Building a casita in Tempe: the rules, fees and the math

The rules in Tempe

Tempe keeps an ADU Standard Plan Library of pre-reviewed detached designs, including the 2025 AARP design challenge winners. Factory-built, modular and trailer-chassis units are allowed on a permanent foundation if they meet code. The old guest-quarters rules were repealed and folded into the ADU rules, and the city publishes an ADU statistics dashboard. HOA covenants may still restrict units.

Source: City of Tempe: Accessory Dwelling Units; library.municode.com; tempe.gov; tempe.gov. Read October 7, 2026.

Fees in Tempe

• Permit and plan review. Standard valuation-based building permit and plan review fees (schedule effective July 1, 2026). For city-approved standard ADU plans the council approved waiving the initial plan review fee, about $2,000, in April 2025.
• Impact fees. General government development fees are listed on the city's fee page with no ADU-specific line; the amount depends on the fee category and the 2026 state cap.
• Utility connection and capacity. Water and sewer development fees apply only if a new connection or meter is set; metering is decided by the utility.

In June 2026 the state capped the development (impact) fees a city may charge an ADU for services other than water and sewer at the lesser of 25% of the single-family fee or the unit's proportionate share, and limited water and sewer fees to the unit's added demand (HB 2946, signed June 5, 2026). Most cities had not yet re-published schedules when we read them; Glendale's 25% ADU line is the first we found. Expect ADU impact fees to fall toward that cap. Governor's announcement.

What the state law guarantees here

Whatever the local code says, in Tempe these points come from A.R.S. § 9-461.18 and the city cannot be stricter:

• At least one attached and one detached ADU on any lot with a single-family home, as a permitted use (no public hearing, no variance)
• A unit up to 75% of the main home's gross floor area or 1,000 sq ft, whichever is smaller (cities may allow larger)
• A third, detached unit on lots of one acre or more if one unit is deed-restricted affordable
• Separate long-term rental of either the house or the ADU (leases of 90 days or more, or month to month)

The math in Tempe

Redfin's median sale price in Tempe is $289 per square foot. A new casita builds for about $265 to $280 per finished foot and a garage conversion for about $120. That puts Tempe in the "Clears at full credit" tier: one square foot of new casita, at the typical $272 build cost, comes out −$55 at a 75% appraiser credit and +$17 at full credit. A conversion clears at either credit.

The target areas page explains the tiers and the math page has the calculator. Rent is the other half: see rental math.

Owners and investors in Tempe

• Homeowners get a by-right unit for family, guests or long-term rent, with the same appraisal and lender rules as anywhere in the Valley.
• Investors can treat the casita as the piece that moves a house out of its neighborhood's price band at resale, as our two Maryvale sales show on the case studies, and as monthly income in the meantime. Tempe's rental rules above say whether both units can be let separately.
• Either way the lot decides: setbacks, utilities, sewer depth and easements. Request a property review and we confirm the current Tempe rules for your address.

Other city pages: Phoenix, Mesa, Chandler, Gilbert, Scottsdale, Glendale, Peoria, Surprise, Goodyear, Buckeye.