City of San Diego ADU Density Bonus Program Viewed as Game Changer Other Cities and States are Considering Adopting; AWG was the first builder to take advantage of the City of San Diego’s ADU Bonus Program.

Atlas West CEO Daniel Shkolnik recently spoke at the inaugural ADU conference attended by roughly 400 industry representatives from across Southern California.

Atlas West CEO Highlights ADU Program as a National Model at Inaugural Industry Forum

At the inaugural Accessory Dwelling Units (ADU) Forum held in Dana Point, Shkolnik emphasized the game-changing potential of San Diego’s ADU Density Bonus Program, a forward-thinking initiative that is gaining attention from cities and states nationwide. Addressing hundreds of industry professionals, Shkolnik discussed the success of the program and its broader implications for addressing housing shortages across California and the U.S.

Shkolnik, whose firm was the first to capitalize on the ADU Bonus Program launched by the City of San Diego in 2020, spoke during a panel titled "Multifamily ADUs: Strategies to Increase Value via Recapturing Non-Residential Space and Excess Land." He noted that ADUs, while still in their early stages of development, offer a unique opportunity to boost housing density and affordability in urban areas.

“It was a great event that gave me a lot of insight into this new and emerging territory – ADUs are at the starting line so it’s important to come together to discuss what’s working, what isn’t, and to connect with other professionals in this space,” Shkolnik said.

The Accessory Dwelling Units (ADU) Forum was hosted by Information Management Network (IMN) at the Waldorf Astoria in Dana Point on Sept. 10.

While a lot of ground was covered, there were two points that multiple panelists repeatedly mentioned during the day-long forum:

1. The City of San Diego's ADU Density Bonus program, introduced four years ago by the city, is a game-changer. “It’s something that many, many, many cities and states across the country are looking at replicating,” said panelist Jared Basler, Director of Policy & Strategic Initiatives at the Los Angeles-based Casita Coalition. AWG was the first builder to take advantage of the City of San Diego’s ADU Bonus Program, approved in 2020. Former San Diego “Mayor Kevin Falconer deserves credit for launching this innovative program and Mayor Todd Gloria deserves equal credit for seeing it through,” Shkolnik said.
2. Navigating the ADU building process is generally seen as difficult and costly, and the biggest hurdle is infrastructure, specifically gas and electric, so attendees were encouraged to focus on those areas early and often.

“When we look at a project we really like to figure out, obviously, highest and best use, and we really use a mix of conversion and excess land,” Shkolnik told the audience. “We really like small properties with a lot of excess land. There’s usually fragmentation in the marketing of that, it’s usually mispriced, and so there’s a great opportunity to arbitrage that and build ADUs.”

He added: “We’re comfortable with ground-up construction and maxing out the conversion to eat up all the FAR – that’s going to create the highest and best use product. It’s also going to make it a lot more palatable for end-use tenants because if you over-build it or you don’t densify it enough, you really have to push rents to make the project work. We like to balance the size of the project to the number of units. We don’t like to build a bunch of micro-units. We like to build sustainable workforce housing.”

ABOUT: Atlas West Group is a privately held full-service development and investment firm operating throughout San Diego County. The company is a premier provider of urban-infill housing and specializes in transforming underutilized properties into vibrant multifamily communities. Atlas West utilizes innovative permitting programs and creative construction strategies to bring out-of-the-box solutions to the region’s housing shortage and affordability crisis. The Atlas West team brings decades of experience to real estate development projects, giving the firm the network, reach, and insights needed to navigate complex situations and deliver results.

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