Cost to Build a Granny Flat Los Angeles

Many people are astonished at what it costs to build a granny flat in Los Angeles. We come across articles all the time that misconstrue the actual cost of construction. So, let’s clear up the discrepancies.

When you’re considering a granny flat (also called an accessory dwelling unit or ADU), you need to think not only about the cost of design, permitting, and construction but also about your return on investment (ROI). 

Understanding the different adu types and steps to building an adu can help you make a more informed decision. 

ADUs are investment properties, so you need to think of them in terms of the income they will generate. 

Granny flats are also more complicated than single-family homes, and adu construction can run into problems that impact the budget—including difficult site access issues for deliveries, higher utility costs because of design challenges, increased permitting fees, and cost overruns on adu construction.

ADUs are not free, quick cash that you can build without needing an exit strategy. 

The most important thing you can do when planning your ADU project is to know what it’ll cost from the beginning—and plan for a reasonable rate of return on your investment. 

In California, it’s proven to be outstanding for most homeowners.

Cost Per Square Foot Can Be Deceiving!

It’s tempting to look at average cost per square foot numbers online, but there are several reasons granny flats cost more per square foot than typical single-family homes. 

• Since granny flats are smaller, the cost per square foot is not offset by extra bedrooms, large living spaces, and hallways that you would find in larger homes. These spaces are considered ‘cheaper’ square footage and normally bring down the average cost.
• Granny flats still require a bathroom and kitchen, which is ‘expensive’ square footage.
• Many permitting and design fees are fixed costs, which means you have to pay them no matter the size of the home or granny flat.
• Margins are smaller for general contractors, subs, and architects.
• Just like a regular house, ADUs require new foundations, plumbing, electric, heating and cooling, and a separate roof.
• There are no economies of scale. Think about the significant discount you get from buying groceries in bulk at Costco. Building a granny flat is the opposite.

What all this means is, yes, cost per square foot of a granny flat is most likely going to be higher than that of a single-family home. But you are packing a lot more value into a smaller space, so it makes sense that you may pay a little bit more from the get-go.

Size and Structural Form Impact the Cost of a Granny Flat

Here are some general rules of thumb to consider:

1. The larger the unit, the cheaper your cost per square foot. Detached units can be up to 1,200 square feet unless specified by a local ordinance. A 1,200 square foot unit is likely to be cheaper per square foot than a 450 square foot unit.
2. Building up is expensive! Most people instinctively want to build an accessory dwelling unit above their garage. It can add ~$50 per square foot to your project. If your budget is tight, stick to single-story.
3. Garage conversion is the cheapest way to convert space into a granny flat. If your budget is limited, keep the existing envelope of the garage, meaning don’t expand on the current footprint. This would add onto the cost.