What Is A Granny Flat And Why Is Now A Great Time To Build One In San Diego?

What is a granny flat?

A “granny flat” is an additional living unit added to a property that already has an existing residence. Granny flats often have their own entrance, bedrooms, bathrooms, and living areas. A granny flat can be used as an income producing rental unit or simply a place for guests and family to stay with a little more privacy from the main house.

Other names for granny-flats include “in-law suite”, “rental unit”, “guest house”, “companion unit”, or “accessory dwelling unit”.

The additional unit can be created by adding onto an existing home, an existing home can be divided in a way to create multiple living units, or a new living unit can be built as a separate structure, often in a backyard. Granny flats are commonly built above a garage, or located in a basement or attic where it is easy to section off the living quarters.

Why is now a great time to build a granny flat in San Diego?

Until late April 2018 the cost to build a granny flat was more than $40,000 in government fees alone for some San Diego residents, according to NBC News San Diego. The large cost in fees in addition to the cost of construction were sometimes seen as prohibitive, discouraging some residents from building granny flats. Fortunately, the San Diego City Council voted at the end of April to lower the cost of building granny flats by more than 60% by waiving three of the required government fees to build granny flats.

The measures approved by the City Council make it easier to build granny flats and speed up the permit process for the construction of new homes. According to Mayor Kevin Faulconer, the move is designed to remove “barriers to encourage the construction of new units that San Diegans can actually afford”, by lowering fees and making it easier for residents to build more living units.

Housing prices in San Diego have been going up for years and according to City officials the average price to buy a home in San Diego now exceeds $550,000 and the average rent is now over $1700 making San Diego one of the most expensive cities to live in the country. Adding granny flats increases the available housing inventory, which should help lower the cost of rents in San Diego, or at least help slow the increase.

Benefits to having a granny flat

  • Privacy and separation from main home and granny flat
  • Can be income-producing if rent is charged to those living in the granny flat
  • Rental income can serve as passive income to help pay down the mortgage faster
  • Rental income can be saved to buy another income-producing home faster


What do you think? Would you build a granny flat? Let us know by leaving a comment.

We Are Pacific Sotheby’s Agents Of Change


We are incredibly proud to announce that our company has raised over $110,000 in 2017 to fund the building of homes in Tijuana through our Agents of Change Initiative. We believe that homeownership is the foundation that gives people the chance for a better life.

As Pacific Sotheby’s International Realty Agents of Change, the Dean Team has committed to donating a portion of our commission from each closing with the goal to provide housing for families in need who are living in one of the poorest communities in Tijuana.

As we look forward to the new year, we are thankful to be a part of such a great company and strive to donate more money and help build more houses in 2018.

When Should A Buyer Not Compromise?

When searching for a new home, we help buyers identify what home features are important to them early in the search. We work with our clients to focus their list on the features that are their most important must-haves, features that would be nice-to-have, and features that are must-not-haves, and we continually edit the search criteria as new features are identified throughout the home search.

Creating a personalized search plan with us allows for a more efficient and focused home search. Our goal is to find your perfect home in the shortest amount of time with the least amount of stress.

The following infographic from realtor.com identifies the top three home features that buyers should keep on their must-have list: (1) floor plan, (2) school district, and (3) neighbors. Do you agree with these top three must-haves?

From our experience, we generally recommend not compromising on the following three home features:
(1) home price that fits within a realistic budget calculated with the assistance of the buyer’s lender that includes any additional monthly or yearly fees and costs such as HOA or insurance,
(2) floor plan with a minimum number of bedrooms and bathrooms and a range of square footage, and
(3) commute
 time to work, school, and other activities as well as whether the commute includes freeways, heavy traffic, or undesirable road conditions.

We understand every buyer has their own must-haves, and we have our own too!

Edward’s personal top three must-haves: (1) walkability of the neighborhood including an area to safely run or walk long distances with a baby stroller and dogs, (2) parking for the home owners and their guests, (3) multi-unit property with at least one separate unit that can serve as rental income.

Jennifer’s personal top three must-haves: (1) backyard size ample enough for a large garden and a play space for kids and dogs, (2) short commute time to work, after having experienced a long 1-1.5 hour commute, and (3) fixer-upper home with a reasonable amount of renovations that can be accomplished primarily via DIY projects so that we can add our own stamp on the home.

Have you decided on your top must-haves? What about your nice-to-haves and must-not-haves?


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