San Diego’s Bonus ADUs Are Not Affordable

By Danna Givot / June 9, 2025

San Diego’s Bonus ADU program is not producing truly affordable accessory dwelling units. Even worse, it is making single-family homes more expensive.

Let’s start with the single-family homes that developers are buying up for their high-density Bonus ADU projects. They prey on starter homes, especially smaller homes on larger lots where they can build the most ADUs for the lowest investment. The developers are willing to spend more than a first-time home buyer can afford because they are valuing the property based on its investment potential, which is the maximum rent they’ll charge for those studios and one-bedroom units.

These developers – often backed by out-of-town investors – offer cash up front for the property, while most home buyers need a mortgage, which requires time-consuming inspections, appraisals, and lots more paperwork for the seller.

Almost invariably, the developers secure the property, and the market reflects these new, higher prices for future buyers.

Meanwhile, the inventory of starter homes is reduced because these single-family homes are permanently taken off the market and converted into ADU apartment complexes, which limits homeownership opportunities.

Now let’s explore the so-called “affordable” ADUs. Almost all the ADUs built under San Diego’s Bonus ADU Program are deed-restricted at 110% of area median income (AMI) for only 15 years. In San Diego, that’s $130,800 a year for a family of four – it’s a lot of money.

So what are the rents for these “affordable” ADUs?  A studio rents for up to $2519/month; a 1-bedroom for up to $2878/month; and a 2-bedroom (if you can find one) for $3238/month.  These rents include utilities, but they have solar, and they are small – most studios and 1-bedrooms are between 450 and 500 square feet – so utility costs are relatively low.

These rents just increased by more than nine percent.  Next year at this time, they will likely go up again based on the increase in San Diego area incomes.

How do these rents compare to market-rate rents in San Diego? In the first quarter of 2025 (January through March), an average studio rented for $1794; a 1-bedroom for $2126/month; and a 2-bedroom for $2600/month.  The “affordable” ADUs, even when you take into consideration that they include utilities, are vastly more expensive than the average market-rate apartments in San Diego.

The so-called “affordable” ADUs rent for $638 to $752 more per month than the average market-rate apartments of the same size.  If you subtract a generous $150/month for utilities, these “affordable” ADUs still cost approximately $500 to $600 more per month than the average market-rate apartment of similar size in the San Diego area.

Bottom line, these deed-restricted “affordable” ADUs at 110% AMI are not “affordable housing.”

One must ask why the City of San Diego is cramming these out-of-scale backyard apartment complexes with dozens – up to more than 100 — ADUs into single-family neighborhoods, when they don’t even produce affordable housing.

Who is this really helping?  Developers! Yes, it is producing more housing units, but these ADUs are too small to house families, which is the kind of housing we need most according to San Diego real estate consultants London Moeder Advisors.  These apartment complexes belong in multifamily zones, where they will be regulated by multifamily zone and fire codes; and have property managers onsite, sufficient parking, and access to transit.

Our Mayor and City Council must open their eyes — and their minds — to these stark failures of the Bonus ADU Program, rein it in, and impose the sensible and much-needed “guardrails” suggested by the Planning Commission, the Community Planners Committee and Neighbors For A Better San Diego.

Danna Givot is vice chair of Neighbors For A Better San Diego and lives in El Cerrito.