I'll chime in since I've built a few of these:
1. You can't hire someone and get it done for $170k, it will cost more than that. @Olivia Romano has done a lot of the work herself.
2. $250k is about right for something fancy, the maximum allowed square footage is usually 864sf.
3. Olivia's estimate of the rent ($1400-$1600 is about right for the dwelling unit. Some of us rent the garage separately for up to $400/month.
4. In neighborhoods zoned TU, you can use the Tandem house form which allows you to build much larger than 864sf, sell it separately, or rent both units (not possible with ADU form)
5. Most redevelopers are just opting to scrape the old house and build a new duplex instead.
6. I'm taking a longer view, so I build a tandem house in the rear, and keep the old primary dwelling unit in service for many more years. That was one of the stated goals of the 2010 ADU/tandem house zoning, to preserve existing the housing stock.
7. Two expert ADU architects: Niccolo Casewit and Becky Alexis http://www.houzz.com/pro/beckyalexis/hive-architecture-by-becky-alexis