What Is an ADU? Types, Costs, and the Prefab Option

An accessory dwelling unit is a second, fully independent home on the same lot as a main house. Own kitchen, own bathroom, own front door. Small enough to fit in a backyard, real enough to rent to a tenant or move a parent into. That is the whole idea, and it is why ADUs went from a planning footnote to one of the most active corners of American homebuilding in under a decade.

The term comes up most in California, where the laws are furthest along, but the question of what an ADU is and what it costs now lands the same in Austin, Denver, and Seattle. Here is the plain version: the three types, what each one costs, how long the build takes, and where the prefab route changes the math.

What does ADU stand for?

ADU stands for accessory dwelling unit. It is a self contained residence built on the same property as a primary home, with a full kitchen, a full bathroom, a sleeping area, and its own entrance. The word that matters is independent. A spare bedroom is not an ADU. A finished basement with a sofa bed is not an ADU. To count under residential building code, the unit has to function as a complete separate dwelling, which is also what makes it legally rentable.

You will hear other names for the same thing. Granny flat. Backyard cottage. In-law suite. Carriage house, in older Northeastern housing stock. They all describe an accessory dwelling unit. The informal label changes by region; the legal definition does not.

The three types of ADUs

There are three, and the difference between them is mostly about where the walls and the foundation come from.

A detached ADU is a standalone building, usually in the backyard, with its own foundation, roof, and utility connections. In much of California the cap is 1,200 square feet. It gives the occupant the most privacy and costs the most to build, because nothing is shared with the main house.

An attached ADU shares at least one wall with the primary home, either carved out of existing square footage or added as an extension. California rules commonly limit it to half the square footage of the main dwelling. Because it shares some structure and utilities, it usually costs less than a detached unit of the same size.

A conversion ADU turns existing space into an independent home. Most often that is a garage, single car at a few hundred square feet or two car at several hundred, but basements and attics qualify too. It reuses the existing foundation, walls, and roof, which makes it the cheapest of the three to build.

Sizes are set locally, but the California floors are a useful reference because they are the most cited. California prevents cities from capping one bedroom ADUs below 850 square feet or two bedroom ADUs below 1,000. A kitchen has to be at least 50 square feet.

What is a Junior ADU (JADU)?

A Junior ADU is a smaller sub type, capped at 500 square feet and built inside the existing walls of the primary home. An attached garage converted to under 500 square feet qualifies. A new detached building does not. The cap is firm under California state law, and planners in other states increasingly use the term as similar legislation spreads.

Three things separate a JADU from a standard ADU. It needs only an efficiency kitchen, which typically means a sink, a mini fridge, and a microwave rather than a full range and oven. It can share a bathroom with the main house instead of having its own. And when it shares that bathroom, the property owner has to live on site. California allows one standard ADU and one JADU on the same single family lot, so the two are not mutually exclusive.

One recent change: AB 1154 took effect January 1, 2026, and narrowed the owner occupancy rule for JADUs. The requirement now applies only when the JADU shares a bathroom with the main house. If the JADU has its own private bathroom, no owner occupancy obligation applies.

How much does an ADU cost?

The honest answer is a range, and the range is wide because the three types cost very different amounts.

A garage conversion is the cheapest, typically $80,000 to $150,000 all in. A detached stick built ADU runs $150,000 to $350,000 or more across most of the country, with California and coastal markets regularly pushing past the top of that. A prefab or modular ADU usually lands between $100,000 and $250,000 all in.

The trap is the difference between unit cost and all in cost, and it is the single biggest source of confusion in ADU pricing. A prefab unit on its own can start around $50,000. That number is real, and it is also incomplete. It does not include the foundation, the site preparation, the crane or delivery, the utility connections, or the permits. By the time the unit is sitting on a finished pad and hooked up to power and water, the all in figure is often double the sticker.

Where prefab earns its place is predictability more than raw savings. Factory production carries fixed pricing, no weather delays, and no subcontractor scheduling gaps, which is where stick built budgets tend to slip. Across the industry, modular construction runs roughly 10 to 25 percent below traditional building, and in some cases closer to 30. The saving is real, but the steadier number is the bigger draw. A quote you can hold to beats a low quote that drifts.

If you want to see how prefab manufacturers present model pricing and specs, the manufacturer directory on Prefab Market lays them out side by side.

ADU permits and rules vary by state

ADU rules are set state by state, and the gap between the friendliest and the strictest is large.

California has gone furthest. The state mandates permit approval within 60 days for most projects, guarantees the right to build up to 800 square feet regardless of local lot limits, and has dropped impact fees for units under 750 square feet. California permanently eliminated owner occupancy requirements for standard ADUs as of January 1, 2024 under AB 976. Washington’s law, fully in effect since July 2025, requires cities to allow at least two ADUs per residential lot and bans owner occupancy requirements outright. Oregon disallows owner occupancy rules inside its urban growth boundaries and leaves size to individual cities.

Texas is a different picture, and one to watch, because it is sometimes lumped in with the friendly states. There is no comprehensive statewide ADU law. The picture is local. Austin has expanded what it allows; Houston is more restrictive; the rest varies city to city. If you are building in Texas or most of the South, the rules live at city hall, not in the state code, so research the specific jurisdiction before you count on anything.

One rule holds everywhere. A prefab ADU needs the same permits as a stick built one. The unit is certified at the factory, but the foundation, the utility hookups, and the site work are inspected locally, exactly as they would be for conventional construction. Factory certification does not skip the permit line.

How long does it take to build an ADU?

Plan on 12 to 18 months for a detached stick built ADU, start to keys, with permitting included. A prefab or modular unit typically finishes in 6 to 10 months, because most of the construction happens in the factory while site prep and permitting run at the same time. A garage conversion is faster still, usually 4 to 8 months, since there is no new foundation and far less site work.

The variable that moves these numbers most is the permit phase, not the construction. California’s 60 day approval mandate compresses the front end hard. In states without that rule, plan review alone can run three to nine months before anyone breaks ground. Weather, plan revisions, and subcontractor scheduling stretch stick built timelines further. Prefab shortens the critical path by moving the slow part indoors, where rain does not stop work and the framing crew is not booked on three other jobs.

Why prefab ADUs are worth considering

The case for prefab is speed and certainty, and it is strongest exactly where stick built is weakest.

A factory builds the unit while the crew at home pours the foundation and the city processes the permit. Those steps happen in parallel instead of one after another, which shortens the overall build window compared with traditional stick built sequencing. The mechanical, electrical, and plumbing arrive tested and certified, so there is no on site rough in to schedule. Quality control runs through repeated factory inspections before the unit ever ships, and factory building cuts construction waste sharply.

It is not the right answer for every lot, and pretending otherwise would be a disservice. Module delivery needs access. Narrow streets, low power lines, steep driveways, or a tight backyard can force an expensive crane or rule out a large module entirely. Floor plans are more constrained than a fully custom stick built design, and structural changes after the fact are hard. Some building departments have little experience with factory certified units, and reconciling factory certs with local code can add the very delays prefab is meant to avoid. And the foundation and site work still cost what they cost, regardless of method.

The way to avoid the traps is to compare manufacturers on what they will commit to in writing, upfront pricing and a real lead time, before you sign. Browse prefab homes by model and specification to see what each builder actually delivers.

ADU vs guest house: what’s the difference?

A full kitchen. That is the line that separates the two.

An accessory dwelling unit has a full kitchen, a full bathroom, its own entrance, and code compliance as a separate dwelling, which is what lets it be rented to a tenant for income. A guest house is an accessory structure for temporary lodging. It usually has no full kitchen, a basic bathroom at most, and is built to a lower standard. In most jurisdictions a guest house cannot be rented out long term, because it is legally defined as space for overnight visitors rather than an independent home.

When a building department looks at a backyard structure, the test it applies is almost always the kitchen. Under some county codes, such as Kitsap County in Washington, a guest house may include a kitchen or bathroom facilities but not both. Add a full kitchen to a guest house and you have very likely built an ADU, with the permitting and the rental rights that come with it.

That is the practical distinction worth holding onto. A guest house is somewhere to sleep. An ADU is somewhere to live.