Own a single-family residential lot in California? Now you can split it in two and build up to 4 housing units.
If you live in California, chances are that you already heard something about Senate Bill 9 (SB 9).
In short, SB 9 (along with several other ADU laws) is intended to improve the ongoing housing crisis in the state.
However, you might be wondering how this affects you as a homeowner and what it means for your property. And this is exactly what we’re going to explain in this article.
What is SB 9?
SB 9 is a new law that went into effect at the beginning of 2022. The bill consists of two provisions:
- Two-Unit Development, which enables California homeowners to build 2 housing units on their lot that is zoned for only 1 unit;
- Urban Lot Split, which allows for single-family residential lots to be split into 2 separate parcels.
SB 9 makes both of these actions a subject of ministerial review process and approval.
So instead of case-by-case reviewing, where each project needs to be evaluated by a municipal representative, all projects that meet the state requirements will be automatically approved.
This leads to a much faster application process that will help homeowners start their projects sooner.
As a homeowner, SB 9 gives you the power to divide your property and add up to 3 or 4 units on each new lot. These changes can both increase the value of your property and create affordable housing for others (whether it is rent or homeownership).
“SB 9 is about opening the door for more families to pursue their version of the California Dream—whether that's building a home for an elderly parent, creating a new source of income, or buying that first house. It's about opportunity.”
— Senator Toni Atkins, Author of SB 9
What can you build with SB 9?
Under SB 9 you are allowed to build up to 4 units on a lot that is traditionally zoned for one.
If you meet the SB 9 requirements for both the Two-Unit Development and Urban Lot Split you can split your lot and build up to 2 units on each lot, resulting in a maximum of 4 units.
SB 9 does not require the 2 units per lot to be attached to each other, which opens up a lot of construction options. Whether you want to split an existing unit into 2, or build an additional unit (attached or detached) is entirely up to you.
What are the benefits of SB 9?
By splitting your lot, you can either sell one of the lots, rent out the extra units or use them to provide housing for family.
However, you will need to occupy one of the lots as your primary residence for a minimum of 3 years.Selling one of the lots can lead to a big financial gain (think $600-800k), while still letting you own your home.And if your property is in a convenient location, building and renting additional units can generate a generous return.
On a larger scale, SB 9 encourages neighborhood scale homes and building smaller dwelling units on smaller lots. This of course is more affordable and increases the chance of homeownership for many Californians.
“Duplexes and other small multi-family homes were once the norm throughout California until cities began adopting exclusionary zoning. SB 9 will allow California to turn the page on our history of exclusion. Plus, legalizing duplexes will bring us much-needed housing.” - Senator Nancy Skinner
Can you build ADUs and JADUs with SB 9?
Some cities might permit ADUs and JADUs to be built in addition to the 4 units allowed under SB 9. This is decided on a municipal level, so make sure to check with your local authorities.
For example, Los Angeles does not permit building ADUs and JADUs on properties that use both the Urban Lots Split and Two-Unit Development.
However, ADUs and JADUs may be permitted on lots that use only the Two-Unit Development allowance.
What’s the difference between SB 9 and ADUs?
The main difference between units built under SB 9 and ADUs is that ADUs are considered secondary or an accessory to the primary home.
Even though they have independent living facilities (kitchen, bathroom, etc.) they are connected to the city infrastructure the same way as the primary home. This means that you cannot sell them separately.
On the other hand, SB 9 allows regular dwelling units, which can be completely independent. They can be independently connected to utilities directly on the street and eventually be sold separately.
In addition to this, SB 9 units and ADUs need to meet different criteria. SB 9 units need to follow the regular zoning rules, while ADUs need to follow the local or statewide ADU regulations.
For example, the local legislation in your area might limit the height of an ADU to a maximum of 16ft, while regular units can go up to 26ft.
Eligibility, Requirements, Restrictions
Where can your property be located?
To be eligible for SB 9’s allowances, your property must be located within an urban area and zoned for single-family use.
And according to a guide published by the State of California, the property cannot be located within protected or hazardous districts and zones. It also should not alter or demolish existing affordable housing.
Requirements for Two-Unit Development
To qualify for the Two-Unit Development, your project cannot include removing more than 25% of exterior walls on a building that currently has a tenant or has had one in the last 3 years.
Requirements for Urban Lot Splits
For the Urban Lot Split, the requirements include:
- The property needs to be split on roughly even parts (no more than 60-40%) and each new lot should be at least 120 sq ft;
- The lot has not been created by a previous SB 9 split and is not adjacent to another SB 9 lot split by the same owner or anyone acting in concert with the owner;
- The homeowner needs to occupy one of the lots as their primary residence for a minimum of 3 years.
Next steps for homeowners
We believe that SB 9 is a big step towards solving the housing crisis and a great opportunity for homeowners too.
So if you are interested in splitting your lot or building an extra unit, start with contacting your municipality to see which specific rules apply.