Will ADUs Get Cheaper if You Wait?

Are accessory dwelling units getting cheaper if you wait? Short answer: no. ADU costs are far more likely to increase over time than drop. If you take nothing else from this article, here is the pattern we see repeatedly:

• ADU costs trend upward, not downward
• Regulations and enforcement tighten over time
• Many homeowners who actually built an ADU wish they had started sooner
• Waiting only makes sense when driven by life timing, not market timing

We understand why this question of waiting comes up. Homeowners are watching interest rates, reading headlines about construction slowdowns, and sometimes hearing from “a guy” who says he can build an ADU far cheaper than established builders. When that happens, it is reasonable to ask whether waiting might lead to lower costs.

In our experience, ADUs behave much more like healthcare or higher education than consumer electronics. Over time, they become more regulated, more specialized, and more expensive… unfortunately not cheaper.

Choosing to “wait and see” is effectively a bet that construction costs, regulations, or timelines will improve. Historically, that bet has not paid off.

Waiting feels safe. In practice, it usually costs more. But of course, that does not mean everyone should rush. We always move at the pace our clients dictate. But it does mean that waiting rarely produces the savings people expect. Below is how we think about it, based on what we see every day building ADUs across San Diego.

Why ADU Costs are Unlikely to Get Cheaper

You likely guessed that construction material is getting more expensive. But ADU-specific labor components are another issue. Regulatory requirements & enforcement contribute to an upward trend in ADU costs prices specifically. Here’s our take.

Inflation and Material Costs

Construction materials are tied to global supply chains, energy prices, and trade policy. Over the last decade, material pricing has moved in waves, but the baseline keeps stepping up. Lumber, steel, concrete, drywall, electrical components, and fixtures rarely reset downward in a meaningful way.

In fact, 2021 to 2025, California residential construction costs increased a staggering 45% (CCCI). That $300K your neighbor built in 2021? It would be $430K now just based on construction labor & material cost increases.

Tariffs and trade uncertainty add another layer. Even when materials dip temporarily, contractors are cautious about passing along short-lived decreases because replacement costs remain high.

Labor Shortages and Rising Wages

ADUs require skilled labor that understands local zoning, inspections, utilities, fire requirements, and sequencing in tight residential sites. That is a narrow and increasingly in-demand talent pool.

As experienced tradespeople retire and fewer workers enter the construction trades, wages rise. Specialized ADU experience commands a premium, and that premium has only grown as cities tighten enforcement.

A clear example is geotechnical engineering. The cost for soils reports in San Diego has roughly doubled over the past five years. This is not just inflation. Geotechs are in massive demand due to infill development and ADUs, as many cities are now requiring soils reports for ADUs.

We see similar dynamics with electrical work, where panel upgrades and service changes have become more expensive as utilities increase requirements and enforcement.

In short, labor is not getting cheaper. Between wage pressure, higher insurance and liability exposure, and growing demand for specialized expertise, labor remains one of the largest and fastest-growing cost components of an ADU build.

Permitting and Fees

While some programs help with specific pre-development costs, overall permitting and impact fees do not trend downward. In fact, many jurisdictions are increasing scrutiny as ADU volume rises. For example, the permitting fees for the City of San Diego now average around $26/SF for builds larger than 500SF. That’s nearly doubled since 2022.

Programs like the CalHFA ADU Grant have helped some homeowners offset early soft costs, but these programs are limited, competitive, and often temporary (grants have not been available since 2023).

Market Reality, Especially in “Booms” like ADUs

When ADUs open up in a new city or region, there is often a surge of new contractors offering aggressive pricing to win work. Many of these bids are not intentionally misleading. They are simply based on incomplete assumptions about what ADU projects actually require.

As projects move forward, the gaps become clearer. Timelines stretch. City and utility requirements become more detailed. Site constraints, inspections, and coordination add layers that were not fully accounted for at the outset. Builders who priced without deep ADU experience quickly realize the true scope of work involved.

Over time, the market corrects itself. Pricing stabilizes at higher, more realistic levels that reflect the actual cost of delivering a compliant, durable ADU.

This is also why comparing ADU bids purely on price can be misleading. If you are curious, we break down in more detail why the traditional advice to “get three bids” often does not translate well to ADU projects.

Why You Should Not Wait to Build an ADU (if you know you will eventually)

Many homeowners do not delay because the numbers do not work. They delay because the project feels big, complex, or hard to start. That hesitation is understandable. ADUs touch zoning, financing, design, construction, and long-term planning all at once.

But indecision itself carries a cost. The longer a project sits in limbo, the more likely it is to become more expensive, more constrained, and harder to execute cleanly. Most homeowners who wait are accepting exposure to rising costs, tighter enforcement, and lost time.

Opportunity Cost

Every month you wait is a month of lost rent, lost housing flexibility, or delayed family plans. For homeowners planning to rent the ADU, that missed income often exceeds any savings they hoped to achieve by waiting.

Even for non-rental uses, delaying an ADU can mean postponing multigenerational living, caregiving support, or the ability to adapt your property to changing needs. Over time, those opportunity costs tend to outweigh the risk of modest construction price increases.

There is also a practical constraint many homeowners overlook: experienced ADU builders have limited capacity. Waiting does not just mean higher costs. It can mean fewer good options, longer timelines, and less flexibility when you are finally ready to start.

People Consistently Wish They Had Started Sooner

In a 2025 survey of SnapADU clients, we asked: “How long had you been considering an ADU before starting your project?”

• 13% said less than 6 months
• 40% had been thinking about it for 6-12 months
• 20% had been considering it for 1-2 years
• And 27% waited over 2 years

In other words, nearly half of homeowners sat with the idea for a year or more before moving forward. We then asked how they felt about the timing of their decision. The result was striking.

• 0% wished they had waited longer
• 77% felt good about their timing
• 23% said they wished they had started sooner

Not a single respondent wished they had delayed their ADU further.

“Only wish we had started sooner. Love our ADU!” – Harry O, San Diego Homeowner

Regulatory Enforcement is Getting (Much) Tighter

ADUs are no longer a niche product. As volumes increase, cities and agencies are refining both their codes and how closely they enforce them. The result is a higher bar than even a few years ago. Also, each code cycle introduces new requirements that add scope, coordination, and cost.

• Fire requirements are a good example. Hose pull distance calculations, fire access rules, and sprinkler triggers continue to evolve, and in many fire districts these interpretations now add thousands of dollars to a project that would have cleared review just a few years ago.
• Environmental overlay enforcement has expanded as well. Conditions like sensitive vegetation, brush management, and environmentally constrained areas are now showing up more frequently in reviews, even on lots that previously appeared straightforward.
• Utilities are another area of growing complexity. Water, sewer, and electrical departments are formalizing requirements that used to be handled more informally. We are seeing more upfront coordination, more documentation, and more physical upgrades required, such as increased water lateral sizing or electrical service changes.
• Energy codes also continue to tighten. What qualifies as compliant today may not qualify tomorrow. Larger ADUs, for instance, now trigger solar requirements that were not enforced earlier in ADU adoption.

As ADUs become more common, reviewers are less inclined to “let things slide.” Items that were rarely flagged in 2023 or 2024 are now routinely enforced. Departments have more internal guidance, more precedent, and more incentive to be consistent.

This means projects are being reviewed with greater scrutiny, and assumptions that once held no longer do. The same lot, design, or access condition that passed quickly a few years ago may now trigger additional comments, studies, or mitigation. Each added review cycle increases administrative time and cost. And without an experienced team advocating appropriately under state law, homeowners may also end up absorbing requirements that were not actually necessary in the first place.

The regulatory environment tends to move in one direction: more clarity, more enforcement, and more cost, not less.

Potential Exceptions: When Waiting Might Help

There are situations where waiting is the right call. The key is that the reason should be personal or logistical, not based on the hope that construction prices will drop.

Interest Rates and Financing Structure

If you are financing your ADU, lower interest rates can reduce long-term borrowing costs even if construction prices increase. For some homeowners, especially those using long-term debt, this can materially affect monthly payments. That said, this approach carries real risk:

• Rates may not fall as much as expected, or may take longer to move.
• Construction costs can rise faster than any rate-driven savings.
• You delay rental income or housing flexibility while waiting.

In practice, many clients who wait for rates to drop end up paying more overall, not less.

Family Timing and Life Transitions

Waiting can also make sense when the timing of the ADU does not yet align with how your household plans to use it. Common examples include:

• A parent or relative who plans to move in later, but not yet.
• Children approaching college age, where future rental or flex use is planned but premature today.
• Major life transitions like job changes, relocations, or caregiving responsibilities that would make construction disruptive in the near term.

In these cases, waiting is about building at the moment when the ADU will actually be used and valued. That is a rational reason to pause, even knowing costs are unlikely to come down.

Delaying can make sense when it is about aligning the project with your life and how the ADU will actually be used, not when it is about trying to time the construction market.

What would actually need to happen for ADUs to get meaningfully cheaper?

For prices to drop, we would need to see some combination of:

• A sustained decrease in labor and material costs
• Looser regulations or lighter enforcement
• Less demand for ADUs in housing-constrained markets

None of those trends are currently pointing downward. In fact, most are moving in the opposite direction. That is why stabilization, not reduction, is the more realistic expectation for ADU costs.

Why Momentum Matters During the Project

Delays inside a project are just as costly as delays starting one.

• Every month of delay is lost rent.
• Prices continue to rise while you pause.
• Incentives, credits, or favorable interpretations can expire.
• Contractors plan staffing and pricing around steady throughput. Long pauses take up queue space and add inefficiency.

Cities also tend to find more issues the longer a file sits. Projects that linger attract more comments.

There is also a human factor. Picking a project up and putting it down increases the chance of errors, misalignment, and rework.

Get in. Get through. Get out.

What if I want to do design work now, then the construction later?

We get this question a lot, and it’s understandable why phasing sounds appealing. However, in our experience, dragging out the project timeline actually leads to more issues.

If you extend the design & permitting process:

• Code cycles can change and zoning interpretations can shift, causing rework
• Elements that were once advantageous may no longer be allowed.

Picking up a project multiple times also carries costs for service providers. This is why many firms price more favorably when a project moves straight through design, permitting, and construction.

This also applies to cities. We have seen projects stall over things like delayed CC&R signatures from the homeowner, only to receive new plan check review comments from the city that did not exist before. The reviewer simply had more time to revisit the project.

Another consideration is that building permits are not indefinite. Once issued, cities typically require construction to begin within a defined window and projects must maintain progress through inspections. We explain these deadlines in our guide to how long ADU permits last in San Diego.

Weighing Your Options: What if You’re Still on the Fence?

If timing is not right for personal or financial reasons, that is valid. But if you are waiting purely in hopes that ADUs will get cheaper, history suggests that strategy rarely pays off.

If you are on the fence, ask yourself this:

• Do I know I want an ADU eventually?
• Am I waiting for clarity, or just postponing the decision?
• If costs were higher and rules stricter a year from now, would I still choose to wait?

If the answer to the first question is yes, the risk of waiting is often greater than it appears.

For real ways to save money on your project, our article on How to Lower ADU Costs highlights the different ways you can cut costs today. For more help on the decision of building an ADU, also check out our articles: The One Shift That Turns ADU Planning Into Progress and How to Prepare for an ADU Build: 7 Steps To Take Before Starting.

You do not need to commit to building today. But getting clarity earlier almost always reduces cost, stress, and delay later. If you want help pressure-testing timing, feasibility, and cost before making a decision, that’s exactly what an early discovery conversation is for. Schedule your free discovery meeting to get answers.