at the contractor level and the subcontractor level. To keep consistent & quality workers on our jobs, we are simply paying more for labor.
The California Construction Cost Index (CCCI) went up 13.4% in 2021 and 9.3% in 2022, and back up at an all-time high as of January 2023. That means an ADU built for about $300,000 in Jan 2021 would cost $384,000 to build in January 2023.
Will ADU prices go down if I wait?
Unfortunately, it’s unlikely ADU prices will go down, but we do expect them to start to stabilize. According to the Commercial Real Estate Services company (CBRE) and the National Association of Homebuilders (NAHB), the increases in construction costs are expected to return to the historical average range of 2% to 4% in the year 2023. It is also projected that the inflation rate will return to nearly normal levels by June of 2023.
How can I keep the cost of my ADU down and improve predictability?
When designing a detached accessory dwelling unit, there are a number of different ways you can go about design and construction. ADU plans can be broken up into several different categories, each with its own pros, cons, and costs.
Certain jurisdictions have put together predesigned ADUs that are about 80% of a complete set of plans. These attempt to streamline the ADU process for homeowners by offering a design off-the-shelf. While pre-approved plans are appealing in concept, these plans typically don’t offer a savings of time or money as compared with other options, plus leave homeowners stuck unable to make changes. If you are curious about pre-approved plans, check out our blog post outlining pre-approved plans from the County of San Diego and the City of Encinitas in more detail.
SnapADU standard plans.
SnapADU offers a set of build-ready plans that we have designed to be the most time and cost-efficient design for homeowners. Our design team has created these plans specifically to ensure their building efficiency, using “value engineering” to shave off what we’ve found to be unnecessary costs in features that don’t affect the livability or stability of the unit (e.g. using truss systems, using standard size doors & windows, combining wet walls). Check out our SnapADU plans.
You can modify any of the SnapADU standard plans to ensure you are happy with the design you have chosen. Modifying will potentially add on an extra cost to your ADU, depending on the type of changes you are looking to make. Modifications come in three different types, all of which you can find in our design policy.
There are a few ways you can modify your ADU plan. “Standard modifications” do not incur any design fees, though there may be some material costs. “Custom modifications” will add on additional fees for design, labor, and material. They are evaluated on a case-by-case basis to ensure these changes are feasible options for your ADU. Finally, “referred modifications” involve modification requests that we will refer out to a qualified vendor to either design, build, or both.
Full custom plan.
This will be the highest-cost option, as custom plans are incredibly technical and involve designing an ADU from scratch. While this offers a lot of freedom in regard to your ADU design, it also corners you into using exclusively custom finishes. For example, a custom shower will likely require a custom shower head, custom tiling, and so on, as opposed to an off-the-shelf shower and finishes. This adds up quickly, which is worth noting before entertaining the idea of a custom ADU.
Why are custom plans more expensive than standard plans?
There are several reasons that choosing a custom ADU plan vs a SnapADU build-ready standard plan is more expensive.
Design time & cost. Starting on a custom design will entail many more hours of a draftsman’s time to produce. Our design policy spells out how much custom changes will cost, starting at $2500 for significant changes.
Custom sizes & elements. Custom designs that utilize many sizes of windows and doors will have higher material and labor costs, as well as more uncertainty on lead times for materials, which can cause delays. Conversely, in standard plans, we use sizes that we know are typically available to reduce costs and potential delays if we, for instance, have a window broken in transit. Standard size materials are simply cheaper to acquire, but don’t affect the livability (think about the difference in a 48” window vs a 52” window). With custom plans, we are sourcing just one or two of most items. With our standard plans, we are sourcing dozens if not hundreds of the same doors and windows, which means we have stronger buying power to get you a better price.
Management time. Highly custom designs and material selections simply take more manual intervention in our processes. We’ve tried to automate as much of the ADU design/build process as we can so that we can offer a high quality product at a compelling price. Once we start deviating from this norm, our team must get involved in more one-off tasks, such as sourcing material or verifying that unique setups will work. This simply takes time and therefore has a cost.
To keep costs down, we urge you to consider using a standard or semi-custom plan. We understand that full-custom is the only option for some situations, for instance on a challenging lot where the space & grading constraints necessitate it. We are happy to advise on what is possible on your lot and we will provide referrals if we are not the right fit.
Is the price of my ADU going to change over the course of the project?
With most design / build projects, your price would not be locked in until your build is about to begin. This leaves a lot of uncertainty on the homeowner, making it difficult to accurately budget for the project. So we’ve decided to take a different approach.
How does the pricing structure work with Snap ADU?
SnapADU Price Lock Guarantee
We are so confident in our ability to build our projects on budget and on time that we are willing to lock in your ADU pricing before we even submit plans to the city.
We have three points of communication about price to ensure we keep you updated on the cost to build your ADU.
- 1st checkpoint: Proposal. This will get you a budgetary project cost so you can have a good idea of how much the total job will cost, from design through build. At this point, we do our best to give you visibility on the potential additional sitework costs that could apply to your project. However, we won’t have detailed site information yet, so this pricing is subject to refinement as our Feasibility Study is completed. At the point of signing the Proposal, we guarantee pricing for the design and permitting portion of the project.
- 2nd checkpoint: Feasibility Report & Construction Estimate. At this point of the process, we have reviewed your full project and completed an onsite assessment of your property, including mapping out your utilities. This gives us – and you – a clear picture of what site constraints we will need to work around, such as need for grading, utility upgrades, and other factors. It will also include design feedback, in case the original plan needs to be adjusted at all to conform with setbacks. We provide you with your Construction Estimate to sign & lock in pricing for the construction portion of the project.
- 3rd checkpoint: Post Plan Check Comments. After we receive revisions from the city, we will know if any additional requirements have been flagged that were not in the original scope. For instance, some cities require a video of the sewer lateral and may mandate work. Others may mandate a survey. We will flag possibilities like this to you, but it is sometimes advisable to take a “wait and see” approach. We would address any of these costs at the time of plan check and review them with you for approval.
This approach of offering a price guarantee means we will take on the risk of any subsequent material & labor cost increases that happen while your ADU is permitted (a process that can take 4-6 months depending on the queue & review times at the municipality). We also love how this approach means you as the homeowner know our interests are aligned with yours. We want to push to get the build started as quickly as possible, just like you do.
Because we have built so many ADUs and have such a deep well of knowledge, we have seen just about every scenario you can imagine. We have permitted so many ADUs that we have encountered – and now anticipate – just about every plan check comment there is. We have a team of 16 employees and perform our own design, permitting, and general contracting in house. Along with our wealth of experience, our vertical integration is what sets us apart from other ADU builders or construction companies.
This vast experience and control over the whole design/permit/build allows us to anticipate the unknowns and hidden costs, which are often left out of most estimates. Because of our size, we are able to keep our costs predictable and relatively stable with vendors. This enables us to deliver a fixed firm price before plans are even submitted for plan check. We operate this way to give our clients total peace of mind, knowing their costs from the outset, while SnapADU takes on the risks for unknowns.
Fill out your property assessment to get started on your ADU.