ADU Permits in Sacramento: Costs, Timelines, ROI

Thinking about adding an accessory dwelling unit to your Sacramento property? You are not alone. ADUs can unlock rental income, support multigenerational living, and boost long-term value. In this guide, you will learn the key steps, realistic costs, timelines, and how to evaluate ROI for projects in both the City of Sacramento and unincorporated Sacramento County. Let’s dive in.

Know the rules in Sacramento

Before you sketch plans, make sure your property and idea fit local rules. California law requires cities and counties to allow ADUs in many zones and to process many applications through a ministerial review. Local agencies in Sacramento still set technical standards, fees, and submittal requirements, so you will work with either the City of Sacramento or Sacramento County depending on where your home is located.

City of Sacramento basics

The City of Sacramento uses a ministerial plan check process for many ADUs. You will confirm your zoning, setbacks, and lot coverage, then submit complete plans for building review. The city provides an ADU checklist and may offer pre-approved plans that can shorten plan review if your site and layout fit.

Sacramento County basics

If your property is in the unincorporated county, County Planning and Environmental Review sets the path. Standards and fees differ from the city. Check your zoning and whether any overlays apply before you invest in design work.

Check these early

• Zoning and lot coverage for your parcel.
• Overlays that can add steps, such as historic districts or flood zones.
• Utility setup: sewer or septic, water district, and electric provider.
• HOA rules, if you are in a community with CC&Rs.

Permit steps and timeline

Most ADU projects follow a similar sequence. Plan for design, approvals, and construction time.

Typical step-by-step process

1. Preliminary check: verify zoning, setbacks, height, and the ADU types allowed on your lot.
2. Site planning and design: choose attached, detached, garage conversion, or a junior ADU; plan utilities and parking if required.
3. Prepare plans: architectural and structural drawings, mechanical, electrical, plumbing, and Title 24 energy documents.
4. Submit for plan check: zoning review and building plan check, often concurrent.
5. Plan review cycles: respond to corrections until plans are approved.
6. Permit issuance: pay fees and pick up permits.
7. Construction and inspections: foundation, framing, systems, and final inspection.
8. Final sign-off: obtain certificate of occupancy or final approval.

How long it takes

• Zoning verification and pre-application: about 1 to 4 weeks.
• Plan preparation: 2 to 8 weeks or more, faster if you use a pre-approved plan that fits your site.
• First plan check: commonly 2 to 8 weeks for straightforward, ministerial ADUs. Each revision cycle can add several weeks.
• Permit issuance after approval: a few days to about 2 weeks.
• Construction: 3 to 9 months typical. Conversions can finish in 2 to 4 months. New detached builds often take 4 to 9 months.

Ways to speed things up

• Use pre-approved city plans if they work for your lot and goals.
• Schedule early consultation with the city or county to confirm standards.
• Submit complete, code-compliant plans, including Title 24 energy documents.

ADU costs in Sacramento

Budgets vary by site conditions, size, and finish level. Plan for both hard construction and soft costs.

What drives the budget

• Hard construction: sitework, foundation, framing, finishes, plumbing, electrical, HVAC, windows, and doors.
• Soft costs: design and engineering, energy compliance, soils or surveys if needed, plan check and building permits, utility connections, and inspections.
• Financing costs: loan fees, interest during construction, and appraisals if you finance the build.

Typical Sacramento cost ranges

• Small conversion or junior ADU of about 200 to 500 square feet: roughly $40,000 to $150,000.
• Attached ADU of about 500 to 900 square feet: roughly $100,000 to $300,000.
• Detached ADU of about 600 to 1,200 plus square feet: roughly $150,000 to $450,000 or more.

Per-square-foot costs commonly range from about $200 to $450 or more, depending on complexity and finishes. Sites with slope, soil issues, large tree work, or major utility upgrades will land at the higher end.

Soft cost benchmarks

• Architecture and engineering: often 5 to 12 percent of construction cost. Using pre-approved plans can lower design costs.
• Structural calcs, soils, and surveys: about $1,000 to $6,000 or more depending on conditions.
• Title 24 energy compliance and HERS testing: about $500 to $2,000 or more.
• Contingency: set aside 10 to 20 percent of hard costs for surprises.

Fees and utility connections

Permit, impact, and connection fees depend on your jurisdiction and utility providers. State rules limit or waive some fees for smaller ADUs and conversions, but you should still expect line items for plan review, building permits, and utilities.

What to expect

• City or county plan check and building permit fees.
• Development impact fees such as parks or schools. Some smaller ADUs and conversions may see reductions under state rules. Confirm your project’s size and category.
• Utility fees: water meter, sewer connection or cleanout, electric service or meter upgrade. Electric providers and water districts set their own schedules.

Total permit, impact, and connection fees can range from a few thousand dollars to more than $20,000, especially if new meters or sewer work are required. If an electrical service upgrade is needed, account for the added time and cost.

Financing your ADU

Owners in Sacramento commonly use:

• Cash or savings.
• Home equity lines or loans.
• Construction-to-permanent loans.
• Renovation mortgages that allow ADU work, subject to program rules.
• Specialized ADU lenders or local banks and credit unions.

Compare the cost of capital to expected rental income and your time horizon. Many owners use a HELOC or cash-out refinance to keep flexibility.

ROI: what to expect

ADUs can return value in several ways. You can generate long-term rental income, house family members and reduce other costs, or improve future resale value. The exact return depends on your total project cost, rental demand in your neighborhood, and your operating plan.

A simple ROI framework

• Gross rental yield equals annual gross rent divided by total project cost.
• Net operating income, or NOI, equals gross rent minus a vacancy allowance and operating expenses like insurance, utilities you pay, maintenance, and management.
• Cap rate equals NOI divided by the ADU’s value or your invested cost. Investors use this to compare returns.
• Cash-on-cash return equals pre-tax cash flow divided by the cash you invested.
• Payback period equals total project cost divided by annual net cash flow.

Example math

Assume a $250,000 project and a monthly rent of $1,800. Annual rent equals $21,600. A 7 percent vacancy allowance equals $1,512, leaving $20,088 in effective rent. If operating expenses run about 20 percent, or $4,017, the NOI is roughly $16,071. That is about a 6.4 percent cap on the ADU itself. Your cash-on-cash return will depend on how you finance the project.

To dial in your numbers, use current rent comps for studios and one-bedrooms in your neighborhood, and price out utilities and insurance for your exact setup.

Taxes, insurance, and operations

New construction usually increases assessed value. Expect your property tax bill to rise based on the county assessor’s valuation of the improvement. Conversions of existing permitted space can have a smaller increase than a brand-new detached unit.

Update your homeowner’s insurance to reflect the added living area and any rental use. If you plan to rent, ask about landlord coverage. Decide if you will self-manage or hire a property manager. Management fees for long-term rentals typically fall near 8 to 12 percent of collected rent.

Avoid common barriers

• HOA covenants: community rules can restrict exterior changes or ADUs. State law may limit some restrictions, but review your CC&Rs and get approvals.
• Septic or well: properties not on sewer face extra health department review and possible upgrades.
• Historic districts or overlays: added design review can extend timelines.
• Unpermitted spaces: garage or basement conversions often require bringing the entire structure to current code. Budget extra time and funds.
• Parking and neighborhood concerns: state law reduces some parking requirements, but site planning is still important.

Short-term rentals

Short-term rental rules are often stricter than ADU approval rules. If you plan to use an ADU for short-term stays, review the city or county’s registration, licensing, and tax requirements before you commit.

Your next-step checklist

• Confirm your jurisdiction: City of Sacramento or Sacramento County.
• Verify zoning, lot coverage, and any overlays for your parcel.
• Choose your ADU type and target size based on goals and site.
• Get concept-level pricing from an ADU-experienced designer and contractor.
• Ask utilities about water, sewer, and electric needs and fees.
• Build a budget that includes soft costs, fees, and a 10 to 20 percent contingency.
• Decide on financing and estimate your monthly carrying cost.
• Run the ROI math using current local rents and your operating plan.

How we can help

You do not have to map this alone. As a Greater Sacramento brokerage, our team helps you evaluate ADU options through a practical lens. We can connect you with local designers and contractors, share neighborhood-level rent comps, and advise on resale and investment strategy so your ADU aligns with your long-term plans. When the time comes to rent or sell, we will help you position the property to maximize value.

Ready to explore an ADU strategy that fits your goals and neighborhood? Reach out to Portfolio Real Estate for a friendly, local conversation and a tailored plan.

FAQs

How long do ADU permits take in Sacramento?

• Plan for 2 to 8 weeks for first plan check after complete submittal, with each correction cycle adding weeks, plus 3 to 9 months for construction depending on whether it is a conversion, attached, or detached build.

How much does a Sacramento ADU cost?

• Small conversions or junior ADUs often run about $40,000 to $150,000, attached ADUs about $100,000 to $300,000, and detached builds about $150,000 to $450,000 or more, depending on site and finishes.

Do I need to pay impact and utility connection fees?

• Expect plan check and building permit fees, possible reduced impact fees for some smaller ADUs or conversions, and utility costs for water, sewer, and electric connections or upgrades that can range from hundreds to many thousands.

Will an ADU increase my Sacramento County property taxes?

• Yes, new construction generally increases assessed value and property taxes, with conversions of existing space often adding less than a new detached unit.

Is attached or detached better for ROI in Sacramento?

• Attached ADUs are often less expensive due to shared systems, while detached units tend to cost more but can offer privacy and potential rent premiums, so site conditions and goals should drive the choice.

Can my HOA stop me from building an ADU?

• HOAs can have CC&Rs that restrict designs or ADUs, and while some state rules limit restrictions, you should review your HOA documents and seek approval early.

What rent and ROI should I expect on a Sacramento ADU?

• Use current neighborhood rent comps for studios and one-bedrooms, subtract vacancy and operating costs to calculate NOI, then compare NOI to your project cost to estimate cap rate and payback period.