Second-Story Addition vs ADU in Sacramento, Elk Grove & Folsom

When a family runs out of room, there are two ways to build up or out: a home addition (a second story or extra rooms that become part of your house) or an ADU (a separate unit with its own kitchen, bathroom and entrance, which can also be built as a second story). They can look similar from the street, but the rules, the paperwork and what you can do with the space afterwards are different.

The short answer

• Choose an addition if the space is for your own household: bigger bedrooms, a primary suite, a home office, more living area.
• Choose an ADU if the space should work on its own: a parent or adult child who wants independence, a caregiver, or a long-term rental.

Can an ADU be on a second floor?

Yes. The state's ADU handbook gives examples of an attached ADU built on top of an attached garage and one built as a new second story. State law sets the minimum heights a city must allow:

• Detached ADU: 16 feet; 18 feet within half a mile of major transit (plus 2 feet to match the roof pitch of the house).
• Attached ADU: 25 feet or the zone's height limit for the main house, whichever is lower. The city does not have to allow more than two stories.

Size rules: a city cannot set a maximum below 850 square feet (1,000 for a unit with more than one bedroom). A detached ADU can be up to 1,200 square feet; an attached one is capped at 50% of the existing house.

How the three cities differ

City of Sacramento. Owners choose between the city's own ADU rules and the state rules. Under the local option, ADU height follows the zone limit (35 feet in R-1), second floors need 3-foot side and rear setbacks, and two ADUs are allowed with detached units totaling up to 1,200 square feet.

Folsom. Under the 2026 ordinance, detached ADUs outside the state conversion rules are capped at 25 feet or the height of the house, whichever is lower. Two-story ADUs get extra design rules, and second-story windows within 10 feet of a property line need translucent glass or a similar privacy treatment.

Elk Grove. The city updated its ADU rules in 2025. Check the current height limits for your zone with the city before you design; they depend on where the unit sits on the lot.

A second-story addition (not an ADU) follows your zone's normal height and setback rules for the house itself, and it goes through regular building permit review rather than the state's ministerial ADU approval.

Money: fees and property tax

• Impact fees: an ADU of 750 square feet or less pays no impact fees. Above that, fees must be proportional to the size of the main house. School district fees still apply in Sacramento.
• Property tax: for both an addition and an ADU, California reassesses only the newly built part. The rest of your property keeps its existing assessed value.
• Financing: both are usually financed through home equity or a renovation loan. See our financing page for how payments work.

Renting and selling

• An ADU can be rented. Cities may require rentals of more than 30 days, and ADUs approved under the state conversion rules must be rented for more than 30 days. The City of Sacramento bans short-term rentals of state-standard ADUs; Folsom requires 30+ day rentals.
• No owner-occupancy rule for ADUs. California removed it permanently. A junior ADU is different: the owner must live on site if it shares a bathroom with the house.
• An ADU cannot be sold separately from the house, except through a nonprofit arrangement or a condo option that a city has to adopt by its own ordinance.
• An addition is simply part of your house. It cannot be rented as a separate legal unit.

Side by side

	Second-story addition	ADU (incl. second-story ADU)
Own kitchen and entrance	No	Yes
Approval	Regular building permit	Ministerial ADU permit
Can be rented separately	No	Yes (30+ days)
Impact fees	Per city schedule	None at 750 sq ft or less
Property tax	New part reassessed	New part reassessed

You can see a real example of the second option in our second-story attached ADU in Sacramento, built above a covered patio so the backyard stayed free.

Sources: California Government Code 66311.5, 66314, 66315, 66321, 66323, 66333, 66341, 66342; Revenue and Taxation Code 71; HCD ADU Handbook (January 2025 edition); City of Sacramento ADU Resource Center; Folsom Municipal Code chapter 17.105. Checked September 2026.