Here’s What You Need to Know About SB-9

To tackle the ever-increasing housing shortage that California is facing, a new bill aims to change the game. 

On September 21st, 2021, Gov. Gavin Newsom signed SB-9 into law, which effectively ends the single-family zoning restrictions that most neighborhoods have faced traditionally across the state. So, what does this mean in terms of what you can do about your properties? Here’s everything you need to know about SB-9. 

What is SB-9?
SB-9, or what is otherwise known as Senate Bill 9, is one of the many solutions that the state has put into action to address California’s housing crisis. In an attempt to create more affordable and inclusive neighborhoods, it will allow property owners to split qualifying single-family lots into two and place up to two units on each. This will create room for up to four housing units on properties that were previously only limited to single-family houses. 

In progress toward that goal, SB-9 is also aimed to promote the following: 
  • Allow homeowners to accumulate generational wealth
One of the best ways for families to move up the social mobility ladder is to build up intergenerational wealth. In passing SB-9, the bill will allow such families to create more housing units and rent them out to other families in the prospects of generating an additional source of income. On top of that, these housing units are likely to be even more affordable, which gives struggling families an option to begin their path of home ownership. 
  • Purely benefit homeowners and not institutional investors
SB-9 is meant to purely benefit homeowners and not institutional investors who seek to solely make a profit from tenants. Part of it will include amendments such as owner occupancy requirements and the prevention of small subdivision developments and other restrictions that will discourage  investors from taking advantage of this new bill. 
  • Preserve the longevity of historic neighborhoods
SB-9 will exclude historic and landmark districts in an effort to preserve them. Any property in these areas will not be allowed to be split up into multiple lots. 
  • Foster greater respect for local control
When any homeowner wants to develop a duplex, they’ll have to pay attention to strict local zoning requirements. 
  • Elevate strategic infill growth
The SB-9 will only be applied to certain areas that meet a set of criteria, which includes population and density thresholds. Thus, the bill’s power can be harnessed to strategically distribute and accommodate the population situations around California. 

The Caveats
In general, not just anyone can split their property up into multiple lots. Only people planning to live on the property as a primary resident are eligible. For proof, you’ll need to sign an affidavit which confirms that you’ll occupy at least one of the housing units as your primary residence for at least three years after you split off your property into additional units. 
To qualify, lots have to be in pre-defined urban zones as per the Census Bureau. SB-9 also requires that every new lot created be at least 1,200 square feet in size. On top of that, a prospective property split cannot be formed from a demolition or alteration of affordable or rent-controlled housing or market-rate housing that has been occupied by tenants for the past three years. SB-9 also does not allow any units to be created for office purposes or any other purpose other than for residential use. 

Finally, in an effort to curb homeowners who are purely looking for profit, this new bill prevents the use of units functioning for the purpose of short-term rentals. Instead, any rental terms set in place must be longer than 30 days.

Who can use SB-9?
Any property   owner in the state of California can look into SB-9 and determine whether or not this is something they want to do. If you’re curious about utilizing SB-9, then you can apply to subdivide your property through your local jurisdiction. 

Could my application be rejected?
If you qualify and follow the rules, then you shouldn’t expect your application to be rejected. However, the local government officials do reserve the right to reject any application only if they find that its proposed action would have a “specific, adverse impact” on “public health and safety or the physical environment” and that there would be no feasible mitigation options. 

Will this new bill really make a difference on California’s housing shortage crisis?
To answer this question, it’s best to take a look at what the statistics predict. According to the Terner Center for Housing Innovation at UC Berkeley, only about 5.4% of California’s current single-family lots would fit the qualifications to be split up into multiple housing units. If every homeowner decides to create the maximum of four housing units, then a total of 714,000 new units could potentially be constructed in a financially feasible way. 

From an overview perspective, those new housing units will create progress in the effort to curb the shortage crisis that California is facing. However, in terms of Gov. Gavin Newsom’s goals to construct more than 3.5 million new housing units by 2025, SB-9’s effects at the moment are predicted to only make a small dent. 

Final Thoughts
At the end of the day, even though there’s no one magical solution that will solve the housing crisis, the passing of SB-9 aims to be a step forward in the fight to create more equitable neighborhoods. 

Should you ever choose to take advantage of SB-9 in splitting your property into multiple units, don’t hesitate to contact us here at Mighty Buildings to inquire about your construction visions and housing goals. As a construction technology company that seeks to mitigate the housing crisis in a sustainable way, we’ll help you get started with our free feasibility study today.