Should I Wait To Build My ADU Because of SB9?
SB9 is a Bill recently passed in the state of California. REIG ADU works with clients who want to maximize their property both in rental potential and value through ADUs. A question that we’ve been getting is whether or not clients should wait to build their ADUs because of SB9? It might just be possible with this new Bill to build even more rental units to better maximize their space and increase the value of their property. Before you pause your current ADU plans there are some things you should know about this Bill:
Are you committed to your property?
If you are up for a lot split and want to develop at least 2-3 more homes on your property, you will have to agree to live in one of the homes for 3 years from the time your lot split is approved.[iii] This means that you’re stuck, you’re committed – no selling no matter how good the market gets, no moving– you are required to maintain at least one home on those 2 lots as your primary residence for 3 years. If you are thinking of waiting on your ADU build because of SB9 potential, you’ll need to plan on living there awhile.
Is your property zoned Single Family Residential?
You may think this is a silly question, but if your lot is already a multi-family zoned property, or any zoning other than simply Single Family Residential, it would be a waste of time waiting around to take advantage of SB9[iv]. However, SB9 does allow for this lot split for homes that have a Single Family zoning with up to 2 units to be split so it actually might still be a good idea to keep that ADU plan rolling and get it built if you can qualify to split your lot.[v]
Where is your lot located?
Properties that are allowed to split their lot under the SB9 Bill must be in “Urban Areas (UA)” or “Urban Clusters (UC)” defined by the United States Census Bureau as having 2,500-50,000 (UC) people or more (UA)[vi][vii]. Coastal San Diego is typically considered within those locations, but the more inland you go in San Diego County, the less likely you are to be in an area that would allow for you to take advantage of this Bill.
Is your lot large enough?
SB9 requires that the split lots be at least 1,200 square feet a piece.[viii] If your main lot is less than 2,400 square feet, then you won’t even find the Bill to your advantage anyway.
Can your lot be split equally?
SB9 only allows you to divide your lot into 2 parcels and once done, can never be done again.[ix] Your lot also must be relatively evenly split. 41%/59% is the smallest lot split possible as you can’t make the lot split less than 40% of the initial lot size.[x]
Can you split your lot without affecting the existing structures?
If you have a main house and/or other structures on the property, you may not be able to take advantage of SB9 if you risk affecting the existing structures. As a rule, unless the local laws allow it, you won’t be able to demolish more than 25% of any existing exterior structural walls. You also won’t be able to do any demolition to structures in areas with low-income housing, or in historical districts. [xi] You’ll want to make sure your house is located where a split is possible without affecting the existing structures – the goal of the California Bill is to increase housing, not to demolish housing. You may think it makes sense to demolish one home if that means developing a greater housing count, but that is not what this Bill allows, so plan accordingly if you think SB9 is a Bill that is right for you.
Are you okay with no short term rentals?
One of the reasons a lot of clients we work with build ADUs is for rental income possibilities, and although there are definitely a lot of great reasons to build an ADU, renting them out is a primary objective for a lot of homeowners. Some clients want to build the maximum unit count possible on their lots and think they can use them as short-term rentals for travel and leisure via websites like Airbnb[xii] or VRBO[xiii]. If possible, the potential to generate income from short term rentals can be greater than a more long-term rental unit depending on the desirability of your location, management, etc. However, should you be considering splitting your lot, building 3 additional units and living in the one while short term renting the others under SB9, think again! SB9 prohibits short term rentals and requires, at a minimum, monthly rentals of 30 days or longer for the properties you build on your lots.[xiv]
Don’t forget: local governments still have a say.
SB9 does allow your local agency to require your property split to have easements, access to public right-of-way, and off street parking (unless near public transit or car sharing is available).[xv] Local governments can also require a setback of up to 4 feet from the side and rear lot lines for structures on the property, so if you want to build make sure your lot allows for that [xvi]. Not to mention it can take a long time for local agencies to implement these kind of laws at the real, not Bill passing, level.
While waiting out your ADU project to maximize the value of your property by a lot split may sound like a good idea, its important to consider if it’s a viable option for you. SB9 isn’t a Bill for everyone, and you could put adding value to your property and rental income potential on hold without being informed. Of course, there is a lot more to this Bill than can be covered in one short article, but we hope this gives you a good start on determining if the wait is worthwhile.
REIG ADU Construction has been a contractor for over a decade serving Southern California. We build ADUs in San Diego and work side by side with expert design firms to make your ADU project as smooth as possible from A to U. We pride ourselves on excellence and transparency. Contact us for free with any questions about your project. We are here to help. Contact Us
[i] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB330 “California is experiencing a housing supply crisis, with housing demand far outstripping supply.”
[ii] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB330 “The crisis has grown so acute in California that supply, demand, and affordability fundamentals are characterized in the negative: underserved demands, constrained supply, and protracted unaffordability” “When Californians have access to safe and affordable housing, they have more money for food and health care; they are less likely to become homeless and in need of government-subsidized services; their children do better in school; and businesses have an easier time recruiting and retaining employees.”
[iii] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “The bill would require an applicant to sign an affidavit stating that they intend to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split, unless the applicant is a community land trust or a qualified nonprofit corporation, as specified.”
[iv] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “The parcel is located within a single-family residential zone.”
[v] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “A proposed housing development containing no more than two residential units within a single-family residential zone shall be considered ministerially, without discretionary review or a hearing, if the proposed housing development meets all of the following requirements…”
[vii] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “The parcel subject to the proposed housing development is located within a city, the boundaries of which include some portion of either an urbanized area or urban cluster, as designated by the United States Census Bureau, or, for unincorporated areas, a legal parcel wholly within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.”
[viii][viii] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 Except [a local agency may by ordinance adopt a smaller minimum lot size subject to ministerial approval] both newly created parcels are no smaller than 1,200 square feet.”
[ix] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “Neither the owner of the parcel being subdivided nor any person acting in concert with the owner has previously subdivided an adjacent parcel using an urban lot split as provided for in this section”(Section 66411.7)
[x] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “The parcel map subdivides an existing parcel to create no more than two new parcels of approximately equal lot area provided that one parcel shall not be smaller than 40 percent of the lot area of the original parcel proposed for subdivision.”
[xi] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “that the proposed housing development would not require demolition or alteration of housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income, that the proposed housing development does not allow for the demolition of more than 25% of the existing exterior structural walls, except as provided, and that the development is not located within a historic district, is not included on the State Historic Resources Inventory, or is not within a site that is legally designated or listed as a city or county landmark or historic property or district.”
[xiv] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “A local agency shall require that a rental of any unit created pursuant to this section be for a term longer than 30 days.”
[xv] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “In addition to any conditions established in accordance with this section, a local agency may require any of the following conditions when considering an application for a parcel map for an urban lot split:
(1) Easements required for the provision of public services and facilities.
(2) A requirement that the parcels have access to, provide access to, or adjoin the public right-of-way.
(3) Off-street parking of up to one space per unit, except that a local agency shall not impose parking requirements in either of the following instances:
(A) The parcel is located within one-half mile walking distance of either a high-quality transit corridor as defined in subdivision (b) of Section 21155 of the Public Resources Code, or a major transit stop as defined in Section 21064.3 of the Public Resources Code.
(B) There is a car share vehicle located within one block of the parcel.”
[xvi] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 “a local agency may require a setback of up to four feet from the side and rear lot lines.”
San Dag. “Urban Areas San Diego.” https://gissd.sandag.org/rdw/rest/directories/arcgisjobs/gp_tools/pltprintlayout_gpserver/j14d5470ff45546e19aa8b33ff23af58d/scratch/06b5c10093b442418799f2e5f69aa59d.pdf, San Dag, 2021, https://gissd.sandag.org. Accessed 21 October 2021.