San Jose Unveils Plan to Make ‘Granny Flat’ Construction Simpler, More Affordable

When Councilwoman Magdalena Carrasco was growing up in San Jose’s East Side, many of her relatives would come from Mexico to stay with them in hopes of finding work in the United States. During those stays, they would live in a pair of granny flats—or so-called accessory dwelling units ( known as ADUs)—tucked away on her family’s property.

“It was because of my parents’ granny flats that they had the opportunity to live with an extended family,” Carrasco says. “Had it not been for my parents to provide that, my relatives wouldn’t have been able to launch the American dream.”

Officials say there’s room to build as many as 160,000 such backyard cottages in San Jose. But prohibitive costs and a confusing permitting process prevent many property owners from even trying.

And that, Carrasco says, is why she’s backing a plan by Mayor Sam Liccardo that aims to spur ADU construction by cutting through red tape at City Hall.

Outside City Hall’s permitting center on Tuesday, the mayor unveiled a series of initiatives that he says would shorten the time and lower the cost to build ADUs by streamlining San Jose’s application process.

The multi-pronged proposal is part of San Jose’s broader effort to add 25,000 units—10,000 of them below-market-rate—to the city’s housing supply by 2022.

“We all know that we are in a housing crisis,” Liccardo declared at the press conference. “We are struggling mightily to get more rent restricted apartments built. We are not going to solve this crisis $650,000 at a time—that’s the cost to build a single apartment. We have to find ways to bend the cost curve.”

With the city’s new ADU initiatives simplifying an otherwise onerous process, local lawmakers hope that more people will build backyard cottages.

To make the process as easy as possible, the city has created an online portal and a checklist to educate homeowners about ADUs and the regulatory requirements to build them. It has also dedicated a full-time employee, Sarah Shull, to help homeowners applying for an ADU permit. And by launching an express lane—dubbed ADU Tuesdays—the city’s permitting office will expedite plans for cottages at least 900 square feet in size.

Sarah Shull is San Jose's new “ADU Ally" in the planning department. (Photo by Nicholas Chan)

The initiative announced this week builds upon prior efforts by the city to expand the supply of ADUs. Just last month, Liccardo proposed an ADU loan forgiveness program, which, if approved by the City Council, would offer prospective cottage-builders a tidy sum of $20,000 to cover permit and construction fees.

City lawmakers have prioritized ADU construction largely because it’s a potentially cheaper, faster way to boost the local housing stock.

The cost for a 400-square-foot ADU ranges from the lower end of $60,000 to an average of about $140,000 to $150,000, according to prefabADU President Steve Vallejos. Another plus: they’re exempt from environmental reviews mandated under the California Environmental Quality Act (CEQA).

That the city will offer pre-approved designs as part of its ADU initiative is another huge plus, Vallejos says.

The city’s ADU initiative mirrors efforts in the state Legislature to prompt more backyard cottage construction. AB 68 proposed by Assemblyman Phil Ting (D-San Francisco) would require local agencies to issue or deny ADU permits within 60 days instead of the current 120-day limit. AB 1484 authored by Assemblyman Tim Grayson (D-Concord) would make cities post ADU permit and construction fees online. And AB 670 by Assemblywoman Laura Friedman (D-Glendale) would stop homeowner associations from blocking accessory dwelling homes.

“I’ve been talking about ADUs for a long time,” San Jose Councilman Johnny Khamis says. “They’re low hanging fruits. They don’t require a whole lot of city funding. It’s a net benefit for the owner of the property. They generate income and increase the value of the house. It’s a win-win-win for everyone.”

Nicholas Chan is a journalist who covers politics, culture and current events in Silicon Valley. Follow him on Twitter at @nicholaschanhk.


  1. Before anyone considers building an ADU in their back yard for use as a rental, please know this: Under CA law, you cannot check perspective tenants against the Megan’s law database of sex offenders & under SJ law, you cannot exclude Section 8 voucher holders.

    Make sure you are OK with the possibility of renting to a sex pervert on welfare because you cannot legally screen for either of those and under San Jose’s Tenant Protection Ordinance, once they are in, you cannot get them out unless you want to spend a year in court and $30k+ in attorney fees.

    Additionally, once in, a renter can move in their children & parents and you have no say in the matter.

    Also, the state legislature is working on bills to prevent you from doing any criminal background checks on prospective renters and universal rent control.

    Proceed with caution, property ownership rights are under constant attack in CA & SJ.

    • > Proceed with caution, property ownership rights are under constant attack in CA & SJ.

      Reality check.

      What does it mean to “own” a rental unit in San Jose?

      Basically, the “owner” is just a custodian working for the public housing bureaucrats and responsible for paying the mortgage.

    • Several months ago the City of San Jose sent out a survey asking about whether survey recipients would be more likely to build/rent a granny unit based upon certain incentives. It was for the reasons noted above that I responded with emphatic noes to all the city’s proposed incentives or to renting at all on my property. It’s not just the money, any miscalculation means misery very close to home. I would be shocked if the city incentives produce more than a handful of takers.

  2. LOL,
    I hadn’t realized it at the time but I grew up in ADU, (not sure what it stands for) but it was 930sqft and 5 of us lived in it for 14 years, 1 toilet 2 sinks one in the kitchen, I’m sure the entire cost including permits was under 14K. The walls were not insulated, no air-conditioning and since it was the same town AOC grew up in there was no garbage disposal!
    Here in San Jose the permits will coast 20K, WOW!

  3. something else to consider that Lizard Liccardo doesn’t mention: once you become a “slumlord” – you are in business. the city passed an ordinance a couple of years ago requiring anyone who rents out their ADU or granny unit – must get a business licence – “Ch-Ching” money for the city. This is all very sketchy – – if you rent to someone in your house or ADU/Granny unit – you are a business.
    Currently there is movement among CA democrats to try and re-work prop 13 – – but “ONLY for commercial properties” they say — if i was renting out a bedroom in my house to my un-married partner (to help cover costs) and i had a business licence — wouldn’t that make me/my house a commercial operation?
    Watch out for these reptiles – – they are stealthy and intend to get into the last place of refuge for the average, hardworking taxpaying person / = = =a man/woman’s home is their castle – – its all about the $$

  4. Back when common sense existed in local government the reason for having rules limiting the construction of granny flats was to prevent overcrowding, congestion, and squalor in our city. These were once thought to be worthy goals and most property owners obeyed the ordinances. Now, since a “crisis” has been proclaimed, San Jose is abandoning these ideals and our “leaders” are scrambling to find ways to cause as much overcrowding, congestion, and squalor as they can.

    • John,
      Overcrowding, congestion and squalor seem to be what the Green New Deal is all about. Pack them into the city’s till they bleed. Save the rest for the ruling class.

  5. Anyone drive down Sunset, Sanders, Kammerer or Oakland? Look how many people are living on single lot dwellings. Cars are double parked on the street, across sidewalks, on front dirt lawns ….. No one cares its just the way it is. If you complain you are an uncaring racist.

  6. San Jose should seek advice from some neighboring cities, like Sunnyvale. Pretty astounding that other cities in the Bay have a much more streamlined process for ADU’s already — and robust BMR programs. Fact is, San Jose just have a bunch of leaders that know nothing about housing, including the Mayor, Council and Housing Department. They use anecdotes for everything – not actual data. They always look in a stupor.

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