Benefits of Building a Backyard House

The landscape of the average household is evolving every day. And with California’s housing crisis hitting families hard, this is a good thing for families who need to find more support–and housing they can afford.

What does this mean for your family? For one thing, your backyard may be the perfect place to house a relative in need of a home.

When your family needs a bit of extra support, a backyard house may be the perfect solution. Here’s why backyard houses are a great choice for so many California families and what you need to know before you decide to build your own.

What is a Backyard House?

A backyard house is a lot more than the name would have you believe. It’s not just a tiny house in your backyard (though it can be) and it’s not necessarily as separate from the main house as the name implies (though it can be).

Basically, a backyard house is a fully functional secondary living unit added onto the same lot as a primary residential structure, typically a single family home or a duplex.

Other Names

Chances are, as a California resident, you’ve heard of backyard houses before, though you may not have heard them referenced under that name.

The legal and regulatory name for backyard houses is accessory dwelling unit, or ADU. However, there are dozens of names in circulation for ADUs, depending on where you live, what you use the space for, and your personal preference.

Common synonyms for backyard houses include:

  • Accessory apartment
  • Accessory dwelling unit
  • Accessory suite
  • Ancillary unit
  • Attic apartment
  • Backyard cottage
  • Basement apartment
  • Carriage house
  • Garden cottage
  • Garden suite
  • Granny flat
  • Home within a home
  • In-law suite
  • Junior accessory dwelling unit (JADU)
  • Laneway house
  • Mother-in-law suite
  • Mother-daughter house
  • Multigenerational house
  • Secondary suite
  • Tiny house (sometimes qualifies as an ADU but not always)

The many names for ADUs refer to their many usages and placements. You wouldn’t call an apartment in your backyard a basement apartment. It occasionally gets tricky when tiny houses come into the picture, as pre-built tiny houses don’t generally legally qualify as ADUs.

In order to fit the legal definition of an ADU, regardless of the name, the unit must have foundations, utility and plumbing hookups, and serve as a fully functional independent living space, complete with a kitchen, bathroom, living space, and sleeping space. Tiny houses do not always qualify because they do not always have their own foundations.

However, while the units are functional as independent living spaces, they cannot be bought or sold separately from the main residence. Instead, they are treated as a feature of the primary residence, even if a completely different family occupies the unit and rents it from the owners in the primary residence.

Types of Backyard House

All names aside, all ADUs fall into one of four categories:

  1. Detached
  2. Attached
  3. Interior conversion
  4. Garage conversion

Detached units are completely separate, freestanding structures from the primary residence. They have their own foundations, their own utility and plumbing hookups, and often their own entrances. This makes them the most independent of the four.

Attached conversions are similar, but they share one wall with the main unit and may share utility and plumbing hookups. However, they always have separate entrances and do not have an internal entrance from the main house to the unit.

Interior conversions are basically fully functional apartments built into your house, such as an attic or basement apartment. This is not to be confused with a guest room–the unit has its own kitchen, bathroom, living space and sleeping space and is independent from the main house, even though it is connected.

Garage conversions, as the name implies, are garages which are converted to living units. They may be attached or detached depending on your garage, but they must meet all the requirements of other ADUs (utilities, plumbing, kitchen, bathroom, sleeping space, and living space).

Because of the name, backyard houses are usually detached, attached, or garage conversion units.

Why Build a Backyard House?

Why would you want to build a backyard house?

The truth is, the reasons for building one are as diverse as the families that build backyard houses. Maybe you want to bring your family together, maybe you want to create more space, maybe you need a specialized space.

Here are a few reasons why you might consider making the investment in a backyard house.

The Family That Stays Together

If you’re like many families, you and your loved ones have been hit hard by California’s affordable housing crisis. Current estimates say that California would need to create 3.5 million affordable housing units by 2025 just to meet its current demand.

Closer to home, San Jose was dubbed one of the country’s hottest housing markets in 2019, but few are celebrating the news. Families find themselves facing a list of bad options.

The average rent for a studio apartment in San Jose is $2,719, a full $1,000 higher than the national average. The price of a house hovers between $800,000 and $1.5 million, out of reach for all but the wealthiest of families.

In order to find housing they can afford, many residents have to commute at least an hour to get from their homes to their jobs. Buying a house in California may be even worse, unless you’re willing to purchase the house with roommates.

So many families find themselves spreading out across the state–or leaving California for cheaper housing options that make it possible to start a family without drowning in debt.

Backyard houses open up a whole new world of affordable housing, one that allows families to stay closer together. Now, you can see your relatives far more frequently–and help them find housing they can actually afford to keep.

Supporting Your Aging Parents

Seniors are being hit especially hard by California’s housing crisis. Those nearing retirement know their wages are unlikely to go up in the near future, and that their time left with their company is likely drawing to a close–which means they no longer have the income necessary to pay for their homes.

It’s even worse if you’re already retired and stuck between a rock (limited income) and a hard place (rising rents). For many seniors, they have to look increasingly far and wide to find housing they can afford, making the choice to leave their friends and family behind. Or, for seniors who simply cannot afford to move, homelessness is a genuine threat.

For seniors who need additional support, prospects are equally frightening. They can no longer live alone or live that far from family, which means they cannot afford to venture further away to find housing they can afford. But the cost of assisted living is worse than an apartment–the national median cost is $4,000 per month, which most families don’t have in reserve.

Backyard houses offer a good solution for many families regardless of your loved ones’ situation. They require an upfront investment, but once that investment is made, you can provide affordable, accessible care to your loved one from your own home, without having to worry about driving distance.

Even if your parents don’t need additional care, you can still offer them a housing option that’s affordable. Instead of struggling to find a housing option that’s within their limited budget, you can offer them an option that’s right in their price range (assuming that you decide to charge them rent).

It’s the perfect choice to offer the support your loved ones need without worrying about the distance necessary to find an affordable option.

The Perfect Home for a Special Needs Loved One

Backyard houses are also a great option to support special needs loved ones.

The incredibly high demand for affordable housing in California means that many individuals with special needs may not be able to access housing they need. Even if they can find housing that’s within their budget, it may not be accessible to them, or require so much remodeling to become accessible that it’s out of the budget once again.

Sadly, living with you in your own house may not be an option either, depending on their needs and your home. Someone in a wheelchair, for example, may not be able to stay in a house that was not built with their needs in mind–wide doorways, open spaces, lower storage.

Backyard houses are a fantastic option because you can build exactly the space that your loved one needs. You can work with them to ensure that they have exactly the space they need. And if you have a relative who may need additional accommodations in the future, you can build a space with those accommodations included.

That way, you can create a space that will serve them well for years to come, no matter how their needs change over time.

A Nest for Your Boomerang Kids

Between the highest student loan debt burden of any generation, expensive home prices, and a difficult job market, more millennials are living at home than any other time this century.

That means that more families are changing the way they live together–and backyard houses are the perfect option for boomerang kids.

Many young adults who have to move back home struggle with the idea of moving back into their childhood bedroom, even though they know that moving home is the best option. They’ve had some time to become independent, and in a culture that prizes independence the moment you can attain it, they’re loath to give it up.

But as a parent, you also know that they need a bit of support to get their feet on the ground and start off their adult life on the right foot.

Backyard houses offer the perfect middle ground. For boomerang kids, they’re not moving into their childhood bedroom–they’re moving into a fully functional separate living space. That way, they can have a degree of independence and start to spread their wings without their parents looming over their shoulder.

And for parents, it’s the perfect opportunity to provide your kids with the safety net they need to thrive. Plus, it’s a good learning opportunity before you let them into the real world–you can use it to learn something about paying rent, managing money, and taking care of an independent living space like a functional adult instead of a college student.

Extra Space to Grow

Last but not least, backyard houses offer you and your family the space you need to grow into something newer and better than ever.

If you don’t have relatives or kids who need a place to stay, you can still create more space with a backyard house. Maybe you need a space of your own to retreat. Maybe you want a space to host parties.

If you do have relatives or boomerang kids who need a place to live, a backyard house offers you the chance to grow and evolve together as a family. You can learn to navigate the new living arrangements in a way that helps you grow together, becoming closer and supporting each other through thick and thin.

After all, whether the going is rough or you’re celebrating your successes, family is what holds us together. A backyard house gives you the chance to hold your family closer and help your loved ones thrive.

The Cost of a Backyard House

Does a backyard house sound like the right fit for you and your family? If you’re like many California families, it may be exactly the solution you’ve been looking for.

That said, we know that building one is no small endeavor. With such a high cost of living in California, the cost of the project is a major consideration. Here’s what you need to know about the cost of building a backyard house.

Cost Per Square Foot

Unfortunately, it’s difficult to provide an exact rule of thumb for estimating the cost per square foot, since it depends on the space, the features you want to include, and other extraneous costs.

Your price will be affected by factors like:

  • Design costs
  • Permits and city fee costs
  • Utility connection costs
  • Construction costs

Keep in mind that while backyard houses are smaller, they pack a lot more expensive square footage (i.e. kitchen and bathroom) into a small space. And unlike a regular house, where the high cost of these rooms is offset by the economy of scale, a backyard house only doesn’t see a lower cost per square foot average. In short, costs per square foot aren’t a reliable metric for costing an ADU.

The amount of renovation required to make your unit possible will also change the cost of the project. If you have to pour new foundations and get a whole new utility hookup, for example, that will be more expensive than, say, converting your garage.

In addition, while a custom plan can offer you the freedom to get exactly the features you want, you’re going to pay more to get the plans approved and construction will likely be more expensive as opposed to build ready options.


You’ll also have to account for several fees attached to the process itself. These are basically fixed costs tacked onto the front of the project.

In San Jose, these fees can include:

  • Permit fees
  • School fees (Pro Tip: these fees do not apply to units smaller than 750 feet)
  • Parkland impact fees
  • Geologic hazard clearance (where appropriate)
  • Tree removal permit
  • Fire variance (where appropriate)

As a rule, the size of your ADU determines the price tag. For a full estimate of your permit fees, complete Form 337 – Permit Cost Estimate Worksheet.

Items Your Budget Should Include

When constructing your budget, you should plan to account for:

  • Excavation
  • Foundation and flatwork
  • Plumbing
  • Frame
  • Roof
  • Flashing and gutters
  • Windows, doors, shades, etc.
  • Insulation
  • Drywall
  • Electrical
  • Millwork
  • Tile
  • Hardware
  • Paint
  • Handrails
  • Appliances

But don’t forget to account for other costs associated with the construction itself, such as specialty tools, debris removal, contractor’s fees, demolition, site prep, landscaping, etc.

When in doubt, work with your contractor. They can help you get a sense of the project scope and what your ideas will cost. They can also help you find ways to lower the sticker price and simplify the process.

Pro Tip: Ask your builder how many ADUs they’ve successfully built themselves.

Permitting and Review Process

Ready to get your project underway? Once you’ve got a handle on the cost of building your backyard house and what you can afford, you’re ready to turn to practical concerns. Time to prepare for the permitting process. Here’s what that looks like in San Jose.

Review the ADU Universal Checklist

The first step recommended by San Jose is to review the ADU Universal Checklist, which is your go-to guide for all things ADU in San Jose.

This guide was designed to help homeowners like you avoid the expensive and frustrating process of altering your designs in the middle of the permit process(something that happens all too often). It will help you figure out if your property qualifies for a backyard house and whether you need any special permits in order to get your project approved.

Treat it like a step-by-step guide through the entire ADU process. Print it, annotate it, keep it on your fridge. Also, complete the entire checklist–you’ll need it for your submittal package.

Prepare Your Submittal Package

With that in mind, let’s talk about your submittal package.

You should not attempt to submit a proposal without completing the ADU Universal Checklist with your professional contractor–otherwise, you may go to a lot of trouble (and expense) only to find your property doesn’t qualify, or that you’re missing design elements or essential piece of paperwork.

To build a complete submittal package, you’ll need:

  • A printed copy of your ADU checklist with all questions answered
  • A rough site plan showing lot boundaries and dimensions, location of the primary dwelling and location of the proposed unit

If you need any help, go to the Permit Center at City Hall for a free consultation with a city planner, who can help address any questions you may have and help you understand what your plans must include in order to be compliant with the Zoning Code.

Submit the Plans for Review

When your concept addresses all issues covered in the ADU Universal Checklist, you’re ready to work with your contractor and draw up construction plans.

While hand-drawn plans were fine for your meeting with the city planner, you’re now going to need an official construction plan complete with technical codes. Hire an expert instead of trying to do this yourself–City Hall will not process inaccurate or incomplete plans. The process is very rigorous.

A complete submittal package must include:

You can submit your construction plans with the package or your builder can submit them for you. Plans may be submitted any day, but you can get expedited services on ADU Tuesdays.

Ready to Build Your Backyard House?

Who says that your backyard is just a place for the kids to play? These days, it’s the perfect place for your loved ones to find a home.

Our job is to make your dream backyard house a reality.

We’re specialized ADU builders who have served the Silicon Valley area for over 30 years. More than that, we understand the importance of creating a home, which is why we’re here to guide you through every step of the building process.

Ready to talk about your project? Get in touch today to speak with an ADU specialist and let us know how we can make your project possible.

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