Straight answers on ADU cost, permits, HOAs, factory-built homes, timelines, financing, and renting, checked against California law.
The short answer
A backyard ADU from Bay Modular costs $124,900 to $271,900 all-in for 2026, with permits, foundation, delivery, and hookups included. California law requires cities to decide on a complete ADU application within 60 days, bars HOAs from banning ADUs, and lets you rent the unit out. Below are the questions homeowners ask us most, with short answers and links to the full guides.
All-in price of a Bay Modular ADU with kitchen and bath, 2026
for your city to approve or deny a complete ADU application (Gov. Code § 66317)
local impact fees on an ADU of 750 sq ft or less (Gov. Code § 66311.5)
about how long installation takes after a one-day delivery
Most people start with the same three worries: what it really costs, whether the city will say yes, and whether a factory-built home is a "real" house. The good news is that California law answers a lot of this for you, and it has moved firmly in homeowners' favor. In 2024, ADUs made up more than 26.6% of all homes permitted in California, according to the state housing department (HCD).
An accessory dwelling unit (ADU) is a second, independent home on the same lot as a house, with permanent places to live, sleep, eat, cook, and bathe (Gov. Code § 66313). Every answer below is checked against state law, state agencies, or our own published prices as of October 2026.
ADU cost questions
How much does an ADU cost in California in 2026?
A Bay Modular ADU costs $124,900 for a 256 sq ft studio up to $271,900 for a 640 sq ft two-bedroom, all-in. Our 480 sq ft 1 Bedroom ADU is $214,900. See the line-by-line breakdown in our ADU cost guide.
What's included in Bay Modular's price?
Planning, permits, site prep, the foundation, delivery and crane, utility connections, and installation. All of it is in one all-in price, fixed in writing before you sign. That is why quotes for "just the building" can look misleadingly low.
Do I have to pay impact fees or school fees?
An ADU with 750 sq ft of interior living space or less is exempt from local impact fees (Gov. Code § 66311.5). School districts may charge fees only on ADUs over 500 sq ft, so our studios and 1 Bedroom ADU skip them. Cities still charge their own plan-check and permit fees.
Will an ADU raise my property taxes?
Only on the value the ADU adds. The State Board of Equalization says that for new construction, "the value of the existing property is not affected." Your county assessor sets the exact amount.
Is there a state grant for building an ADU?
Not right now. CalHFA's ADU Grant paid up to $40,000 toward pre-development costs, but CalHFA reported its latest round "fully allocated" on December 28, 2023, and HCD's March 2026 handbook says the funds are exhausted. Some cities run their own programs or waive fees.
Permits and rules
Can I build an ADU on my property?
If your lot has a single-family home in a residential zone, very likely yes. Cities must approve ADUs that meet objective standards without a public hearing, can't set a minimum lot size, and can't use lot coverage or floor-area rules to block an 800 sq ft ADU with four-foot side and rear setbacks. Our guide to California ADU laws covers the details.
How long does an ADU permit take?
Your city has 15 business days to tell you whether the application is complete, then 60 days to approve or deny it. If it misses the 60-day deadline and there's an existing home on the lot, the application is deemed approved (Gov. Code § 66317).
Can my HOA stop me from building an ADU?
No. Civil Code §§ 714.3 and 4751 void CC&Rs that prohibit or unreasonably restrict ADUs on lots zoned for single-family homes. An HOA can still apply some limited objective standards.
Do I have to live on the property?
Not for an ADU. A city can't require owner-occupancy (Gov. Code § 66315). The rule is different for a junior ADU (JADU) inside your house: if it shares a bathroom with the main home, the owner must live on site.
Do I need to add parking?
At most one space per ADU or per bedroom, whichever is less, and often none. Cities can't require parking for an ADU within a half-mile walk of public transit, in a historic district, or with a car-share vehicle within a block (Gov. Code § 66322).
How big and how tall can an ADU be?
A city must allow at least 850 sq ft for a one-bedroom and 1,000 sq ft for two or more bedrooms. For a detached ADU, a city must allow a height of at least 16 feet, or 18 feet within a half-mile walk of major transit (Gov. Code § 66321).
Does a new ADU need solar panels?
A newly built detached ADU does under California's Energy Code, with some exceptions. The California Energy Commission says the code doesn't specify where the panels go, so they can be added to your main house's system.
Can I sell the ADU separately from my house?
Usually not. A city may allow it by adopting a condominium ordinance under Gov. Code § 66342, and there's a narrow exception for certain nonprofit-built homes. Ask your planning department whether your city has one.
Rules on top of state law vary by city. See our guides for San Jose, San Francisco, Oakland, Los Angeles, Palo Alto, Sunnyvale, and San Mateo.
Product and factory
What is a factory-built ADU?
HCD defines factory-built housing as "a factory-constructed version of a site-built residential building" that's transported to its permanent site. Bay Modular is a California factory-built housing manufacturer (HCD #1585366): the state oversees the build in our Lathrop, CA, factory, and your city inspects the foundation and hookups. More in What Is Factory-Built Housing?
What's the difference between modular, prefab, and manufactured?
Prefab means parts of the home are built off-site; modular means it's built in finished sections that are set on site. A manufactured home is different: it's built on a permanent chassis to federal standards (Health and Safety Code § 18007). See What Is Prefab Construction?
What types of ADUs are there?
Detached, attached, and converted ADUs (a garage or part of the house), plus junior ADUs of up to 500 sq ft inside your home. Our quick guide to ADU types compares them.
Which models does Bay Modular build?
Five: Backyard Studio (8' × 15', $75,900), Small Studio (256 sq ft, $124,900), Large Studio ADU (320 sq ft, $154,900), 1 Bedroom ADU (480 sq ft, $214,900), and 2 Bedroom ADU (640 sq ft, $271,900). All prices are all-in; see all models.
Process and timeline
How long does it take to get an ADU?
The total depends on your city and your lot. The permit review clock is set by law (60 days after a complete application), and once the unit is built, it's delivered in a day and installed in about a week. Most of the construction happens in our factory, not in your yard.
Who inspects a factory-built ADU?
The unit is inspected during manufacturing under HCD's factory-built housing program. HCD says installation "is subject to inspection by the local building department," so your city checks the foundation and utility hookups.
How do I get started?
Send your address for a free lot assessment. We review satellite imagery, mark the buildable area and delivery access, and check your city's ADU rules. Here's what the assessment covers.
See one before you decide
Tour our factory in Lathrop and see how the units are built.
Financing and rent
How do people pay for an ADU?
Usually with home equity (a HELOC or cash-out refinance), an ADU construction loan, a renovation loan, or cash. Fannie Mae, Freddie Mac, and FHA all offer ADU financing options. Talk to a lender about what you qualify for; see our Pricing & Financing page.
Can ADU rent help me qualify for a loan?
It can. HCD notes that FHA and Freddie Mac now let rental income from an ADU count toward a borrower's qualifying income. One catch: FHA's 203(k) rehabilitation loan can be used only to build an attached ADU.
Can I rent out my ADU, or list it on Airbnb?
You can rent it out, but your city may require rental terms of more than 30 days, which rules out most short-term stays (Gov. Code § 66315). Our step-by-step rental guide and rental & ROI calculator show what an ADU can earn.
Have a question about your own lot?
Send your address. We'll check your lot and your city's rules and show you what fits. 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, quoting Gov. Code §§ 66311.5, 66314, 66315, 66317, 66321, 66322, 66333, 66342, and Civil Code §§ 714.3 and 4751. Accessed October 8, 2026.
- HCD, Factory-Built Housing and Inspections. Accessed October 8, 2026.
- California State Board of Equalization, New Construction FAQs. Accessed October 8, 2026.
- CalHFA, ADU Grant Program, update of December 28, 2023. Accessed October 8, 2026.
- California Energy Commission, 2025 Energy Code ADU FAQs. Accessed October 8, 2026.
- Bay Modular Pricing & Financing, October 2026.
This FAQ 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.
