Accessory dwelling units reportedly hit a record share of Bay Area housing permits in 2024 — nearly 28% — according to Planetizen's summary of San Francisco Chronicle reporting. That's up from 8% in 2019. The reporting describes the broader trend as the ADU share "more than doubling to 18%" by 2025, so 28% appears to have been a one-year peak, driven partly by a temporary dip in multifamily permitting that year, rather than the current, ongoing level. Both the 2019-to-2025 doubling and the 2024 peak are notable; this piece doesn't treat 28% as "where things stand now."
In some Bay Area jurisdictions, the ADU share is even more extreme. Hillsborough permitted 58 homes in 2025, and 56 of them were reportedly ADUs.
Here's what San Francisco homeowners should take from this shift.
What You'll Learn
- Why the "28%" figure is a 2024 peak, not the current ongoing share (which the same reporting puts closer to 18% in 2025)
- Where ADU growth is actually concentrated in the Bay Area, and how San Francisco's picture differs
- What's genuinely changed since 2019 that makes a San Francisco ADU more viable today
- Where an ADU investment can and cannot make financial sense
- The current cost of a San Francisco Planning pre-application meeting and why project-specific estimates matter
Where the growth is actually happening
The headline percentage obscures where ADUs are and aren't being built. Wealthy peninsula suburbs — Hillsborough, Atherton, Los Altos Hills — are reportedly leading the surge, often because ADUs let them meet state housing goals without accepting multifamily development.
San Francisco proper is a different story. The city's ADU permit growth is real but slower, constrained by dense existing housing stock, small lot sizes, and higher construction costs. When a Bay Area ADU is being built, it's more likely to be behind a suburban single-family home than in a San Francisco garage conversion.
That said, San Francisco's ADU numbers are also climbing. State legislation over the last several years has systematically removed barriers: parking minimums, minimum lot sizes, discretionary review triggers, and owner-occupancy requirements have all been reduced or eliminated for qualifying ADUs. Check San Francisco Planning's current ADU program bulletin for the specific rules that apply to your project, since these requirements have changed multiple times in recent years.
Why this matters for San Francisco homeowners considering an ADU
A few things have changed since 2019 that make San Francisco ADU projects more viable than they used to be:
The permit path is more established. Several years ago, San Francisco Planning was still building out how to handle ADU applications at scale. The process has matured since then, and architects and contractors have a much larger base of completed San Francisco ADU projects to draw from than they did in 2019. Growth does not mean short timelines: our Chronicle ADU timeline analysis distinguishes permit review from the later issuance-to-completion period.
Rebates and financing options have expanded, though the specific programs and amounts available change over time — check current terms before assuming a specific incentive applies to your project rather than relying on what was available in past years.
Contractor expertise is deeper. In 2019, hiring a San Francisco-experienced ADU contractor meant choosing from a handful of firms. Today there are more contractors and design-build firms across the Bay Area with substantial San Francisco ADU portfolios, which has generally improved competition on quality and pricing.
What San Francisco has that suburbs don't
The Hillsborough-heavy trend has led some critics to argue ADUs aren't actually solving housing affordability; building a guest cottage behind a multimillion-dollar home isn't the same as adding rental supply.
San Francisco is arguably better positioned than wealthy suburbs to turn ADU growth into actual rental supply, because:
- San Francisco has strong rental demand at every price point
- San Francisco's existing housing stock includes many properties with buildable garage or backyard space
- San Francisco Planning treats long-term ADU rentals differently than short-term rentals, which keeps them in the long-term housing market
If you're a San Francisco homeowner sitting on an underused garage, backyard, or basement space, you're in a market where an ADU can plausibly generate rental income while adding to the housing stock. A different calculus than a suburban lot where the ADU is more likely to be a guest house.
The nuance worth naming
A San Francisco ADU is not a "get rich" investment. Construction costs, achievable rent, and utility-connection needs vary too much by site to use a generic online range responsibly. Get project-specific numbers from a contractor, rental comparables, and the applicable agency fee schedules.
One verified early cost is Planning review. The San Francisco Planning Fee Schedule, effective August 29, 2025 and updated June 15, 2026, lists a Department-Facilitated Pre-Application Meeting at $1,373. It lists a Project Review Meeting at $581 for five or fewer dwelling units or affordable housing projects, and $1,373 for other projects. DBI permit fees, Planning fees, utility connections, and architectural work should be budgeted as separate line items rather than blended into one percentage.
Where San Francisco ADUs tend to make more financial sense:
- Long-term hold with intent to rent
- Multi-generational family use (aging parents, adult children)
- Increasing property value ahead of sale (some San Francisco buyers pay a premium for an existing, permitted ADU)
- Combined workspace + rental potential
Where they tend to make less sense:
- Quick-flip investment plays
- Short-term rental (San Francisco regulations limit STR use of ADUs)
- Properties with severe access constraints or lot issues
For homeowners actively considering a San Francisco ADU
Three things to do before spending money on design:
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Verify zoning eligibility. San Francisco has property-specific zoning that affects whether attached vs. detached ADUs are viable. Check the San Francisco Planning zoning map for your address.
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Budget for a paid San Francisco Planning pre-application meeting, not a free one. The current San Francisco Planning Fee Schedule, effective August 29, 2025 and updated June 15, 2026, lists a Department-Facilitated Pre-Application Meeting at $1,373. A Project Review Meeting is $581 for five or fewer dwelling units or affordable housing projects, and $1,373 for other projects. It's still generally worth doing — planners can flag issues while they're cheap to fix — but budget for the fee rather than expecting it for free.
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Get itemized cost estimates rather than a single "soft cost percentage." DBI permit fees, Planning review, utility connections, plan check, and architectural fees each need their own line item — a single blended percentage figure isn't reliable enough to budget against.
Related guides
Sources
Considering a San Francisco ADU? Permit Compass generates your specific permit list, cost estimate, and pre-filled DBI application forms — for $49.
