The Cost of Building an ADU in Phoenix, Arizona

Phoenix, Arizona, is experiencing a surge in the popularity of Accessory Dwelling Units (ADUs) as homeowners seek innovative ways to maximize their property value, provide additional housing solutions, and earn rental revenue. ADUs are secondary housing units located on the same lot as a primary residence, offering numerous advantages from increased rental income to enhanced property value. Under HB 2720, Arizona requires cities over 75,000 people to allow at least one attached and one detached ADU on any lot where a single-family home is already allowed. Let’s dive into the costs of building an ADU in Phoenix, the growing trend of ADUs, the benefits they offer, and how our team at Minimal Living Concepts are making the process more efficient.

The Growing Popularity of ADUs in Phoenix

ADUs have become increasingly popular in Phoenix due to several factors:

1. Housing Demand: As Phoenix’s population grows, the demand for affordable housing options has risen. ADUs provide a flexible and cost-effective solution to this demand.
2. Rental Income: Homeowners can lease the second unit, and that rent goes against the mortgage on the property.
3. Property Value: An ADU adds a second dwelling to the lot, which is priced into an appraisal against local comparable sales.
4. Flexible Living Arrangements: ADUs offer versatile living solutions, accommodating elderly parents, adult children, or guests without the need for major property modifications.

Advantages of Building an ADU on Your Property

An ADU does two financial things on a Phoenix lot. It creates a second unit that can be leased separately from the main house, which produces rent. It also adds a second dwelling to the property, which an appraiser prices against comparable sales in your own neighborhood rather than against a state average. Both sides are covered in our guide for Phoenix rental investors; the rest of this article is about what the unit itself costs to build.

Minimal Living Concepts: Speed and Efficiency in ADU Construction

Minimal Living Concepts is a specialized company in Phoenix that focuses on building ADUs efficiently and effectively. Our specialization brings several advantages:

1. Expertise: With a deep understanding of ADU design and construction, our team streamlines the building process, ensuring high-quality results.
2. Efficiency: Specializing in ADUs allows the company to implement efficient construction practices, reducing build time and minimizing disruption to homeowners.
3. Cost Savings: Building one product type repeatedly means the same crew, the same details and the same suppliers on every project.
4. Customization: The company offers a range of customizable designs, ensuring that the ADU meets the specific needs and preferences of the homeowner.

Costs Involved in Building an ADU in Phoenix

The cost of building an ADU in Phoenix can vary based on several factors:

1. Size and Design: The larger and more complex the design, the higher the construction costs. Simple designs with standard materials will cost less than custom, high-end finishes.
2. Site Preparation: Costs can increase if significant site preparation is needed, such as grading, utility hookups, or demolition of existing structures.
3. Permitting and Fees: Obtaining the necessary permits and paying associated fees can add to the overall cost. Working with a specialized company like Minimal Living Concepts can help navigate this process efficiently. Here is how ADU permitting works in Phoenix, stage by stage, including the 60 to 90 day review window.
4. Construction Materials: The choice of materials impacts the cost. Sustainable or premium materials will increase the budget compared to standard options.
5. Labor Costs: Skilled labor is required for ADU construction, and labor costs can vary depending on the complexity of the project and local market rates.
6. Utilities and Infrastructure: Extending utilities (water, sewer, electricity) to the ADU may require upgrades to neighborhood transformers or other utility enhancements if the property is not already set up for an additional unit.
7. Finishing Touches: Interior finishes, fixtures, and appliances will also impact the final cost. Homeowners can choose to splurge on high-end finishes or save with more economical options.

Simplification in building with Minimal Living Concepts

We aim to simplify the costs in building an ADU by wrapping all of the predictable project costs into the singular price of your unit.

FLEX (322 sq ft): $155,000 turnkey starting price

LIVE (576 sq ft): $165,000 turnkey starting price

LIVE+ (741 sq ft): $216,000 turnkey starting price

DWELL (1,178 sq ft): $279,000 turnkey starting price

What’s included in the unit cost?

1. Drafting.
2. Structural engineering, electrical engineering, mechanical engineering, and plumbing engineering.
3. Permitting Fees.
4. Management of the entire permitting process.
5. The complete construction of you move in ready unit including all cabinetry and appliances.

What’s separate from the unit costs?

1. Site costs such as tree removal, demolition of existing structures, fill and compaction if a specific area must be built up.
2. External utility costs such as panel upgrades to the main home, septic tanks, and water meter upgrades.
3. Special permitting fees or processes such as variances, hillside studies, or flood studies.

Conclusion

Building an ADU in Phoenix is a cost decision first: what the unit costs to build, what your site adds to that, and what the finished unit is worth as a rental or at resale. The growing popularity of ADUs in the city highlights their role in addressing housing demand and offering cost-effective living arrangements. Companies like Minimal Living Concepts bring expertise and efficiency to the construction process, making it easier for homeowners to add these valuable units to their properties. While the costs of building an ADU can vary with the site, the useful comparison between two quotes is what each one includes.