How San Diego Kicked Off an Affordable ADU Building Boom

San Diego's ADU Bonus Program has emerged as California's most successful affordable accessory dwelling unit initiative, producing hundreds of affordable housing units since its launch in 2020.

A new UC Berkeley Terner Center report highlights the program's effectiveness in incentivizing property owners to build deed-restricted ADUs alongside market-rate units, offering valuable lessons for other California municipalities seeking to expand affordable housing options.

The program operates through a straightforward exchange: property owners who construct one deed-restricted ADU receive the right to build an additional market-rate unit on the same property.

The affordable units must maintain rent levels accessible to households earning 110 percent of area median income for 15 years, or 80 percent of area median income for 10 years.

This approach addresses state requirements under SB 671, which mandates local governments create incentives for affordable ADU development to ensure California's broader ADU boom serves all income levels.

For California property developers and homeowners, San Diego's success demonstrates a viable path to maximize development potential while contributing to affordable housing goals.

ADUs, which are secondary housing units built on existing residential properties and cannot be sold separately from the primary residence, comprised roughly 25 percent of all new homes constructed statewide last year.

The San Diego model's permitting data suggests that bonus programs can effectively stimulate affordable unit production without requiring direct public subsidies.