Building a Custom Home in Hillsborough: Floor Area Rules, Design Review and Cost

Last updated: November 2026

Short answer: A custom home in Hillsborough is sized by formula: total floor area can reach 25 percent of net lot area for the first acre, plus 15 percent of any area above one acre, and every house must have at least 2,500 square feet. A new home over 8,000 square feet goes to the City Council after design review. Basements, tall rooms and attics all count toward floor area in specific ways, so the floor-area budget shapes the design from the first sketch.

Hillsborough is one of the most expensive towns on the Peninsula, and its code is written to keep large homes in proportion to large lots. The sections below cover the market, the size rules, the review path and the cost, with the code section behind each number.

What should you know before building a custom home in Hillsborough?

Start with the market. The median single-family home in Hillsborough sold for $6,075,000 in October 2026, down 10.8 percent year over year, at a median of $1,704 per square foot and 9 days on market. [Source: MLSListings 2026] At those prices, most new Hillsborough homes replace an older house on an established lot rather than going up on vacant land.

The town is entirely residential, and its zoning allows one single-family dwelling per half acre in the RD-1 district, not counting ADUs. That density, plus the floor-area formula below, is why Hillsborough lots tend to carry larger homes set well back from the street. If you are still choosing a lot, our checklist for buying a teardown on the Peninsula covers trees, utilities and soils.

How big can a custom home in Hillsborough be?

Hillsborough caps total covered floor area at 25 percent of net lot area for the first acre, plus 15 percent of net lot area above one acre, and sets a minimum house size of 2,500 square feet. [Source: Hillsborough Municipal Code 17.32.030] Here is what that formula allows on common lot sizes.

Floor area per Hillsborough Municipal Code 17.32.030; coverage per the sliding scale in 17.32.060(B). Calculations by Craftsmen's Guild.

Coverage has its own cap. Structural coverage follows a sliding scale by lot size, and structures plus hardscape together may not exceed 50 percent of net lot area, dropping to 40 percent within a street-adjacent setback. Pervious hardscape can count at half its area if it lets water into the soil. Each covered accessory structure is limited to 1,000 square feet.

What counts toward floor area in Hillsborough?

More than many owners expect. Basement area with at least six feet of headroom counts at 33 percent when the exterior walls stand less than two feet above natural grade, and at 100 percent when they stand two feet or more above it. Spaces taller than 12 feet count at 150 percent after the first 300 square feet, and attic-type areas count once they reach five feet of height. [Source: Hillsborough Municipal Code 17.32.020]

Source: Hillsborough Municipal Code 17.32.020.

These rules reward a fully buried basement and penalize double-height foyers. A 600-square-foot great room with a 16-foot ceiling, for example, counts as 750 square feet: 300 at full value plus 300 at 150 percent. Our guide to basement construction on the Peninsula covers the groundwater and shoring side of that trade-off.

How does design review work for a new Hillsborough home?

Hillsborough's Architecture and Design Review Board, or ADRB, reviews new homes, and a new primary dwelling over 8,000 square feet then goes to the City Council for a public hearing. [Source: Hillsborough Municipal Code 17.32.040] Reporting on a 12,986-square-foot replacement home noted that the Council step can be waived when there are no unresolved concerns and the ADRB approves without dissent, and that projects of that size get at least two public hearings. [Source: San Mateo Daily Journal]

The first hearing usually gathers feedback and the second takes a vote, so plan the schedule around two rounds rather than one. Confirm the exact review path for your project with town planning staff at the start, since it depends on size and on whether you need any exceptions.

Placement and height follow the code's envelope. The town measures height from a building envelope that starts 22 feet above grade at the setback line and slopes inward at 45 degrees to a 32-foot maximum, with a 25-foot street setback and a 20-foot interior setback. Homes over 8,000 square feet must add to their aggregate setbacks. Our custom home construction process models the envelope against your survey before massing is fixed.

What does a custom home in Hillsborough cost to build?

Plan on the top tier of Bay Area pricing. Our 2026 Bay Area custom home cost guide puts upscale construction in Peninsula hill towns at $600 to $800 or more per square foot, and true luxury finishes at $900 to $1,200 or more. A 7,500-square-foot home at $600 to $800 per square foot is $4.5 million to $6 million before land, demolition, site work and soft costs.

Land sets the floor. With the median Hillsborough home at $6,075,000 in October 2026 [Source: MLSListings 2026], a teardown lot plus a new house commonly lands well above $10 million. Hillside parcels add grading, retaining walls and drainage, which our guide to building on a hillside lot breaks down.

Allow time as well. A Bay Area custom home typically takes 12 to 24 months from design to move-in, and two rounds of design review sit in the front half of that schedule, as our custom home timeline guide shows.

How Craftsmen's Guild approaches a Hillsborough home

Craftsmen's Guild has been a family-owned design-build firm since 1988, with architects, designers and builders on one team. On a Hillsborough lot, that means the floor-area budget, coverage, envelope and basement strategy are worked out together before the design goes to the ADRB, so the house you see in drawings is one that fits the code and the budget.

We build across the Peninsula, including Atherton and Palo Alto, and our Bright and Airy Home in San Mateo is a nearby example of our work. See our overview of custom home builders in the Bay Area, or compare the rules in Woodside. Owners with their own architect can use our owner's representative service.

Frequently asked questions

How big a house can I build on a one-acre lot in Hillsborough?

Up to 10,890 square feet of total covered floor area, which is 25 percent of a 43,560-square-foot lot. Structural coverage on that lot is capped at 6,239 square feet, and because the home would exceed 8,000 square feet, it would also go to the City Council after design review. Basement and tall-room rules can change how much of that you use.

Does a basement count toward floor area in Hillsborough?

Partly. Basement area with at least six feet of headroom counts at 33 percent when the exterior walls are less than two feet above natural grade, and at 100 percent when they are two feet or more above grade. A fully buried basement is the most floor-area-efficient way to add space.

Is there a minimum house size in Hillsborough?

Yes. Total covered floor area must be at least 2,500 square feet. In practice, most new homes in town are far larger, because the maximum is set by lot area and most lots are half an acre or more.

When does a Hillsborough home go to the City Council?

When a new primary dwelling exceeds 8,000 square feet of covered floor area. Those projects go to the Architecture and Design Review Board first and then to the Council for a public hearing, a step that can be waived when the board approves without dissent and no concerns remain.

Planning your Hillsborough home

A Hillsborough custom home is a floor-area exercise as much as a design one: 25 percent of the first acre, a sliding coverage cap, and counting rules for basements and tall rooms. Owners who model those numbers before design and plan for two rounds of review move through approval with fewer surprises. When you are ready, book a complimentary consultation and we will review your lot with you.