Building an ADU in Gilroy in 2026? You're looking at $180,000 to $510,000 all-in depending on whether you're doing a garage conversion or a detached new build. Gilroy's permit fees run $3,000 to $12,000 (less for pre-approved plans), and the city has been issuing some pre-approved ADU permits in as little as 15 working days.
Use our free Gilroy ADU Cost Calculator to get a 60-second estimate tailored to your build. Or read on for the full breakdown.
Gilroy ADU costs in 2026, by type:
Gilroy expanded its pre-approved ADU program in 2023 to include backyard cottages and garage conversions. Key Gilroy facts:
The single most impactful design decision is staying under 750 sqft. California state law AB 68 waives local impact fees on any ADU under 750 sqft. Cross that threshold by 10 sqft and you can add $5,000 to $8,000 in school, park, fire, and traffic fees overnight.
If your project goals can be hit at 750 sqft or below (think 2 bed/1 bath ADU at 720 sqft), you save real money on permits.
An 800 sqft detached ADU in Gilroy rents for roughly $2,200 to $2,500 per month in 2026. After property management, vacancy, maintenance, and insurance (call it 25% of gross), net is around $20,000 per year.
At a $475,000 all-in cost, that's a 24-year undiscounted payback. Not a screaming cash-flow deal. Most Gilroy owners build for family reasons (aging parents, adult kids, in-laws) and treat the rental income as optional upside. The other answer is appraisal value: an ADU typically adds 60 to 80% of its all-in cost to the home's post-construction appraisal.
Plug your specific design parameters into the Gilroy ADU Cost Calculator. Pick "Gilroy" as your city, choose your ADU type, and you'll get the all-in cost, monthly rent, and payback period in 60 seconds.
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