The shed goes chic - Owners who need more space but can't afford to add on to the house are taking backyard retreats to a new level.

It wasn't ideal, not with her own teenage son still living at home. But adding onto the 1,500-square-foot house would have cost $110,000 to $130,000, so she did what a growing number of squeezed homeowners are doing: She bought a kit for a pint-sized cottage and erected it in the backyard.

Now she strolls across the grass and opens the French doors into her 12-foot-by-16-foot office, where she writes training programs for businesses. The gray exterior, trimmed in white, blends with her home. Inside, white furniture offsets the sky blue walls.

Miller and others are redefining the common backyard shed. Once shabby, now showy, the shed has become a haven for the home office, art studio, sewing niche or guy getaway.

It's cheaper than adding on, goes up faster and looks nothing like a place to stash the lawn mower. The sheds come in a variety of styles -- rustic, urban modern, dollhouse -- and some owners add comfy features such as air conditioning, sky lights, custom windows and doors, everything but plumbing.

Miller is happy with her backyard retreat, though the $12,000 kit she bought from Summerwood Products last fall ballooned into a $25,000 project by the time she was done.

And she hit some bumps along the way -- pitfalls that others might heed.

Her kit arrived in a big box with sections pre-assembled by Summerwood, a Toronto company that uses Canadian cedar. She hired a contractor to lay a concrete foundation and put it all together for $10,000.

"It was reasonably easy to build," Miller said.

All was well, until a Los Angeles building inspector knocked on her door one day. "I had it built without permits," said Miller, still in the dark about who reported her. Though it was built to code, accessory buildings larger than 64 square feet need a building permit in the city.

"I had to retroactively get permits," she said. "It was not a fun experience."

The additional engineering drawings and permit process added $3,700 and four months to the project. The permit process caused her to go over budget and she had to finish off the interior herself.

"After all the gnashing of teeth, now I'm happy," she said. "It's nice looking. It doesn't look cheesy."