Granny flat construction continues surge in San Diego despite pandemic

The number of new granny flats approved and completed in San Diego continued its upward surge in 2020, despite the COVID-19 pandemic.

New city data shows granny flats are being built mostly in three areas: near the beaches, urban communities surrounding downtown and neighborhoods near San Diego State University.

City officials credited the surge to loosened regulations, simplified approvals and fee reductions, but they said last week that additional efforts are underway to encourage even more granny flat construction in more parts of the city.

They also are exploring whether more code enforcement is needed to prevent granny flats from being used as vacation rentals. And some neighborhoods have complained they lack the infrastructure to support new granny flat residents.

Since San Diego and the state began loosening regulations five years ago, granny flat construction in the city has climbed from nine units built in 2016 to 286 units in 2020. The increase has been steady: 13 in 2017, 61 in 2018 and 202 in 2019.

San Diego granny flat surge continues

Approvals of new granny flats have followed a similar trend. The 14 units approved in 2016 climbed to 19 in 2017, 237 in 2018, 501 in 2019 and 541 in 2020.

The number of new granny flats has increased steadily in each of San Diego’s nine council districts, but the strongest surges have been in Council Districts 2, 3 and 9.

Since 2016, 185 have been built in District 9, which includes San Diego State; 131 have been built in District 3, which includes downtown and surrounding areas like North Park, and 101 have been in District 2, which includes the beaches.

On the other end of the scale are the city’s two most wealthy council districts. Just 34 granny flats have been built in District 1, which includes La Jolla and Carmel Valley, and only 12 have been built in District 5, which includes Rancho Bernardo and Scripps Ranch.

Councilwoman Vivian Moreno said credit should go to city officials for promoting the program and to former council members Scott Sherman and David Alvarez for spearheading efforts to loosen regulations.

“There are hundreds of places for people to live that didn’t exist a few years ago,” Moreno told her colleagues last week during a meeting of the council’s Land Use and Housing Committee.

City officials call granny flats the cheapest and fastest way to help solve the local housing affordability crisis. The smaller than normal homes are considered ideal for recent college graduates, young people with lower-paying jobs and senior citizens on fixed incomes who gave these units their colorful name.

In addition to boosting the local housing supply, granny flats generate rental income for homeowners, decreasing the likelihood they will struggle to pay their mortgage.

Councilman Sean Elo-Rivera said he supports granny flat construction, but he warned that granny flat rents might not always be as low as people think because housing is so scarce in San Diego.

“Let’s not pretend that they are necessarily that affordable,” Elo-Rivera said. “There are plenty of landlords who are willing to exploit the shortage of housing.”

Elo-Rivera also suggested the city find a way to help lower-income families build granny flats. He said most of the homeowners who can afford to build a granny flat are already relatively wealthy.

In addition to loosening regulations, the city has waived multiple fees that were previously required. Gary Geiler, who oversees granny flat approvals for the city’s Development Service Department, said typical city fees have been reduced to between $5,000 and $25,000, depending on neighborhood.

The city also had been providing money to cover separate fees for sewer and water hook-ups, but the money in that fund ran out last year.

San Diego has expanded the types of zones where granny flats can be built, eliminated parking requirements and created a program to allow property owners to build one bonus granny flat for each one they build with rent restrictions.

The city also has tried to reduce architecture costs by allowing property owners to use more than a dozen pre-approved designs created by the city of Encinitas and the county government.

The California Coastal Commission also is considering a city proposal that would streamline approvals in the city’s coastal zone, where they are more complex.

The city’s granny flat handbook can be found here:

The city’s granny flat webpage, which includes the pre-approved designs, is here: