Summary

California’s housing shortage has many homeowners and investors exploring Senate Bill 9 (SB9) as a way to unlock the potential of their property.

But not every lot is created equal. As a contractor, I look at land differently than most people. I focus on lot size, slope, zoning, and neighborhood context to decide whether a property is SB9-ready.

This blog will walk you through what contractors evaluate before taking on a lot split project, what factors can influence cost, and how to quickly self-assess whether your property qualifies under SB9.

What Contractors Look for in a Lot Split Property: Evaluating SB9 Potential in California

SB9, often called the California “lot split law,” gives homeowners and investors the right to build two homes on a single parcel or split one lot into two.

For anyone in Los Angeles, San Diego, or other high-demand areas, this creates new opportunities for rental income, resale value, and multi-family living.

But not every property works for an SB9 lot split. I look at land size, shape, slope, access to utilities, and even neighborhood trends before deciding whether a project is worth pursuing.

In this post, I’ll share the contractor-level insight I use to evaluate SB9 lot split properties in California.

SB9 Lot Split Requirements: What Does the Law Say?

So, what is the lot split law in California? SB9 gives homeowners two main opportunities: you can build up to two primary dwelling units on a single-family parcel, or you can split one lot into two separate parcels (called an “urban lot split”).

Here are the basics every homeowner should know:

• Minimum lot size: After splitting, each lot must be at least 1,200 square feet.
• 50/50 rule: The split should be as equal as possible, with no lot smaller than 40% of the original.
• Owner occupancy: Many cities require at least one of the units to be owner-occupied for a period of time (commonly around 3 years).
• Zoning: The property must be zoned for single-family residential use.

Not every property will qualify. Lots in historic districts, high fire hazard areas, or environmentally protected zones are often excluded. You can review the full SB9 California code for all the details.

When I evaluate a property, the first step is always confirming these SB9 lot split requirements before looking at anything else.

How Contractors Evaluate SB9 Lot Split Properties

Once a property meets the basic legal requirements, the next step is to assess whether it works in practice. This is where a contractor’s eye makes a difference. I focus on three main areas:

1. Lot Size, Shape, and Setbacks

Flat, rectangular lots are often the most efficient to work with. They make it easier to design layouts, meet setback requirements, and plan driveways or access points. Oddly shaped or narrow parcels may mean higher costs and limited building options.

While SB9 simplifies the process compared to a full subdivision, setbacks and access rules still apply and can make or break a project.

2. Slope, Easements, and Utility Access

Red flags appear quickly when a lot sits on a steep slope, shares a driveway, or lacks clear access to utilities. These conditions can add significant costs, especially if retaining walls, grading, or trenching are required.

Easements, such as drainage lines or utility corridors, can also restrict where new homes can be placed. All of these factors directly affect the SB9 lot split cost.

3. Neighborhood Context and Long-Term Value

Even if a lot technically qualifies, location matters. I always think about whether the area is growing, whether rental demand is strong, and how future resale looks.

Walkability, proximity to transit, and city zoning overlays all influence long-term value. Many investors review lot split property maps in California to identify strong markets like Los Angeles, San Diego, and the Bay Area.

Does My Property Qualify for SB9 in California?

One of the most common questions I hear is, “Does my property qualify for SB9?” The answer depends on a few factors. While the state sets the baseline rules, every city may add its own restrictions. Here’s a quick checklist to help you self-assess before calling in a contractor:

• Property is zoned for single-family residential use.
• The lot can be split into two parcels of at least 1,200 square feet each.
• Split results in two lots no smaller than 40% of the original size.
• Property isn’t located in a historic district, a high fire hazard area, or an environmentally protected zone.
• The lot has street access and space for utilities and driveways.

Cities like Los Angeles, San Diego, and San Francisco add their own layers of regulation. For example, the SB9 lot split in Los Angeles includes special design and parking rules that affect how a project is planned.

If your property passes these tests, you may be a strong candidate for an SB9 lot split. The next step is getting a feasibility review to understand whether the project is financially and structurally practical.

Cost to Split a Lot in California: What Homeowners Should Expect

The process of dividing a qualifying single-family lot into two or even building multiple homes comes with real costs that homeowners should understand up front.

There are three main categories to budget for:

• Soft costs: These include surveys, architectural design, city permits, and legal fees. Depending on the city, these can add up quickly before construction begins.
• Hard costs: Site work, trenching for utilities, grading, and new construction on the split lot. Actual costs vary widely depending on lot condition, scope, and local labor/materials rates.
  • Crucial Utility Costs: When you split a lot or add a new unit, you are usually required to install separate utility meters (water, gas, electric). You may also need to run entirely new sewer and water lateral connections from the new building area all the way to the main street line. These infrastructure tie-ins are a massive, expensive hurdle and a critical part of the SB9 lot split cost.
• Hidden costs: Things that often surprise homeowners, like demolition, soil issues, utility upgrades, or unplanned compliance requirements.

Altogether, SB9 projects typically involve significant investment. The exact number depends on city fees, site conditions, scope of build, and design choices.

Why Working with a Contractor Early Can Save You Time and Money

The sooner you bring in a contractor, the faster you’ll know whether your property is truly SB9-ready. A lot may look good on paper, but real-world factors like utility access, setbacks, and slope can quickly change the picture.

At Builders Now, we provide pre-construction evaluations that cover lot conditions, costs, and neighborhood context. Instead of guessing, you’ll get a clear understanding of whether your SB9 project makes sense financially and structurally. This upfront step saves you from spending on designs or permits for a project that may not pencil out.

SB9 Lot Split California: Real-World Example from a Contractor

In Los Angeles, we recently evaluated a corner lot with 8,000 square feet on a flat street. On paper, it looked like the perfect SB9 candidate. But once we checked the utilities, we found additional costs that needed to be considered.

The client still moved forward, but knowing that number upfront made all the difference. They could adjust their budget, secure financing, and plan the project without being blindsided later. This is the kind of insight a contractor brings to the table.

Bottom Line: Think Like a Contractor Before You Split

Not every property is SB9-ready. Lot size, slope, setbacks, and neighborhood context all make the difference between a successful split and a stalled project. Before you invest in designs or applications, it pays to think like a contractor.

At Builders Now, we evaluate lot splits with the same care we bring to full remodels and ADUs. We’ll help you see both the opportunities and the challenges so you can make informed decisions that protect your time and your budget.

Schedule an SB9 evaluation with Builders Now and discover if your property has the potential to unlock new value.

FAQs

Can I build a second home on my property in California?

Yes. Under SB9, you can add a second primary unit if your property meets the requirements.

Can a lot have two owners?

Yes, but ownership should be clearly defined in the subdivision documents.

Can multiple people own one piece of land?

Yes. Co-ownership is allowed, but agreements should be recorded to prevent disputes.

What is the rule of co-ownership?

Each owner’s rights and responsibilities are spelled out in legal documents. It’s always best to consult a real estate attorney.

What is the maximum amount of land a person can own?

There’s no legal maximum in California, though zoning laws and use restrictions apply.

What is the new law in California to subdivide property?

SB9, passed in 2021, allows homeowners to split lots and add units to increase housing supply.

Was SB9 California overturned?

As of 2025, SB9 is still in effect, though some cities have added restrictions. Always check your city’s planning department for the latest rules.

When homeowners start planning their ADU, one of the first big decisions they face is: who do I work with first?

It’s completely natural to get excited about the design. After all, you’re picturing how you’ll use the space, how the rooms will flow, where the kitchen will go, how much light you’ll get. That’s the fun part. So for many people, the first instinct is to call up an architect or designer and start drawing up plans.

The challenge is that once those plans are done and you bring a builder into the process, that’s often when unexpected pricing surprises show up. The beautiful design might work perfectly on paper, but the construction costs tied to those design choices can sometimes push the project far outside the original budget.

And that’s not because anyone made a mistake. Designers focus on layout, style, and function, while builders are the ones pricing out the real-world cost of actually constructing it all.

The Two Common Paths Most Homeowners Take

When people start thinking about building an ADU, they usually approach it one of two ways. Each has its pros and cons depending on how much experience you’ve had with construction projects.

1️⃣ Hiring a Designer or Architect First

For many homeowners, starting with a designer feels like the natural first step. You’re excited about the space and want to see your vision on paper. You want to have input on the layout, finishes, and flow before thinking about the technical side of things. In many ways, that’s completely understandable because it’s where your ADU starts to feel real.

The problem is that without someone on the design team who’s also tracking the construction costs behind those design choices, it’s very easy to run into budget surprises later. You might design a beautiful vaulted ceiling, a bump-out for extra living space, or larger bathrooms, but each of those features has cost implications that aren’t always factored in during design.

Designers typically focus on how the space will function and look, which is absolutely important. But they aren’t pricing out the real-world cost of structural engineering, foundation work, framing complexity, soil reports, utility connections, or city permit requirements while they’re drawing. Those are the exact areas where costs can quickly snowball.

I’ve worked with clients who brought me gorgeous finished plans that were unfortunately $100,000 or more over what they originally hoped to spend. This wasn’t because anyone made a bad decision, but simply because nobody was watching the budget while those design decisions were being made.

2️⃣ Hire a Full Design-Build Firm

On the other side, some homeowners go straight to a full-service design-build company where the same company handles both the design and the construction process under one roof.

There are definite advantages to this model. You get better coordination between design and cost since both teams are in-house and working together from the start. Often, design-build firms can move projects forward more efficiently because everyone’s on the same page.

But here’s the part many homeowners don’t realize until later: in many traditional design-build contracts, the builder owns the design plans. That means if, for any reason, you decide not to build with that company, you may not be allowed to take your plans elsewhere without paying extra fees or starting over entirely.

In some cases, the design plans are essentially tied to the builder’s contract. You can feel locked in before you even see your final construction number. For many homeowners, that can feel like losing flexibility and control over who ultimately builds their ADU.

The Builders Now Approach: The Best of Both Worlds

This is exactly the gap we’re solving for at Builders Now. Over the years, I’ve seen where both of those typical paths fall short, and we’ve built our process specifically to give homeowners the advantages of both, without the major downsides.

1️⃣ We Start With a Separate Design Contract

When you work with us, we don’t bundle design and construction into one big contract that locks you in. Instead, we begin with a standalone design contract. This allows you to move forward with your design work and permitting without forcing you into a full construction agreement upfront.

Our main goal is always to be the builder for your project, but you should feel confident and fully informed before making that final commitment.

As I often tell clients: “We’re going to get you through permitting. We want to build this, that’s our main goal. But you’re not locked into using us as your builder if you don’t want to.”

2️⃣ We’re Involved in the Design Process Early, Actively Tracking Costs

The biggest advantage of our process is that we are involved from the very beginning of design. As your design evolves, we work alongside the designer to keep a close eye on real-world construction costs.

Every time you’re considering a design feature like adding square footage, changing rooflines, adjusting layouts, we’re running the numbers right away. This means you’re making design decisions fully aware of how they affect your budget, long before plans are finalized or permits are submitted.

3️⃣ We Bring in Trusted Designers, While Keeping Cost Control in the Process

Unlike many fully in-house design-build firms, we work with trusted, experienced designers, but under our management and process. This allows us to pair creative design with practical, real-time construction knowledge.

By subcontracting designers directly into our system, we ensure:

• Homeowners get professional design guidance
• Builders Now stays involved in pricing decisions
• You maintain ownership and flexibility with your plans

✅ High-Touch, Start-to-Finish Guidance: You’re Never On Your Own

One of the things homeowners appreciate most about working with Builders Now is how hands-on we are from start to finish. Our team stays involved with you through every stage of your project, from your first design consultation all the way to your final walkthrough.

We know how overwhelming construction projects can feel. That’s why we don’t just hand you a set of plans and send you off. Instead, we hold your hand throughout the process, guiding you through:

• Early budget planning and cost analysis
• City permitting and regulatory requirements
• Design adjustments to avoid costly surprises
• Contractor coordination and construction schedules
• On-site inspections and progress updates
• Final quality checks and walkthroughs before completion

At every step, we’re your advocate and your partner, helping you navigate the details and decisions with confidence. Our high-touch process is built to minimize stress, keep surprises to a minimum, and ensure your ADU project stays on track.

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The Perks of Builders Now’s Flexible Approach

At the end of the day, this flexible approach is about helping homeowners feel more confident and in control as we move through the design and build process.

• You’re making design choices with real cost information. No guessing games or surprises later.
• You avoid expensive redesigns because we’re keeping the design and budget in sync.
• You always own your plans, so you’re never locked into anything.
• You get builder input early, so we can spot potential cost drivers before they become bigger issues.
• You’re fully supported from start to finish through our high-touch, hands-on process that keeps you informed and confident every step of the way.

For most homeowners, having both creative freedom and builder guidance early on takes a lot of the stress out of the process. That’s exactly what we aim for: helping you build smarter, with fewer surprises along the way.

Build Smarter, With More Confidence

If you’re just starting to explore your ADU project, this early stage is where we can save you the most time, money, and stress.

At Builders Now, my goal is simple: give you professional guidance from day one, help you design something you love that also fits your budget, and make sure you stay in control of your project every step of the way.

👉 Schedule a free ADU consult with Builders Now

In our previous blogpost, we talked about the biggest cost drivers when building an ADU and how smart planning can help you avoid unnecessary expenses. But after you’ve cut the right corners and kept your budget in check where it makes sense, there’s one piece of advice I always give my clients:

Sometimes, the best way to save money is actually to spend a little more upfront on the right things.

Think of it this way: you’re not just building something for today. You’re building a space you’ll live in, rent out, or share with family for years to come. If you cut corners on quality now, you’re almost guaranteed to pay for it later, whether it’s repairs, replacements, or just frustration with things that don’t work the way they should.

That’s why when I sit down with homeowners, I don’t just talk about cutting costs. I also walk them through the smart investments that are actually worth spending a little extra on. These are things that improve durability, comfort, and long-term value, and help you avoid those costly regrets a year or two down the line.

Here are 7 areas where, in our years of experience, it’s well worth putting your money.

1️⃣ Solid-Core Doors

Interior doors might seem like a small detail when you’re designing your ADU, but trust me, this is one of those places where a little extra upfront cost makes a huge difference in how the space actually feels to live in.

The cheaper, hollow-core doors you often see in new construction feel flimsy, sound hollow when you close them, and do very little to block noise between rooms. Over time, they tend to warp, rattle, and simply don’t hold up with daily use, especially in rentals or multi-generational setups where people are opening and closing doors constantly.

Solid-core doors feel heavier, sturdier, and do a much better job blocking sound. The privacy is noticeable, especially in smaller ADUs where bedrooms and bathrooms are close together. That added weight and quality also help them last longer without sagging or wearing out.

And it’s not just the doors themselves. While you’re at it, you want to pair them with good quality hardware too:

• Solid hinges that don’t loosen after a year
• Well-made knobs and handles that feel solid in your hand and don’t get loose or wobbly over time
• Smooth-closing latches that avoid that annoying “slam” when doors close

The best part? We’re not talking huge dollars here. For most ADUs, spending maybe an extra $1,500 to $2,000 across the entire project gives you doors and hardware that feel high-end every single time you use them. It also helps make the entire ADU feel more solid, quiet, and well-built for years to come.

2️⃣ Quiet Drain Pipes

One upgrade a lot of people don’t realize they need until it’s too late is soundproofed drain pipes, especially for two-story ADUs or ADUs attached to the main home.

In a smaller space, you’re often much closer to your plumbing than you would be in a larger house. With standard PVC pipes, you hear every flush, shower, and sink drain, sometimes even from across the unit. People often don’t think about it until they move in, then suddenly realize how disruptive that water noise can be, especially at night.

The solution is simple: invest in cast-iron or quiet-rated drain pipes for key areas like upstairs bathrooms or shared walls. It’s a small upgrade during framing but makes a big difference in comfort, especially for long-term living or rental units where you want your ADU to feel like a private, quiet space.

3️⃣ Quality Garbage Disposal

You’d be surprised how often I see homeowners regret going cheap on something as simple as a garbage disposal.

The basic, entry-level models might save you a hundred bucks at the start. But they tend to jam up, struggle with larger food scraps, and burn out after just a couple of years, especially if multiple people are living in the ADU or if it’s being used as a rental. When they fail, it usually means calling a plumber, dealing with water backups, or replacing the whole unit sooner than you’d like.

Spending a little more upfront for a better-quality disposal gives you stronger grinding power, smoother operation, fewer jams, and most importantly, fewer plumbing headaches down the road. In a smaller ADU where every system gets a lot of daily use, simple upgrades like this can save you from unnecessary maintenance calls, frustrated tenants, or out-of-pocket repair costs later.

4️⃣ Interior Insulation

Most people understand the value of exterior insulation for energy efficiency, but where a lot of homeowners miss an opportunity is inside the house: interior wall insulation.

I always recommend adding insulation between rooms, especially between bedrooms, bathrooms, and shared walls if the ADU is attached to your main home. It’s a relatively small upfront cost, often just hundreds of dollars, but the payback is huge in terms of comfort and privacy.

This is especially important if your ADU is going to be rented out, used for guests, or become a multi-generational living space. Nobody wants to hear conversations through the walls, toilets flushing upstairs, or someone watching TV late at night.

It’s one of those upgrades that renters will never directly notice, but they’ll feel it. And if you plan to live there yourself, you’ll appreciate it every day.

5️⃣ Heat Pump Water Heaters

As we talked about in the previous post, California’s newer regulations are pushing many homeowners toward heat pump water heaters. While they do come at a higher upfront cost compared to older gas tankless units, they’re one of those upgrades that truly pay off in the long run.

Heat pump models are much more energy-efficient and can help significantly lower monthly utility bills. This matters even more in areas like San Diego where electric rates keep climbing. Many models also pull heat from the air around them, which can even help cool and dehumidify the space they’re installed in.

This is one of those upgrades where yes, you may feel the sting up front. But after a few years of lower energy bills, fewer repairs, and better overall efficiency, most homeowners are glad they made the switch.

6️⃣ Durable, High-Quality Flooring

Flooring is another area where going cheap is almost always a mistake, especially in a compact, high-traffic space like an ADU. The floor is one of the most heavily used surfaces in the entire unit, and low-quality materials just don’t stand up to the daily wear and tear, particularly if the ADU is a rental. Inexpensive laminate flooring might look fine on day one, but it’s notoriously prone to scratching, chipping, and swelling at the seams the moment it gets wet—a disaster waiting to happen in a kitchen or near a bathroom. Similarly, low-grade carpet wears down quickly in pathways, stains easily, and will likely need to be replaced after just a few years of use, creating a cycle of unnecessary expense and hassle.

Spending a little more on a superior material like Luxury Vinyl Plank (LVP) or engineered hardwood is a far smarter investment. LVP is a fantastic choice for ADUs because it’s waterproof, highly scratch-resistant, and does an excellent job mimicking the look of real wood. It’s built to handle tenants, pets, spills, and constant foot traffic without degrading. You’re not just paying for a better-looking floor; you’re paying for durability that prevents you from having to do a costly full-floor replacement every few years. It’s a choice that saves money, avoids tenant disruption, and keeps the ADU looking its best for much longer.

7️⃣ Thoughtful Electrical Planning

One of the most common regrets we hear from homeowners after their ADU is built has to do with something surprisingly simple: outlets and switches. During construction, it’s tempting to just meet the minimum code requirements for electrical outlets to save a few hundred dollars. This is almost always a mistake. The “cheap way” results in a space that’s immediately impractical for modern life. You end up with not enough outlets for chargers, lamps, and kitchen appliances, forcing you to rely on clumsy power strips and extension cords. You might find there’s no outlet where you want to mount a TV, or that the light switch for a room is in an awkward location. Fixing this after the drywall is up is a major hassle, requiring cutting into walls, patching, and repainting. A smart upfront investment is to walk through the framed space and think critically about how you or a tenant will actually live there. We always recommend adding more outlets than you think you need, especially in the kitchen, near the bedside, and in the living area. It’s also wise to:

• Add dedicated circuits for a future EV charger.
• Place outlets in practical locations, like inside a pantry for charging a cordless vacuum or on a kitchen island.
• Install exterior outlets for landscape lighting or patio use.

Spending an extra $500 to $1,000 on thoughtful electrical planning during the rough-in phase is one of the highest-value upgrades you can make. It costs very little upfront but eliminates years of daily frustration, making the ADU far more functional and convenient to live in.

The Bottom Line

At the end of the day, you don’t have to overspend to build a great ADU. But you also don’t want to chase the lowest price at the expense of long-term headaches. Smart spending isn’t about cutting everything. It’s about knowing where those extra dollars will actually save you time, money, and frustration in the years ahead.

And that’s exactly the kind of planning we help homeowners with at Builders Now.

If you’re thinking about an ADU, feel free to reach out anytime. We’re happy to sit down, walk you through the process, and help you build an ADU that holds up both today and years from now.

👉 Contact Builders Now for a free ADU consult.

When most homeowners start thinking about building an ADU, one of the first questions that comes up, and rightfully so, is about cost. And yes, it’s true: over the last few years, prices for construction have gone up. Between changes in building codes, material costs, and overall demand, California ADU projects today can cost more than they did even just a few years back.

But here’s the good news: it’s completely manageable once you understand where those costs are coming from. In fact, a big part of what I do with my clients at Builders Now is help unpack these different factors upfront so you’re not walking into the process blind and you have a clear plan for how to build smart, avoid unnecessary costs, and still get the high-quality ADU you’re hoping for.

So let’s break it down together.

The Surge in ADU Demand — And What It’s Doing to Costs

If you’ve been even remotely looking into ADUs lately, you’ve probably seen that a lot of people are building them right now. And that’s true; there’s a reason for it. I’m seeing it every day in my own projects.

What’s happening is that a lot of folks would love to move into a bigger place, but with how high interest rates are right now, they’re realizing it makes more sense to stay put and build extra space on the property they already own. Families are growing, aging parents need space, or people just want rental income. Building an ADU solves all of that.

This huge wave of ADU construction has put a strain on the trades (electricians, framers, plumbers) because, like anything else, it’s simple supply and demand. When more people are building at the same time, the available labor pool gets stretched, prices go up, and schedules start backing up.

The Regulations: New Codes, New Costs (But Also Long-Term Benefits)

Another piece that plays a role in ADU costs, and honestly one that makes sense when you step back, is California’s push for better energy efficiency. The state has made a big effort over the past few years to build more energy-smart homes that are better for the environment, more resilient, and ultimately cheaper to operate long term. That’s a good thing. But like with anything in construction, many of these improvements do come with some upfront investment that’s important to plan for early in your ADU process.

For example, under California’s 2022 Energy Code, if you’re building a new detached ADU, you’re generally going to need to include solar panels as part of the build. This alone can add $5,000 to $10,000 or more to your upfront budget depending on the system size and your installer.

Then there’s the water heaters. This is where I get a lot of surprised looks from clients when we’re reviewing specs. California now heavily encourages the use of heat pump water heaters instead of the old gas tankless systems that used to be the go-to. Heat pumps are definitely more efficient long term, but they’re also a bit more expensive at install.

On top of that, switching to electric appliances like these can sometimes mean you’ll also need to either add a new meter, or in some cases upgrade your electrical panel to handle the additional load. A lot of older homes only have 100-amp panels or smaller, and these new systems often require you to bump that up. This can add thousands more, depending on your setup and utility provider.

Now to be fair, there’s a logic behind these regulations. The state wants homes to be more efficient and reduce gas dependency. Gas lines, especially for water heaters, have been a costly utility to pipe in. By going electric, and especially with a heat pump, you’re reducing that complexity. And down the line, many homeowners will save on monthly utilities.

But when you’re budgeting for your ADU build upfront, these code requirements can catch people off guard if you don’t plan for them early.

Design Choices: Where Small Decisions Can Have a Big Impact on Your Budget

One of the places where I see ADU budgets either stay on track or start to spiral is actually in the design phase. This is where early decisions, such as room sizes, layouts, and add-ons, start adding up, sometimes way more than people expect. And this is an area where you really can control your costs if you plan intentionally from the start.

Take bathrooms, for example. Everybody loves the idea of a big spa-like shower. But doubling the size of your shower doesn’t just mean buying a little more tile; it also means more labor, more waterproofing, more plumbing, and more framing. That extra space can easily add several thousand dollars without adding much real function.

For kitchens, people often want larger layouts, but in an ADU where square footage is limited, every extra cabinet and every foot of countertop drives up both material and labor costs. Custom cabinetry, tile backsplashes, and built-ins are all beautiful but can really blow out your budget if you’re not careful.

Even how you shape the structure itself matters. I was working with one client recently who wanted to overhang the second story a little further to create a covered patio below. It looked great on paper, but when we ran the numbers, that small overhang would’ve required extra foundation work and structural engineering that can add tens of thousands of dollars to the total cost. We ended up pulling that overhang back just a few feet and saved them a huge chunk of change with no real sacrifice to the livability of the space.

That’s why I always tell my clients: bigger isn’t always better. A well-designed smaller footprint will almost always serve you better in the long run, both for your budget and your day-to-day use of the space.

Alright — so how do we keep these costs under control?

This is the part I really try to emphasize with homeowners, because the good news is, there are actually a lot of things you can do early in the process to help minimize unnecessary expenses. You can’t control market inflation or regulations, but you can control how you approach your project.

Here are some of the key things I walk clients through:

1️⃣ Design Smart from the Start

Like I mentioned earlier, design choices have one of the biggest impacts on your budget. The goal is to design a space that works for your needs without adding square footage or features that don’t give you meaningful long-term value. A 100 sq ft difference may not sound like much, but when you multiply that by the cost of framing, foundation, roofing, drywall, insulation, flooring, electrical, and plumbing, it adds up quickly.

2️⃣ Prioritize Function Over Flash

Avoid the fancy bells and whistles that seem nice on paper but don’t really improve how you use the space. I’ve seen people add high-tech features like voice-controlled faucets, oversized custom showers, or smart appliances that add thousands of dollars but rarely make a huge difference in your daily life. Put your money where you’ll feel it most: good layout, proper insulation, solid fixtures, and quality materials that will hold up for years.

3️⃣ Plan Utility Loads Early

Many people don’t realize that adding just one or two extra plumbing fixtures could trigger costly utility upgrades like new water meters or sewer connections. We always evaluate this carefully during the design phase to avoid crossing thresholds that automatically bump up your required service capacity. Similarly, adding too many electric appliances could force a costly electrical panel upgrade. Planning this early saves a ton of headache later.

4️⃣ Bring Your Builder Into Design Conversations Early

This is a big one. One of the ways we do things a little differently at Builders Now is that I’ll work with clients and their designer together, right from the start. That way, we’re always keeping an eye on how design choices will translate to real construction costs. It’s much easier and cheaper to adjust drawings early than after permits are submitted.

5️⃣ Don’t Skip Quality Where It Matters

Sometimes saving money up front can cost you more in repairs or replacements later. I always recommend spending a little more for things like:

• Solid-core doors (quieter, more durable)
• Proper interior insulation (helps with noise and energy efficiency)
• Upgraded garbage disposals that won’t jam every year
• Good quality plumbing fixtures you won’t have to replace

We’ll cover these specific “worth-the-investment” items more fully in a separate guide, but it’s always better to invest in long-term reliability where you can.

6️⃣ Stay Flexible — But Build a Game Plan You Can Actually Stick To

One thing I always try to prepare homeowners for is that no matter how well you plan, there’s almost always some curveball along the way. Maybe it’s a permit delay or a small design change that unlocks unexpected savings or costs.

The key is to approach your ADU build with clear priorities upfront, but hold everything else with an open hand. Decide early on:

• What’s non-negotiable for you? (i.e. bedroom count, layout, accessibility, rental income goals)
• What’s nice to have but flexible? (i.e. higher-end tile, certain room sizes, specific appliances)

That way, when surprises happen, and they will, you’ve already built a roadmap for how to adjust while still protecting your bigger goals and budget.

And honestly, this is exactly why I encourage homeowners to bring builders in early. At Builders Now, our role is to sit on your side of the table and walk through all these moving parts together before you even break ground. The sooner builders are involved in your process, the easier it is to avoid costly mistakes and keep your budget working for you.

Ready to Build Smarter? Let’s Talk.

Building an ADU in California today absolutely can still make financial sense, if you build smart. The truth is, there’s no magic number or one-size-fits-all budget. Every property, every family, and every set of priorities is a little different. But with the right planning, the right design approach, and a builder who knows how to navigate both the costs and the codes, you’ll be in a much stronger position to build something you’re proud of.

If you’re starting to explore your ADU options, or even just want a gut check on your existing plans, feel free to reach out. We’d be happy to sit down, walk you through it, and help you make sure your ADU works for your property, your budget, and your long-term goals.

👉 Contact Builders Now to schedule a free consult.

When Assembly Bill 1033 (AB 1033) was signed into law, it offered a bold new tool in California’s response to the housing crisis: the option for homeowners to sell Accessory Dwelling Units (ADUs) as separate condominiums, provided their local city or county opted in.

But AB 1033 is not a statewide mandate. It’s an opt-in law—meaning its real impact depends on how individual jurisdictions respond. While the state laid the foundation, cities and counties hold the keys to implementation.

In this post, we explore which cities have taken action, what their approaches look like, and why San Diego may be on the verge of a significant shift.

In our first blog in this series, we covered the fundamentals of AB 1033—a California law that allows cities to let homeowners sell Accessory Dwelling Units (ADUs) as separate condominiums, independent from the main residence. If you haven’t had a chance to read it, we recommend checking it out for a full overview of how the law works and what it means for homeowners, buyers, and builders.

In this blog post, we’re taking the next step: examining where AB 1033 is being adopted, how cities are interpreting the law, and why San Diego may soon play a major role in its expansion.

Early Adopters: Cities That Have Opted In

Because AB 1033 is an opt-in law, it only applies where local governments pass ordinances to allow it. A small but growing number of cities have already taken that step, each with its own approach to implementation.

San José

San José was the first city in California to adopt AB 1033, approving its ordinance in mid-2024. The city now permits the sale of ADUs as condominiums, provided the homeowner files a condominium parcel map, installs separate utility connections, and establishes a homeowners’ association (HOA) if there are shared spaces. San José has also released an official checklist and guide to help property owners navigate the process.

Santa Cruz

Santa Cruz followed in early 2025, integrating AB 1033 into its municipal code. The city allows both the main home and the ADU on a lot to be sold separately—provided they meet subdivision rules and building codes. However, Junior ADUs (JADUs) are excluded from separate sale.

These cities reflect a range of policy priorities—from streamlining conversions to maintaining neighborhood consistency. But across the board, their adoption signals a growing recognition that small, ownership-ready units can help address California’s housing affordability challenges.

Beyond formal adoption, many other jurisdictions are actively evaluating AB 1033 like Sacramento, Los Angeles, and San Francisco.

These cities are reviewing how to integrate ADU condo conversion into their housing strategies while balancing infrastructure, financing, and planning constraints.

Closer to San Diego, Encinitas and National City have signaled early interest, recognizing the potential of AB 1033 to expand ownership opportunities without significantly altering density.

San Diego’s Evolving Approach to ADUs and Ownership

While San Diego has not yet formally opted into AB 1033, the city is actively reviewing the legislation as part of broader efforts to modernize its housing policies. With one of the state’s most aggressive ADU incentive programs already in place, San Diego is well-positioned to be a leader in this next phase of housing reform.

ADU Bonus Program Adjustments

In recent years, San Diego gained statewide attention for its ADU Bonus Program, which allows homeowners to build multiple ADUs on a single lot. The program incentivized infill housing, particularly in transit-priority areas, and dramatically increased ADU construction across the city.

However, by early 2025, concerns began to surface around the scale of some developments and their impact on neighborhood character and infrastructure. In response, the city council voted to amend the program, introducing measures that place new limits on the number of bonus ADUs and tighten development requirements in certain neighborhoods. These changes signaled a shift in focus—from maximizing unit count to ensuring that ADU policy aligns with long-term urban planning goals.

It is within this evolving context that San Diego is evaluating the possibility of allowing for the sale of ADUs.

Looking Ahead: AB 1033 and the Small-Scale Neighborhood Homes Initiative

Rather than adopt AB 1033 in isolation, San Diego appears to be exploring how to incorporate it into a larger framework. City officials have referenced the forthcoming Small-Scale Neighborhood Homes Initiative—a planning effort aimed at legalizing and supporting a wider range of modest, ownership-oriented housing types, including duplexes, rowhomes, and subdivided lots with ADUs.

According to city statements and planning discussions, AB 1033 is expected to be considered as a policy tool within this broader initiative. If adopted, it could enable thousands of San Diego homeowners—many of whom already have permitted ADUs—to legally convert and sell these units as condominiums. This would expand the city’s homeownership base while preserving neighborhood scale.

City planners are currently engaging with stakeholders and reviewing best practices from early adopters like San José and Santa Cruz. A formal ordinance could be introduced as early as 2026, following the development of implementation guidelines and public outreach.

San Diego has long been a leader in ADU innovation. As the city shifts toward more nuanced and ownership-focused housing solutions, the adoption of AB 1033 could mark the next evolution in how residents create, use, and share property.

Want to explore your property’s potential? Contact Builders Now for a consultation. We’ll help you navigate current ADU policy, prepare for what’s coming next, and build smarter for tomorrow.

 

Building an Accessory Dwelling Unit (ADU) in San Diego can feel like navigating a maze—especially with recent regulatory shifts causing significant changes for homeowners and developers alike. Staying updated and adaptable to these changes is critical. Let’s unpack the most recent regulatory updates in San Diego and what they mean for your ADU plans.

Recent Regulatory Updates Impacting ADUs

San Diego’s aggressive ADU bonus program, initially intended to ease housing shortages by allowing multiple ADUs on single lots, has seen substantial controversy and practical challenges.

On March 4, 2025, the San Diego City Council voted to significantly roll back the program due to mounting concerns from neighborhoods overwhelmed by increased density (FOX 5 San Diego).

This rollback represents a major shift and emphasizes the importance of understanding current rules before investing heavily in your ADU project.

Understanding the Rollback: The Bonus ADU Program

So, why the sudden change? It mostly boils down to some extreme cases where developers took advantage of the bonus ADU program, constructing as many as 17 ADUs on a single property.

Understandably, this caused quite a stir among local communities, raising concerns about neighborhood character, infrastructure strain, and quality of life.

The city council had little choice but to step in and pause the incentive program, creating clearer guidelines to prevent similar issues in the future (San Diego Union-Tribune).

The rollback specifically targets the practice of stacking bonus ADUs by limiting the number of ADUs that can be built based on lot size and other neighborhood-specific criteria.

Moving forward, homeowners and developers will need to demonstrate their project’s compatibility with existing community standards. This shift aims to balance the urgent need for affordable housing with preserving neighborhood integrity.

Navigating Fire Hazard Zones

Even with these recent changes, some regulatory challenges remain consistent. Properties located near fire-prone areas, for example, must adhere strictly to stringent fire safety regulations.

This includes using fire-resistant construction materials and implementing specific building designs to meet California’s wildfire preparedness standards (CAL FIRE Resource).

In San Diego, ADUs built within designated fire hazard severity zones require additional permits and fire-resistant designs. Ensuring you address these requirements upfront can help avoid costly redesigns or project delays later in the process.

Builders Now strongly recommends conducting a detailed site analysis early to identify potential fire hazards and adequately plan for them.

FAA Height Restrictions: Navigating the Airspace

Another crucial consideration for ADU projects in San Diego involves proximity to San Diego International Airport. If your property is within specific proximity zones, FAA height restrictions come into play, particularly if you’re planning a two-story ADU or taller structure.

The FAA mandates a formal airspace review process to ensure that new structures do not disrupt established flight paths.

To streamline your permitting process and prevent potential delays, it’s prudent to complete the FAA Notice Criteria Tool (FAA Notice Criteria Tool) during the initial design phase. This proactive step can significantly reduce project risk by identifying potential issues early, allowing you to adjust plans accordingly.

Coastal Commission Rules: Building Near the Shoreline

For those lucky enough to live near San Diego’s beautiful coastline, special considerations are also in place. Properties within the coastal zone require additional approvals from the California Coastal Commission. The Coastal Commission aims to protect coastal access, environmental resources, and scenic views, which means your ADU plans must demonstrate compliance with these objectives.

Projects within this zone typically require detailed environmental impact assessments and may face additional scrutiny related to public access and viewshed impacts. Early engagement with coastal commission requirements, including preparing robust documentation and working closely with experts, can expedite this approval process.

Preparing for Regulatory Compliance: Practical Steps

Given these detailed regulatory requirements, homeowners and developers might feel overwhelmed. However, there are practical steps you can take to simplify your journey:

• Early Due Diligence: Conduct thorough site analyses to identify potential regulatory challenges.
• Expert Guidance: Partner with professionals familiar with San Diego’s specific ADU regulations to avoid common pitfalls.
• Community Compatibility: Engage proactively with local community groups and planning authorities to ensure your ADU meets neighborhood standards and expectations.
• Documentation: Keep meticulous records and prepare comprehensive documentation that clearly demonstrates compliance with all relevant regulations and standards.

Moving Forward with Confidence

Regulatory shifts can feel overwhelming, but they don’t have to derail your ADU plans. At Builders Now, we prioritize staying ahead of these changes, ensuring every project remains compliant and moves forward smoothly. Our commitment is to keep you informed and prepared, so your ADU project becomes a reality without unexpected hurdles.

Stay tuned for updates as regulations evolve. With Builders Now, you’re partnering with a team dedicated to navigating the complexities of ADU regulations effectively, making your vision a stress-free reality.

When it comes to construction, one size never fits all. California’s neighborhoods are as diverse as its residents, and each comes with its own set of rules, challenges, and opportunities. Whether you’re building in a sprawling suburb, a dense urban center, or a quaint coastal town, understanding the local context is crucial to the success of your project.

For developers and property owners, tailoring construction strategies to fit the unique needs of each neighborhood isn’t just about compliance—it’s about building smarter, faster, and with the community in mind. Here’s why local context matters and how it can make or break a project.

Understanding Local Context in Construction

Local context refers to all the unique factors that define a neighborhood, from zoning laws and architectural styles to community priorities and geographic quirks. In California, where housing needs are urgent and regulations vary widely, adapting to these nuances isn’t optional—it’s essential.

Take San Diego, for example. The city’s ADU bonus program has specific allowances for increasing density that neighboring cities like La Mesa don’t share. What works in one area might hit roadblocks just a few miles away. Developers who skip the homework risk costly delays, compliance issues, and even community resistance.

At Builders Now, we’ve seen firsthand how projects that align with local context not only avoid these pitfalls but also thrive. By understanding the lay of the land—literally and figuratively—you can create housing that meets both the needs of the market and the expectations of the community.

The Risks of Ignoring Local Context

What happens when developers overlook local factors? Let’s break it down.

1. Regulatory Setbacks

California’s housing laws might aim to streamline development, but local regulations often add layers of complexity. Zoning laws can dictate everything from height limits to parking requirements, and these rules vary from city to city—and sometimes even within neighborhoods.

For example, in La Mesa, a non-lot split SB9 project might allow for innovative development without owner occupancy requirements, but the same approach in another area could run into a zoning brick wall. Failing to navigate these local distinctions can result in rejected permits, fines, or even abandoned projects.

2. Community Pushback

Communities are protective of their character, and for good reason. New construction can feel disruptive, especially if it clashes with a neighborhood’s existing look or feel. Residents might oppose projects they believe will increase traffic, strain resources, or alter the aesthetic of their streets.

This kind of resistance can delay construction, drive up costs, and even damage a developer’s reputation. In one example from San Diego, homeowners pushed back against two-story ADUs that threatened their backyard privacy—an issue that could have been mitigated with more thoughtful design.

3. Missed Opportunities

Ignoring local context doesn’t just lead to problems—it also means missed opportunities. Every neighborhood has unique assets, from zoning allowances to underutilized spaces, that can be leveraged for smarter development. Developers who fail to dig into the details might miss out on creative solutions, like repurposing a parking lot into affordable ADUs or taking advantage of special density bonuses.

The Benefits of Getting It Right

On the flip side, aligning with local context brings a host of benefits. For starters, it can streamline the permitting process. Cities are far more likely to approve projects that comply with their specific rules and reflect the character of their neighborhoods.

It also builds trust with the community. When residents see that a project respects their needs and enhances their environment, they’re more likely to support it—or at least not oppose it. And let’s not forget the financial upside: smarter use of land and resources often translates to higher property values and better ROI for developers.

Understanding local context isn’t just about avoiding mistakes—it’s about unlocking opportunities. By tailoring construction strategies to fit the unique needs and priorities of each neighborhood, developers can build smarter, faster, and more sustainably. Here’s how to get it right.

1. Dive Deep into Local Regulations

Every city has its own set of zoning laws, building codes, and permitting requirements. In California, these rules can vary significantly even between neighboring areas. For example, San Diego offers an ADU bonus program with unique density allowances, while nearby La Mesa has stricter regulations that might require creative workarounds.

Developers need to do their homework—or better yet, work with local experts who know the ins and outs of the area. Understanding everything from parking requirements to fire safety codes can save time, money, and frustration down the line.

Tip: Tools like city zoning maps and permitting databases are invaluable resources for identifying what’s allowed and where. Pair this research with consultations with city planners or local architects to avoid surprises.

2. Engage the Community Early

Community buy-in can make or break a project. Residents are often the first to voice concerns about density, parking, or changes to neighborhood character. Engaging them early in the process shows respect and builds trust.

Hosting neighborhood meetings or focus groups can help developers gather valuable input and address concerns before they escalate. Simple steps like explaining the benefits of a project—such as new housing options or economic growth—can go a long way toward winning support.

Real Example: In one San Diego neighborhood, concerns about privacy from a two-story ADU were resolved by adjusting window placements and landscaping plans. These small changes helped ease tensions and keep the project on track.

3. Design with the Neighborhood in Mind

A neighborhood’s character isn’t just about aesthetics—it’s about how the community feels and functions. A successful project should complement, not clash with, the existing environment.

This might mean using materials and designs that match the surrounding architecture or maintaining green spaces to balance increased density. Developers should also consider practical needs, like ensuring traffic flow isn’t disrupted or providing shared amenities that enhance the area.

For Suburban Areas: Single-story ADUs or garage conversions can blend seamlessly into a neighborhood without causing visual disruption.

For Urban Centers: Mid-rise developments with mixed-use spaces (like retail on the ground floor) can enhance walkability and community interaction.

4. Invest in Infrastructure and Sustainability

Increased density brings added strain to infrastructure—roads, utilities, and public services. Developers who proactively address these needs not only reduce pushback but also create better living environments.

This could mean incorporating green building practices, like solar panels or rainwater collection systems, to reduce the environmental footprint. For areas with limited parking, including bike racks or rideshare hubs can help offset concerns about car congestion.

Long-Term Thinking: Projects that align with sustainable urban planning trends—like walkable communities and transit-oriented development—are more likely to gain community support and thrive in the long run.

5. Leverage Technology for Better Planning

Tools like JobTread and other project management software help streamline communication, track progress, and ensure compliance with local regulations. These tools can also provide transparency for clients and stakeholders, fostering trust and collaboration.

For developers working across multiple neighborhoods, technology becomes even more critical. It allows teams to manage the unique requirements of each project without losing sight of the big picture.

Building for the Community

Adapting construction strategies to fit local context is about more than meeting regulatory requirements—it’s about building homes and communities that people love to live in. From respecting a neighborhood’s character to addressing infrastructure needs, thoughtful development benefits everyone involved.

At Builders Now, we specialize in creating construction strategies tailored to the unique needs of each neighborhood. Whether you’re navigating complex zoning laws or aiming to win community support, our team has the expertise to help you succeed. Ready to build smarter? Let’s start the conversation today.