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City Council Creates New Incentive to Build More Affordable ‘Granny Flats’

Updated: Aug 10, 2023

City Council Creates New Incentive to Build More Affordable ‘Granny Flats’

The San Diego City Council has created a new incentive to encourage construction of accessory dwelling units that are rented to very-low-income tenants.

The council on Monday unanimously approved a change to the “granny flat” rules that shortens that period homeowners building a second unit must maintain it as affordable housing.

Under current state law, any single-family home can have one accessory dwelling unit. A second unit can be built if it is for low-income tenants.

For very-low-income tenants, the council shortened the time period that rent must be controlled on the second unit from 15 years to 10 years. The shorter deed restriction gives homeowners and property developers more flexibility if they need to sell or move after building the units.

“We must use all the tools in the toolbox to create more affordable homes for San Diegans amid our housing crisis,” said Council President Sean Elo-Rivera. “This Accessory Dwelling Unit Bonus Program amendment will incentivize home builders to create opportunities for low- and very-low income people and families to live in a new ADU which may be closer to their jobs and in communities with more resources available to them.”

The 10-year restriction applies if the unit is rented to a tenant earning less that 60% of the area’s median annual income, or under $40,000.

The 15-year restriction still applies to tenants making more than that, up to 110% of the median income, or about $73,000.

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