A small number of developers are exploiting accessory dwelling unit programs to sidestep multifamily building codes, creating safety risks and neighborhood conflicts that planning boards are working to address.
California’s accessory dwelling unit laws were designed to let homeowners add secondary units: a backyard cottage, a converted garage, or housing for a family member. According to Eric Law, chair of the Peninsula Community Planning Board, a small group of developers has repurposed those laws to build apartment complexes in residential backyards, bypassing oversight that would normally apply to multifamily construction.
The ADU Loophole in San Diego
The mechanism is straightforward. ADU projects are classified differently from multifamily developments, meaning they are not subject to the same building codes, design standards, or discretionary review. A developer who stacks multiple ADUs on a single lot can produce a three-story apartment building in a neighborhood of one- and two-story homes, without triggering the review a conventional apartment project would require.
“It’s not an ADU. An ADU is a place where you put your kids and your grandma. These were literally apartment buildings.”
What Law describes wasn’t a fringe interpretation of the rules — it was, for a time, technically permitted. San Diego’s ADU Bonus Program, adopted in 2020, allowed developers to build a nearly unlimited number of units on a single-family lot in exchange for designating some as affordable housing. Community pressure eventually forced a reckoning: in June 2025, the City Council imposed caps, limiting bonus ADUs to between four and six units per lot depending on size, and eliminating the bonus program entirely in eight low-density residential zones.
When Developers Cut Corners
Law describes one case that illustrates how the problem compounds. A developer conducted renovation work without permits, used uncertified contractors for electrical and plumbing, added unpermitted structures, and then proposed an 80-unit ADU apartment building in the backyard. When the planning board pulled the plans and engaged city staff, it found code violations throughout the project.
The safety risks were concrete. Law describes electrical and plumbing work that would never meet code, structural modifications, including the removal of a load-bearing beam, and additions that had never been reviewed or certified. The project was not simply aggressive in its density. In Law’s characterization, it was genuinely dangerous.
“They didn’t get permits, did a lot of shady work without certified contractors.”
Law is careful to frame this as an isolated problem. He estimates that 90 to 95 percent of developers follow proper procedures, work collaboratively with planning boards, and move through the approval process without significant friction. The remaining five to ten percent consume a disproportionate share of the board’s time and the city’s enforcement resources.
“You always spend 90% of your time on 10% of the problem children. It’s probably less than five percent that are really trying not to work inside the community.”
How Boards Flag Problem Projects
When the collaborative path fails, the Peninsula Community Planning Board escalates, but only after exhausting every other option. Problem projects typically surface when community members notice unpermitted work or unusual construction activity. The board then pulls the plans, contacts city staff, and opens a dialogue with the developer, the architect, and legal representatives. The goal is to redirect the project toward compliance rather than block it.
“We try to have the conversation with the developer, the architect, and the lawyers, to encourage them to get things to the right place. Only after we exhaust all of those avenues do we get hard power.”
The board’s effectiveness depends significantly on the professional expertise of its members. The Peninsula Community Planning Board includes architects, engineers, a project management professional, real estate agents, real estate lawyers, former city managers, and former city attorneys. That depth allows the board to identify technical violations a less specialized body might miss and to engage developers in substantive conversations about compliance, rather than simply objecting on neighborhood-character grounds.
Fast Approvals, Sharper Oversight
For developers who arrive with complete documentation, professional teams, and a genuine intent to work within code requirements, the planning board functions not as an obstacle but as an accelerant. Law says well-prepared applicants can move through the board’s review in a matter of weeks.
“If someone’s got their act together, we’re the fastest part of the approval process.”
The board’s dual role offers one model for how community planning groups can function as a constructive part of the development process rather than a blanket source of opposition. It moves compliant projects quickly while applying sustained scrutiny to those that exploit regulatory gaps.
Whether other planning boards across San Diego’s 41-plus community plan areas adopt similar approaches may depend on their ability to recruit the professional expertise needed to distinguish genuine compliance from superficial compliance. As state law continues to expand ADU allowances, the gap between what rules permit and what developers attempt through creative interpretation is likely to remain a source of tension for planning boards, city staff, and the neighborhoods they serve.
About the Expert: Eric Law is chair of the Peninsula Community Planning Board in San Diego, California, a position he was reelected to in early 2026. His focus is on land use, housing policy, and community planning within San Diego’s coastal neighborhoods.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
