Bonus ADUs vs. Low-Income, Deed-Restricted ADUs: What’s the difference?

San Diego’s housing market is one of the most competitive in the nation, and homeowners are increasingly exploring Accessory Dwelling Units (ADUs) as a way to add value to their property, generate rental income, and help address the region’s housing shortage.

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If you’ve been researching the San Diego ADU program, you may have come across two terms that sound similar but work very differently: bonus ADUs and low-income, deed-restricted ADUs. While they look identical from the outside, the financial and regulatory distinctions are crucial for both homeowners and investors.

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Do Bonus ADUs and Low-Income ADUs look different?

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Not at all. Whether it’s a bonus ADU or a deed-restricted ADU, both are built to the same high-quality standards as any other ADU in San Diego. They feature the same layouts, finishes, and construction quality. This is by design. San Diego’s housing policies ensure that affordable housing is indistinguishable from market-rate units, so communities remain cohesive, and renters of all income levels have access to well-built housing.

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What is a Low-Income, Deed-Restricted ADU?

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A low-income ADU is a unit that comes with a legally recorded deed restriction, typically lasting 10 to 15 years. During that period, rent is capped based on the tenant’s income, using the Area Median Income (AMI) guidelines set annually by the U.S. Department of Housing and Urban Development (HUD).

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How AMI works in San Diego

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The Area Median Income (AMI) for San Diego is re-calculated every year and varies based on the amount of bedrooms the unit has. Income categories are broken down into:

• Extremely Low Income: ≤30% of AMI
• Very Low Income: ≤50% of AMI
• Low Income: ≤80% of AMI

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In simple-terms, the amount that the deed-restricted ADU can be rented for will vary, but no matter where someone’s income level lies on the chart, the rent will be capped so they don’t spend more than 30% of their income on housing. This makes ADUs an essential tool in expanding affordable housing in San Diego.

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What is a Bonus ADU in San Diego?

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A bonus ADU is the incentive unit a homeowner is allowed to build once they commit to creating a deed-restricted, low-income ADU on the property.

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Here’s why this matters:

• Normally, zoning limits how many ADUs can be built on a property.
• Under the Bonus ADU Program in San Diego, providing a deed-restricted ADU unlocks permission to build an additional unit that has no affordability restrictions.
• This bonus ADU can be rented at market rate, giving homeowners or investors the opportunity to balance affordability requirements with the potential for stronger returns.

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Why this matters for homeowners and investors

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For homeowners, this program can offset the cost of construction by allowing one ADU to generate market-rate rental income while the other meets affordability requirements.

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For real estate investors, the San Diego bonus ADU program offers a creative way to maximize property potential, boost long-term value, and contribute to solving the housing shortage. With rental demand in San Diego at an all-time high, the ability to add extra units can significantly improve return on investment.

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The bottom line: identical construction, different classifications

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When it comes to bonus ADUs versus deed-restricted ADUs in San Diego, the construction is identical. The difference is in their classification and use:

• Deed-Restricted ADU: Rent capped by AMI; legally restricted for 10–15 years.
• Bonus ADU: Market-rate rental unit allowed as an incentive for building the deed-restricted unit.

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Together, these two ADU types are helping San Diego expand housing options, proving that affordable housing doesn’t mean lower quality—it means more opportunities.