San Diego is saying no to towering apartment buildings and massive housing complexes in more backyards after years of fighting between developers and ADU-averse homeowners.
After months of deliberation, the San Diego City Council clamped down late Monday evening on the sprawling structures that have cropped up in backyards across the city by heavily tightening the most developer-friendly policy in California.
The slew of new restrictions passed by the council in a razor-thin 5-4 vote put steep limits on the developers who have used a loophole in an affordable-housing program to snap up properties with large backyards and pack over a dozen units into them.
Residents complained of a Golden Hill backyard packed with three-story duplexes and cul-de-sac complexes with units in the double digits.
The key rollbacks will put a stop to construction of more of these backyard towers and large complexes.
The sprawling structures are a far cry from the handful of dainty mini-homes that the city envisioned when embracing accessory dwelling units, better known as ADUs, as a solution for the city’s affordable housing shortage in 2020.
The crowning cutback caps the number of units builders can construct in even the largest backyards at six, shattering plans to build more sprawling structures filled with hundreds of ADUs.
Other new rules require developers to build parking for units that are far from public transit and place enough space between ADUs in wildfire-prone areas, following growing concerns among neighbors about safety and packed street parking.
“Change needs to be made,” said Councilmember Sean Elo-Rivera. “We’ve seen exploitation of this program, egregious examples of people exploiting the program, disrespecting neighbors and neighborhoods.”
Neighbors slam ‘granny towers’ next door
As a millennial, Madeline Denaro knows she’s a rare young homeowner in a city with one of the most expensive housing markets in the nation. She invested in her Clairemont home by outfitting it with solar panels in 2019, a year before San Diego incentivized property owners to build affordable backyard units.
She never expected that under the affordable-housing program, a towering ADU apartment would be constructed next door — blocking the sunlight that powers her home.
“This isn’t just inconvenient,” Denaro told the council. “It’s financially punishing, and for what? To squeeze in rental units like sardines when San Diego already has tons of vacancies because they are overpriced?”
Many opponents of backyard apartment complexes called for the City Council to cap the maximum number of ADUs property owners could build on one lot at four. The council ultimately compromised on a maximum of six. (Photo by Madeline Nguyen/Times of San Diego) Credit: Madeline Nguyen / Times of San DiegoNeighbors like Denaro have for years sounded the alarm about the burdens large, towering backyard apartments have brought to neighborhoods filled with traditional homes. Under the new restrictions, developers can’t build backyard ADUs higher than two stories.
The council’s hope is that neighborhood complaints like inadequate trash collection, packed parking and privacy violations will tone down with the new limits — especially in developer-preferred spots, like Clairemont and Encanto.
Many of these homeowners have mobilized in community groups, including Neighbors for Encanto, making backyard units a hot-button issue in San Diego.
The contention was on full display at the council meeting, which stretched until late into the evening following over four hours of raucous public discussion.
“Just because you have a housing crisis doesn’t mean that you cannot just continue to allow developers to ransack neighborhoods by stripping their character, killing generational wealth, while not providing parking and not providing the needed resources pertaining to affordable housing,” Shane Harris, founder of the People’s Association of Justice Advocates, told the council to cheers from the audience.
Affordable housing ‘experiment’ gone wrong
Thousands of backyard units have opened, broken ground or are in the planning process since San Diego dangled a one-of-a-kind incentive for property owners to build what are popularly known as “granny flats” as affordable housing during the pandemic.
Under that policy, property owners could build and charge market-rate rent for any number of backyard units — as long as they also constructed and rented an equal amount of ADUs at rates affordable enough for low- to moderate-income tenants.
In the vast majority of projects, property owners put up one to three mini-homes in their backyards. But a handful of developers found ways to turn “granny flats” into multi-story “granny towers.”
Council members all agreed that these “granny towers” weren’t what the city had in mind when embracing backyard units. But they were also divided on how far restrictions should go without limiting the affordable housing that backyard units can provide.
“ADUs are homes,” Elo-Rivera told audience members who called the units a “plague.” “You cannot like that style of housing, but they are homes, and in those homes live people, people who are trying to get by.”
Restrictions may violate state law
The new limits on backyard units are a long-awaited win for neighbors. But they also complicate the ongoing conversation about the city’s housing shortage — and where San Diegans should turn to find homes they can afford.
The new ADU limits could set the city up for a showdown with state regulators, who are sternly opposed to the rollbacks because of its potential impact on affordable housing supply.
Last week, the California Housing and Community Development Department, in a stern letter, threatened to rule that San Diego was violating state law governing the reforms. If so, the city would lose state funding.
The council deliberated for hours and scaled back restrictions on backyard units while attempting to comply with state regulators. Council members worked to craft a compromise on the maximum number of backyard units on one property.
While crusaders like District 5’s Marni von Wilpert stood with anti-ADU neighbors and advocated for a strict cap of four units per backyard, affordable-housing supporter Elo-Rivera and Land Use and Housing Committee Chair Kent Lee backed a more permissive cap of seven.
Ultimately, the council compromised on a cap of six.
The downsizing meant that the new restrictions didn’t go as far as some granny tower opponents would have hoped. What the state thinks of the scaled-back limits is still to be seen.
How developers capitalized on ADU rules
On paper, the planned Chalcifica complex promises dream apartments for San Diego’s crop of college students and young adults: 120 modern units in an ideal coastal location in Pacific Beach, some at a more affordable price than beachside apartments. But they’re packed into two adjacent backyards.
Chalcifica is one of numerous blueprints drawn up by a handful of developers to pack backyards with dozens to hundreds of apartment units — all under the banner of affordable housing.
Chalcifica’s developer, Christian Spicer, put forward his plans just before the council passed new restrictions that will keep the planned complex from ever breaking ground.
“We have a unique opportunity to acquire these properties now, before homeowner awareness and prices jump up,” an online investor manual for Spicer’s firm, SDRE, stated. The manual has been taken down since ADU apartment opponents publicized the materials before the City Council.
Backyard-unit developer Daniel Shkolnik, right, spoke against the new reforms before the council as ADU opponents turned down their thumbs. The new restrictions would keep more mid-size backyard apartment complexes, like the ones Shkolnik develops, from being built. Credit: Madeline Nguyen / Times of San DiegoUnder the city’s backyard-unit incentives, hundreds of ADUs developers have built in recent years are reserved as affordable housing. Because the incentive didn’t specify many aspects of how backyard units should be built, a portion lack key infrastructure, like adequate parking and sidewalks.
The new limits aim to change that. But some builders and affordable-housing advocates say the reforms go too far. They argue that the restrictions don’t just target large-scale backyard developments — they’ll cause less affordable housing to be built.
“This program was put in place during a time when the city was focused on what we all deemed as a high emergency,” developer Daniel Shkolnik told the city council. “It feels like we’re now losing effort.”
Shkolnik said that his firm, Atlas West Group, has never built a backyard apartment complex with more than 12 units.
With the new ADU restrictions, vocal affordable-housing advocates on the council said San Diego must explore new alternatives to make sure everyone can afford a place to live in the city.
“Folks deserve a place to live,” Elo-Rivera said. “It’s the basic foundation for life, for opportunity, and there is no future in this city if people do not believe that they’ll be able to afford to live here. So we can oppose the exploitation of the program and still not refer to (ADU) housing as a plague or as a virus.”
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