Stacked Units using San Diego ADU Bonus Program
Hidalgo Avenue, San Diego, CA 92117
Homeowner Story: Generate rental income
Special Circumstance: Multiple ADUs
Building a Duplex ADU with San Diego’s Bonus Program
Utilizing a special program to build a bonus ADU in San Diego, this investor stacked two 1200 sqft ADUs to create this two-story unit. Our Snap Standard 3BR/3BA 1200sqft L-Shaped plan is being used for both units to offer symmetry between the two rentals. Minimal modifications were made to the units to ensure the building is as cost-effective as possible. This client is a busy professional who was looking to be hands-off for the project, which is being built on one of his rental properties.
Strategic Design for Cost-Effective Development
For homeowners considering multiple ADUs, strategies like stacking units or building duplex-style ADUs can optimize space while staying within regulatory guidelines. These approaches work especially well on multifamily or larger single-family lots.
However, it’s important to account for the cost implications of building multiple units. Consider economies of scale, fire rating requirements, and additional access points. Also, plan for added utility expenses including water, sewer, gas, and electrical connections which can impact total project cost.
Affordable San Diego ADU Bonus Program
The Affordable ADU Bonus Program offers a valuable incentive for developers. For every ADU restricted to moderate-income households for 15 years or low-income households for 10 years, property owners can build an additional market-rate ADU.
Key points of the Affordable ADU Agreement include:
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Restrictions on renting to related individuals, student dependents, property owners, or tenants with liquid assets exceeding 110% of the Area Median Income
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Design requirements that ensure affordable ADUs match the size and amenities of the market-rate units
This promotes consistency and quality across the development while increasing access to affordable housing.
By stacking units and leveraging San Diego’s bonus program, this investor has created a highly efficient and profitable duplex ADU — one that meets both financial goals and community housing needs.
Floor Plan:
3BR/3BA 48×31 L-Shape
Community:
The City of San Diego ADU Guide
With more than 70 ADU projects completed or in progress throughout the City of San Diego, we’ve seen firsthand how the city’s regulations create opportunities that are not available in many other jurisdictions.
One of the biggest differentiators is San Diego’s Affordable ADU Bonus Program, which allows qualifying properties to add multiple ADUs when some units are rented at affordable rates. This has made San Diego a leader in ADU development and has opened the door for homeowners and investors to create additional housing beyond what is typically allowed under state law.
In 2025, the city became the first jurisdiction in San Diego County to adopt AB1033, allowing qualifying ADUs to be sold separately from the primary residence. As of June 2026, only the County of San Diego and the City of San Diego have adopted AB1033.
San Diego also offers significant flexibility in the types of ADUs that can be built. The city allows two-story ADUs, ADUs with garages, ADUs with guest quarters, ADUs with rooftop decks, front yard ADUs, and stacked ADUs for multi-unit projects. We’ve worked on all of these project types throughout the city.
Another unique aspect of San Diego is its setback regulations. Many single-story ADUs can be built with 0-foot side and rear setbacks, creating opportunities on properties where space is limited. However, building too close to property lines can trigger additional fire-rating requirements and construction challenges, which is why thoughtful site planning remains critical even when the regulations appear flexible.
San Diego ADU Permitting
Most ADU permits in the City of San Diego are approved within approximately 3 to 5 months after submission, although timelines vary depending on project complexity and city workload.
Compared to many other jurisdictions in San Diego County, the City of San Diego has some of the highest ADU permit fees. Permit costs often range from approximately $26-$28 per square foot, though smaller ADUs under 500 square feet can benefit from reduced fees closer to $14 per square foot. We maintain a detailed breakdown of City of San Diego permit fees, including plan check fees, building permit fees, impact fees, and inspection fees, in our ADU permit fee guide.
Approximately 10% of our City of San Diego projects are located within the Coastal Zone. While coastal properties often raise concerns for homeowners, many ADUs qualify for exemptions from Coastal Development Permit requirements under the City’s updated Local Coastal Program. Learn more about building an ADU in the Coastal Zone.
Working with an experienced ADU builder helps identify potential permitting requirements early and creates a more predictable path through design and permitting.
