San Diego ADU Bonus Program: Everything You Need to Know

What is the Affordable ADU Bonus Program in San Diego?

In California, homeowners are generally allowed to have one accessory dwelling unit (ADU) and one junior accessory dwelling unit (JADU), which is essentially a smaller version of an ADU. However, San Diego’s Affordable ADU Bonus Program expands these options by enabling homeowners to build more ADUs than what is typically permitted under state law. Here’s how the program works:

• Deed Restrictions Homeowners can construct an unrestricted ADU (which can be rented at market rates) for each deed-restricted affordable ADU built. A deed restriction is a legal agreement that requires the affordable unit to be rented at below-market rates for a specified period—10 years for low-income units and 15 years for moderate-income units.
• Flexible Construction In Sustainable Development Areas (SDAs) or Transit Priority Areas (TPAs), there is no limit on the number of bonus ADUs that can be built. Outside these areas, homeowners can build one affordable ADU and one unrestricted ADU.

Other benefits of the Affordable ADU Bonus Program include:

• Increased property value in a challenging housing market
• Substantially increased potential for rental income
• Relaxed zoning regulations
• The ability to build multiple ADUs on one property, space permitting
• Contribute to affordable housing solutions

San Diego’s Affordable ADU Bonus Program allows homeowners to construct multiple ADUs, promoting housing solutions with greater flexibility.

Who Qualifies for the San Diego ADU Bonus Program?

To participate in San Diego’s ADU Bonus Program, the property must be zoned for residential use and the main home must remain owner-occupied. For the San Diego ADU Finance Program, homeowners’ income cannot exceed 150% of the Area Median Income (AMI), currently around $236,000, and a minimum credit score of 680 is required. Additionally, there is a $2,500 application fee due at construction loan closing, following SDHC approval.

Properties within Transit Priority Areas (TPAs) or Sustainable Development Areas (SDAs) have more flexibility in the number of ADUs they can build. The program applies to both single-family and multifamily properties, with different requirements for both.

While these are the general qualifications, prospective participants should consult with the San Diego Housing Commission for the most up-to-date and detailed eligibility criteria for both the ADU Bonus Program and the ADU Finance Program.

Eligibility for San Diego’s ADU Bonus Program depends on zoning, owner occupancy, and income criteria.

Incentives and Benefits of the ADU Bonus Program

The San Diego ADU Bonus Program offers several incentives and benefits to encourage homeowners to participate in creating affordable housing through accessory dwelling units. The program offers construction-to-permit loans up to $250,000. During the construction period, the loans have a fixed interest rate of 1%. Additionally, there are tax incentives to help lower costs for homeowners.

Other cost savings incentives include reduced costs for permits for building ADUs and time-saving incentives like expedited processing times. The SDHC can also help by providing ADU consultants, free technical assistance, and project management support. These incentives and benefits help make the ADU Bonus Program an attractive option for homeowners looking to maximize their property’s potential.

San Diego’s ADU Bonus Program offers incentives like reduced permits and affordable loans, making modern ADU projects more accessible to homeowners.

How to Apply for the ADU Bonus Program

Applying for the ADU Bonus Program? You’ll need to contact Ann Kern at [email protected] for a copy of the application. Also, follow these steps:

Prepare and submit project plans: A designer or architect will prepare a complete permit set, including property layout, elevation, utility plan, and roof design. These plans will be submitted to the City of San Diego Development Services Department (DSD).

• DSD and SDHC review Once the DSD reviews the plans, they will be sent to the San Diego Housing Commission (SDHC) for further review.
• Submit application and fee A $600 fee must be paid to the SDHC along with the application and any supplemental documents.
• SDHC document review The SDHC will review the application, then provide drafts of the affordable housing agreement and deed of trust.
• Document recording Once reviewed, the documents will be recorded on the property.
• Building permit approval After the documents are recorded, the SDHC will sign off on the building permit, allowing construction to begin.

The SDHC typically issues a conditions letter, ADU Bonus Application, and project invoice within 60-90 days. They will not sign off on any building permits until the ADU Bonus Agreement is recorded.

Maximizing Your Property’s Potential: Building Multiple ADUs

To maximize your property’s potential with multiple ADUs, focus on strategic space optimization and cost management. Start by carefully planning the placement of each unit to ensure efficient use of space while maintaining privacy and meeting building code requirements. Where allowed, consider stacking ADUs to maximize available land. Shared elements like driveways and outdoor spaces can further optimize space and reduce costs. Additionally, exploring high-quality prefab options can help keep construction costs consistent and more affordable.

Maximize your property’s potential by designing multiple ADUs with shared elements like driveways and outdoor areas, optimizing land use and affordability.

Common Pitfalls and How to Avoid Them When Applying for ADU Bonus Program Permits

When applying for the San Diego Affordable ADU Bonus Program, one common pitfall is submitting incomplete documentation – This can cause delays or even disqualification. Make sure all forms are filled out accurately, including project plans and income verification for deed-restricted units. Additionally, the application process for affordable housing agreements with the San Diego Housing Commission (SDHC) can take several weeks, so it’s essential to plan for these potential delays.

Avoid including mid-project design changes, misunderstandings about affordability restrictions (which must remain in place for up to 15 years), and failure to follow neighborhood-specific zoning rules. For instance, properties within a Sustainable Development Area (SDA) or Transit Priority Area (TPA) can build multiple ADUs, but the size, design, and affordability requirements must be adhered to, as outlined by the SDHC.

Avoid pitfalls in the ADU Bonus Program application by preparing accurate plans and meeting zoning regulations, as shown in this well-organized construction project.

Start Your ADU Project Today

By turning your single-family property into an income-producing housing solution, you could not only increase your property’s market value but uncover untapped income right in your backyard. Want to talk to an experienced team that could help you have a successful ADU build? All you need to do is fill out our free estimate tool.