An ADU (Accessory Dwelling Unit) is a secondary dwelling unit attached to a primary residence or building. They are typically located in residential neighborhoods and are often rented out to low-income families. ADUs are becoming more common in urban areas across America. In some cities, they are even required by law. The number of ADUs has increased dramatically over the last decade. According to the National Association of Home Builders, the total number of ADUs in the U.S. grew drastically from 2000. Multifamily housing is a growing trend in the United States. As the population continues to age, the demand for affordable housing increases. Many developers are looking at multifamily ADUs as a way to meet these demands.

Multifamily development is expected to grow by 9%  to reach 42 billion square feet by 2026. By 2026, it will make up 28 percent of all new constructions. This includes multifamily ADUs.

How Much Does It Cost To Build an ADU?

Although the specifics can differ slightly depending on where you live, one thing remains the same: cost.

When you decide to build an ADU, several factors affect its costs. These include the size of the home and location.

Most lenders require a 10%-15% down payment to receive preapproval for financing. Some also require a cash deposit that may vary based on the property type. For example, a condo requires less money because owners own their units outright, while single-family homes need a higher amount.

In addition to the cost of construction, there are also costs associated with legal fees, permit processes, utilities, and maintenance. It’s important to consider those additional costs when deciding whether or not to go through with the project.

Steps to Follow When Building MultiFamily


1. Decide  First

There are pros and cons to each type of multi-family structure. Depending on which option you choose, you may be able to save money on rent versus having multiple tenants living together. However, you may lose part of your privacy.

If you decide to have a duplex, it may be easier to renovate the interior space. If you choose to add another floor to a single-family home, the work may be more extensive.

2. Make Sure Your Neighborhood Has Permitting Requirements Before Starting Construction

Depending on your city or you may need special permission before adding a second-story loft, making structural changes to a garage, or constructing an accessory unit.

3. Consider How Much Land Is Required

Only half of the area needs to be covered by walls for every two people who share an apartment. But for four people, it requires three times the space.

4. Determine Whether There Are Any HVAC Regulations That Apply To Second Story Units

Many apartments don’t have sufficient plumbing capacity. In such cases, an ADU can help solve that issue. However, some cities restrict appliances such as fridges in the upper section of the unit.

5. Calculate the Costs Of Electrical And Plumbing Systems

You’ll need electrical wiring along with plumbing installation (in case you plan on using the bathroom inside). Therefore, to ensure everything works properly, it’s best to hire professionals for these services.

6. Consult A Surveyor About The Property Line And Accessibility Issues

Depending on where the house sits, you might need to extend the sidewalk or other structures into the backyard. You could also have issues if your lot slopes. It’s up to the surveyor to determine whether the slope is too steep or if it will affect accessibility later.

7. Choose Materials Wisely

Consider color choices, insulation materials, and exterior textures. These decisions should be made carefully to match the existing look of the rest of the home.

8. Create Space In The Design With Functionality In Mind

As mentioned earlier, some buildings include stairs, doors, and openings that lead from one house area to the next. These spaces must allow light but keep out cold air.

9. Check Local Codes On Safety & Fire Hazards For Your Project

Most local codes require fire sprinklers and other safety features for any additional rooms added to the house. Therefore, you should first consider the location of those additions.

10. Plan Ahead On Financing Options

ADUs come in different price ranges depending on construction costs. Some require smaller down payments than others. Depending on your individual situation, the bank may offer several options, including interest rates, mortgage payment assistance programs, and grants for low-income families.

14. Consider Insurance Coverage

If you choose to add an extra bedroom or bathroom to your home, you’ll likely need insurance. Look at the company’s coverage and compare it with what you currently have.

In case you have any architectural, structural, and MEP design including fire sprinkler design requirements, or need multifamily ADUs design including structure, and HVAC design, feel free to contact us.  We provide you with the full permit set design + T24 for your request.