What ADU can you build in your Panama City backyard?

Instant zoning report — see exactly what your zoning allows: permitted ADU types, size limits, setbacks, and lot requirements for your specific property.

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The quick answer

Panama City ADU rules at a glance

  • Owner-occupancy
    Not required — you can rent both units
  • Short-term rentals
    Allowed with local licensing — verify with the city
  • Where it's allowed
    Eligibility varies by zoning district — check your address to confirm yours
Modern backyard ADU in Panama City, Florida

ADU Rules in Panama City, Florida

We've researched Panama City's ADU rules so you don't have to. Here's what matters most — the facts that determine whether your project is possible, and how much it will cost.

  • Accessory apartment allowed in any residential district — ≤60% of the primary home (no fixed sq-ft cap), one per lot (ULDC Sec. 110-3.B)
  • Code does not require owner-occupancy
  • Code does not address renting — confirm with the city

Last verified: 2026-07-15

Florida homeowners proudly pointing at their completed backyard ADU in Panama City — the result of a successful build

Backyard ADUs like this are being built across Panama City — here's how to do it right.

What Panama City's zoning may allow for an ADU

Panama City permits an 'accessory apartment' (granny flat) in any district that allows residential uses, capped at 60% of the primary home's habitable floor area (no fixed square-foot limit), one per lot. The code does not restrict renting or require owner-occupancy, but confirm both with the city before relying on it.

Zoning allowance

An accessory apartment is permitted in any Panama City zoning district that allows residential uses, limited to one per residential lot; mobile homes may not be used as an accessory apartment (ULDC Sec. 110-3.B).

Size limits

Panama City caps an accessory apartment at 60% of the primary structure's habitable square footage, with no fixed square-foot maximum (ULDC Sec. 110-3.B.3). Units within required setback areas are limited to 14 ft in height (11 ft if within 3 ft of a property line).

Lot + setbacks

Setback requirements vary by zoning district in Panama City. Confirm exact setbacks with Bay County planning.

Height + coverage

Height and lot coverage limits vary by zoning district. Check Panama City zoning code.

Parking

Parking requirements for ADUs in Panama City vary by zoning district. Verify with local planning.

Rental / occupancy

Panama City's code does not address renting an accessory apartment and does not impose an owner-occupancy requirement — it is a full dwelling unit, but confirm rental treatment with the city, as short-term/vacation rentals may be governed separately.

Permit process

ADU permits in Panama City follow standard Florida residential building permit workflow. Contact Bay County building department for current requirements.

ADU Size Examples (60% of Primary)

Primary Home SizeMax ADU Size
1,200 sq ft720 sq ft
1,800 sq ft1,080 sq ft
2,400 sq ft1,440 sq ft

Formula applies to floor area of primary dwelling. Verify exact measurement with Panama City Planning.

See Bay County ADU rules

Building limits and rental rules, side by side

These figures are based on the best available data for Panama City and should be confirmed with the city's planning department before you commit to a design or a rental strategy — local ordinances change and vary by parcel.

Building Limits

  • Max Size:See requirements above
  • Detached Allowed?Check with city
  • Max Height:14 ft

Rental Rules

Short-term rental rules vary — confirm with Panama City Planning.

ADU rules in Florida are set locally. Whether Panama City allows an ADU—and at what size, setbacks, parking and occupancy terms—depends on the applicable local zoning ordinance. Florida Statute §163.31771 allows local governments to adopt ADU ordinances but does not create a universal statewide right to build an ADU on every residential property. Check your address to review the rules that may apply to your parcel. See the full Florida ADU laws guide →

Here's exactly what you'll pay — and how to avoid the fees that catch most homeowners off guard

Most homeowners spend 3–4 weeks piecing this together on their own. We've mapped the full Panama City permit process step by step — so you know exactly what's coming, and what to prepare.

1

Step 1: Pre-Application Zoning Check

Where:
Panama City Planning Department
What to bring:
Property address and parcel ID, preliminary site sketch, lot survey
Timeline:
No appointment fee — call ahead to confirm office hours
Cost:
No fee for initial inquiry
2

Step 2: Submit Permit Application

Where:
Panama City Planning Department — contact for portal link
What to bring:
Architectural plans, site plan, boundary survey, energy compliance docs
Timeline:
Contact planning to confirm current review timelines
Cost:
Contact planning for current fee schedule
3

Step 3: Plan Review & Revisions

Where:
Panama City Planning Department
What to bring:
Responses to any correction letters; revised drawings if required
Timeline:
Plan for one or more review cycles — timeline varies by submission completeness
Cost:
No additional fee for standard resubmittal
4

Step 4: Construction & Inspections

Where:
Panama City Building Department
What to bring:
Approved permit set must be on-site at all times during construction
Timeline:
Schedule inspections as each phase of work is completed
Cost:
Included in permit fee
Aerial view of a Florida residential neighborhood — properties where homeowners are adding ADUs

Panama City neighborhoods where ADU permits are being filed — is your street next?

Panama City ADU — Frequently Asked Questions

These are the questions we hear most often from Panama City homeowners. If yours isn't here, our ADU Zoning Experts can answer it directly.

Can I build an ADU in Panama City, Florida?

An accessory apartment is permitted in any Panama City zoning district that allows residential uses, limited to one per residential lot; mobile homes may not be used as an accessory apartment (ULDC Sec. 110-3.B).

What is the maximum ADU size in Panama City?

Panama City caps an accessory apartment at 60% of the primary structure's habitable square footage, with no fixed square-foot maximum (ULDC Sec. 110-3.B.3). Units within required setback areas are limited to 14 ft in height (11 ft if within 3 ft of a property line).

Do I need to be an owner-occupant to build an ADU in Panama City?

Panama City's code does not address renting an accessory apartment and does not impose an owner-occupancy requirement — it is a full dwelling unit, but confirm rental treatment with the city, as short-term/vacation rentals may be governed separately.

Can I use my Panama City ADU as an Airbnb?

Contact Panama City Planning to confirm current short-term rental rules for ADUs.

How do I get an ADU permit in Panama City?

ADU permits in Panama City follow standard Florida residential building permit workflow. Contact Bay County building department for current requirements.

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Serving homeowners in 32401, 32403, 32404, 32405, 32407, 32408 and surrounding Panama City zip codes.

This page provides general information based on current ordinances and publicly available data as of 2026-07-15. Zoning rules change — verify all requirements with your local planning department before making financial commitments.