What Is an ADU?
An Accessory Dwelling Unit (ADU) is a secondary residential unit on a single-family or multifamily property that includes its own entrance, kitchen, bathroom, and sleeping area. It’s a fully independent living space — not a bonus room or a converted closet — with the same amenities as a standalone apartment.
ADUs go by many names: granny flat, backyard cottage, in-law suite, casita, secondary unit, or companion home. The legal term in California is ADU, and since 2020 California has made ADU construction significantly easier, more affordable, and faster to permit than at any previous point in history.
ADUs serve many purposes. Inland Empire homeowners build them to house aging parents, adult children, or other family members while maintaining independence. Others build for rental income — a well-built ADU in the Inland Empire can generate $1,400–$2,200/month, often covering the financing payment entirely. Still others build to increase property value ahead of a sale.
Whatever your reason, the economics of ADU construction have never been more favorable. Setback requirements dropped to 4 feet. Parking replacement was eliminated for garage conversions. Permit timelines are capped by state law. And impact fees were waived for ADUs under 750 sq ft on many properties. The window to add a rental-income unit to land you already own — at costs that pencil out — is wide open.
Types of ADUs
California recognizes four main types of ADUs. Each has different cost profiles, timelines, and use cases. Construction Station builds all four.
A standalone structure built in the backyard — completely separate from the main home with its own foundation, utilities, address, and entrance. Maximum design flexibility and privacy. The most expensive ADU type but also the most rentable and the most valuable at resale.
An addition to the main home that shares at least one wall. Can be added to the side or rear of the home. Shares the main home's foundation system where possible, reducing cost. Requires its own separate entrance.
Converting an existing attached or detached garage into a fully permitted living space. The fastest and most affordable ADU path. California prohibits cities from requiring replacement parking. Construction Station has completed multiple garage conversions in Redlands and the broader Inland Empire.
Carved from within the existing home footprint — typically a bedroom, garage, or interior space. Must share a wall with the main residence. Requires its own exterior entrance and efficiency kitchen. Our Redlands Jr. ADU project (465 sq ft, 1BD/1BA) came in at approximately $200K all-in.
California ADU Laws
California’s ADU legislation has transformed what’s possible for homeowners. Here are the most important bills and what they mean in practice:
You no longer need to live on the property to build or rent an ADU. Investment properties qualify. Reduced minimum setbacks to 4 feet for rear and side yards. Permitted ADUs in single-family and multifamily zones statewide.
Cities and counties must approve or deny complete ADU applications within 60 days (deemed approved if not acted upon). Impact fees waived for ADUs under 750 sq ft on owner-occupied properties. School fees significantly reduced for ADUs.
Cities cannot require replacement parking when a garage is converted to an ADU. No minimum lot size requirement. Eliminated setback requirements for garage conversions within existing footprints.
Cities that opt in can allow ADUs to be sold separately from the primary dwelling as individual condominiums. Not all IE cities have adopted this yet, but it opens the door to treating an ADU as a separate real estate asset in participating jurisdictions.
Made the owner-occupancy waiver permanent (previously set to expire). Homeowners who don't live on the property can build ADUs and rent both units without any sunset date.
State law sets the floor, not the ceiling. Every Inland Empire city enforces its own plan-check process, lot coverage rules, height limits, and utility tie-in standards. Yucaipa, Redlands, Loma Linda, Lake Elsinore, and San Bernardino County all approve ADUs — but each city has its own inspection cadence and common plan-check corrections. Construction Station has worked through all of them.
The Construction Process
Building an ADU involves five distinct phases. Understanding each phase helps you plan your timeline and budget, and know what questions to ask a contractor.
We walk your lot, verify setbacks and lot coverage, assess utility connections (water, sewer, electrical panel capacity), check for easements, and confirm what your city will and won't approve. This is free with Construction Station and takes about 60–90 minutes. You leave with a realistic sense of what you can build and what it will cost.
A licensed architect draws floor plans, elevations, and a site plan. A structural engineer provides calculations for the foundation and framing. A Title 24 energy consultant produces the required energy compliance report. This phase takes 4–8 weeks depending on design complexity and whether you use custom plans or city pre-approved plans (much faster).
We submit your complete package to the building department — plans, calculations, Title 24, and permit application. The city has 60 days to approve or request corrections (plan check). Most IE cities respond with corrections in 3–6 weeks; we respond and resubmit quickly. Total permit time: 2–4 months depending on city workload and whether corrections are needed.
Once permits are approved and posted, construction begins. For a detached ADU: site prep and grading, foundation pour (slab or raised), framing, roofing, rough MEP (mechanical, electrical, plumbing), insulation, drywall, tile, cabinets and countertops, flooring, exterior finishes, and final punch list. Construction runs 4–8 months depending on ADU type and size.
The city inspector conducts a final inspection — checking structural, MEP, insulation, and finish work against the approved plans. A certificate of occupancy is issued where applicable. Construction Station provides a two-year workmanship warranty on all ADU projects.
ADU Costs in the Inland Empire
ADU costs vary significantly by type, size, site conditions, and finish level. The figures below are 2026 all-in estimates for the Inland Empire — including design, permits, construction, MEP, finishes, and utility connections.
| ADU Type | Size Range | All-In Cost Range |
|---|---|---|
| Garage Conversion (Attached) | Existing footprint | $85,000–$130,000 |
| Garage Conversion (Detached) | Existing footprint | $95,000–$160,000 |
| Junior ADU (JADU) | Up to 500 sq ft | $100,000–$175,000 |
| Detached ADU — Studio | 400–500 sq ft | $150,000–$210,000 |
| Detached ADU — 1 Bedroom | 550–700 sq ft | $185,000–$270,000 |
| Detached ADU — 2 Bedroom | 750–1,000 sq ft | $240,000–$350,000 |
| Detached ADU — Max Size | 1,000–1,200 sq ft | $300,000–$420,000+ |
What drives costs up: Hillside or slope lots (foundation complexity), properties far from the existing sewer or electrical panel (utility run costs), high-end finishes (tile, countertops, appliances), and detached new construction vs. conversion.
What drives costs down: Using city pre-approved plans (saves $6,000–$14,000 in design fees), keeping the ADU close to existing plumbing and electrical, standard finish selections, and garage conversions (no foundation required).
Financing Your ADU
ADU projects are large investments — $100,000–$400,000 for most types. Most homeowners use some form of financing rather than cash. The right product depends on your current equity, existing mortgage, credit profile, and long-term goals.
Revolving credit line secured by your home's equity, typically up to 80% LTV minus your mortgage balance.
Homeowners with significant equity who want flexible draw timing as costs are incurred.
Variable interest rate; total borrowing capacity limited by current appraised value.
Lump-sum loan secured by home equity at a fixed interest rate. Works like a second mortgage.
Homeowners who want a fixed monthly payment and have enough equity to cover the full ADU cost.
Lower rates than unsecured loans but limited to current equity.
Replace your existing mortgage with a larger loan and take the equity difference in cash.
Homeowners whose current mortgage rate is close to or higher than today's rates — refinancing doesn't cost much more than holding.
Refinancing at today's rates may increase your monthly payment significantly if your current rate is low.
Lends against your home's projected after-renovation value (ARV) rather than current equity — allowing you to borrow significantly more without refinancing your first mortgage.
Homeowners with limited current equity whose home will appraise much higher after the ADU is built.
Offered through partner lenders (not directly through RenoFi). Shop rates and terms carefully.
Short-term loan that funds construction in draws, then converts to a permanent mortgage at project completion.
Homeowners who want to consolidate ADU financing into a long-term mortgage product.
Requires two closings (construction loan and permanent loan) with associated fees. Construction lenders require detailed plans and contractor qualifications.
FHA-backed loan that combines home purchase or refinance with renovation costs into a single mortgage.
Buyers purchasing a home with plans to add an ADU, or homeowners refinancing and adding renovation costs.
FHA loan limits apply; requires an FHA-approved contractor and HUD consultant oversight.
Construction Station works with local lenders experienced in ADU construction financing and can provide referrals. We also work with borrowers using Enhancify financing for smaller renovation projects. See our financing page for more details.
Rental Income Potential in the Inland Empire
Rental income is one of the most compelling reasons to build an ADU. Current Inland Empire rental market data shows strong demand and limited supply of small, well-built units — the exact product ADUs create.
| ADU Type | Monthly Rent (IE Market) | Near Loma Linda LLUMC |
|---|---|---|
| Studio (400–500 sq ft) | $1,100–$1,500 | $1,400–$1,700 |
| 1 Bedroom (550–700 sq ft) | $1,300–$1,800 | $1,600–$2,000 |
| 2 Bedroom (750–1,000 sq ft) | $1,600–$2,200 | $2,000–$2,600 |
Investment return example: A $200,000 Redlands Jr. ADU generating $1,600/month in rent produces a 9.6% gross yield on construction cost. After a typical 20% vacancy factor, net yield is approximately 7.7%. At a 7% 30-year mortgage rate on $200,000, the monthly payment is approximately $1,330 — meaning the ADU is cash-flow positive from day one.
Property value impact: A well-built ADU typically increases property value by 100–150% of construction cost in the IE. A $200,000 ADU can add $200,000–$300,000 to the appraised value of the primary property. This compounds with rising rents over time — an ADU built today with $1,600/month rent will likely command $2,000–$2,400/month in 5 years at historical IE rent growth rates.
Timeline Expectations
The single most common source of homeowner frustration with ADU projects is unrealistic timeline expectations. Most contractors quote construction time without factoring in design and permitting. Here’s the complete picture:
| ADU Type | Design | Permitting | Construction | Total |
|---|---|---|---|---|
| Garage Conversion | 4–8 wks | 6–12 wks | 12–20 wks | 6–10 months |
| Junior ADU (JADU) | 4–8 wks | 6–14 wks | 14–24 wks | 6–11 months |
| Detached ADU (pre-approved plans) | 2–4 wks | 6–10 wks | 16–28 wks | 7–11 months |
| Detached ADU (custom plans) | 6–12 wks | 8–16 wks | 18–32 wks | 9–15 months |
Permitting timeline assumes a complete, correct submittal. Incomplete applications, missing documents, or sites with unusual conditions extend timelines. Using city pre-approved plans (available in Yucaipa, Redlands, Temecula, Rancho Cucamonga, and others) can reduce design time by 4–8 weeks.
How to Get Started with Construction Station
The best first step is a free feasibility consultation — a 60–90 minute site visit where we walk your property, assess setbacks and lot coverage, review your city’s ADU ordinance, and give you an honest picture of what’s buildable and what it will cost.
No obligation, no sales pitch. You leave with a realistic understanding of your options and a sense of whether an ADU makes sense for your property and goals.
If you want to move forward, we begin design coordination and permitting. We provide a fixed-price contract after the design is complete so you know the all-in cost before any site work begins.
Construction Station has active ADU projects in Redlands, Lake Elsinore, and other Inland Empire cities — and has completed garage conversions and Jr. ADUs in the region. CSLB License #1108879 is in good standing and verifiable at cslb.ca.gov.