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!