In July, the San Francisco Board of Supervisors unanimously passed legislation establishing a one-year pilot program in which Department of Building Inspection (DBI) fees will be waived for Accessory Dwelling Units (ADUs) and 100 percent affordable housing projects. Under the legislation, co-sponsored by District 4 Supervisor Gordon Mar and District 5 Supervisor Vallie Brown, charges for building inspection, plan review, and records retention will be set aside. These fees, along with associated professional services, can consume upwards of $25,000 per ADU. ADU construction costs typically range from $100,000 to $400,000.
ADUs are garages, basements, laundry rooms, attics, and storage spaces that’re converted to spare quarters. The units are often rented or used for multi-generational living. Older San Franciscans frequently choose to construct ground-floor rooms, with adult children living in the levels above. The City allows two ADUs to be built in dwellings with five or more units; a single ADU can be added to structures with four or fewer existing units.
The City began allowing ADU construction in 2014, starting in Districts 3 and 8. In 2016, ADU authorization was extended city-wide. As of late July, applications for 1,848 ADUs have been submitted since the program’s inception, according to Planning Department data. Single-family homes adding an ADU reflect roughly 15 percent of ADU filings.
Planning Department data indicate that over the past five years 190 ADUs have been completed. Another 932 had been approved for construction as of June. The modest amount of built ADUs is because for the past three years the City has been slow to approve hundreds of units, a delay partially created by applications being processed on a case by case basis, creating long review periods and inconsistent directions to applicants.
San Francisco Housing Inventory, published by the Planning Department in March 2019, revealed that property owners had constructed just 23 ADUs in 2017; 79 in 2018. In August 2018, Mayor London Breed issued an executive directive to clear the backlog.
The Tenderloin, Nob Hill, Richmond District, Sunset District, and Haight-Ashbury have the highest numbers of ADU applications, according to Mark Hogan, principal at OpenScope Studio, an 18th Street architectural firm. Hogan said the first ADU permits went to large apartment buildings Downtown and North of Market. “Our office has accepted some proposals for ADUs in SoMa. We are only just now about to start working on one in the Bayview,” said Hogan.
“We are generally supportive of ADUs,” said J.R. Eppler, Potrero Boosters Neighborhood Association president. “We haven’t had any complaints about putting them in. The issues that might arise with putting in an ADU are those worked out between immediate neighbors.” According to Eppler, Southside neighborhoods may be slow to add ADUs because the homes “…are already carved up into multiple dwelling units, a fair amount of families living together.”
Steven Huang, a Mission District-based real estate agent with Ascend Real Estate, said Potrero Hill residents often don’t want to renovate their garages into ADUs, preferring to keep the space available for vehicles and storage. “There’s very few bus lines and trains to that neighborhood,” said Huang.
ADUs can be built as stand-alone structures in a backyard, although doing so is difficult under the City’s Planning code. Hogan said a stand-alone ADU can be just as safe as one in an existing structure. Creating an ADU in a present building usually requires a seismic retrofit, in some cases prompting the need to replace parts of the foundation.
“You have to add sprinklers and upgrade utilities to improve the safety of the entire building. You may also need to add shear walls,” said Hogan. He added that residents can usually remain at home during ADU construction.
Hogan said that it’s important to design ADUs so that occupants don’t feel like they’re living in “leftover space. Details like recessing a door away from the street and putting in a planter outside can make a difference,” said Hogan.
According to Huang, properties located on hillsides often have more opportunities to create openings in an ADU. “Typically, you have more exposure to put in windows and doors on one side. It’s harder to find that room in homes where it’s flat,” said Huang.
George Mak, managing partner of SGDM, LLC, a Clement Street-based general contractor, said ADU development can be structurally safe for older edifices on steep hills if a seismic retrofit is done at the same time. “When building on a hillside, excavation of dirt can pose challenges both in terms of the actual construction and potential added cost,” said Mak.
Mak said that homeowners should seek financial advice before constructing a unit. “Some homeowners use traditional loans or revolving credit to pay for an ADU. Other homeowners use alternative financing, the equity from their home or another building they own, to obtain a loan,” said Mak. He hoped that ADU construction will bring more units onto the market and help mitigate the City’s high rents.
Huang said most ADUs in the City are being constructed in buildings with five or more units. “Single-family homes have less garage and storage spaces to add ADUs. But ADUs are going to be in demand in neighborhoods where there are a lot of rentals. All over the eastside of the City, rents are very high. This gives landlords an incentive to create ADUs,” said Huang.
Planning Department data support Huang’s observations. In 2018, less than 26 percent of ADU applications were associated with single-family homes. In 2017, fewer than 20 percent of requests were tied to single-family homes.
Homeowners have built ADUs without permits. Gina Simi, Planning Department communications manager, said the City’s policy is to encourage ADU legalization as much as possible. “Once we are aware of an unauthorized unit, we present the path of legalization to the owner. They can go through a screening process with DBI to determine the costs and the scope for legalization. If they decide to remove the unit, they will have to go through a conditional use authorization process,” said Simi.