Introduction: What is the Affordability Bonus ADU Program in San Diego?

The Affordability Bonus ADU Program in San Diego is a pivotal component of the city’s strategy to address the affordable housing crisis. With rising housing costs and limited space for new developments, this initiative aims to encourage homeowners to build Accessory Dwelling Units (ADUs)—also known as granny flats or in-law suites—while providing incentives for affordable housing options.

This program offers significant benefits to homeowners and developers, making it easier and more financially viable to create affordable housing in San Diego. In this article, we’ll explore how the Affordability Bonus ADU Program works, who qualifies for it, the financial incentives available, and how it contributes to alleviating San Diego’s housing shortage.

What is an Affordability Bonus ADU?

The Affordability Bonus is an incentive program designed by the City of San Diego to encourage the construction of affordable ADUs. The concept of an "affordability bonus" works by offering density bonuses, reduced fees, or increased height limits in exchange for reserving the ADU for low-income renters.

Through this program, homeowners who build ADUs and agree to rent them at an affordable rate can benefit from several perks, including:

• Waived or reduced permit fees

• Increased floor area allowances (meaning you can build a larger unit)

• Faster permitting and approval processes

• Financial subsidies or grants for development costs

By making these incentives available, San Diego hopes to meet its housing goals while also providing affordable housing solutions to residents in need.

How Does the Affordability Bonus ADU Program Work?

The Affordability Bonus ADU Program is primarily designed for homeowners and developers interested in constructing affordable ADUs on their property. The mechanics of the program are straightforward:

1. Construction of Affordable ADUs

Homeowners or developers looking to build an ADU on their property can apply for the program. The key requirement is that the unit must be designated as an affordable housing unit, meaning it must be offered at a rent that is affordable to individuals or families earning below a certain percentage of the area’s median income.

2. Affordability Criteria

To qualify as an affordable unit under the program, the ADU must meet the following income restrictions:

• Very Low-Income: 50% or less of the Area Median Income (AMI) for the San Diego region

• Low-Income: 80% or less of the AMI

• Moderate-Income: 120% or less of the AMI

The rent for the ADU must align with the affordable rent limits established by the city, ensuring that the unit remains accessible to those who are priced out of the traditional housing market.

3. Financial Incentives for Homeowners

In exchange for committing to make the ADU affordable, homeowners receive benefits such as:

• Increased Building Height or Square Footage: Homeowners can build a larger ADU or increase the height limit, allowing for more space and better rental potential.

• Fee Waivers: The city may waive or reduce permit fees, saving homeowners a significant amount of money during the construction process.

• Fast-Track Approval: ADUs that are part of the Affordability Bonus program may be prioritized in the approval process, shortening the time it takes to receive permits and start construction.

• Potential Grants or Subsidies: Depending on funding availability, homeowners may also qualify for grants or subsidies to offset construction costs.

Eligibility Requirements for the Affordability Bonus ADU Program

To participate in the Affordability Bonus ADU Program, homeowners must meet certain eligibility criteria. Here are the key requirements:

1. Property Location: The property must be located within San Diego city limits, and the homeowner must comply with local zoning laws.

2. Commitment to Affordable Rent: Homeowners must agree to rent the ADU at affordable rates to qualified tenants. Rent for these units must be within the established affordability levels based on income.

3. Income Qualification: Homeowners must agree to reserve the ADU for low- or moderate-income tenants. The rent cannot exceed the allowable limits set by the city.

4. Building Code Compliance: The ADU must meet all of San Diego’s building codes and safety regulations to be eligible for the program.

Benefits of the Affordability Bonus ADU Program

The Affordability Bonus ADU Program provides several key benefits for both homeowners and the San Diego community as a whole:

• For Homeowners:

  • Reduced Construction Costs: Homeowners can benefit from reduced fees, financial incentives, and potentially larger units, making the process of building an ADU more affordable.

  • Increased Rental Income: By building a larger or more appealing ADU, homeowners can attract higher-paying tenants (within the affordable range) and generate more rental income over time.

  • Priority in Approvals: Homeowners get faster access to the city’s approval and permitting process, which can streamline the construction timeline.

• For the Community:

• Affordable Housing: By incentivizing the creation of affordable ADUs, the city can increase the overall supply of rental housing available to lower-income households, helping to mitigate the housing crisis.

• Improved Neighborhoods: The program allows homeowners to add value to their properties by building ADUs, potentially increasing neighborhood stability and property values.