National Law Review: ‘San Diego ADU Incentive Rollback Sheds Light on California Housing Woes’

The San Diego City Council voted 5-4 on June 16, 2025, to impose caps on the number of Accessory Dwelling Units that can be constructed on single-family residential lots, marking a significant reversal of the city's previous housing policies.

The decision rolls back a 2020 program that had allowed developers to build virtually unlimited ADUs on qualifying properties, particularly in transit priority areas within half a mile of transit stations.

ADUs are secondary housing units built on the same lot as a primary residence, such as converted garages or backyard cottages, and have been promoted statewide as a tool to address California's housing shortage.

The original 2020 amendments to San Diego's Municipal Code eliminated minimum lot size requirements, removed density limitations, and waived parking requirements for ADUs in transit areas.

The policy also included a bonus system allowing one additional market-rate ADU for every deed-restricted affordable unit constructed.

City records indicate the program was successful in spurring development, with 5,182 of the 5,720 ADUs permitted during the program's tenure being smaller-scale projects attached to primary residences.

However, the policy faced community opposition over concerns about neighborhood density and character changes.

The rollback reflects the ongoing tension California municipalities face between state mandates to increase housing supply and local resistance to development intensification in established residential areas.