San Diego, known for its stunning coastline, vibrant culture, and thriving economy, is facing a critical issue: a significant supply and demand imbalance in its housing market. As the city experiences robust population growth and limited housing availability, this imbalance presents a unique opportunity for developers to address the housing crisis. In particular, San Diego’s Bonus ADU Program, combined with the rising popularity of high-density accessory dwelling units (ADUs), offers an ideal avenue for developers to contribute to the solution. This article delves into the supply and demand dynamics in San Diego, explores the benefits of high-density ADUs, and highlights how developers can leverage the Bonus ADU Program to make a positive impact.

Understanding the Supply and Demand Imbalance in San Diego

2022 Annual Report on Home October Updates

A. Population growth and housing demand

  • San Diego’s desirable attributes attract residents: San Diego’s beautiful weather, coastal location, and diverse cultural scene make it an appealing place to live, leading to an increased demand for housing.
  • Job market and economic growth as driving forces: San Diego’s strong job market and thriving industries, including biotechnology, defense, and tourism, attract individuals seeking employment opportunities, driving up housing demand.

B. Limited housing supply

  • Geographical constraints and land scarcity: San Diego’s limited available land due to natural barriers like the Pacific Ocean, Mexico to the south, and mountains restricts the ability to expand geographically and build new housing developments.
  • Zoning regulations and density limitations: Strict zoning regulations in San Diego often prioritize low-density residential development, like suburban neighborhoods, making it difficult to build higher-density housing options such as apartments or condominiums.
  • High construction costs and lengthy approval processes: Factors such as labor expenses, materials, and complex approval processes contribute to higher construction costs in San Diego, discouraging developers from building new housing units.
  • Implications of the housing shortage on affordability and homeownership rates: Limited housing supply leads to increased prices, making it challenging for many residents to afford homes or enter the homeownership market, exacerbating the affordability crisis.
2022 Annual Report on Home October Updates

The Rise of High-Density ADUs as a Viable Solution

A. The concept of ADUs

  • Definition and types of ADUs: Accessory Dwelling Units (ADUs) are additional residential units on a single-family property and can include detached structures, converted garages, or basement apartments. Since the vast majority of San Diego is zoned for single-family, this provides a massive opportunity to increase density across the board.
  • Benefits of ADUs for communities:ADUs can help address housing shortages and promote community integration. The only way to reduce the cost of housing is to build more housing, and with the limited supply of vacant land, ADUs provide one of San Diego’s only options for increasing supply and reducing the rise in housing costs.

B. High-density ADUs: Meeting the demand for increased housing density

  • Exploring the advantages of high-density ADUs: High-density ADUs maximize land use by incorporating multiple units on a single property, increasing housing density and accommodating more residents in limited space. When ADUs were first introduced in 2017, it was intended for adding 1-3 units to a single family home. High-density ADUs involved adding 4-30 units to an existing lot, and in some cases, even more.
  • Maximizing land use and addressing population growth:High-density ADUs help utilize available land efficiently, offering a practical solution to population growth and increasing housing supply without expanding geographically.
  • Design considerations and architectural innovations for high-density ADUs: Creative design approaches like modular construction, smart space utilization, and vertical designs enable high-density ADUs to provide comfortable living spaces within limited footprints.
    Balancing privacy and livability in dense urban environments: High-density ADU designs often incorporate privacy features such as separate entrances, outdoor spaces, and soundproofing measures to ensure a comfortable living environment in densely populated areas.
2022 Annual Report on Home October Updates

Unveiling San Diego’s Bonus ADU Program

A. Overview of the Bonus ADU Program

  • Objectives and incentives for developers:
  • Expediting the ADU approval process
  • Relaxing certain zoning requirements

San Diego’s Bonus ADU Program provides incentives and streamlines the approval process for ADU development, allowing developers to expedite projects and benefit from relaxed zoning requirements.

B. Leveraging the Bonus ADU Program for high-density ADU development

  • Key features of high-density ADUs under the Bonus ADU Program
  • Accessing financial incentives and grants for developers
  • Case studies showcasing successful high-density ADU projects in San Diego
  • Community engagement and collaboration in high-density ADU developments

The Bonus ADU Program allows for increased floor area ratios (FAR), reduced setbacks, and parking requirement waivers, enabling developers to construct more units in a single property.

2022 Annual Report on Home October Updates

The Opportunities for Developers in San Diego

A. Addressing the housing shortage with high-density ADUs

  • Increasing housing supply and meeting diverse needs
  • Providing affordable housing options for residents

Developers may be eligible for financial incentives, grants, or low-interest loans provided by the city or state to encourage the construction of affordable and high-density ADUs.

B. Contributing to sustainable and inclusive communities

  • Embracing sustainable design and energy efficiency in high-density ADUs
  • Promoting transit-oriented development and reducing traffic congestion
  • C. Building partnerships with local government and stakeholders
  • Navigating regulations and streamlining the development process
  • Incorporating community input and addressing concerns
  • Showcasing the social and economic benefits of high-density ADUs
2022 Annual Report on Home October Updates


San Diego’s supply and demand imbalance in the housing market has created an opportune moment for developers to make a substantial impact. With the rising popularity of high-density ADUs and the support offered by San Diego’s Bonus ADU Program, developers have the tools and incentives to meet the growing demand for housing while maximizing land use and fostering sustainable communities. By embracing this opportunity, developers can play a crucial role in alleviating the housing crisis, enhancing affordability, and shaping a more vibrant and inclusive San Diego for generations to come.