Accessory Dwelling Units, commonly referred to as ADUs, have become an increasingly popular solution for homeowners looking to maximize their property’s potential and address housing shortages. These small, self-contained residential units can be attached to or detached from the primary residence and offer flexible living arrangements for family members, guests, or tenants. As cities across the United States grapple with housing affordability and availability, ADUs have emerged as a viable solution, providing additional income for homeowners and contributing to urban density without altering neighborhood character.
Overview of San Diego's ADU Bonus Program
Recognizing the potential of ADUs, the City of San Diego has introduced the ADU Bonus Program to incentivize the construction of these units. This program offers significant benefits for homeowners looking to expand their properties. Here’s an in-depth look at what the program entails, who is eligible, and how to apply.
What is the ADU Bonus Program?
San Diego’s ADU Bonus Program presents homeowners with an opportunity to expand their property’s potential. For each deed-restricted ADU, an additional unrestricted ADU is permitted, effectively doubling the capacity for additional dwelling units. Moreover, properties within the Transit Priority Area (TPA) enjoy even greater flexibility, with no limit on bonus ADUs, subject to available space. This provision encourages sustainable development and aligns with the city’s transit-oriented living goals.
Key Benefits of the ADU Bonus Program
- Increased Property Value: By adding more units to your property, you can significantly increase its value and rental income potential.
- Flexibility in ADU Placement: With the ADU Bonus Program, properties within the TPA can add multiple ADUs, maximizing the use of available space.
- Affordability Options: The program allows homeowners to select from various Area Median Income (AMI) levels for deed restrictions, ensuring affordability across diverse income levels within the community.
What Does the ADU Bonus Program Require?
Homeowners must meet several requirements to participate in the ADU Bonus Program:
- Affordability Restrictions:
- Moderate-income ADUs: Affordability restrictions for 15 years.
- Low-income ADUs: Affordability restrictions for 10 years.
- Lien Positions: Restrictions are in the second lien position for single-family zones and the first lien position for multifamily zones.
- Income Verification:
- Property owners must submit income verification to the San Diego Housing Commission (SDHC) before tenant occupancy.
- Tenants must provide annual income information to confirm continued eligibility.
- Annual Monitoring Fee: $150 per unit for the duration of affordability restrictions.
- Income Thresholds:
- Income increases for very low- and low-income tenants can rise to the next income level.
- Moderate-income tenants' income can rise up to 140 percent of AMI. Beyond this threshold, tenants will receive a 180-day notice to vacate.
- Rent Restriction Notices:
- Tenants must receive rent restriction expiration notices three years, 12 months, and six months before the restriction ends.
How to Apply for the ADU Bonus Program
Step-by-Step Guide
- Design and Documentation: Have a designer or architect draft the permit set, including elevations, layout, utility plan, and roof plan.
- Submission to DSD and SDHC: Submit the permit set to the City of San Diego Development Services Department (DSD). DSD will then forward the plans to the San Diego Housing Commission (SDHC) for review.
- Application and Fee: Submit the ADU Bonus Program application, supplemental attachments, and a $600 application fee directly to SDHC.
- Review and Approval: SDHC reviews the application and provides drafts of the affordable housing agreement and deed of trust. Once recorded, SDHC signs off on the building permit.
Documentation Required
- Detailed Project Plans: Including elevations, layout, utility, and roof plans.
- Completed Application: Alongside all supplemental attachments.
- Application Fee: $600 to cover legal fees.
Real-Life Case Studies and Success Stories
To illustrate the program’s impact, let’s explore a few success stories from San Diego homeowners:
- Located within the TPA, a family utilized the ADU Bonus Program to add two additional units to their property. This not only provided rental income but also allowed extended family members to live nearby, fostering a close-knit family environment
- Outside the TPA, they added one restricted and one unrestricted ADU, turning their backyard into a thriving apartment complex-like community space, greatly increasing their property value and rental income.
- A family opted for eco-friendly materials and designs for their ADUs, aligning with San Diego’s sustainability goals and attracting environmentally conscious tenants.
Expert Insights on the Future of ADUs in San Diego
The future of ADUs in San Diego looks promising, with potential challenges and opportunities on the horizon:
- Challenges: Navigating regulatory requirements and ensuring compliance can be complex. Homeowners should stay informed about changes in regulations and seek professional guidance.
- Opportunities: As demand for affordable housing increases, ADUs offer a viable solution. Innovations in design and construction methods will continue to enhance the feasibility and attractiveness of ADUs.
Final Thoughts and Call to Action
San Diego’s ADU Bonus Program offers a unique opportunity for homeowners to maximize their property’s potential while contributing to the city’s housing goals. By participating in this program, you can enhance your property value, generate rental income, and provide much-needed affordable housing options.
Ready to explore the possibilities of ADUs for your property? Consult Our Experts for expert design and planning assistance. Don’t miss out on the chance to make a positive impact on your community and your bottom line!
For more detailed information about the ADU Bonus Program, eligibility criteria, and application process, visit the City of San Diego’s Information Bulletin 400.
