Why ADUs Are Booming in San Diego Coastal Cities: A Guide for Homeowners
Accessory Dwelling Units (ADUs) are gaining popularity in San Diego coastal areas, and there are many good reasons for this trend. Whether you want to create additional living space, generate rental income, or accommodate multi-generational family members, ADUs provide a flexible and cost-effective solution. In this guide, we will explore why ADUs are rising in San Diego, discuss their benefits, and provide information on how to start building one.
What Is an ADU?
An ADU, a granny flat, in-law suite, or backyard cottage, is a secondary housing unit on a single-family residential lot. ADUs can be detached (distinct buildings), attached (connected to the main home), or converted (e.g., from a garage or basement). In San Diego, ADUs are becoming a popular way to maximize property values and address the housing shortage.
Why Are ADUs Booming in San Diego Coastal Cities?
Housing Demand and Affordability
The San Diego housing market, including its coastal areas, has seen steady growth in recent years, with median home prices rising by 3.1% to approximately $937,000 as of December 2024. Coastal neighborhoods like La Jolla and Pacific Beach have experienced even higher price increases—5% and 4.5%, respectively—driven by high demand for oceanfront properties and desirable amenities. This consistent appreciation highlights the enduring appeal of San Diego but also underscores the growing affordability crisis.
Accessory Dwelling Units (ADUs) offer a practical solution to this situation, providing homeowners an affordable way to expand housing options on their existing properties. By leveraging ADUs, homeowners can address affordability concerns while contributing to the community's housing needs, without needing new land development.
Flexible Zoning Laws
In recent years, California has enacted laws to simplify and encourage ADU construction, offering homeowners benefits like streamlined permitting (AB 2533, SB 1077), increased ADU limits (SB 1211, AB 68), and no owner-occupancy requirements (AB 976). Pre-approved ADU plans (AB 434) and reduced restrictions on height, setbacks, and unpermitted structures (SB 897, AB 2221) make building easier and more affordable. These changes provide flexibility, financial opportunities, and support housing availability.
Multi-Generational Living
Given the rise in San Diego housing market, including its coveted coastal areas, ADUs provide a perfect solution for multi-generational living allowing families to create additional living spaces on their properties, offering privacy and independence for aging parents, adult children, or extended family members without the high costs of purchasing a separate home.
Increase Property Value and Rental Income Potential
Adding an ADU can significantly increase the value of your property. In San Diego’s competitive real estate market, homes with ADUs are highly sought after, making them a wise investment.
On the other hand, ADUs are a great way to generate passive income. An ADU can provide a steady revenue stream in an area like San Diego, where rental demand is high. Whether renting it out long-term or using it as a short-term rental (like Airbnb), an ADU can help offset your mortgage or provide extra cash flow.
How to Get Started on Building an ADU in San Diego
1. Research and Planning
Before starting, ensure your property complies with San Diego’s ADU regulations. This includes zoning laws, size restrictions, and parking requirements.
2. Obtain permits
Building an ADU in San Diego requires building, electrical, and plumbing permits. Each city’s Development Services Department handles these, and our team at SoHo Construction has extensive experience working with them to streamline the process and avoid delays. We’ll guide you through every step to ensure your project stays on track.
3. Hire a reputable contractor
Choose a contractor with experience building ADUs in San Diego. At SoHo Construction, we specialize in designing and constructing ADUs tailored to the unique needs of San Diego’s coastal areas. With years of experience navigating local permitting processes and building codes, we ensure your ADU is compliant and built to the highest standards of quality and craftsmanship. From concept to completion, we’ll guide you every step, making the process seamless and stress-free.
4. Plan your design
This is where your vision comes to life! Work with your architect or contractor to design an ADU that meets your needs and complies with local regulations. Selecting materials, finishes, and appliances is fun; having a contractor with strong industry connections can save you time and money. Our team keeps you in the loop during construction with a user-friendly communication platform. You can track progress, leave comments, and see real-time updates, ensuring everything meets your expectations.
5. Inspection and Certificate of Occupancy
Once construction is complete, the city will conduct a final inspection. If everything meets the code, you’ll receive a certificate of occupancy, allowing you to move in or rent out your ADU. Need help with renting? Our in-house Realtor and property management partners can assist with setting rental rates, lease agreements, and more.
Conclusion
ADUs are booming in San Diego for good reason—they offer a flexible, cost-effective way to add living space, generate income, and increase property value. Whether you want to build a detached ADU, convert your garage, or create a JADU, now is the perfect time to explore this growing trend.
