Saturday, April 30, 2011

The Permit and the ADU Design Build, Time and Cost Breakdown

Six and a half weeks after submitting the permit application to the City of Portland, we have gotten the permit! Needless to say, I am thrilled to move forward with the construction phase. 

We're going to be moving really fast now, so I'll be posting frequent updates of the construction process. In the next two days, I'll post pictures and videos of the groundbreaking, excavation, and foundation wall forms.

This post however, is about the costs and time of this initial phase of the project, as well as the cost of the ADU project overall. I know that cost is the most major factor for everyone who is considering such a project. So, I'll be transparently reporting on the costs of this project so that others have a good sense of the costs involved.

To start, it is very noteworthy that Portland has temporarily waived all System Development Charges for ADUs. System Development Charges, which are the city's administrative fees for transportation, water, and waste management for all new construction projects, typically ran $10,000 for ADUs. This policy has obviously been a major recent incentive for many residents to consider building new ADUs (or legalize their existing ADUs).

Portland took this measure to actively promote ADUs to add density to the urban core. This is one the many laudable urban planning policies that consistently keeps Portland near the top of the list for being on the nation's most livable, walkable, and bike-able cities.

System Development Charges for ADUs through June, 2013.

ADU Costs

One of the goals for this project is to build high-quality custom construction at a relatively low cost; partially by making better design decisions, and partially by sourcing materials and labor astutely.

Here is a time and cost breakdown of the design phase that I just completed, which amounted to $8,196.
Design Phase Cost Time Breakdown

Generally speaking, custom high quality construction costs $150-200 sq. ft. My original goal was to get the whole project done for $100 sq ft, but it's looks like I won't be able to get the project costs that low.

Here are my current cost projections. If I am able to stick to this budget of $88,196, the project will cost ~$110 sq ft.

Of course, there's a well-known rule of thumb that says that you should always expect to pay 20% more than what you estimated, and that the project will take twice as long as you had hoped.

Building To Code

Many people are interested in building ADU's and the daunting capital expense is their only deterrent. I know that some have converted garages into livable spaces for as little as $20K without a permit, and that others spend up to $200K to build an ADU from scratch with a permit. Since this post comes in conjunction with the permit, I've attached the line item Portland BDS permit fees below for reference, which, for this project, amounted to $4,205.38.

Building legally requires more work that building illegally and it comes at a cost. However, it gives more peace of mind, legal assurance, and better financial payback to the homeowner for rental and resale. Building legally or not is a big decision that the homeowner must carefully consider.

If you're considering whether and how to build a new structure in accordance with the city's rules , I've found that the City of Portland BDS is great about answering questions about new construction by phone or in person. So, don't hesitate to sit down with them and talk frankly about your ideas--you don't even have to give them your address if you're still trying to decide how to proceed.

The City Of Portland permit costs amounted to $4,205.38 for this project.

I'm curious to understand how this permit fee compares other permit fees around the country, and whether the fees are structured on a per sq ft basis.

To me, this permit fee seems reasonable. If the $10K system development charges were in effect, I would have balked at funding this project. So, again, I applaud Portland's active promotion of ADUs.

Quality, Cost, and Time

There's a huge range of tactics that effect project cost. But, my Sustainable Home Professional instructor introduced me to a great rule of thumb, called the Project Management Triangle:

'There are three relational pillars in every design/build project: Quality, Cost, and Time- and it's hard to optimize all three pillars.'

In other words, you can build a high quality project at low cost, if you have lots of time. You can build a high quality project in little time if you have lots of money. And you can build quickly and cheaply if you don't care about quality.

Finding that sweet spot in the middle is really tough. But, that doesn't mean we can't try!


  1. I have 15 grand, total to spend. Contractor is willing to do it for 10k, all the tear down, insulation, adding floors, sheet rock, plumbing etc. I just need to paint and put the sinks, bath & kitchen fixtures in.

    I thought the SDC was dropped, a 10 grand savings, and there "might" be up-to a grand in misc fees... like I know I need to add a Fire Wall and get a waiver from having to pull all the outside cedar shake off and just add it within the structure... that was around $243?

    Anyway, it is STILL going to cost over 4 grand for permits?? I think I am building a tiny home on a trailer instead.

    This is just a 220 sq ft detached garage I want to turn into a simple little studio with a bath and kitchen. Nothing fancy, but livable.

    I would love to know more I tried the 4th and Hall building and they just send me all over the place. This break down is the best I have seen!

  2. Reading your post more thoroughly, It seems yours is vastly larger and was a lot more intricate i design, plus it is ground up. Hoping your permits will not relate to what I would need to do since they would be grandfathering a very small structure that was built a long time ago with the home. :) I might meet my 12 grand max plan.

  3. It would be hard to complete a permitted ADU for $12K. I know of another non-permitted garage conversion ADU that cost $22k; that is the least expensive ADU I’ve seen.

    That’s awesome you’ve found a contractor who is willing to do all that work for only $10K though.

    The permit cost is based on projected construction costs, so if your project was projected to cost $25K, your permit may only run you $1,000.

    Other options for you to consider are tiny houses, yurts, and detached bedrooms, all of which cost $3-15K, and may meet your needs.

  4. H Kol. Thanks for the info. Yes, if permits to convert a mere 190-220 sq ft are amounting to over $1000-1600, I plan to look into other options like a tiny home.

    Can you rent a little home on a trailer out? I know I would get more return on a rental that is a house off wheels by a nominal amount, but with those permit costs it still sounds like it would not pan out in my favor. It is 220 sq ft max.

    Can you rent a detached room out? I could put a bathroom in our basement that they would have to walk to through the side door. That seems sketch to me though. I would need a sink, fridge, and hot plate in that room likely for decent living. Sounds like this would also be involving permits. I guess it could be fine without running water, as long as they had a bath in the basement...

    We are agreeing on placing the floor, adding the sinks and toilets, as well as painting the place on our own, and those materials will be our own expenses outside the 10 grand....I am trying hard to find on-sale and repurposed materials in that area. The contractor would handle all the break down of the walls, adding the insulation, electrical needs, and plumbing hooked up to the sewer.

    Getting over 5 grand seems pretty okay to me. That is good money for such a teeny place.

    What kind of permits does the city need that would exceed over 1000 bucks? I just do not have a 20 grand budget to play with. If a tiny home can be rented out, I will go that route and keep the budget below 12 grand.

    Any idea how the utilities would hook up? There is a car port right next to the garage I am considering making an ADU out of. It is big enough for something like a Lugsby Tumble Weed home. I would consider straight electric heat, water heater, etc , and I assume better to not go the propane route or have that as back up if I ever want to take the home off the grid or something.

    Come to think of it, it would be nice to have something I could just take away if we ever decided to move.


  5. Actually the budget is closer to 8 grand. We will be slowly adding the other bits after he gets the basic wall, 2nd door, sheet rock/insulation, electrical and plumbing all in order.

    But I am really interested in a tiny home, if I can legally rent it out and provide a safe utility option hooking it up to our home in some way?

  6. The hose to the back yard is about 20 feet away from the back wall of the detached garage. I was told we could dig a ditch right to the water and sewer line. It will be a good half day of digging for me and a buddy before they go to town on the plumbing.

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  9. I am in the process of an ADU and the water meter upgrade is over $700.00. the intake of the plans was $956.00 and the electrical permit was $300.00.I think there are fees that have not been included in their permits.

  10. here is an update to the estimated costs for an ADU in the city of portland
    City of Portland
    Development Services Center
    Online Fee Estimate Residential Project
    This is an estimate for Project: adu
    Fees Effective as of This Date - Created/Modified: Nov 16, 2016
    Reference # Estimate Type Estimate Scope Type of Work
    3925049 Residential Fee Estimate Building Permits/SDCs/Trades New Construction/Addition

    Bldg Plan Rvw/Processing RS/MI/MP $380.00
    Land Use Plan Review Res $140.00
    RES Site Plan Rev - Complex Sites $350.00
    Intake Fees Subtotal: $870.00

    BES Sanitary SDC-Residl $5,720.00
    BES Storm SDC-Residl $920.00
    PDOT SDC $0.00
    Parks SDC $5,780.00
    Water System Development (SDC) $2,400.00
    SDCs Subtotal: $14,820.00

    Address Assignment Fee $70.00
    BES Plan Review-Residl $650.00
    Building Permit RS $590.00
    Building Permit St. Sur. $70.00
    Decommission $650.00
    Development Services Fee - RS $160.00
    Electrical Permit RS $330.00
    Electrical Permit St Sur $40.00
    Forestry Residential Permit $150.00
    Mechanical Permit RS $200.00
    Mechanical Permit S. Sur $30.00
    Metro Excise Tax $80.00
    PBOT Bldg Plan Review - RS $320.00
    Plumbing Permit RS $2,280.00
    Plumbing Permit St. Sur. $280.00
    RES Site Insp - Complex Site $280.00
    School CET $710.00
    Water Single Family/Row Housing Review $70.00
    Zoning Inspection Fee $110.00
    Issuance Fees Subtotal: $7,070.00

    TOTAL ALL FEES Total: $22,760.00

    -------------------- This estimate is based on the following customer identified input --------------------

    Project Info
    Submitted Value of Construction: $12,000.00
    Final Permit Valuation: $64,661.00
    Fee Estimate Based On: $64,661.00

    1. That's a great breakdown. Thanks for sharing. Was that available digitally somewhere for your project?

      So, if it's an ADU, you don't pay the SDCs, which amounted to $14K in your case. So, the total permit cost for you will be ~$8K, which is average.

  11. Your article has proven useful to me. It’s very informative and you are obviously very knowledgeable in this area. You have opened my eyes to varying views on this topic with interesting and solid content. building estimating service


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