Santa Cruz Green Builders would be pleased to help you as a one-stop shop for ADU design and construction. In this article, we exlpore all of the common questions, details, and resources that are important for homeowners to review as you embark on the journey of designing and building an Accessory Dwelling Unit in Santa Cruz.

Topics in this article

• A summary of how we work

• Why would I want to build an ADU?

• Common Scenario: Cash + Home Equity Loan

• What’s the right size ADU?

• Santa Cruz City Requirements

• Santa Cruz County Requirements

• How much will an ADU cost?

• How long will it take to design, permit, and build?

• Who can live in my ADU? Can I rent it?

• Where should I start?

How We Work

We begin each ADU project with a phone consultation followed by a site-specific feasibility review. Once we understand any zoning constraints, we will lead you through the design process, carefully documenting each decision along the way to develop a comprehensive set of construction documents that will ensure your custom ADU is built exactly as you envision it.

We work with industry-leading 3D modeling software to bring your project to life and provide color renderings to ensure that you understand the shape of the building, and to help select interior and exterior finishes. As the design progresses, we will provide you with detailed cost estimates, allowing you to understand construction costs, and ensuring the design stays within budget. We will coordinate with required consultants and assemble additional documentation required for permitting with your local jurisdiction. Finally, we will submit the plans and applications for all required permits, respond to questions and comments from reviewing departments, and keep you updated until you have a building permit in hand.

What is an ADU?

ADU stands for Accessory Dwelling Unit. It is an additional, self contained housing unit that is secondary to the main residence. ADU’s are sometimes referred to as “Granny Units” or “Mother-In-Law units” since many ADU’s were initially constructed to provide housing for family members. They can take many forms. In some cases, an ADU can be attached as an addition to the house, or as a second story over a garage. The garage itself may be converted to an ADU or the ADU may occupy a basement. An ADU can be a section of the main house that is separated from the main living space, or an ADU can be a stand-alone unit like a small house or cottage. The City of Santa Cruz only requires that an ADU have a kitchen, bathroom, and place to sleep.

Why would I want to build an ADU?

An ADU can provide a separate living space for family, a home office, or a rental, among many other uses. Converting a garage or building a new ADU and renting it, is one way to increase your income, while adding value to your property at the same time. If you don't have enough savings to afford the project, ADU’s can often be financed with a loan, and then the rent can cover the new monthly payments in most cases, while adding more value and flexibility to your property.

Here is an example of a common situation we see:

You have a 500 sf garage that is in good shape and you would like to convert it into a 1 bedroom ADU. We go through the design and estimating process and the bid is for $200,000. You have some savings but don’t want to spend it all, so you decide to pay $125,000 out of pocket, and get a loan from your bank for the rest. Interest rates vary over the years and banks offer many types of loans, but for this example, let’s assume you get a $75,000 HELOC, 20 year loan, at a fixed 6%. This works out to be a monthly payment of $537. We build the ADU and then you rent it for $2,900 per month, which is an average rent for a new ADU of this size. If we assume there is a small increase in property tax and insurance of $250/month, you have a net gain of $2,113 per month. At the same time, your property value has risen by at least $200,000. And you now have more flexibility in your life. You could have a friend or family member live there if needed. You could move into it when you want to downsize and go travel while you rent out the main house. Or have live-in care next door, in your later years, when you need a bit of extra help.

How large can my ADU be?

The rules are constantly being updated and becoming more lenient. Check with us during the site visit for up to date rules that apply to your jurisdiction, or click on the link below for the City rules. To get a general sense of size, in the City you may be able to build up to 10% of your lot size with a maximum allowable ADU of 1200sf for detached ADU’s. For attached ADU’s you may be able to build up to 50% of the size of the main house, or 800sf, whichever is largest.

How do I find out the size of my lot?

Visit the County Assessor’s Office or call the City Planning Department at: 831.420.5100 

Basic Requirements for Accessory Dwelling Units: City ADU website

The rules are constantly being updated and becoming more lenient. Check with us during the site visit for up to date rules that apply to your jurisdiction, or click on the link below for the County rules. To get a general sense of size, in the County of Santa Cruz- ADU’s up to 640sf may be allowed within the urban services line(where sewer and water utilities are provided) if your lot is less than 10,000sf, and up to 800sf if your parcel is over 10,000sf. Outside of the urban services line, ADU’s may be allowed up to 800sf to 1200sf, depending on your parcel size.

A great local resources for Accessory Dwelling Units: County website for ADU’s

Contact the City or County planning departments or go into their offices to find out more about your specific parcel.

How much will it cost?

The cost to build an ADU varies widely. A garage conversion of a relatively new garage is usually the least expensive option, while a custom, stand alone ADU, or ADU on top of a garage, is more expensive. Here is a breakdown of some basic costs.

Soft Costs:

• $10,000-20,000 for Planning and Building Department fees, depending on the size of the ADU and if it is a conversion or new ADU

• $10,000-20,000 for water, sewer, and fire sprinkler connection(sprinklers only needed if main house has sprinklers). These costs depend on whether the existing services can be shared or if new services need to be tapped in at the street. Add $20,000-30,000 more if you are in the Soquel Creek Water District, for a new water meter.

• $5,000-8,000 for PG&E electric hookup/panel upgrade, depending on if you have a 200 amp panel at the main house, or if a new service is required, and how far the gas line needs to run from the shared meter(or go all electric and add solar!)

• $15,000-35,000 for architectural plans, structural engineering, title 24 energy modeling, and a possible soils report. The huge range in costs here is because garage conversions may not require much in the way of engineering and soils reports, while stand alone ADU’s require structural engineering and may need a soils report.

Building Costs:

• $150,000-300,000 for garage conversions, depending on the condition and size of the existing garage, how close the utilities are, and how much the structure needs to be upgraded.

• $300,000-700,000 for stand alone or attached ADU’s, depending on size, site, accessibility, finishes, and building department requirements. $650-700/sf is a good ballpark for building cost for smaller ADU’s. For larger ADU’s over 800sf, the square foot cost usually comes down because of the economy of scale on a larger building, if the design and finishes are fairly simple. The range in cost is great because larger ADU’s, such as a 1200sf ADU, can be 3 bedroom/2 bath complete homes, and the square foot cost may be closer to $600/sf depending on design and clients preferences.

* A note on cost: ADU’s usually have a higher cost per square foot than homes because they are smaller and have less economy of scale, and they also have the two most expensive rooms: the kitchen and bathroom. If you have a tight budget, a garage conversion is usually the most affordable way to build an ADU, and often has the best return on investment, if used as a rental. For new stand alone ADU’s, costs can be kept to a minimum with a simple design, and using affordable but durable finishes. During the planning process, we can advise on how to keep costs down and quality up!

How can I finance building an ADU?

There are many ways that people finance constructions costs. We recommend talking with your bank or mortgage lender about credit available to you, and the best way to structure a loan. See the County’s ADU website and link to “financing” in their ADU Guides: County ADU Website

How long will it take to design, permit, and build?

The design phase is usually about 4-6 months, depending on complexity. Permitting is usually another 3-5 months. Construction usually takes 6-7 months for garage conversions, 7-8 months for smaller stand alone ADU’s, and around a year for large ADU’s. It may take more or less time depending on the complexity of the project and the time of year the process is started(i.e rainy weather slows us down).

Who can live in the ADU?

Anyone can live in your ADU. The City of Santa Cruz no longer requires owner occupancy, and the County will probably be following suit shortly to comply with new State rules.

Can I rent the ADU?

You can rent the ADU, or live in the ADU, and rent the primary residence. But in no case can an ADU qualify as a legal short term vacation rental.

How much can I rent the ADU for?

The University of Santa Cruz Housing Services statistics for 2021 have studio apartments in the City of Santa Cruz renting for an average of $2,000/month, one bedroom apartments renting for $2,900/month, and 2 bedroom houses renting for $3,500. The actual rental cost for your unit will likely be higher since it will be nice and new, but rents can vary. Santa Cruz Average Rental Rates

Can I see an ADU that Santa Cruz Green Builders has built?

Yes. Call, email us, visit the contact page, and we will arrange for a visit. …or go to our ADU projects page.

Where should I start?

The first step is to visit the County or City of Santa Cruz Planning Department to see if there are any special restrictions that would keep you from building- be sure to have your property address and/or APN# with you. At this point you can also engage us to do this feasibility work for you on an hourly basis. We are happy to come out to your property to look at your lot configuration, setbacks, and other buildings, to see if your lot can accommodate an ADU.

Once it is determined your property can have an ADU, we can start the design process. We offer in-house design services to streamline your project. Or, you can bring in your own architect or designer, and we can do the construction phase. Regardless of who you use, it is important that the property owner, builder and designer all work together on the design. This ensures an efficient building process that is kept on budget and results in a much better finished product. 

How do I get in touch with Santa Cruz Green Builders?

Call us at 831.419.0514 or send an email to info@santacruzgreenbuilders.com