Lessons Learned From San Diego Housing Commission Pilot Project on Building ADUs

This past Monday, Oct. 11, the San Diego Housing Commission released a report on the lessons it learned in a pilot project to construct five Accessory Dwelling Units, or “granny flats.” It’s part of the Commission’s effort to help San Diego homeowners considering building the units.

The ADUs were constructed in yards of five single-family homes owned and rented by SDHC’s nonprofit affiliate.

Based on the pilot project, SDHC found cost estimates to build a granny flat ranged from $116,803 for a 224-square-foot studio to $342,078 for a 1,199-square-foot three-bedroom unit. And depending on the type of ADU, the building time may range from 10 to 26 months.

According to KPBS:

To develop the ADUs in its pilot program, SDHC modified plans from Encinitas to ensure they fulfilled San Diego city code requirements. SDHC submitted those final plans to the city and, upon final approval, will make them available as permit-ready plans for other San Diego homeowners. …

ADUs were identified as one of the five main sources of potential new housing in the city of San Diego over 10 years, through 2028, in SDHC’s report released Monday. The number of ADUs permitted for construction in the city rose from 32 in 2017 to 266 in 2018 and 627 in 2019. In 2020, 493 ADUs were permitted for construction, according to the city’s annual housing inventory report.

Here are the lessons learned from the SDHC, from their website:

The following are key takeaways from this pilot program for homeowners as they consider ADU development.

1. Assemble a team of experienced professionals for the design, permitting, and construction of the ADU.

• Homeowners who do not have prior design, development, and permitting and construction experience should select an experienced designer or licensed architect to ensure that the project proceeds according to predetermined design, budget and timelines.

2. Use permit-ready plans.

• Permit-ready plans provide significant cost and time savings during the design phase, as the architect will not need to draft the plans from scratch.
• Permit-ready plans still require architectural services, and the level of work needed depends on the characteristics of the site.
• The SDHC project team worked with the architect to develop four design/building plans that include economical design elements. These will be made available for public use on
  the City of San Diego’s ADU webpage  and SDHC’s website
  .

3. Consider factors that can significantly impact cost:

• Units smaller than 500 square feet benefit from City of San Diego fee waivers; larger units have higher soft costs (e.g., permit, fees, surveys and studies, etc.).
• When deciding whether to split, or to share utilities between the main home and the ADU, homeowners should consult with their contracted designer or architect to consider the upfront or ongoing costs associated with each option to make an informed decision.
  • The cost of splitting utilities may add $10,000 or more to the project’s budget.
  • Homeowners should work with their architects (who will work with the MEP engineer) to determine if street trenching is needed (i.e., if the existing electrical panel does not have additional capacity to connect to the ADU) as the cost ofstreet trenching may be approximately $100,000 and may take six months to complete.
  • Alternately, while sharing utilities between the main home and the ADU does not have upfront costs, there may be ongoing costs, such as if a homeowner elects to contract with a third-party utilities monitoring service for ratio utility billing (RUB) services, which is applicable to deregulated utilities such as sewerand water. For the determination of payments for regulated utilities such as electricity and gas, the homeowner and potential resident of the ADU may mutually agree on a payment arrangement.
• Site-specific conditions require additional preparation during the design phase, such as a topographic study to account for the slope of the property. Consideration for property
  setbacks, the distance between the existing home and the ADU, resident access, and privacy should be studied and planned to avoid significant changes and additional time
  and cost during the construction period.
• The cost per square foot can be more than 25-35 percent higher than that of a typical single-family home.
• Unexpected cost overruns can be avoided with adequate preparation in the predevelopment phase.
• A contingency reserve of closer to 20 percent of estimated costs is recommended for ADUs.

4. Prepare for factors that can significantly impact the project’s timeline:

• Design phase:
  • Using permit-ready plan sets can reduce the overall time for the architect to prepare the plans for approvals. The architect will make modifications to these plans, as needed, to adapt these to the site.
  • Opting for a manufactured home will require minimal input from the homeowner’s architect, reducing the design phase costs and timeline.
• Permitting phase:
  • Homeowners may hire a permit expediter to help with faster processing of permits
• Construction phase:
  • A thorough site feasibility study during the design phase will account for site-specific considerations and help avoid unexpected delays and construction changes.
  • Weather and climate will impact the construction timelines.
  • Weather does not affect the assembly (construction) of manufactured units because they are created off-site; as a result, timelines are more reliable. Site preparation and unit delivery may still be delayed by inclement weather.

5. Consider manufactured units as an option to reduce time and cost per square foot without compromising quality or design.

• Homeowners should determine site feasibility, including any clearance needed for the delivery and installation.
• As with the permit-ready plans, this option includes a limited amount of involvement by the architect, which reduces costs.
• A manufactured unit requires the least on-site work and may be completed earlier than traditional units.
  § In the pilot program, this was due in part to weather conditions (rain) not affecting the manufacturing of the unit.
• During the selection of a manufacturer, include the same considerations as with selecting a general contractor, such as desired level of construction quality, whether the units are compliant with local building codes, if the units are solar-ready, along with personal preferences for the quality of finishes.
• Site preparation will be the same for manufactured units as with traditional units.