Thinking about adding a backyard home in San Mateo to boost monthly income or support multigenerational living? You are not alone. ADUs are popular across the Peninsula because they pair long-term rental demand with flexible use. In this guide, you will learn the rules that govern ADUs in San Mateo, how to ballpark rent, what it costs to build, and simple ROI math to decide if it pencils. Let’s dive in.
San Mateo ADU rules at a glance
San Mateo follows California’s ADU law and offers ministerial approval when your plans meet objective standards. That means no discretionary hearings in most cases and a predictable checklist to follow. You can review the city’s development standards and permitting framework in the ADU ordinance and code resources. Refer to the city’s ADU ordinance for details on setbacks, heights, parking, and use rules. (San Mateo ADU ordinance)
- Number and size. You can build the state-allowed mix, including one detached ADU, with a “by-right” path for at least 800 square feet subject to height and setback limits. Larger units must fit your lot’s floor-area rules. (San Mateo ADU ordinance)
- Height and setbacks. New ADUs must observe minimum 4-foot side and rear setbacks, cannot sit in the required front yard, and must meet height limits noted in the code. Converting an existing permitted structure can change what setbacks apply. (San Mateo ADU ordinance)
- Parking. The default rule is one off-street space per ADU, but standard state exemptions apply. No extra parking is required if your ADU is within a half mile of public transit, is a conversion of existing space, sits in an eligible permit district, or is near a car share. Replacement parking is not required when converting a garage. (San Mateo ADU ordinance)
- Rentals and short stays. If you rent an ADU, the lease must be at least 30 days. Short-term or nightly rentals are not allowed. (San Mateo ADU ordinance)
- Owner occupancy. State law does not require owner occupancy for ADUs in most cases, so you can rent both the main home and the ADU. Junior ADUs have distinct rules. For state guidance, use the HCD ADU resources. (California HCD ADU guidance)
- Separate sale. You cannot sell an ADU separately from the primary residence under current city code. (San Mateo ADU ordinance)
- Utilities. Detached new construction may require separate or new connections. Confirm scope and fees during design. (San Mateo ADU ordinance)
- City vs county rules. If your property is in unincorporated San Mateo County, the county’s ADU ordinance and process apply. (San Mateo County ADU ordinance)
For submittal steps and current flat permit fees, start with the city’s ADU resource page. (City of San Mateo ADU information and fees)
What ADUs rent for in San Mateo
San Mateo is a high-demand rental market. City-level listing indices often show one-bedroom medians in the high 2,000s to low 3,000s, with variation by month and neighborhood. The broader Bay Area rental market tightened in 2024 and 2025, which supports absorption for quality ADUs and raises expectations on finishes and privacy. (SF Chronicle market context)
A practical planning range for a studio or one-bedroom ADU in San Mateo is roughly $2,000 to $3,500+ per month, depending on size, finishes, parking, privacy, and whether utilities are separately metered. Anchor your estimate to current San Mateo medians from an active listing index when you are ready to price. (Zumper San Mateo rent reference)
Tip: If utilities are shared, clarify in your lease whether the tenant pays a set utility allocation or if you keep utilities included at a slightly higher rent. Remember the 30-day minimum lease term.
What it costs to build in San Mateo
Total project costs vary by site, but a common Peninsula planning range is $450 to $600 per square foot for hard and soft costs combined. Garage conversions tend to be on the lower end. Detached new construction with trenching, new foundation, or complex site work pushes higher. The San Mateo County ADU Resource Center offers a local calculator and guidance. (San Mateo County ADU Resource Center)
- Permit and plan fees. The city publishes flat ADU permit fees. Recent examples include a new ADU permit near $2,800, with different amounts for remodels or JADUs. Always verify the current schedule before you apply. (City of San Mateo ADU information and fees)
- Utility hookups. New or separate water, sewer, or electrical connections can add cost. Factor these into soft costs early and confirm with the city.
- Timeline. From concept to move-in, many projects take 12 to 24 months. That includes design, reviews, and 6 to 12 months of construction. (San Mateo County ADU Resource Center)
A simple ROI model you can run today
Use a conservative approach and test best, likely, and lower cases.
- Income inputs
- Market rent: use current San Mateo studio or one-bedroom medians for your month of analysis.
- Vacancy: model 5 to 8 percent for a small unit.
- Operating expenses
- Management: 6 to 10 percent of collected rent if you hire a manager.
- Maintenance reserve: 5 to 10 percent of rent, or $500 to $1,500 per year.
- Insurance: add an incremental $400 to $1,200 per year.
- Property tax: apply about 1 percent to the increase in assessed value from the ADU improvement. Local assessments vary.
- Utilities: include costs if you plan to pay them.
- Financing and grants
- Owners often use cash, HELOCs, construction-to-perm loans, or specialized ADU loans. The County ADU center lists options and partners. (San Mateo County ADU Resource Center)
- Public programs like the CalHFA ADU Grant have offered help with predevelopment costs when funding is available. Check current status before you rely on it. (California HCD ADU guidance)
Example structure to test:
- Cost: 600 square feet at $500 per square foot equals $300,000 total project cost.
- Rent: $2,800 per month as a mid-range 1-bedroom benchmark. Gross rent equals $33,600 per year.
- Operating allowance: assume 30 percent for vacancy, management, maintenance, insurance. Estimated NOI equals about $23,520.
- Unlevered ROI: NOI divided by total cost equals roughly 7.8 percent. If financed, subtract annual debt service to see cash-on-cash return.
Permitting steps and timing
- Pre-feasibility. Confirm your property is inside San Mateo city limits, then check zoning, setbacks, trees, easements, and any flood or historic considerations. Use the city’s ADU page to get started. (City of San Mateo ADU information and fees)
- Design and scope. Choose between a garage conversion, attached addition, detached unit, or a JADU. Conversions typically cost less and move faster. (San Mateo County ADU Resource Center)
- Ministerial review. Submit plans that meet the city’s objective standards to qualify for ministerial approval. California also promotes preapproved plan programs that can shorten reviews. For state-level guidance on timelines and standards, use HCD’s ADU page. (California HCD ADU guidance)
- Build and finalize. Expect 6 to 12 months of construction in a typical case, then final inspections and a certificate of occupancy.
Common tripwires to avoid
- Short-term rentals. ADUs cannot be rented for fewer than 30 days within San Mateo. Plan for standard leases. (San Mateo ADU ordinance)
- Unpermitted units. If you have an older, unpermitted space, explore the county’s amnesty resources before renting or renovating. Legalization may require safety upgrades. (San Mateo County ADU amnesty)
- HOAs and CC&Rs. Many HOAs must allow ADUs under state law, but they can enforce some design or recording rules. Review your documents early.
Local resources worth bookmarking
- City of San Mateo ADU information and fee list. Steps, submittal guides, and current flat fees. (City of San Mateo ADU information and fees)
- San Mateo County ADU Resource Center. Local calculator, timelines, financing partners, and case studies. (San Mateo County ADU Resource Center)
- California HCD ADU handbook and FAQ. State rules, timelines, and enforcement guidance. (California HCD ADU guidance)
- San Mateo municipal ADU ordinance. Development standards and use rules. (San Mateo ADU ordinance)
- Unincorporated properties. If you are outside city limits, see county rules. (San Mateo County ADU ordinance)
Ready to map out your ADU strategy, run the numbers, or spot value-add opportunities before you build? Reach out to Babek Sandhar for a data-driven consult and a clear action plan.
FAQs
Are short-term rentals allowed for ADUs in San Mateo?
- No. San Mateo requires a minimum rental term of 30 consecutive days for ADUs.
Do I need to live on-site to rent out an ADU in San Mateo?
- Generally no. State law does not require owner occupancy for ADUs in most cases, although JADUs have different rules.
What are typical ADU rents in San Mateo today?
- A practical range is about $2,000 to $3,500+ per month for a studio or one-bedroom ADU, depending on size, finishes, and location.
How long does an ADU project take from start to finish?
- Many projects run 12 to 24 months from concept to move-in, including design, permitting, and 6 to 12 months of construction.
What parking is required for a new ADU?
- The default is one off-street space per ADU, with exemptions if the unit is near transit, is a conversion, or meets other state criteria.
I am in unincorporated San Mateo County. Do city rules apply?
- No. Properties outside city limits follow the county’s ADU ordinance and permitting process.
