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San Diego is running out of room to grow—literally. With the city’s developable land nearly built out and housing prices rising faster than incomes, planners are shifting focus inward. They are encouraging urban infill, rethinking zoning, and unlocking the potential of small or underused lots to meet housing demand.
This shift is more than a strategy, it’s a necessity. According to the City of San Diego’s 2021–2029 Housing Element, a state-required plan for future housing growth, traditional suburban-style development is no longer sustainable. Instead, the city is prioritizing infill housing: the strategic use of vacant or underutilized land within already-developed neighborhoods.
From backyard cottages to duplexes on compact lots, San Diego’s infill efforts are part of a larger plan to ease the housing shortage without expanding into open space, fueling sprawl, or worsening climate impacts.
Urban infill refers to developing underused land, like empty lots, garages, or outdated commercial properties, within existing neighborhoods. It’s especially effective near transit, jobs, and amenities, where infrastructure already exists.
In San Diego, infill isn’t just smart planning, it’s essential. In fact, the Housing Element estimates that most future housing growth must come from infill. In a city like San Diego, where most land has already been developed, this approach not only conserves natural landscapes but also supports walkable neighborhoods, reduces car dependency, and allows for a greater mix of housing types.
Done well, infill can blend seamlessly into neighborhoods. Modest-scale housing, like townhomes, cottage clusters, or courtyard apartments, offers what’s often called “gentle density,” increasing supply without dramatically altering community character.
San Diego’s push toward more flexible zoning started with Accessory Dwelling Units (ADUs). In 2016, California implemented statewide ADU building standards, which significantly streamlined the ADU permitting process throughout the state. In 2020, San Diego launched its ADU Bonus Program, which allowed homeowners to build more than one ADU on their property if they agreed to designate at least one unit as deed-restricted affordable housing.
The program was designed to both increase housing supply and incentivize affordability, especially in areas well-served by public transit. It worked: according to the city’s Development Services Department, by 2023, nearly 20% of all new permitted homes in San Diego were ADUs.
Building on that momentum, the city expanded by-right approvals for ADUs and small-scale housing. A by-right project can skip public hearings and move straight to permitting if it meets city standards, reducing uncertainty, cost, and delay.
In mid-2025, however, the City Council voted to scale back some provisions of the Bonus Program in response to concerns about fire safety and neighborhood impacts. New rules added height limits, restrictions in cul-de-sacs with wildfire risk, and reinstated parking requirements in neighborhoods that aren't within a half mile of a major transit stop.
The changes require a second reading and final approval by the San Diego City Council, expected in mid-July. If the ordinance passes, the new rules could go into effect as early as August. (Source: https://timesofsandiego.com/business/2025/06/17/san-diego-city-council-bans-backyard-adu-apartment-towers/)
Even with those changes, ADUs remain a key part of San Diego’s housing strategy—and a gateway to broader zoning reform.
San Diego is now looking beyond ADUs to unlock the full potential of small residential lots. One major shift involves moving away from zoning rules that determine how many units are allowed on a lot, and instead using floor area ratio (FAR) to guide development.
FAR sets a maximum building size based on the size of the lot, which gives property owners and architects more flexibility in what they decide to build. For example, a lot might allow 2,000 square feet of total housing, and the builder can decide whether to use that space for one larger home or two smaller units. This model supports the development of “missing middle” housing, a term used to describe duplexes, triplexes, courtyard apartments, and other modest-scale buildings.
These changes are designed to create more opportunities for housing that blend into existing neighborhoods without erasing their character or displacing longtime residents. By making better use of small lots and existing infrastructure, San Diego can add much-needed housing in a way that is equitable, sustainable, and community-scaled.
San Diego’s Land Development Code (LDC) is the master rulebook for how land is used, from zoning and density rules to design and permitting processes. Every few years, the city updates it to reflect new priorities. The 2025 LDC Update is focused on making infill development more accessible. Key proposals include:
The goal is to remove red tape for homeowners and small developers who want to add housing in their neighborhoods. Public workshops are underway, and the city aims to finalize the updates by the end of 2025.
Zoning reform and urban infill aren’t just planning terms; they open real doors for people across San Diego. If you’re a homeowner, you may soon have more options to add a second unit, build a duplex, or convert underused space. If you’re a developer or designer, clearer rules and more by-right projects mean fewer surprises and delays, particularly on small infill lots near transit. And if you’re a community advocate, these reforms are a chance to shape a more inclusive housing future, where affordability, sustainability, and neighborhood character aren’t at odds.
In a land-constrained city like San Diego, urban infill isn’t a fringe concept anymore. Instead, it’s the foundation of a more livable, equitable future, built one small lot at a time.
Quick tip: Housing policies and regulations are constantly changing. Before you make any building decisions, you should check with housing professionals in your jurisdiction to make sure you’re up on the very latest changes.
Xavier Rodriguez is the CEO of ADU Geeks, San Diego’s leading ADU consulting and project management firm. In 2024, the company was ranked No. 1 on the San Diego Business Journal’s Fastest Growing Private Companies list in the Small Business category, achieving 594.3% revenue growth.
Looking for more ADU news? Continue exploring in-depth articles on California accessory dwelling unit laws, policy updates, and development trends.
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