Tempe legalized ADUs citywide in late 2024 to comply with Arizona HB 2720 (ARS 9-461.18), which requires cities over 75,000 residents to allow ADUs on all single-family lots. Homeowners can now build one attached and one detached ADU by right, with no added parking, no design-matching mandate, and no owner-occupancy requirement for long-term rentals. Owner occupancy applies only if an ADU built on or after December 20, 2024 is licensed as a short-term rental.
Zoning & Size Requirements [1][2]
Yes — Tempe allows ADUs. A detached ADU can typically be up to 1,000 sq ft under current Arizona and Tempe zoning rules.
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| Allowed Zones | All single-family residential districts citywide (per ARS 9-461.18 and Tempe's amended ADU ordinance) |
| Max Size (Detached) | 1,000 sq ft or 75% of the main dwelling's gross floor area, whichever is less |
| Max Size (Attached) | 1,000 sq ft or 75% of the main dwelling's gross floor area, whichever is less |
| Max Size (JADU) | Not a category in Arizona (no JADU designation) |
| Max Height | Same as the underlying zoning district standard (typically 30 ft); no stricter ADU-specific cap allowed |
| Max Units | 2 per lot (1 attached + 1 detached); a 3rd detached ADU allowed on lots 1+ acre if one unit is restricted-affordable |
Setback Requirements [1][2]
Tempe requires a rear setback of about 5 ft for a detached ADU, and no additional parking is required. Owner-occupancy is not required — you can rent it out without living on the property.
| Rear Setback | 5 feet minimum (all districts, unless the district allows less) |
| Side Setback | 5 feet minimum, including street side yards (all districts, unless the district allows less) |
| Front Setback | Per underlying zoning district — Confirm with Tempe Community Development |
| Parking Required | No additional parking may be required (ARS 9-461.18 bars ADU parking mandates and in-lieu fees) |
| Owner Occupancy | Not required for long-term rentals; owner must reside on site only if an ADU built on/after Dec 20, 2024 is licensed as a short-term rental |
| Min Lot Size | No ADU-specific minimum — allowed on any lot with a permitted single-family dwelling |
Permit Process & Fees [3][4]
An ADU permit in Tempe typically costs Building permit and plan review fees based on valuation — Confirm with Tempe Community Development and takes Typically 4-8 weeks for residential plan review — Confirm with Tempe Community Development, through a ministerial, by-right review.
| Approval Process | By-right building permit (ministerial); no public hearing or conditional use permit allowed under state law |
| Review Timeline | Typically 4-8 weeks for residential plan review — Confirm with Tempe Community Development |
| Permit Fees | Building permit and plan review fees based on valuation — Confirm with Tempe Community Development |
| Impact Fees | Confirm with Tempe Community Development; state law bars ADU-specific parking in-lieu fees |
| Plan Check | 2-4 weeks typical — Confirm with Tempe Community Development |
| Pre-Approved Plans | No city pre-approved plan library — Confirm with Tempe Community Development |
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Construction Costs [5]
Building an ADU in Tempe typically costs $120,000-$250,000 ($140-$280 per sq ft); a garage conversion runs $60,000-$140,000.
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| Average Build Cost | $120,000-$250,000 |
| Cost per Sq Ft | $140-$280 |
| Garage Conversion | $60,000-$140,000 |
| Prefab ADU (Installed) | $85,000-$200,000 |
Finance Your ADU Project
Most ADU projects are funded through HELOCs, construction loans, or cash-out refinancing. Compare rates from top lenders.
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Rental Income Potential [6][7]
A 2-bedroom ADU in Tempe rents for around $1,600-$2,100/mo, an estimated 7-10% annual return.
| Avg Rent (1 Bedroom) | $1,300-$1,700/mo |
| Avg Rent (2 Bedroom) | $1,600-$2,100/mo |
| Short-Term Rental | Allowed with an Arizona/Tempe STR license, but the owner must live on site if the ADU was built on/after Dec 20, 2024 |
| Est. Annual ROI | 7-10% annual return |
Explore Prefab ADU Options
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Recent Law Changes
What's Changed Recently
- Arizona HB 2720 (ARS 9-461.18, effective Jan 1, 2025): cities over 75,000 must allow one attached + one detached ADU by right on single-family lots, with rear/side setbacks capped at 5 ft, no added parking, no design-matching, and no owner-occupancy mandate for long-term rentals
- Tempe City Council adopted its HB 2720-compliant ADU ordinance in late 2024 (effective Dec 20, 2024), replacing the restrictive 2019 rules and allowing ADUs across all single-family areas citywide
- ADUs built on or after Dec 20, 2024 that are licensed as short-term rentals trigger an on-site owner-residency requirement
- A bonus detached ADU is allowed on lots of 1+ acre when rented as restricted-affordable housing (80% AMI)
Tips for Building an ADU in Tempe
- The 5-ft rear/side setback floor is set by state law — Tempe cannot demand more, which opens up many older backyard configurations
- Your ADU does not have to match the main house's design, roof pitch, or materials (state law prohibits matching mandates)
- ASU's rental market makes Tempe one of the strongest ADU rental markets in the Phoenix metro — long-term rentals cannot be prohibited
- If you plan to use the ADU as a short-term rental, note the owner-residency rule for units built after Dec 20, 2024 — plan your licensing before you build
ADU Builders in Tempe
Looking for an ADU builder in Tempe? ADU projects need a contractor experienced with local zoning, the permit process, and utility connections — not every general contractor has built one. We match Tempe homeowners with experienced local ADU contractors who provide free, no-obligation quotes. Getting at least three bids typically saves 20-40% on the same scope.
Sources & References
All data on this page is sourced from official government records and verified market data. View our full methodology.
- Accessory Dwelling Units (ADUs) — City of Tempe Planning government — Accessed 2026-07-10
- ARS 9-461.18 — Accessory dwelling units; regulation; applicability; definitions state_statute — Accessed 2026-07-10
- Accessory Dwelling Units (ADUs) — City of Tempe Planning government — Accessed 2026-07-10
- HB 2720 House Bill Summary — Arizona Legislature state_statute — Accessed 2026-07-10
- ADUs in Arizona: Rules, Costs, What to Know (2026) industry — Accessed 2026-07-10
- Average Rent in Tempe, AZ — RentCafe Market Data — Accessed 2026-07-10
- Average Rent in Tempe, AZ — Zumper Market Data — Accessed 2026-07-10
Frequently Asked Questions
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