California SB9: What it means and how to make it work to your advantage

A new state law is poised to dramatically change single-family zoning restrictions in neighborhoods across California. It’s called SB9, and it’s already causing some confusion as homebuyers and homeowners try and figure out what it means for California neighborhoods.

Essentially, SB9 is a new state law that was signed into law on September 16, 2021. It takes aim at some of the long-standing zoning restrictions for single-family properties. When the law officially goes into effect on January 1, 2022, it’s going to make it much easier to build more than one housing unit on some single-family zoned properties.

It’s a new tool to tackle the state’s housing needs, but more importantly for the rest of us, SB9 gives average property owners a way to potentially create more cash-flow by building another housing unit, a duplex or even a four-plex. There are plenty of restrictions in play, however, to make sure big developers don’t simply wipe through neighborhoods and use the law to their own advantage.

To better understand SB9, it’s important to understand exactly what It does and what it does not do. Made up of two provisions, the first part of SB9 allows you to divide a single-family parcel into two parcels. The second part gives you the ability to construct a second home on the parcel. This means, you could start with one home on one parcel, but create two parcels with up to four total homes spread across the original property.

As stated, there are a lot of restrictions, starting with the location of the property. SB9 can essentially only be used for California cities and nearby suburbs. It cannot be used in historic districts or in fire hazard zones, which prevents SB9 from being used in certain locations across the State of California. If you’re interested in using it for a beach city property, it DOES apply to coastal zones.

There are also a number of restrictions when it comes to rent-controlled housing and low-income housing. In some cases, even if you recently had tenants but they moved out, it may not even work. There are also restrictions related to the size of the property. Under SB9, the parcel of land has to be at least 1,200 square feet.

Another unique restriction has to do with an existing single-family home on the property. If you’re redeveloping, you can only demolish one of that home’s walls. Also, local agencies could require you to put in one parking spot for each of the units on the property if it isn’t close enough to mass transit.

One of the biggest restrictions has to do with the property owner living in one of the units. To take advantage of SB9, you actually have to sign an affidavit saying you will occupy one of the housing units as your principal residence for at least three years. The penalty is perjury if you don’t abide by this.

Because you have to live in one of the units for an extended period of time, SB9 isn’t aimed at helping developers simply take over neighborhoods. Instead, it’s a tool that could help average single-family property owners build another home on the property, create a duplex or even a four-plex. That could end up being a major revenue builder for a savvy property owner.

The new law was designed to create more housing in California. With all of the restrictions in place, some estimates suggest SB9 could create upwards of 700,000 new housing units in the state. While that’s not a small amount, it is considerably less than the millions of new housing units the governor has said he wants to see built in the near future. There’s still some time left before SB9 officially becomes law across the State of California. In the meantime, it’s going to be interesting to see how cities and counties might respond with their own local ordinances.