Real 2026 numbers for a backyard home: what's in the price, the fees most people miss, and the ones California law took off the table.
The short answer
A finished, permitted backyard ADU from Bay Modular costs $124,900 for a 256 sq ft studio up to $271,900 for a 640 sq ft two-bedroom in 2026 — permits, foundation, delivery, crane, and utility hookups included. Keep it at 750 sq ft or less, and California law says your city can't charge you impact fees.
All-in price range for a Bay Modular ADU with a full kitchen and bath, 2026
permits, site work, foundation, crane and hookups included — fixed in writing before you sign
local impact fees for an ADU of 750 sq ft or less (Gov. Code § 66311.5)
for your city to approve or deny a complete ADU application (Gov. Code § 66317)
Ask ten contractors what an ADU costs and you'll get ten answers — most of them for a different thing. One quote is just the building. Another skips the foundation. A third forgets the trench that brings water and power across your yard. By the time the real number shows up, you've already said yes.
California homeowners keep asking anyway, and for good reason. In 2024, cities and counties permitted 30,354 ADUs — more than one in four new homes in the state, according to the state's housing department (HCD). So this guide does one thing: it shows a complete 2026 price, line by line, and the rules that can add — or remove — thousands of dollars.
What does an ADU cost in California in 2026?
For a complete backyard ADU you can live in or rent out, plan on roughly $125,000 to $271,900 with Bay Modular, depending on size. Those are all-in prices, from planning and permits through the final inspection.
| Model | Size | Layout | All-in price | Price per sq ft |
|---|---|---|---|---|
| Backyard Studio | 8' × 15' | Open studio with deck | $75,900 | — |
| Small Studio | 256 sq ft | Studio, full bath | $124,900 | $489 |
| Large Studio ADU | 320 sq ft | Studio, bath, laundry | $154,900 | $484 |
| 1 Bedroom ADU | 480 sq ft | 1 bed, 1 bath | $214,900 | $448 |
| 2 Bedroom ADU | 640 sq ft | 2 bed, 1 bath | $271,900 | $425 |
Prices from Bay Modular's Pricing & Financing page as of October 8, 2026. Price per square foot is our math (price ÷ interior sq ft). The Backyard Studio is an open studio, so it's not directly comparable.
What does the all-in price include?
Everything from permits to keys. Many quotes cover only the building — the foundation, the crane and the utility trench show up later. Our price includes all of it, and we confirm it in writing after a free lot check, before you sign.
✓ Design and HCD-approved plans
✓ Permits, city fees and plan check
✓ Site preparation and foundation
✓ The home, built in our California factory
✓ Delivery and crane placement
✓ Water, sewer and power hook-ups to your house
✓ Final inspection, move-in ready
That's why "price per square foot" quotes can mislead you. A company that quotes only the building can look almost half the price on paper and cost the same — or more — once the backyard work is done.
Watch out
Before you compare two quotes, ask one question: "Does this include the foundation, the crane, and the utility trench to my house?" If the answer is "no" or "it depends," you're not looking at the real price yet.
Why the "$150,000 ADU" number is out of date
A number you'll see all over the internet — a median of $150,000, or $250 per square foot — comes from a statewide survey of ADU owners published in 2021. It's useful history, not a 2026 budget.
Writing about that survey, UC Berkeley's Terner Center reported that "the median statewide construction cost of an ADU is $150,000, or $250/square foot," and that 71% of ADUs cost less than $200,000 to build. That data is now five years old. We couldn't find a newer statewide cost study from the state or a major research center, so treat any "average" you see with care — and ask for a quote that names every line.
Which fees will you actually pay?
Fewer than most people expect. California law removed or capped several fees for ADUs; others depend on size and your city.
Impact fees
A city, special district, or water company "shall not impose any impact fee" on an ADU with 750 sq ft of interior living space or less. Above that, fees are charged in proportion to the size of your main house.
Gov. Code § 66311.5(c), effective January 1, 2026School district fees
ADUs under 500 sq ft are exempt. Larger ones may be charged — up to $5.38 per sq ft in 2026. On a 640 sq ft ADU, that's at most $3,443 — already included in our 2 Bedroom ADU price. A 480 sq ft one-bedroom pays nothing.
Gov. Code § 66311.5(c)(3); State Allocation Board rate adopted Jan. 28, 2026Water and sewer connection
A detached ADU on a lot with an existing home isn't treated as a "new residential use" for connection fees. If a separate connection is required, the charge must be proportionate to the ADU's size or plumbing fixtures.
Gov. Code § 66311.5(b) and (e)Solar panels
New detached ADUs must include solar under California's Energy Code — but the panels can go on your main house instead of the ADU. Attached ADUs don't need solar.
California Energy Commission, 2025 Energy Code ADU FAQsYour city still charges its own plan-check and building-permit fees, and those vary from town to town. During a free lot assessment, we check which fees apply to your address and whether they're already in your quote.
Pro tip
The 750-square-foot line is worth real money. Every Bay Modular model is under it, so local impact fees don't apply. If you're designing a custom ADU, ask your designer to check the interior living space before you fall in love with an 800 sq ft floor plan.
Is a bigger ADU more expensive per square foot?
No — usually the opposite. Our 640 sq ft two-bedroom costs about $425 per sq ft, while the 320 sq ft studio costs about $484.
Every ADU needs the same expensive pieces no matter its size: a kitchen, a bathroom, permits, a crane, and utility lines. Spread those over more square feet and each foot costs less. That's why a one-bedroom often makes the most sense: at 480 sq ft it skips school fees, stays far below the 750 sq ft impact-fee line, and costs less per foot than a studio.
Will an ADU raise your property taxes?
Yes, but only on the value the ADU adds. Your main house keeps its current assessed value.
The State Board of Equalization explains that for new construction, the assessor adds the new value to your property, and "the value of the existing property is not affected."
"The short answer is yes, but only on the marginal value of the ADU. Assessors throughout California treat ADU's like a home addition. The existing home will not be reassessed."
— Santa Clara County Office of the Assessor
The exact amount depends on your county's assessment. Your county assessor's office can tell you how it will value your project.
How long does it take — and why time is money
State law gives your city 60 days to approve or deny a complete ADU application. With a factory-built ADU, most of the building happens in the factory, not in your yard.
Under Government Code § 66317, the city has 15 business days to tell you whether your application is complete. Then "if the local agency has not approved or denied the completed application within 60 days, the application shall be deemed approved."
Bay Modular builds each unit in our factory in Lathrop. The finished unit is delivered in a day and installed in about a week. Fewer weeks of construction in your yard means less disruption for you and your neighbors — and if you plan to rent, earlier rent.
Bay Modular is a California factory-built housing manufacturer (HCD #1585366). The state oversees how the unit is built in the factory; your city inspects the foundation and the utility hookups on site.
How do people pay for an ADU?
Homeowners usually pay with home equity (a HELOC or cash-out refinance), an ADU construction loan, a renovation loan, or cash. The state's ADU grant program is out of money for now.
- Home equity. Borrow against the house you already own. Often the simplest option if you have equity.
- ADU construction loan. Some lenders specialize in California ADUs and look at the value after the build.
- Renovation loan (such as FHA 203(k) or HomeStyle). One loan for the house and the ADU, often used when buying or refinancing.
- Cash. The fastest path, if your savings allow.
The CalHFA ADU Grant once covered up to $40,000 of pre-development costs, but according to HCD's March 2026 handbook, "the funds have been exhausted." Check CalHFA's site before you plan on it. And talk to a lender before you sign anything — they'll tell you what you qualify for.
If you're building to rent, a 2021 statewide survey reported a median ADU rent of $2,200 a month in the Bay Area. Rents have moved since; see our step-by-step guide to renting out your ADU and the rental & ROI calculator for current numbers.
"Since ADU approval was made ministerial by state law in 2017, there has been an explosion of ADU construction."
— William Fulton and Sarah Karlinsky, Terner Center for Housing Innovation, UC Berkeley (October 2025)
How to get the exact number for your lot
Your lot shapes a big part of the budget: how far the utility lines run, how the crane gets in, and what your city requires. A free lot assessment answers that before you commit.
Send your address
Tell us where you live and what you'd like to build.
We check your lot
We review satellite imagery, mark the buildable area and access for delivery, and check your city's ADU rules.
You get your numbers
You see which model fits, what's included, and which local fees apply. The assessment is free, with no obligation.
Want to see one before you decide?
Tour our factory in Lathrop and see how the units are built.
Frequently asked questions
Is a prefab ADU cheaper than a site-built one?
Not always, and there's no reliable recent statewide study that compares them. The bigger difference is certainty: a factory-built ADU has a known price for the house itself, and most of the work happens in a factory instead of your backyard.
Do I have to pay impact fees on my ADU?
Not if it has 750 square feet of interior living space or less. That's California law (Gov. Code § 66311.5). Larger ADUs can be charged, but only in proportion to the size of your main house.
Does a new ADU need solar panels?
A new detached ADU does under California's Energy Code, unless an exception applies. The panels can be installed on your main house. Attached ADUs don't need solar.
Will my property taxes go up?
Only on the value the ADU adds. Your existing home is not reassessed. Your county assessor sets the exact amount.
Is there a grant for building an ADU in California?
The CalHFA ADU Grant paid up to $40,000 toward pre-development costs, but HCD reported in March 2026 that its funds were exhausted. Check CalHFA for any new rounds.
How long does an ADU permit take in California?
Your city has 15 business days to confirm the application is complete, then 60 days to approve or deny it. If it misses the 60-day deadline, the application is deemed approved (Gov. Code § 66317).
Find out what an ADU costs on your lot
Send your address. We'll check your lot and local rules and show you what's included. Free, with no obligation.
About Bay Modular Team
Bay Modular is a California factory-built housing manufacturer (HCD #1585366). We design and build backyard ADUs in our factory in Lathrop, CA, and install them across California. More about us
Sources
- California Department of Housing and Community Development (HCD), Accessory Dwelling Unit Handbook, March 2026 (ADU permit counts, school fees, CalHFA grant status).
- California Government Code § 66311.5 (impact, school, and connection fees), effective January 1, 2026, and § 66317 (60-day review). Accessed October 8, 2026.
- Office of Public School Construction, Developer Fee History: residential Level 1 maximum $5.38 per sq ft, adopted January 28, 2026.
- California Energy Commission, 2025 Energy Code ADU FAQs. Accessed October 8, 2026.
- California State Board of Equalization, New Construction FAQs; Santa Clara County Office of the Assessor, Granny Units / ADUs.
- Terner Center for Housing Innovation, UC Berkeley, statewide ADU owner survey, April 2021 (median cost and rent), and Lessons from San Diego, October 2025.
- Bay Modular Pricing & Financing, October 8, 2026 (model prices and cost breakdown).
This guide is general information, not legal, tax, or financial advice. Local rules and fees vary; confirm details with your city's planning department, your county assessor, and a lender.
