On September 16th, the governor signed off on SB 9, also known as the California Housing Opportunity and More Efficiency (HOME) Act, which officially became law on January 1, 2022.
California SB 9 allows two things to happen for single-family zoned properties (You can choose one or the other or a combination)
- Urban Lot Splits: Dividing your existing property into two individual parcels.
- Duplex Conversion: Adding another unit to your existing property.
When it comes to the approval of an urban lot split and or a duplex conversion, a few things have been put in place to ensure a seamless transition.
- A local municipality must ministerially approve it, which means they have to make it relatively easy and they can’t set a special meeting and require the project to be approved in front of the planning commission.
- There must be objective standards that people can meet and know ahead of time before submitting their plans.
- SB 9 is not subject to California’s Environmental Quality Act (CEQA) which would normally require the public agency in charge of permitting the project to conduct an environmental review
I have a single-family zoned property. Is it eligible under SB 9? It is important to note that just because your property is zoned single-family residential, it does not automatically mean your property is eligible.
SB 9 Property Eligibility:
- It must be zoned single-family residential (1 lot + 1 house) and have only one APN / assessor’s parcel number.
- The project site must be in a city or urbanized portion of an unincorporated county.
- Affordable housing is excluded. SB 9 prohibits the demolition or extensive renovation of affordable housing.
- It must be located outside of a historically designated area.
- The property must be outside of a high fire zone.
- The property can’t be occupied by a tenant or have been used as a rental within the last 3 years
- If the property had been pulled off the market as a rental property through the Ellis Act in the past 15 years, this property is not eligible.
Urban Lot Splits: Dividing your existing property into two individual parcels
- The owner must sign an affidavit that for three years after the approval of the lot split, one of the parcels will need to be their primary residence.
- No Assemblage! This means you can’t assemble neighboring parcels and you can’t work with another neighbor to split a nearby lot.
- Lot splits must be relatively proportionate. Ideally, your split would divide your current land into 50/50 parcels but you could potentially get away with 60/40.
- The minimum lot size for a newly divided parcel is 1,200 sq ft. So theoretically, the original lot size has to be a minimum of 2,400 sqft in order for it to qualify for a split.
- You can only split your property once!
Can a lot split or duplex conversion or a combo of both be rented? YES, but any of the units being rented must be rented for 30 days or longer. SB 9 is not conducive to short-term rentals or vacation rentals.
Duplex Conversion: Adding another house to your existing property
- Unlike the urban lot splits, as an owner conducting a duplex conversion, you do not have to sign a 3-year affidavit stating that one of the units will be your primary residence.
- In California, a duplex is defined as a single building that contains 2 dwelling units or 2 single unit dwellings on a single parcel.
- SB 9 excludes accessory dwelling units (ADU) and junior accessory dwelling units (JADU), which are considered accessory residential units as defined by State law and Division 3, Section 9.31
- Whether you decide to add another stand-alone unit to your property or create an attached unit, your property will now be designated as a “duplex”
Economic Feasibility: Does SB 9 financially make sense for you?
The best part of SB 9 is that you can do a combination of an urban lot split and a duplex conversion! This means you can take your original property and home, undergo a lot of splits, build an additional unit on your original parcel, and build two units on your new parcel! This would create a total of four units which would bring great value.
But we know first-hand that building extra units on your property is not free. You need to ensure that SB 9 works for you and your property. This is why we are here to help! We would be happy to discuss your property and help you establish the best course of action.
Torben Yjord-Jackson – Realtor
EXP Realty of CA, Inc.
License # 02050831