Simple Homeowner's Guide to San Diego Granny Flats

Simple Homeowner's Guide to San Diego Granny Flats featured image

August 15, 2019 / by Gregg Cantor / In In-law Suites

Since 2016, approved accessory dwelling units have increased 63 percent throughout California. With the loosened regulations and simplified permitting process that has trickled down to San Diego, you have the opportunity to maximize your property. Whether residents build in-law suites in San Diego or rental units onto their homes, it’s important to know the benefits and drawbacks of building a granny flat, as well as the ADU rules and regulations in San Diego.

Why Build an ADU in San Diego?

Southern California is seeing a huge rise in the popularity of accessory dwelling units - often referred to as “ADUs,” “granny flats,” “companion units,” or “in-law suites.” These living spaces can be attached or detached from your main dwelling, as long as there is a separate entrance and a few other amenities.

Communities and neighborhoods throughout San Diego County are following the state’s lead, and several municipalities are lowering and waiving ADU permit and inspection fees, as well as easing regulations to build accessory dwellings on owned property.

But what are the benefits of building a granny flat in San Diego? As with any home remodeling project, there are pros and cons to consider before building an in-law suite, but there are a handful of very compelling reasons why you should consider building an accessory dwelling unit in San Diego.

Rising Costs and Fewer Options

Homeowners in San Diego know that this area is an idyllic place to call home. Amazing year-round weather, tons of outdoor activities, a thriving craft beer and wine scene, and plentiful restaurants, bars, music venues, and family-friendly fun are just a few of the reasons that San Diego, known as “America’s Finest City”, is among the most desirable places to live in the United States.

Unfortunately, that popularity has played a significant role in San Diego’s housing shortage and steep cost of living. As part of an effort to address the housing shortage, the city of San Diego released a Housing Inventory Annual Report in June that found “roughly 30 percent of moderate-income households can’t afford rent in San Diego, and 70 percent can’t afford to own a home.”

With the housing shortage leading to increased prices and fewer options, several city building ordinances are being changed to incentivize residential development. Some of these incentive are affordable housing density bonuses, reduced parking requirements and waived fees for accessory dwelling units, also known as granny flats.

Potential Rental Income

Since the housing market is on fire in San Diego, adding an ADU to your existing property as a rental unit can be a great investment - if it’s done properly. Building a granny flat or ADU is a smart investment if:

  • You plan to own the home long-term and can rent it for many years.
  • You already own the land since the rent to cost ratio is very favorable.
  • There’s no owner occupancy clause forcing you to stay on the property.
  • You have home equity or access to capital to build or make improvements.
  • Building a granny flat is a good lifestyle fit.

While current regulations prevent homeowners from offering accessory dwelling units as vacation rentals (ADUs have a minimum 30-day lease), short and long-term renting is definitely an option. A 500-square-foot ADU in San Diego can generally earn around $1,600/mo in rental income. That’s money that can be used to pay down your mortgage, cover utilities and other household expenses, save for retirement, or spend on a vacation.

image of small single-story granny flat Photo: Kristaandrosie.com

Recent Homeowner-friendly Updates

In 2018, the City of San Diego made some significant changes that impact homeowners seeking to construct granny flats - many of them positively. These updates included:

  1. New Resources - City officials provide pre-approved ADU flat designs and instruction manuals to speed up construction.

  2. Wide-Ranging Fees - Location and granny flat type impacts fee costs. The fees range from $4,800 to over $80,000. The City of San Diego passed a waiver of development and impact fees, which saves local residents $17,000 on average.

  3. Fee Waivers - Encinitas homeowners who are building in-law suites up to 1,200 square feet can save approximately $3,500 in waived fees.

  4. Expanded ADU Size - In-law suites may be 1,200 square feet or 50% of the primary home’s size, whichever is less. This is up from 700 square feet. For example, if an existing house is 3,000 square feet, the attachment it can’t exceed 1,200 square feet in size.

  5. No Vacation Rentals - ADU rentals must have a minimum 30-day lease, which eliminates the granny flats from being used as short-term vacation rentals.

Additional Space for Family and Friends

Hosting out-of-town relatives, taking in aging parents, or welcoming college-aged children back home are all cases in which homeowners will definitely require more space. An in-law suite provides a comfortable, separate space for visitors, family, or tenants. Better yet, your backyard is closer, cheaper, and more familiar than a hotel or Airbnb across town.

Planning, Designing, and Building an ADU in San Diego

ADU Planning

Once you’ve decided that adding an ADU to your property is the right move, consider whether you’re interested in building an entirely new structure from the ground up or if you’d rather upgrade an existing dwelling unit or other structure. There are endless ways to take advantage of new regulations and improve your property value for decades to come.

But before you start picking out curtains and cabinets, let’s start with the basics. The first big decision concerns the type of ADU to be built on your property. There are three main types of ADUs:

  • Detached
  • Attached
  • Repurposed Existing

illustration of main ADU types Photo: Hausable.com

Detached units are standalone structures that are separated from the primary residence. An attached unit is built onto an existing residence and has its own private entrance, bath and kitchen. In many cases, this is the configuration you want if you plan to rent your in-law suite to a long-term boarder, since it maximizes both your privacy and theirs. However, you can also build an ADU adjoining your home, which is ideal if you plan to use this space for an elderly relative or additional living space. Above the garage, attics and basements fall under this category. An example of a repurposed existing unit is a garage conversion. This is a space within the primary house that’s converted into a unit for independent living.

Attached ADUs

The possible size of an attached granny flat is linked to the square footage of your main residence: your in-law suite cannot exceed 50% of the total floor area of your primary dwelling on the same property, and it cannot be bigger than 1,200 square feet.

For example, if the floor plan of your home is 2,000 square feet, your attached ADU cannot be larger than 1,000 square feet. You are able to design a smaller granny flat, of course, but that depends on your plans and the size of your lot. If your primary residence is 4,000 square feet, you are limited to an in-law suite of 1,200 square feet.

You must also provide an entrance distinct and separate from the main entrance to your house; ADUs are not considered additional rooms in your existing structure.

Detached ADUs

Detached granny flats also cannot exceed 1,200 square feet, but there are no rules that link the size of the floor plan to the square footage of the main building. Instead, you can choose whatever size footprint you want to meet your needs, as long as it doesn’t exceed 1,200 ft2. This option is especially alluring if you already own a detached garage or shed, and you want to enhance that structure with the addition of an in-law suite.

Repurposed Existing (Garage, Basement, etc. Conversion)

When a property is already outfitted with a garage or basement, property owners may choose to convert the entire structure or only part of it to an in-law suite. Either of these options are viable, as long as the square footage requirements are met, and the original floor plan does not change. In fact, it may be beneficial for you to add a second story to your garage and preserve the existing space the way it is. This is advantageous to homeowners who want to maintain their garage and yard space but still want to add living space to their property.

ADU Designing and Building

Hiring an Architect versus a Design-Build Firm

As you do your research and learn about building your granny flat in San Diego, you may decide that hiring a professional is the right choice for you. But what type of professional should you pick? You can take the scenic route and hire an architect to draw up the plans, then choose a contractor to do the work, and then pick a designer to put the finishing touches on the interior. Or, you can save hours and avoid the anxiety by hiring a design-build firm that does all of this in-house.

The design-build method is rapidly becoming the primary model for construction projects in the United States, outpacing architecture-led projects due to the efficient cost model, single point of contact, and cohesive team mentality. An architect can add thousands of dollars to a project, and they may require a percentage of the cost of the construction if you want them to oversee the work. Of course, the other option is to do the work yourself.

rendering of an accessory dwelling unit Photo: Propelstudio.com

DIY versus Hiring a Pro

If you decide to put your DIY acumen to the test, take heed of these warnings by the city of San Diego before you begin; the risk you carry is high.

The city will not issue a building permit until you first complete the Owner-Builder Declaration Form, which heaps liability onto you for choosing not to commission a licensed contractor. For example, if you fall off a ladder, crushed by a collapsing ceiling, electrocuted by a live wire, or if you cut off a toe with a saw, your homeowners insurance may not cover these injuries.

Moreover, if anyone helps you with this construction, and your entire project costs more than $500, you are considered an employer by state law. This is significant because you must register for an EIN with the federal and California governments, withhold taxes, provide disability insurance, and pay unemployment. Failure to abide by these rules will cost you - much more than you may be willing to pay.

Most importantly, the work you do building or upgrading your ADU will follow you years into the future. If you sell the property one day and the next owner is injured by your faulty workmanship or poor quality materials, you could be liable for those damages. If you decide to hire a design-build firm to handle this project for you, they will take care of the permits, the liability, and the stress.

San Diego ADU Zoning and Regulations

Property Qualifications

An ADU can be built on property that is zoned for a single-family residence. In some instances, granny flats may be built on some multi-family lots. It’s best to check with the City before building on the land. Additionally, to obtain a permit for a lot, it must be free of code violations. Here are a few additional facts worth noting:

  • San Diego ADUs are always rentable, but these units can’t be sold separately from the primary home.
  • ADUs only require a fire sprinkler system when it’s required for the main residence.
  • Owner-occupancy isn’t necessary for renting either primary homes or ADUs, unless you live in San Diego County.
  • Existing structures converted to CUs aren’t subject to water or sewer charges when it has the correct meter size.

Setbacks

Every structure must maintain a specific distance from a property line, curb or structure within a building. This is done for the purposes of environmental protection, privacy and public safety. The City requires that each ADU unit complies with the main property’s setback. In the case of a two-story granny flat, it must be situated five feet from the rear and side lot lines. However, existing permitted garages are exempt from this requirement.

Parking

Parking accommodations is another matter you must factor into your construction. San Diego parking regulations require that newly built granny flats provide .5 space for each bedroom, whether it’s an area in the driveway or tandem parking. If you design and build a new secondary dwelling, you must also add one parking space to account for the new living space.

If you convert a garage into a granny flat, you must provide a parking space for the new dwelling AND replace the off-street spots lost when you demolished or converted the garage.

Newly created parking spaces must measure at 8.5 feet by 18 feet.

However, there are some exceptions to this rule. You do not need to provide a parking space for your granny flat if:

  • Your property is within one half-mile of the MTS, a Breeze bus, waterfront shuttles or any other public transportation.
  • Your property is within the boundaries of an historic district.
  • Your property is located within a residential parking district.
  • Your property is located within one block of a car or bike share station.
  • Your companion unit is less than 500 square feet in floor area.

Zoning Info

San Diego’s city government maintains a very easy-to-read and comprehensive website replete with guides, tips, downloadable applications, and contact information. For the most efficient citizens who can’t wait to get started remodeling their granny flats, the building division office provides average wait times by the hour for each day of the week.

In any city, zoning regulations are often extensive and complex. San Diego’s zoning ordinance is published online, and it is recommended that you familiarize yourself with the sections most relevant to you. But if you don’t have time to peruse even the introductory section (at 102 pages of technical language, it’s not a casual read) you can contact the building division directly. Of course, you should contact your designer or builder for support as well.

image of modern ADU with wood siding and soffits Photo: Attomdata.com

ADU Costs, Fees, and Financing in San Diego

General costs to design and build an ADU in San Diego

  • Small ADU (200 - 600 sq.ft.) = $150,000 to $250,000
  • Large ADU (600 - 1,200 sq.ft.) = $250,000 to $350,000

There are usually additional fees associated with building an ADU that vary by city. These fees include licenses, taxes, utility fees & upgrades, city required upgrades such as sidewalks and driveways, etc.

As an example, a recent 1,200 square foot detached ADU that Murray Lampert build for a homeowner in Point Loma had fees totalling around $3,500.

In addition to the design and construction costs of a companion unit in San Diego, the city imposes several fees and taxes, which can change year-to-year. For fiscal year 2018-2019, the city requires the following fees for accessory dwelling units:

  • Plan Review Fee: $1,490 + $0.315/sf
  • Permit Fee: $1,222 + $0.411/sf

These fees each have a base cost plus an additional cost depending on the size of your ADU. Therefore, you will pay 31.5 cents per square foot extra for a plan review, and 41.1 cents per square foot extra for the permit itself. For example, if your granny flat is 500 ft2, you will pay $157.5 on top of the base fee of $1,490 for a plan review, and $205.5 on top of the base fee of $1,222 for the permit. Your total cost will be $3,072 for the plan review and permit.

Permits have a built-in expiration date, and require renewal after a predetermined amount of time. Permits also require inspections every 180 days, and a failed inspection will force the expiration of your permit and delay your ADU remodel. Moreover, you will be charged extra if the city building official must inspect your property after normal business hours, or if you submit an expedited permit request.

ADU Taxes

In San Diego, taxes cannot increase more than 2% annually. However, your property will be reassessed when your new construction is complete, just as it was when you first purchased the home. Since adding an ADU to your property will increase its value, you can expect your taxes to increase as well.

ADU Financing

Unless you plan to pay cash to build your new in-law suite, this major home improvement project will need financing. Since architects and design-build firms generally don’t provide their own financing for projects like these, you’ll have to search elsewhere to get the funds you need.

As a homeowner, you’re probably familiar with interest rates. A home equity loan is a popular choice among San Diegans looking to build an ADU on their property. There are numerous financial institutions (major banks, online lenders, and credit unions) that offer a variety of rates and options for financing your granny flat. Many banks also offer personal loans, and savvy homeowners can consolidate and refinance these personal loans into one mortgage with a good interest rate when the accessory dwelling unit is complete.

Furthermore, If you are 62 years of age or older, you are eligible to take out a reverse mortgage against your home equity. It is widely recommended that you thoroughly research this option before you decide on getting a reverse mortgage to finance your ADU.

What Else Can I Do With My ADU?

Alternative Uses for an ADU

Not all San Diegans build an ADU on their property to earn an income or house family and friends. In fact, many residents who build a granny flat to house family members and friends eventually decide to redesign this space when it’s no longer used for this purpose. But not everybody is interested in having tenants living on their property.

Consider this: upgrade your ADU into a home gym. You can reap the benefits of daily exercise in the peace and quiet of your own home; and with these features included in your remodel, you may end up moving in full-time.

Your Gym, Your Way

Not all people exercise and train the same way. Some of us prefer high-intensity resistance training with weights and barbells; others prefer endurance and cardio training. And let’s not forget those of us who prefer a calm environment for yoga, pilates, barre or other body weight movements. There are thousands of design ideas available online no matter what type of workout oasis you want to build. Here are a few to consider as you redesign your ADU to accommodate a home gym:

  • Concrete Walls - If you’ve ever tried to mount a TV on drywall, you already know why you need concrete walls to hang heavy barbells, weights, medicine balls or pull-up bars. Concrete walls give you the opportunity to use the wall itself as a fitness element.
  • Glass Exterior Walls - Conversely, you may decide that you prefer a view as you ride your Peloton or jog on your True Form. With tempered glass walls, you can maintain the security of your building without feeling confined to a box.
  • Foam or Rubber floors - Whether you intend to drop heavy weights or stretch out in bridge pose, you need to consider what type of flooring will give you the best combination of utility and aesthetics. This is an easy DIY project; even Home Depot carries interlocking mats that you can install yourself.
  • Surround Sound - Look to Bose or Sonos for the highest quality home gym surround sound systems. By placing Bluetooth speakers strategically around your fitness area, your tunes will follow you wherever your workout takes you.

Adding Self-Care Elements

An ADU in San Diego must include a kitchen space, sleeping space, and bathroom space. When you convert your granny flat into a workout studio, you can intentionally upgrade these elements to support your health and wellness.

Install sound-dampening panels in the bedroom to control exterior noise so you can get a deep post-workout rest. Add a natural stone shower and a corner bathtub to your bathroom to help you relax and recover. Depending on the layout of your ADU, you could add an island to increase your counter and storage space. Contemporary kitchen islands are chock-full of gadgets and technology, too; height-adjustable counters, secret spaces to hide your appliances, and even touch screens embedded in smooth surfaces.

Building a Smart, Sustainable ADU

image of solar panels on an ADU Photo: Urdesignmag.com

Go Solar

San Diego is ranked second in the United States for harnessing solar energy. With all this sunshine, why not take advantage of the long-term cost savings? And now that you have a granny flat in your backyard, you have even more roof capacity to accommodate photovoltaic cells (or PV cells), which are commonly called “solar panels.”

Costs: Fees, Permits, and More

The city of San Diego is currently waiving the cost of checking plans and issuing building permits to install photovoltaic cells on your property. There is one stipulation, according to the city’s website: “Fees for residential solar PV building permits could be incurred if the Department of Environmental Health and/or the Department of Public Works need to review the building plans. This is typically only required for ground mount solar PV.”

Savings: Calculate What You Can Save

We all know that supporting renewable energy providers is a good investment for the globe and the Southern California environment, but making the switch to solar can also be good for your bank account. While the up-front cost can be high, homeowners can expect to earn back what they’ve spent, and many even make money long-term. San Diego has partnered with several banks to provide options to homeowners who want better terms than you’d normally get with a home equity loan.

There are many factors to consider when deciding whether or not to install solar panels on your property. For example:

  • Can you afford to install solar panels? Can you acquire a home improvement loan to cover your new granny flat installation as well as a photovoltaic system?
  • Will you install PV cells on your roof, or somewhere else on your property?
  • Is your property in full view of the sun, or do trees or other topographic elements get in the way?
  • Is your available roof space (more if you include your granny flat) enough to accommodate an adequate number of solar panels to make your investment worthwhile?

Talk to your solar installer or your design-build team to find out what other factors you need to consider. If you want to be prepared for a conversation about financing, there are many cost estimators available online to help you determine the cost of purchasing the system as well as your energy savings over the life of the cells.

ADU Automation

illustration of cellphone being used to control home automation processes

Upgrading your ADU in small ways can have a big impact on not only your day-to-day living, but the amount you can earn from renting your granny flat to a tenant or boarder. Once your ADU is designed and built, consider adding these easy tech projects to your DIY list.

Smart Power Outlets

Only a handful of people reading this might remember a time when power outlets only accepted 2-prong plugs. Now, power outlets have advanced way beyond the need for traditional pronged plugs; instead, you can plug USB cords directly into wall outlets to charge all your handheld devices. Or, if you are searching for a more autonomous home, look for (or ask Google or Amazon to look for you) a smart-outlet that you control with your smartphone.

Smart Circuit Breakers

As with old 2-prong wall outlets, gone are the antiquated fuse boxes that were once ubiquitous in homes across the country. Circuit breakers replaced fuse boxes, which removed the need to install fuses and instead relied on electromagnetism to prevent power overload. Now, the next step in electrical control is here: [smart circuit breaker(https://www.economist.com/science-and-technology/2017/11/23/smart-circuit-breakers-for-energy-efficient-homess]. You can also monitor and control these home automation devices via your smartphone. You can cut the power to your granny flat to save money, monitor the power consumption of your ADU to help determine cost of utilities for tenants, or predict your upcoming electric bills.

Smart Doorbells

Remember when you had to creep up to the front door and peek through the peephole without making a sound just to see who was knocking? Now you can see your visitors in glorious high-definition from wherever you are in the world. With devices like Ring and Google Nest, you can see, hear, and interact with people at your front door. This is an ideal choice for semi-empty-nesters whose grown children have relocated into the granny flat in the back - next time they Uber home and forget their keys, you can let them in without leaving the comfort of your bed.

Motion Sensors and LEDs

Finally, if you still use incandescent bulbs, it’s time to get on the LED bandwagon. This inexpensive technology will give you infinite interior design options, including mood lighting both in your home and in outdoor spaces like pools and ponds. But most importantly, when paired with motion sensors, putting LEDs in your home and in your ADU will save you money.

San Diego granny flats are a hot trend that many homeowners are taking advantage of. Changes in the ADU rules and regulations make maximizing your property an easier and faster process. If you need a trusted company for your ADU construction project, contact Murray Lampert Design, Build, Remodel. We’re ready to put our 40 plus years of experience to work for you.

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