Prefab ADU: 4 Promising Construction Types

Prefab house on a crane

Prefab ADU: 4 construction types to learn about before you make your choice

Demystifying prefabricated ADUs

7min read
by Olesia Chikunova, ADU Specialist.

Everybody deserves a home. The world’s third oldest profession, home building, hasn’t changed much over the past 2 Millennia. Find land, dig a footer, bring in building materials, add workers and within a span of time the new occupants move in. It still works this way in most places, but the change is slowly coming. New trends? Prefabs or prefabricated construction. A lot of hype, a lot of misunderstanding and unmet expectations.


Let us start with the basics. What is traditional construction? Custom-built house with lumber and other building materials from plywood to tile brought and cut on site. This means waste and additional expenses of dump fees.

This also means customization. We give you as much flexibility as you want. That means we build the hand holding and extra time into our costs so you have the freedom to customize the details to whatever degree you desire.

When planning for a prefab ADU, we work with you to craft your home from among our curated choices – you do it from within our office. You have predetermined combinations that work well together, make the process easy and allow us to provide it at the best price to you. There will be trade offs to make – you may not like the colors our designers picked or appliances that we are installing.

Both traditional construction and prefab have pros and cons, so it’s best to consider your specific needs in terms of your lot, design intention, ease of hiring contractors, etc.

Prefab ADU has many advantages as a solution to add space.

Let us learn the pros and cons.
Prefabricated accessory dwelling unit

Traditionally, a homeowner hires a builder to construct the unit that their architect designs or a design/build firm handles the entire process. This allows the homeowner to design a home fitted to their space and needs. Traditional construction also allows for smaller changes to the design during the process, even after construction has started.

With prefabricated methods, a factory builds a prefab ADU and ships it  to your site.

The term “prefabricated” means that a factory has manufactured a building or building components in advance. The prefix “pre-” means “before” . “Fabricated” means “made” or “constructed”. So “prefabricated” literally means “made before” or “constructed in advance”.
The prefab unit often passes several building inspections – framing, rough plumbing and electrical etc. in the factory. After passing all necessary inspections, it is transported to its permanent location.
When ready, the crane puts the prefab ADU on a truck, then the truck transports the house to its final destination.
Local authorities typically inspect only site work and connection of utilities. The prefab ADU itself comes with a State stamp.
Prefabricated buildings and structures include a wide range of different types of housing. The factories can build single-family homes, multi-unit apartment buildings, commercial and industrial structures.
Some buildings are made of prefabricated components. These may be wall panels, that are manufactured off-site in a factory, and then assembled on-siteThe factory allows for the controlled environment. This means efficient use of materials, standardized construction methods, and quality control. The result is a faster and more cost-effective construction.
In summary, prefabricated refers to any building or structure that is made in advance of its intended use, typically in a factory or other controlled environment and it is assembled on-site after transportation.

Prefab ADUs typically offer less customization. Less changes to floor plan possible. Not as much choice on finishes and fixtures.

On the plus side, these methods rely significantly less on subcontractors—except for on-site assembly, foundation, utility hookups, etc.

Additionally, prefab often saves time because the site can be prepared while the home is being constructed in the factory. These days though you have to time it well, as some factories have six month lead time – if not more.

What drives prefab ADU costs?

Vendors sell prefab homes  at the same prices as traditional construction, though some companies offer lower-cost options. While prefab homes can appear to offer cost savings, it’s important to consider some of the additional costs like transport, crane costs, the foundation, and sales tax when comparing costs, which can end up being 20-40% of the total cost. Also, not all banks will finance prefab construction, so make sure you know your financing options.

A lot of finishes are considered upgrades and drive the cost up from what you had originally expected. This is similar to homes built by DR Horton or KB Homes – where you see the model home and have to make sure you know what is included in base price, and what comes as an extra. One day I was surprised to learn that recessed ceiling lighting was an upgrade…

Finally, do not forget utility hook up costs – the utility companies often ask for new clean outs or meter upgrades.

Prefabricated Small House

Prefabricated housing is a broad term that includes various types of houses. Basically, prefabricated construction means that a factory builds some or all sections of the house and then gets them shipped to the site as a whole or as parts to be assembled there. Any house built this way falls under the category of prefabricated housing.

What is prefabricated construction?

“Prefabricated” may refer to buildings built in components (e.g., panels), modules (sections of the unit or the entire unit are built off-site) or transportable manufactured homes, the latter may also be used to refer to mobile homes, i.e., houses on wheels. Although similar, the methods and design of them vary widely.

There are considerable differences in the construction types. In the U.S., mobile and manufactured houses are constructed in accordance with HUD building codes, while modular houses are constructed in accordance with the IRC (International Residential Code) and governed by State.

Panelized homes:

Homes constructed from two-dimensional, prebuilt sections that are assembled on-site.

Panelized construction - wood frames
Image courtesy of SFBay ADU

Is non-wood prefabricated construction possible?

Definitely. You can have panels made of various materials, flat packed and shipped to the work site ready for framing and assembly. 

Modular homes:

Created in sections, and then transported to the home site for construction and installation. These are typically installed and treated like a regular house, for financing, appraisal and construction purposes, and are usually the most expensive of the three.

Although the sections of the house are prefabricated, the sections, or modules, are put together at the construction much like a typical home. Fully constructed and finished boxes (with cabinets, plumbing, and doors already installed) that are hooked up on-site.

Manufactured homes:

Built on steel beams and transported in complete sections to the home site, where they are attached to a foundation. Wheels, hitch and axles are removed on site when the home is placed on a permanent foundation.

Manufactured homes, once placed on a permanent foundation, are considered the same as modular or site build homes for appraisal purposes though some appraiser might still have different ideas, and one often hears stories about issues with insurance. Similar to modular in that unit is built off-site, but it’s regulated by federal building code, often designed to be mobile, and usually more affordable.

Spoiler alert

Are you excited to get a modern prefab house?

So, prefab homes or simply prefabs, are dwelling types of prefabricated building, which are manufactured off-site in advance, usually in standard sections that can be easily shipped and assembled. Some current prefab home designs include architectural details inspired by famous designers and by postmodernism or futurist architecture.

We are currently trying to build a shed in one of the cities in Santa  Clara County and received this as a plan checker comment: The design of the detached accessory unit shall maintain the appearance of the primary dwelling unit, by using similar wall cladding, trim detail, roofing material, building color(s), window frames/trim and divisions, and the predominant roof form and roof pitch.

As you can see, it really depends on your local city hall what will be allowed and how futuristic you can be.

What does the term “Manufactured home” really mean?

On July 15, 1976, a law passed by the U.S. Congress titled The Federal Construction and Safety Standard Act, administered by the Department of Housing and Urban Development (HUD), was implemented. The HUD Code regulates manufactured home design and construction, strength and durability, fire resistance, wind safety, energy efficiency, and overall quality.

The HUD Code also sets performance standards for heating, plumbing, air conditioning, and thermal and electrical systems. That means manufactured homes are the only form of housing subject to a federally mandated national building code.

Finding quality, affordable housing is becoming more and more difficult. Today’s modern manufactured home is a viable solution to the uniquely American dream of home ownership. Producers offer a wide selection of floor plans, models, sizes, and customizing options to fit a homebuyer’s budget, taste, and lifestyle.

A new manufactured home will be built with quality, features, and amenities equal and often superior to a comparable site-built home. Comparable is a key word here – when you are considering a manufactured home, visit several showrooms to confirm that the quality of the homes you see meets your expectations. Manufactured home will typically be built with a price ~25% less than a traditional one.

Know the difference between HUD and HCD

HUD – think Federal. HCD – think State. Regulations and requirements differ. Do I have to tell you which one is more stringent?

Modular home shoppers may also not be aware that HUD Code manufactured home builders are also the largest builders and sellers of IRC modular homes in North America, by a huge margin. So do not be surprised to learn that your neighbors’ modular ADU was built on the same factory as your great uncle’s manufactured home.

showroom for prefab ADU
Courtesy of Adore-Homes

What is the difference between modular and manufactured homes?

Kitchen in manufactured home.

From a legal standpoint, the primary difference between modular and manufactured homes is that modular homes are held to the same local, state and regional building codes required for on-site homes, while manufactured homes are held to a federal code set by the Department of Housing and Urban Development (HUD).

One of the biggest advantages of modular construction has always been the amount of finished work included in each module that leaves the factory. 

Premade Home

We’ve all heard the modular naysayers telling everyone that buying into the modular method of building a home means you’re paying to have the factory ship lots of air inside each six-sided module. 

Yes, you are trading off transporting air vs paying local labor costs and waiting for subs who juggle too many jobs at the same time.

Paying for air?

What is “Finished” air you’re paying for? All the labor that site builders used to do at the jobsite such as framing, insulation, drywall, MEP and finish work, is included in that module being sent to the jobsite. 

Every time you see a modular home “land” in its new location it feels like magic to the neighborhood onlookers – people admire how the units often arrive with cabinets and even shades installed.

Time is the commodity of value in modular construction. A site builder or developer having a hard time finding laborers or subcontractors means their project will drag out over a longer period of time than ever before. Rough plumbing and electrical inspections can go on repeat cycle. The finished” air that the modular factory delivers to the jobsite will help restore most of the time site builders and developers have lost.

inside prefab adu

Different ways to get your prefab ADU

I have seen several types of modular builds. The first sells a unit to the homeowner, and the homeowner is responsible for permitting, left looking for the crane company and contractor to get it all to work on its property. Most often happens with out of state manufacturers, so read the small print in your contract.

The second type creates the units’ design and gets them a California wide certification to ease the way for a local building permit. Then sells the unit to the homeowner and subs out all the site work (foundation, utility hook ups etc.). The third type carries general contractor license so is technically responsible for the whole process but most still use local subs for site work.

A homeowner is left to decide which modus operandi works best in their personal situation. What I see most often is people loving particular design and then going with the flow. You have been warned. Nothing compares to seeing the quality with your own eyes to make 100% sure that you will be getting the house you want.

There is no way to return a modular building once it had landed on your property. You will be picking up the pieces and rebuilding it on site to match your own requirements. And it takes way longer because all the subs are back at the factory and will not come out to fix anyting. Back to square one.

Kit Homes and ADU kits

There is one more way to build. In full disclosure, I am a fan. It lets you build a custom home with lumber pre-cut for you at the factory so all your workers need to do is assemble it – as a Lego kit.

Mind, they need to know what they are doing. If you have got a Lego kit with a car, it should not look as a Bionicle on completion, if you know what I mean.

You have free rain with finishes, or you pick whatever the factory has to offer. It’s your call.

You can get them in any style, shape or form – from US, Canada or Finland if you so wish. And surprisingly the gains on using prefab methods payoff even when you add transportation cost.

Quintessential California prefab homes

Container homes

container home
Image courtesy of Steelblox

Many people are excited about shipping containers finding a second life as small homes. Typically, these heavy-duty steel boxes are 20 feet long and 8 feet wide and are repurposed by companies and do-it-yourselfers into dwellings made up of just one container or multiple containers connected together. They should meet all legal requirements for your location.

If you need an affordable home, think of this type of home made from recycled materials. And if it looks unique, that’s even more of a reason to move in! And don’t let the fact that you’ll be living in a shipping container get you down—that’s part of the appeal for some people. Fans of this type of living can be found on the Instagram pages that’s devoted to the cool and gorgeous homes built out of industrial shipping containers.

Like with most architectural projects, however, there are always luxury models available, too. Who knew living in a literal container could be considered chic as well? It looks like there’s a bit of everything for everyone.


What are specific reasons behind the popularity of shipping containers

Advantages of using shipping containers are huge and, comparatively, disadvantages are negligible. Obviously, such things would get popularity in no time. Shipping containers provide you a new home with minimum consumption of time and money. This is a very strong reason for choosing them when building homes.

These homes can be constructed at any place of the world. You can place a shipping container home on the mountain covered with snow. Just imagine the location. Is this possible with conventional building? Not at all. Containers are getting upcycled in a workshop and then transported to your site.

Do you love contemporary style? Are you in the search of a home to match? Containers are stylish homes with all facilities. Some are simple, some are complex. A few ones are decent and many are elegant. This means homes also vary according to your persona. Some people like simple homes, while others like homes with character (me..?). 

They can easily be assembled as two or three story structures, so possibilities are endless. I can totally see it getting dropped on top of the existing garage as long as it is structurally sound.

Your container manufacturer can help you with permits at the State level and then bring the permitted unit to your property pretty much like any other modular builder. Or you can choose to DIY. Crane or forklift required. You will have to engage a general contractor to prepare the site, build foundation, run utilities and hook up the unit on arrival.


Container prefab unit

Prefab mother in law cottage – what would that be?

I have not seen one yet. Let us keep it simple. It is a one level structure. It has wide doorways comfortable for walkers or wheelchairs because anyone can break a leg. Faucets are one handle – easy to use with one hand. Showers have flexible hose, no entry barrier (linear drain preferred) and a shower bench.

We have written about it already in a previous post, so will skip the spiel here.

The most obvious red flag? The model house that has a porch with five plus steps leading to the front door.

Homeowner of container prefab ADU
If a Prefab ADU does not work for you

More ways to add space

tiny home studio

Tiny Home, Small ADU

Looking for a newly built detached solution with a bathroom and kitchenette? This type of projects start from $158,000.

Check it out
home office

Modern Shed

If all you need is an extra room for an office, then a simple 120 sf backyard structure may work. Starting at $46,000.

Check it out
accessory structure

Accessory Structure

There are jurisdictions that allow accessory structures with plumbing fixtures. Permits required. Starting at $75,000.

Check it out

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