The word “shed” may conjure images of dusty, spider-filled shelves cobbled together with construction scraps. But in the last decade, the overlooked outbuilding at the far corner of the yard has experienced a renaissance of sorts.  

In urban yards, people are rethinking how a shed can serve as an alternate living space. These scaled-down buildings are filling the needs of homeowners who want a separate space for work, exercise or hobbies. 

“Small urban lots, for a long time, have been largely ignored,” says Jeff Pelletier, principal architect at Board & Vellum in Seattle. “Now people are realizing, with the cost of real estate, that you only have so many square feet to work with, so you may as well take advantage of the space you have outdoors, and make it something special.” 

“In particular, now that we’ve been quarantined, everyone’s really assessing every single square foot of their property and wondering how we can use it better,” he says.

The lessons learned from the tiny home movement also apply to the fancy shed movement. In fact, the lines between the two quickly blur — especially when you want to use the space for more than just storage.

Here’s what you need to know about adding a useful outbuilding to your home.

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There has been an uptick in requests for sheds that can be used as home offices, as seen in this model by Modern-Shed. (Courtesy of Modern-Shed)
There has been an uptick in requests for sheds that can be used as home offices, as seen in this model by Modern-Shed. (Courtesy of Modern-Shed)

More than a roof for the lawnmower

The baby is fussy. My oldest child is rampaging from room to room, melting down wherever he goes. Even as I write this article, I can’t find a quiet space to concentrate. All I need is a chair, Wi-Fi and some silence, but my only option is the family car parked in the driveway. 

It’s a common story in an era when working from home and raising a family collide under the same roof.

In urban Seattle, where lots can be small and households bursting with activity, residents are turning to contemporary sheds as an accessory to their homes — but also a space removed from it. They are an oasis to explore whatever people are passionate about, says Joey Fentress, principal at Proform General Contractors.

Fentress has seen customers use their sheds as extra guest rooms, a backyard yoga studio, rooms for reading and writing, and as accessory spaces for entertaining next to pools and hot tubs.

But the most dramatic change of late has been the demand for home offices and gyms. Since the stay-at-home order began in March, Tim Vack, general manager at Modern-Shed, has seen a huge spike in requests from people needing room to work and exercise.

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“When the shed movement started, it was just about getting extra space in your backyard. When Airbnb came around, the movement shifted to larger structures that people could rent out to make money,” he says. “When COVID-19 happened, everything changed. Nobody is interested in [backyard cottages] anymore because people don’t want strangers living on their property. But now 65% of the population has to work at home, and people are interested in their own gym or their own office.”

Pelletier says recent clients are relishing their extra space. “When we talk to clients, especially during this quarantine, their backyard reading retreat was the best thing they’d ever built,” he says. “It really felt like they had a second home inside the city; like a vacation in their backyard.”

A custom cottage in Seattle’s Montlake neighborhood, designed by Board & Vellum and built by Proform General Contractors, features a bathroom with a shower, a sleeping loft, a glass-walled porch, built-in bookshelves and high-end finishes throughout.  (Courtesy of Andrew Giammarco)
A custom cottage in Seattle’s Montlake neighborhood, designed by Board & Vellum and built by Proform General Contractors, features a bathroom with a shower, a sleeping loft, a glass-walled porch, built-in bookshelves and high-end finishes throughout. (Courtesy of Andrew Giammarco)

The question of cost

Just how much a fancy shed will cost is a bit like asking, “How long is a piece of string?” The answer: It depends. 

The range of cost is vast, running from a mere few thousand dollars to well over $200,000.

Not only is there a wide range of design options for the shed itself, but the infrastructure and prep work can vary — and add substantially to the total bill. In many cases, the actual shed is the smallest portion of the cost, Vack says. 

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Ground work, foundation, plumbing, electrical, permitting, landscaping and decks must also be considered.  

“Clients don’t think about having to flush the toilet and being connected to something; they think you can just put a hose to the line somewhere. But I’ve seen connections to the sewer line be as high as $40,000,” Vack says.

With new-home construction, the level of finishes you choose can impact your budget up or down by about 15%. The same is true with small structures.  

Clients always underestimate the cost, says Pelletier. “You’re basically building a very small new house,” he says. “You have separate utilities, new foundation, new roof. It’s far less than a house, but also not cheap.”  

That’s not to suggest that every type of shed will cost a fortune. Even the budget-minded have reasonable options. It all depends on how nice you want it to be.

Types of buildings 

Budget and intended purpose will help determine the type of structure you choose. Here are some broad categories and rough pricing to help narrow your focus.

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A custom cottage in Seattle’s Montlake neighborhood, designed by Board & Vellum and built by Proform General Contractors, features a bathroom with a shower, a sleeping loft, a glass-walled porch, built-in bookshelves and high-end finishes throughout.  (Courtesy of Andrew Giammarco)
A custom cottage in Seattle’s Montlake neighborhood, designed by Board & Vellum and built by Proform General Contractors, features a bathroom with a shower, a sleeping loft, a glass-walled porch, built-in bookshelves and high-end finishes throughout. (Courtesy of Andrew Giammarco)

CUSTOM DESIGNS

If you really want to do it right, design it from the ground up. Those eye-catching designs you see on Pinterest or in Dwell magazine were carefully planned by a team of architects, builders and landscapers.  

This is especially true for tricky building sites where someone wants to take advantage of a nice view or their space calls for a creative design.

When you build from scratch, every aspect can be controlled, allowing customers the freedom to get exactly what they want, from the placement of the windows to the finishing touches.

It’s essentially like building a miniature house — and the time and price tag can reflect this. In order to get that level of customization, expect to pay top dollar. When you factor in the design process, permitting and construction, a shed can take a year to come together. 

Cost: $90,000–$200,000 and up

The cost of a shed can vary widely depending on amenities such as plumbing and electrical. This model, from Modern-Shed, is used as a guest suite and has a small bathroom and a kitchenette. (Courtesy of Modern-Shed)
The cost of a shed can vary widely depending on amenities such as plumbing and electrical. This model, from Modern-Shed, is used as a guest suite and has a small bathroom and a kitchenette. (Courtesy of Modern-Shed)
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ASSEMBLED ON-SITE

Higher-end prefab companies, such as Modern-Shed, save on costs by producing the buildings in a factory and then assembling them on-site. A menu of sizes and options allows customers to select their features like choosing sandwich toppings.

The assembled components are shipped to your site where a team assembles them in a few days, with the whole process taking around 5–10 weeks.  

This option doesn’t forego the need for a permit. But the overall building process is faster since much of the design work is done in advance. 

Cost: $18,000–$100,000

 A yurt, such as this model from Sun Time Yurts, can have electricity and plumbing. (Courtesy of Sun Time Yurts)
A yurt, such as this model from Sun Time Yurts, can have electricity and plumbing. (Courtesy of Sun Time Yurts)

YURTS

One option that is frequently overlooked is using a yurt instead of a hard structure. These are more akin to rigid tents rather than traditional buildings, and they’re ideal for off-grid living.

Colin Sternagel, of Sun Time Yurts, imports to the Pacific Northwest four sizes of traditional Mongolian yurts with translucent ceilings. He says many of his customers install wood stoves and use the yurts as living spaces.  

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Yurts typically sit atop a deck platform and can be outfitted with plumbing and electricity. Once the prep work is finished, the yurt itself can be assembled in just a few hours with no special equipment.  

Unlike normal shed structures, yurts fall into a permit category known as “temporary membrane structures” so the permitting process can be easier.

Cost: $4,200–$15,000

This DIY shed in East Wenatchee was built by Andrew Campbell and is used as a home office. Doing the work yourself can save you money and allows you to get creative with materials. (Courtesy of Michelle Campbell)
This DIY shed in East Wenatchee was built by Andrew Campbell and is used as a home office. Doing the work yourself can save you money and allows you to get creative with materials. (Courtesy of Michelle Campbell)

DO IT YOURSELF

For those with carpentry skills, a DIY project can save you a bundle on construction costs, and it allows you to add personal touches and features usually reserved for higher-end projects. And if you want to use reclaimed materials, this is probably your best route.

Be sure to follow the same best practices as building a traditional house. If you need design help, there are dozens of online resources from which you can download plan sets. 

Cost: Starting at a few thousand dollars — plus a lot of your time.

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Prefab sheds, as seen at Old Hickory Shed’s location in Poulsbo, come in a limited range of sizes and styles. (Courtesy of Jeff Layton)
Prefab sheds, as seen at Old Hickory Shed’s location in Poulsbo, come in a limited range of sizes and styles. (Courtesy of Jeff Layton)

PREFAB DELIVERED

One of the most affordable options comes in the form of pre-built structures that are commonly sold through national distributors. If your goal is something serviceable and fast, then this is a fine option.  

In most cases, there are a handful of choices you make about the basic size and design, then your finished unit is trucked to your property.  

Tony Worland, of Old Hickory Sheds, recently sold five successive structures to customers on Bainbridge Island who wanted quick and easy chicken coops. Another customer needed a bedroom for a 13-year-old son, so there’s a huge range of uses.  

The tradeoff with these types of buildings is aesthetics. Often, they are utilitarian, or they lack the joy and whimsy that draws people to tiny structures.  

The upsides: They are sound structures, are waterproof (normally the most important requirement), are frequently better looking than DIY projects and they can be obtained quickly and at minimal cost.

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Cost: $3,000–$20,000

Understanding permits

Once you find a structure that matches your budget, you will need to deal with local permits and regulations.

Requirements vary by location, with Seattle being one of the strictest cities when it comes to permitting.

“Permitting is not straightforward,” says Pelletier. “The biggest challenge we see early on with clients is the misconception of how easy this should be. They underestimate the length and complexity of permitting.”

A general rule of thumb is: If a structure is meant to be habitable, then it requires a permit. In other words, if you’re planning on doing things inside it beyond storing tools or animals, then you’re on the road to permits.

Some areas don’t require a permit until the building is over a certain size — often 120 square feet. And rural areas are typically more lax about regulations. Also, if you can put it on wheels and make it a “trailer,” then the permitting process is easier.

In cities such as Seattle, permitting a shed puts you in line with other major construction projects, such as new-home construction, which can mean months of wait time plus thousands of dollars to draft and submit plans. 

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That doesn’t mean that everyone actually gets a permit. Most shed manufacturers put the responsibility for obtaining a permit on their customers.  

Even if your property doesn’t require a permit, there are still rules dictating where you can put your structure. For example, you may have a steep slope or a septic field to work around. There are setback requirements from your property line, and Seattle has hardscape limits which restrict how much of your property can be filled with structures.

Before you go too far into the process, do a robust site analysis and research your local building requirements and homeowners association rules.

A custom cottage in Seattle’s Montlake neighborhood, designed by Board & Vellum and built by Proform General Contractors, features a bathroom with a shower, a sleeping loft, a glass-walled porch, built-in bookshelves and high-end finishes throughout.  (Courtesy of Andrew Giammarco)
A custom cottage in Seattle’s Montlake neighborhood, designed by Board & Vellum and built by Proform General Contractors, features a bathroom with a shower, a sleeping loft, a glass-walled porch, built-in bookshelves and high-end finishes throughout. (Courtesy of Andrew Giammarco)

What to know before you start

When you’re thinking about adding a backyard structure, there are some key things to keep in mind.

Budget: There is a huge range of cost depending on what you’re hoping to achieve. The simplest prefab structures can be a few thousand dollars, while a high-end custom project can set you back more than $200,000. Having a rough idea of what you’re willing to spend will immediately narrow your choices.

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Purpose: Will it be used as an office? Extra living space? A home gym? Multipurpose space? Having a clear idea of the intended use will direct the design process.

What is allowed? Understanding the layers of regulation for where you live is critical. Even if a structure doesn’t need to be permitted, there could be HOA rules in place. City and county restrictions, such as setback laws and impervious surfaces rules, may restrict where and how big you can build.    

Financing: Most large banks won’t lend for projects like a shed. If you’re building a full backyard cottage (also known as a DADU), try a credit union or a small local bank. A home equity line of credit is a popular way to finance sheds. 

Will there be plumbing? If you’re planning to have a sink, shower or toilet, it’s more complicated than just hooking up a hose. Where does the grey and black water go? Disposing of your used water means hooking up to a sewer or septic system, which can be complicated and expensive. If you use a composting toilet, this is less of a problem.

Light and access: The location and direction of the structure are subtle decisions that have a huge impact. If the building isn’t convenient, it won’t get used as much. Thinking through the potential view lines and how it picks up light throughout the day will also affect how much you enjoy it.