Developers Building ADUs Could Be Responsible for Huge Slowdown in San Diego Apartment Construction

by on August 31, 2023 · 24 comments

in Ocean Beach, San Diego

San Diego Axios, a brand new online daily platform for the metro region, is reporting that ” developers taking advantage of recent city policy changes meant to spur accessory dwelling unit production could be part of the decline” in San Diego’s apartment construction this year.

Let’s grab a hold of this statement from Elyse Lowe, director of San Diego’s development services department, reported by Andrew Keatts — but this seems significant.

The whole point of the city’s push for ADUs was to increase development of in-fill small houses to alleviate San Diego’s crisis in housing. For the last several years, ADU construction has been given the green light by the development services department – and local community planning groups no longer have much discretion in reviewing them. Parking requirements were eliminated, sideyards decimated – all to allow more ADUs.

Now, the city is conceding that the rush by developers to build ADUs has probably resulted in a glut of new permits, and in the process has drastically slowed down the building of multi-unit apartments.

First, did you know that developers have built less than half of the apartments the first half of 2023 than they did last year during the same period?

Keatts reports:

“Developers broke ground on buildings with 1,150 apartments in the first half of 2023, according to new data from CoStar, a real estate information company. That’s down from 3,031 during the same period last year….

The crash in homebuilding will only exacerbate a long-running regional housing shortage.”

According to Joshua Ohl, a San Diego analyst for CoStara, real estate information company, projects within the permitting phase run into substantial problems prior to the start of construction because of how long permits take to get final approval. Keatts quotes Ohl:

“With the rapid rise in costs for labor and materials, projects that are penciling at the beginning of the permitting phase, by the time they get permits approved, they no longer pencil out.”


Lowe said developers taking advantage of recent city policy changes meant to spur accessory dwelling unit production could be part of the decline.

“The infill development community is small and there are only so many projects they can do at once,” she said. “We’re going to review as many projects as we did last year, but we’re going to get fewer units.” …

“It does stand to reason that as the city converts to more infill, and smaller projects, that there would be a slowdown,” said Keely Halsey, assistant DSD director. “It’s just a different layer of complexity for those projects, and then you get fewer units out of them.”

In January, the city brought in private contractors to help clear a lengthy permit backlog. [Lowe] told Axios the city will clear that backlog in two months.

Oh, the city, the city, the city.



{ 24 comments… read them below or add one }

Zack August 31, 2023 at 6:16 pm

So rather than blaming ADUs shouldn’t this article propose that the city increase its capacity to review permits?


Zack August 31, 2023 at 6:31 pm

Seriously this is so disingenuous and leaves out what the rest of the article talks about which is not really blaming ADUs.

This is verbatim from the article:
Lowe said the best thing the city can do to combat the downturn is approve permits on a predictable timeline. In January, the city brought in private contractors to help clear a lengthy permit backlog.
She told Axios the city will clear that backlog in two months.

Seriously OB Rag I know you guys aren’t fans of ADUs or housing construction generally but stop cherry picking.


Frank Gormlie August 31, 2023 at 7:09 pm

The Rag chose to emphasis what was important from the article. Just because the original reporter soft-pitched the point, it’s not cherry picking to discuss and try to understand its significance. From the post:

““It does stand to reason that as the city converts to more infill, and smaller projects, that there would be a slowdown,” said Keely Halsey, assistant DSD director. “It’s just a different layer of complexity for those projects, and then you get fewer units out of them.”

In January, the city brought in private contractors to help clear a lengthy permit backlog. [Lowe] told Axios the city will clear that backlog in two months.”


DiegoK September 1, 2023 at 8:20 am

The untold story of the Bonus ADU program is who got in Kevin Faulconer’s ear to propose this unvetted and impactful policy change in the first place. This right around when he came out as a YIMBY, which he later abandoned when running for Governor during the Newsom recall campaign.

The City’s ADU program deviates from the state’s ADU minimum which calls for a 16′ height limit, and I believe three or six foot setback at the property line. The City opted for 30′ and zero set back, then added in incentives to build more than one unit and tossed in waived/reduced impact fees.

It’s unbelievable that the Council approved this major change on consent.

It would be nice if the UT or another publication could go back and review Faulconer’s emails on this topic, it would tell us a lot.


Zack September 1, 2023 at 9:42 am

I’d say the untold story of the ADU program is that Mayor Faulconer empowered property owners to do what they wished with their property without their busybody neighbors having a say.

The OB Rag may not like that which I think makes the case that it doesn’t believe in people’s private property rights. I’d hate to have to get my neighbor’s approval to build on MY property and frankly I can’t imagine the readers of the Rag would like it either if it happened to them.


Frank Gormlie September 1, 2023 at 10:02 am

For decades if not more, there have been reasonable limitations on what a private property owner can do with their residential site(s). It’s legitimate that communities have a say in what is built in their neighborhoods. For instance, it’s not legal to build an animal skin tanning business within your residential property. Nor can you set up an 80 foot antenna or flag pole or build above the 30 foot height limit in the coastal zones of SD. Nor can you install a 12 foot fence around your lot. There’s lots of limitations, Zack, so welcome to the current world.


Zack September 1, 2023 at 3:11 pm

Welcome to the current world? Or welcome to everything west of the 5 in city limits? Most places in the world don’t have as many arbitrary buildings restrictions as we do.

Not sure why you’re bringing up an animal skin tanning business. That would be unreasonable. An ADU is totally within reason. Don’t think so Frank? Ask the thousands of Californians statewide who are building them. Are they all greedy developers? Or are they primarily law-abiding property owners looking to increase the value of their property?

Just because you live in a neighborhood doesn’t mean you can control what everyone else in it does. You don’t like the ADU or condos being built down the street? You have the right to sell your property and move to a place where that isn’t happening.

People deserve to enjoy a reasonable degree of freedom in life. The OB Rag has made a point to consistency oppose reasonable freedom from other people’s tyranny regarding land use and housing. It’s unfortunate


Frank Gormlie September 1, 2023 at 4:18 pm

Zack – in brief, that’s bullpucky. Your freedom to swing your arms, as they say, stops at my nose. Your reading of the Rag’s history turns reality and our views upside down.


Zack September 1, 2023 at 5:36 pm

Bull pucky? Who the hell even says that? More importantly, what do you mean by the swinging arms remark? Someone swinging their arms would indeed injure you if they hit your nose, hence why it would be reasonable to prohibit people one from hitting you.

Building an ADU on the other hand doesn’t hurt anyone, unless of course we count one’s wounded asthetic preferences as harm. Conflating this with physical injury is strange and I can’t imagine most reasonable people agreeing.

You may not like how your neighbor’s ADUs look but they aren’t hurting you. Continued opposition to people’s property rights does much more harm.


chris schultz September 5, 2023 at 2:49 pm

Building an ADU on the other hand doesn’t hurt anyone

Disagree there. More people, less space, no additional parking, less privacy by height, infrastructure fees omitted, less ownership, more rentals where people don’t have a vested commitment to the neighborhood. I was fine with the old rules before the current construction rules changes.

Also 2019 rules were in place until the end of last year so permits were likely filed intentionally before the new year to no have to update to the current codes. I’ve heard of 9 months for a permit in some cases.


Gs3463 September 1, 2023 at 8:27 pm

Thanks Frank for defending the middle. So easy for extremism to throw up “I should be able to do anything I want. To hell with my neighbors “ arguments. We all live together in community. We don’t always agree and the restrictions “west of 5” are certainly more strict than Miami Beach – but it has led to our unique community and I think OTHERS should move away if they don’t like it


DiegoK September 2, 2023 at 10:33 am

Zack – You sound like the guy who protested seat belt laws because no one should be able to tell you what to do in your car.

Or the person who whined about smoking bans in restaurants because no one should tell you what to do with your body when you are having a meal. If other customers don’t like it they can move or eat somewhere else…


Zack September 2, 2023 at 12:30 pm


On the contrary I think this comparison is disingenuous. Car accidents and second-hand smoke harm other’s health. ADUs DO NOT.

Sure, I may be making a superficially similar argument but substantively these are entirely different issues. Hey if you think I’m wrong then why don’t you explain to me how ADUs harm people’s health?


Mark nasman September 3, 2023 at 5:54 pm

“I’m just asking” … read the article


Ramoaner September 3, 2023 at 5:56 pm

“I’m just asking” … read the article


Susan Baldwin September 4, 2023 at 2:20 pm

Zack – Do you think building nine “ADUs” behind a house in Normal Heights on an 8,000 square foot lot (54 du/ac) in a Very High Fire Risk Area (the exact location of the 1985 Normal Heights (NH) fire that destroyed 76 houses and damaged 57 others) is good planning and that it would not have the potential to harm people’s health? That is exactly what is planned on a lot in NH (and will be planned on others). The lot is 9/10 of a mile from two local bus stops, and in an SDA (Sustainable Development Area). Oh and no parking will be required. As a former city planner and current housing and climate advocate I believe that the state requirement to allow two ADUs per lot absolutely makes sense, but in my opinion nine “ADUs” on the aforementioned NH lot, and 130+ “ADUs” proposed on a lot in Encanto will cause more problems than will be solved.


Paul Webb September 4, 2023 at 11:53 am

Okay, let’s skip the animal skin tanning business, but let’s talk about real City of San Diego land use policies. For years, the city had a “Residential/Industrial” land use and zone category in Barrio Logan. You could literally build a chrome plating business next to a single family residence (if you don’t know about the hazardous chemicals associated with plating, the movie “Erin Brocovich” was about chromium6, which is one of many very toxic by-products of plating). Now, that zone is gone. Land use tyranny or good land use policy? I guess it depends on whether you own a plating firm or live next door.

This is an extreme example, but it is a real example of the City’s indifference to the needs (and health!) of its citizens. ADUs will not have the same extreme impact as plating companies, but a very real impact on quality of life.

Land use “tyranny” was approved by the supreme court in its Euclid v. Ambler decision almost 100 years ago (1926) as a legitimate use of municipal power, saying that you don’t put a pig in the parlor.

You, on the other hand, have the right to sell your property and move to a country (Haiti? Somalia?) where you can build whatever you want wherever you want it. Your choice.


Paul Webb September 5, 2023 at 9:54 am

I forgot to add Houston to the list.


Sal September 1, 2023 at 12:37 pm

Weird to read this article as something this website is concerned about. Shouldn’t the comment section of the OB Rag be overjoyed by this slowdown? You’re all getting exactly what you want – less housing!


chris schultz September 5, 2023 at 2:59 pm

No, planned building like apartments actually near transit will work better than ADU random infill that’s farther than .5 mile to transit. Developers want profit. Owners want profit. This enchilada started by the city was pitched as a trojan horse for affordable housing.


nostalgic September 5, 2023 at 2:27 pm

Paul Webb is talking about changes in San Diego that are NOT happening everywhere in California, where people drive cars and expect to live in their homes without an apartment building or hotel next door with no height limits and no places for those people to park their cars, and so expensive that it takes at least 3 people or couples living together to pay the rent on affordable units. That is the new San Diego. Welcome! Yes, it does matter to OB.


Octavian September 6, 2023 at 9:43 pm
sealintheSelkirks September 7, 2023 at 3:56 pm

The only way to get more housing quickly is to cancel all STVR ownership, while ending the Wall St./corporate entities and the very wealthy millionaires/billionaires ability to buy it all up at incredibly inflated prices that do nothing but increase their stock dividends while impoverishing the rest of us. This includes foreign investors and their facades that hide what they are doing by parking excess money in the US housing market.

That likely would drop the price across the board of home ownership and rents because there would be an incredible glut of available housing instantly for working people who can hardly afford to rent at this point. Imagine what wonderful shift that would be!

Of course that means a huge drop in property taxes which will make the politicians scream because they’ll be forced to deal with less revenue and lower wages and less blatant bribery (campaign contributions)…and doesn’t that break one’s heart?

I think dealing with that is much better than the alternatives we are already seeing happen.



sealintheSelkirks September 27, 2023 at 5:05 pm

Look, NYC is breaking Airbnb:

New York is breaking free of Airbnb’s clutches. This is how the rest of the world can follow suit

Could this become a model to bring back thousands of long-term rentals to San Diego? Does anybody care at City Hall?



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