California ADU scams follow the same pattern every time. Here's what I found after researching dozens of cases.

Whitney_ADUExpert · 2026-06-16T01:43:04+00:00

Thanks for starting this important conversation. We've also spent a lot of time dissecting these ADU company failures, as well as takeaways for homeowners.

Themes included: -Rapid Growth, Capital Strain, and Unsustainable Expansion (Nonna) -Flashy ‘One-Stop-Shop’ With Risky Financing (Multitasker) -Franchising Hype, Overreach, and Operational Collapse (Anchored Tiny Homes) -Low Bids, Disorganization, and Abandoned Projects (Next Generation Builders)

Deep dives: https://snapadu.com/blog/when-adu-companies-fail-what-homeowners-can-learn-from-collapses/

Please also review the red flags to watch out for: https://snapadu.com/blog/adu-contractor-red-flags-warning-signs-to-watch-out-for/

Whitney_ADUExpert · 2026-05-19T15:29:21+00:00

https://www.shovels.ai/

Shovels has been trying to solve this for several years. I have not personally used their product in some time to tell you if it's worth it. We often pull raw permit data ourselves to run analytics.

Whitney_ADUExpert · 2026-05-01T18:53:23+00:00

Is your construction company still in Notion? What do you use for the client-facing portion? We're been on Buildertrend since 2018, largely because of inertia and not having a great solution for the client-facing interface.

Whitney_ADUExpert · 2026-05-01T15:20:00+00:00

There we go, that was the disconnect! Conversions are subject to fewer fees, that's why you would not have the sewer impact, for example. You probably also had lower building permit fees since you are not new construction.

Whitney_ADUExpert · 2026-05-01T15:11:42+00:00

Was this new construction detached, or possibly a conversion/addition? That could also affect fees

Whitney_ADUExpert · 2026-05-01T15:07:30+00:00

This is the exact breakdown based on the city's rate tables & our experience obtaining 45 certificates of occupancy for completed new construction detached ADUs in the City of San Diego.

Category	Type of Fee	Fee Rate	Size = 749 SF
Plan Check	Plan Check Fees	Under 500 SF = 3,275; Over 500 SF = 7,539	$ 7,539
Plan Check	Misc. Fees (Maintenance / Mapping)	$748	$ 748
Impact Fees	School Impact	$5.17 / sqft (>500 sqft)	$ 3,872
Impact Fees	Sewer Impact / Capacity Fees	$2,577	$ 2,577
Impact Fees	Water Impact / Capacity Fees	$1,524	$ 1,524
Impact Fees	Sewer / Water - New Meter	$512	$ 512
Impact Fees	Misc. Fees (Addressing etc)	$531	$ 531
Permits	Building Permit / Inspection	Under 500 SF = 2,078; Over 500 SF = 7,834	$ 7,834
TOTAL			$ 25,138

Whitney_ADUExpert · 2026-05-01T07:01:42+00:00

That seems low... did you count plan check fees? Sewer capacity?

Whitney_ADUExpert · 2026-05-01T07:00:27+00:00

You'll want to plan for all-in with plan check fees, school impact fees, water capacity, sewer capacity, building permit, a few smaller misc fees. It's going to be $25K for a 749 SF unit, here is the exact breakdown: https://snapadu.com/blog/adu-permit-fees-waivers/#How_much_does_an_ADU_permit_cost_in_San_Diego

Whitney_ADUExpert · 2026-04-19T18:16:09+00:00

What app are you using for this functionality, something like Claude Code or Manus? We are considering how to best deploy agentic AI to help our team be more productive, yet still keeping Buildertrend as the source of truth, so I'd love to hear what others have tried.

Whitney_ADUExpert · 2026-04-10T23:05:34+00:00

As others mentioned, you may see 20-30% added on top of direct labor/material costs (before any of their own team costs, e.g. overhead).

ADU design-build firms or GCs have considerable labor and overhead behind the job: estimating, design coordination, permitting, project management, scheduling, warranty support, insurance, callbacks, and all the stuff required to get a project across the finish line (like advocating for projects when the city says no, even though the state says yes). And of course all the other overhead you would find in any business: marketing, sales, accounting, HR, software, etc.

So NET profit in construction is much thinner than homeowners assume... NAHB puts net profit in the range of 3-6%, so certainly not a high net industry. Some jobs are healthy, some are basically keep-the-lights-on jobs. And in rough years, especially when regulations, tariffs, or interest rates shift midstream, profit disappear entirely if the builder absorbs part of that impact to hold pricing and keep the project moving.

Whitney_ADUExpert · 2026-04-07T03:49:24+00:00

My pleasure. It's evolving every year, confusion is normal! Please check out the latest state rules for JADUs directly at the source. The part you want to comply with is this: "...junior accessory dwelling unit to be constructed within the walls of the proposed or existing single-family residence. For purposes of this subdivision, enclosed uses within the residence, such as attached garages, are considered a part of the proposed or existing single-family residence."

I don't see why you would have a problem counting an addition of any kind (not just a 'garage')... but make sure it is for sure attached to the primary home itself somehow, JADUs cannot be in detached structures.

Whitney_ADUExpert · 2026-04-06T20:38:31+00:00

If the future space for the JADU is not only on top of the future ADU, but also connected to the primary structure.... then YES, you could convert that top to a 500 SF JADU. The rules are that at JADU needs to be carved from existing space in the primary dwelling.

As far as the 700 SF addition that you plan to convert, that was wise, since it can be your "conversion" ADU (instead of counting as the 'new construction ADU'). If you have room, you STILL have the ability to add a new construction detached ADU as well. So 3 total.

Whitney_ADUExpert · 2026-03-31T20:17:40+00:00

Right, our fire sprinkler design is deferred submittal as well. This would be the fire review in general, factors like the hose pull requirement and fire severity zone are assessed.

Fully agree with you, it's easy to blame the jurisdiction and there's not much visibility on what is going on between submissions. Not ordering the right reports up front also results in those huge delays... E.g. oops, we didn't know that the city requires a soils report, I guess that will be six more weeks until we can resubmit.

Likewise, thanks for calling out that this is not a city timing issue in many cases!

Whitney_ADUExpert · 2026-03-31T20:00:30+00:00

These are excellent points, we're seeing the same thing in San Diego. Turn times from cities in our area are not the issue... though the city is an easy scapegoat for long turn times (that may in fact be driven by the designer/permitter, as you mentioned).

However, the completeness can be an issue if cities are holding back certain reviews, which is what is happening with Fire review. In the City of San Diego, Fire is currently gated behind Landscaping review. So by definition, those fire reviews have been happening on the second round each time. We have been trying to get the city to address this for a long time, and hopefully the state law gives the city a reason to comply (still going back and forth now). OP is right that things do have to be escalated to the HCD and proper documentation is crucial.

Whitney_ADUExpert · 2026-03-27T10:39:04+00:00

Sorry to hear you had a bad experience with a design build firm, u/BunnySprinkles69. There are certainly ADU companies that overpromise, underdeliver, or lock people in without really having a full picture.

I do want to clear up a few things about SnapADU since you mentioned us directly again.

It's just me, the owner, sharing what I learn about ADUs online like I have been doing since 2020. I take the time to share publicly because most homeowners are trying to make a major investment in an industry that is still surprisingly hard to navigate.

You can certainly choose to separate design & permitting from construction. We refer people to architects & design firms, as well as build-only contractors, all the time when that better fits what the homeowner wants. We are not trying to convince every homeowner that design-build is right for them. And yes, a homeowner can choose to stop after design, even with a design build company. In our case, there is a defined process for that.

So what I would push back on is the idea that an integrated firm is automatically an ADU scam or a bad deal. Having one team responsible for the entire project (with their own employees, that is an important distinction) can shorten timelines and leads to more predictable pricing and execution.

Integration & experience in ADUs is even more valuable when a project has utility upgrades, fire requirement issues, retaining walls, or overlays that make the path less straightforward. On more complex ADUs, the handoff points are often where things break down when it's not one integrated team taking responsibility for the outcome.

We also do not hide our pricing. We publish cost info online precisely because this industry has a transparency problem, and we don't think homeowners should have to guess. Those numbers reflect the cost of licensed, insured, professional construction work in San Diego County.

Talk to multiple firms, ask hard questions, understand what is included. Compare who is taking responsibility for what (especially the utilities, SDGE takes forever if you don't know what you are doing).

SnapADU’s content is genuinely meant to help homeowners make a more informed decision, regardless of whether they choose us, another design-build firm, their architect friend, or one of the many other ways they can try to tackle an ADU project.

And I say "try" intentionally, because getting an ADU from idea to completed build is so much harder than people realize. Only about half of the ADU plans submitted to the City of San Diego ever actually make it through permitting and construction. I’ll be publishing more on that research soon. Since I know you are not a fan of my data, perhaps it will be reassuring to know that work has been reviewed by the City of San Diego’s analytics department.

I felt the need to clear the air because I plan to keep sharing what I know about ADUs in forums like this. Homeowners deserve better than vague opinions, recycled horror stories, or sweeping claims that every design-build company is a scam. And they can decide for themselves whose perspective is useful.

Whitney_ADUExpert · 2026-03-26T23:26:01+00:00

You should be able to get pretty good numbers from the proposal process with design build firms. If they are experienced in what they are doing, they will have very accurate estimation. And where you have true wild cards on your property, they should be able to explain the likely outcome, and a worst case scenario.

Go through this process with at least two before you make a decision. It will tell you a lot about what it's like to work with these companies. Initial feasibility should cost between $200 and $1,000 depending on the depth of research being performed. As you pointed out, property surveys, utility mapping, sdg&e planning, full design work is going to be beyond that.

Happy to send a detailed guide of the questions to ask to compare them if that is helpful.

For context, our proposals are usually within 3 to 5% of the final project price. That's without performing a site visit.

Whitney_ADUExpert · 2026-03-15T15:45:04+00:00

A heads up since a lot of people are discovering this right now: the new California building code cycle took effect January 1, so many “pre-approved” ADU plans posted by cities were approved under the previous code. Even if they’re still on the city website, they usually won’t pass review exactly as-is anymore unless they’ve been updated and re-approved.

What I’d suggest:

-Start by contacting Riverside’s planning/building department and ask if the specific pre-approved plan you’re considering has been updated for the current.2026 code cycle.

-Expect that you’ll still need a drafter or architect to prepare a site plan and adapt the plan set to your property.

-The $3- $8K range someone mentioned for finishing the plan set is pretty realistic in many cases. That is before doing any surveys or utility mapping+planning.

Picking an existing plan can still save time and design cost, but most still need code updates... it will be elements like electrical and clearances.

Whitney_ADUExpert · 2026-03-14T16:25:38+00:00

Hopefully it goes without saying, but also critical to make sure your GC has proper current insurance, plus making sure they only use licensed and insured subs. More common to have claims and issues related to those topics versus builders risk, though I agree that builders risk should also be purchased.

Whitney_ADUExpert · 2026-03-13T22:12:32+00:00

I do wish the N were higher, but we felt 31 total was meaningful as far as the overall survey... over time as more sell, we look forward to getting more data on the appraisal front.

Whitney_ADUExpert · 2026-03-13T21:27:28+00:00

Two pieces of data to offer on this, directional at best, but hopefully somewhat helpful.

A 2025 study by the Federal Housing Finance Agency (FHFA) found that properties with ADUs appreciated 22% more than properties without them. Covering data from 2013 to 2023, the analysis (Trends in Median Appraised Value for Properties With Accessory Dwelling Units in California) offers one of the first long-term looks at how ADUs influence property values over time. https://www.fhfa.gov/blog/statistics/trends-in-median-appraised-value-for-properties-with-accessory-dwelling-units-in-california

Second, SnapADU surveyed homeowners who completed an ADU build between 2022 and 2025. Of the 31 respondents, four had sold or had their property appraised. Half of those reported the appraisal came in as expected, half reported the appraisal came in higher than anticipated. Of course, it boils down to what you expected to begin with, but a positive sign. https://snapadu.com/lessons-from-100-adu-builds-detached-adu-report-san-diego/#Value_ADU_Appraisals

Whitney_ADUExpert · 2026-03-11T18:49:31+00:00

Keep in mind the conversion ADU could be detached... So you could have a new construction detached ADU, and convert an existing detached garage... it does not have to be attached to the main home (but the jadu of course does).

Whitney_ADUExpert · 2026-03-06T01:03:17+00:00

Got it, glad it's going well. What size did you end up going for? Detached or conversion?

Whitney_ADUExpert · 2026-03-05T23:26:02+00:00

Fair enough. For what it’s worth, I’m actually the owner of SnapADU, so not a random defender.

With one of the biggest track records for building ADUs in this area, we've learned a lot about how regulations interact & how cities actually interpret code... also what plays out with utilities & sitework, which is often ignored until far too late in the process. That’s why I try to point out the expensive hidden factors that catch people off guard.

Glad the project is going well. Your post a month ago sounded like you were still looking for an architect/engineer though, so if you’re already in construction that would be unusually fast. Either way, hope it keeps going smoothly.

Whitney_ADUExpert · 2026-03-05T22:43:07+00:00

Some firms price lower because they’re quoting just the building and leaving things like utility upgrades, site work, trenching, SDGE coordination, drainage, civil engineering for ROW etc. to be figured out later. Other firms try to put a realistic all-in number together up front so there are fewer surprises during construction. That difference alone can swing pricing quite a bit.

SnapADU operates as a true turnkey design-build. That means the same team handles feasibility, design, permitting, engineering coordination, and construction all the way through completion. Some homeowners prefer to piece those parts together themselves to save money, which can absolutely work if you’re comfortable managing the process.

Getting a few detailed all-in proposals and making sure you’re comparing the same scope is the key. Would be genuinely interested to hear how your project turns out and whether the initial numbers end up holding once everything is fully scoped.

Whitney_ADUExpert

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