Back Yard Sheds: 10 Popular Questions

Back Yard Sheds: 10 popular questions you may ask before you build one

Also known as accessory structures, back yard sheds are a fastest way to add space.

4min read
by Olesia Chikunova, ADU Specialist.

Back yard sheds are making a huge come back ever since we got locked up at homes in 2020.

We have found tons of creative uses for these structures (we have explored some of them in an earlier post).

There are many reasons why you might want some extra space. These are the most popular types of back yard sheds.

  1. Traditional storage sheds
  2. Garden sheds
  3. Home office
  4. Home Gym
  5. Art or Music Studio
  6. Workshop

The first two do not require a lot – typically these are not insulated, do not have power, are tucked into a corner of the property- thus not too much demand on the looks. However, the other four types are much more demanding. Insulation, looks, lighting, view from the windows suddenly start to matter.

Many shades of sheds

From simple and functional to modern looking and luxurious
steelblox office unit
Courtesy of Steelblox

Before we go into design details, that are obviously much more exciting, let us get other questions out of the way.

Is it legal to build a shed in your backyard?

Most likely, yes. You are typically allowed to have up to 40% of the rear yard to be used for structures. No, if you have maxed out on your lot coverage and  floor area.

Will a shed increase property value? 

Appraisers do not attribute the same value of a shed’s square foot as for the main house, so it might only add to the value of the property whatever you can show as proof of payment – say, invoice from a licensed contractor. And that only if you had it built with permit. It does not have the same equity benefits as an accessory dwelling unit. But it does cost less. And it can be built faster.

Where to put backyard shed?

Definitely not in the front yard. Generally, any shed larger than 120 sf will count towards lot coverage and floor area maximums for the lot. Every time we have a new request for a city we have not worked in before, we check local requirements.

Accessory structures should be located outside of required setback areas of your lot. There will be also local requrements how far a shed should be from other buildings. It may vary from 3 to 10 feet depending on local jurisdiction. Rear setbacks are often 10-20 feet. Side setbacks typically start from 3 feet for structures that are higher than 6 feet.

Are there sheds you can live in?

Yes, there are. Some cities have the special term ” habitable detached accessory building”, in others you will need to opt for an accessory dwelling unit (ADU).

Is it possible to have a back yard shed with a bathroom?

It depends on your jurisdiction. Yes, again. San Jose and Campbell allow two plumbing fixtures, so you can select which two you want – sink, toilet, water heater or shower. Exotic choice. Other cities may allow two plumbing fixtures plus a water heater. You need to dig into the city ordinance to confirm.


artist studio for backyard home business

How much do sheds cost?

From $2,000 and up - the sky is the limit.
If you are prepared to put in some sweat equity, your costs can be under $5,000. All big box stores sell sheds these days: Costco, Walmart, Home Depot, Lowe’s to name a few.
Site built sheds cost more – starting from $39,000. If you like the design, but need it customized for your property (size, height, change of windows etc.) the price will be even higher.

Modern shed cost

For pre-built sheds, that arrive assembled,  please add transportation, taxes, installation (you may need either a crane or a forklift), foundation, utilities (electrical at least). Installation may also trigger road closure permits and require some creative scheduling.

That is why, site built sheds win easily modern modular sheds on costs. The trade off is often between getting it installed within a week for $60k or get it built on site in 4 weeks for $40k. Go figure.

Prefab Home Office delivery
Courtesy of Backyard Unlimited

buying a shed – what to consider

Avoid the change orders - learn early what is excluded

Let us take a deck as an example. You see the image on the website of a vendor that has beautiful home office with the deck and a cosy chair on it. You might assume that the deck is included. Word of caution. Please ask. Some vendors include it in the fixed price, because after all an entry landing is required by the building code.

Other shed vendors might treat it as an upgrade.

Sheds go on different foundations – from gravel, to screw piles, to concrete. Which foundation is included, if any?


Prefab Home Office
Courtesy of Modal Living

Estimate for sheds vary from one vendor to another.

This is the short list of what you need to check:

  1. Cost of delivery
  2. Foundation (gravel, piers, slab)
  3. Installation/Assembly
  4. Electrical work for lights and outlets
  5. Finishes (insulation, drywall, paint)

Please make sure you have adequate backyard access if the shed arrives assembled. We had to disassemble the fence once and move the storage shed  – to make space for a new modular home office.  

A modular shed often arrives on a flat bed, and an additional forklift is required to get it onto its pad.

Would you like to have internet cable in the shed? Account for the additional wiring.

When you put all the costs together, often something that looked like a cost leader suddenly loses its appeal. 

330 sf accessory structure floor plan

How does your city define accessory structures?

Some jurisdictions are lenient, some - not so much.

How big can a backyard shed be?

There is the square footage cut off to build a back yard shed without a building permit. Typically it is a magic number of 120sf. But for example in Palo Alto, it will be less than 120 sf, while in San Jose – up to 120 sf.

If you want a bigger structure, that is possible with a building permit. Again the maximum square footage differs by the city. Last time we checked, it was up to 450 sf in Los Gatos and up to 650 sf in San Jose (you will need to subtract the area of your detached garage though if you have one).

Is electrical permit required when building a shed?

Are you planning to use power in the shed? Then yes. Quite often you might be recommended by your contractor to upgrade the panel.

Are plumbing fixtures allowed in accessory structures?

It depends. Are you in San Jose or Campbell? Then most likely yes, though you will be required to get an approval from your local water utility.

Can we install an HVAC in the shed?

Highly unlikely. If you are lucky to be living in Sunnyvale where the city allows detached habitable structures, then may be. But most of the cities look at sheds as non-habitable, thus any hint that people might be able to live in it is frowned upon. You might be surprized by what we can do with a good vent these days though…

back yard shed on a hill

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