San Diego City Council Proposes to Limit Applicability of Successful ADU Bonus Program

The San Diego City Council voted on March 4, 2025, to begin the process of revising its Accessory Dwelling Unit (ADU) Bonus Program (ADU Bonus Program or Program), which has served, to date, as one of the state’s most innovative and successful local infill housing programs.

ADU BONUS PROGRAM BACKGROUND

While state law generally authorizes ADUs on all residential properties, the City’s ADU Bonus Program currently allows developments to exceed the ADU minimums specified by the state. To qualify under the Program, a project must be located a Sustainable Development Area, which is determined based on a site’s proximity to transit. After the state-mandated ADUs that are allowed by right (typically one detached ADU in single-family zones), qualifying projects may earn one additional market-rate (i.e., unrestricted) bonus ADU for each ADU that is restricted for low- or moderate-income households. Project scale is limited by the floor-area ratio and height limits imposed by a site’s base zone.

The City’s ADU Bonus Program has been praised as a successful housing incentive because it allows for increased density near transit to help the City achieve its climate and mobility goals, while requiring that about half of new ADUs be deed-restricted as affordable to lower or moderate-income households. The Terner Center for Housing Innovation at UC Berkeley lauded the Program’s success at producing missing middle-income housing without public subsidies. The Program earned the City a 2024 Ivory Price for Housing Affordability, a national award recognizing scalable solutions to housing affordability.

ADU BONUS PROGRAM REVISIONS

Unfortunately, the City’s ADU Bonus Program has faced opposition from single-family homeowners who were surprised to see additional housing in neighborhoods dominated by single-family homes. After a previous attempt to repeal the Program was marred by a potential Brown Act violation, the City Council considered the Program again on March 4, 2025, at the end of a marathon City Council meeting.

While the City Council stopped short of completely repealing the ADU Bonus Program, they instructed City staff to bring back an action item within 60 to 90 days to remove eligibility for the Program from lower density residential areas (i.e., zoning districts with a minimum lot size of 10,000 square feet or greater). The City Council also proposed to further modify the Program as outlined in a February 28, 2024, memorandum from the Planning Director as a part of the City’s regular 2025 Land Development Code Update process. These changes are expected to include eliminating the Program in Very High Fire Hazard Severity Zones as well as applying more stringent Fire Code standards to ADUs created through the Program, among other revisions.

These changes are meaningful locally because the ADU Bonus Program has generated a notable amount of development activity in some of the City’s least-dense residential zones. The Program revisions also are relevant at a state level because the City is currently a leader among large California cities in promoting infill development. Previous innovations, such as the City’s 50% density bonus and stacking of density bonuses, have been pushed by City legislators and adopted in state law.

IMPLICATIONS

The City Council’s actions to modify the ADU Bonus Program are surprising given the City’s history of proactively fighting the housing crisis by approving new housing development and implementing innovative strategies to encourage mixed–income projects. San Diegans who support new development remain hopeful that this is an isolated effort to reform, rather than kill, a successful program, and that this will not signal a changing tide against housing among elected officials in California’s second largest city.

Our firm is on top of the shifting ADU Bonus Program regulatory environment, and we have a leading understanding of evolving local issues more broadly. Please contact us if you need assistance navigating the local land use regulatory environment, particularly to develop new housing projects.