SB9 Explained

Senate Bill 9 enables single-family homeowners to split their lot and build two new housing units on each. We believe SB 9 is a tremendous opportunity for homeowners to build beautiful, affordable housing throughout California. So we want to make sure you have clear information about the possibilities of SB 9. You can also use the links below to navigate.

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ContextThe LawWhat Can I Build?ExclusionsBenefitsChallengesDevelopment Options
I photo of a backyard home, duplex, or ADU

Context

California is facing a shortage of affordable housing in urban areas like Los Angeles which is increasing rental burden and driving displacement. It is estimated that California will need 1.8 million units of housing by 2025 to address the need, however we are only constructing 80,000 new homes per year. The allowance of ADUs and JADUs has helped add housing units but it's not enough. One of the challenges to the construction of new housing is the predominance of single-family zoning which allows for only one house per lot. Multigenerational families, communal living, and work-from-home have all transformed the ways we live together in cities, and it’s time for our community zoning to change to reflect that.

The Law - SB 9

Senate Bill 9 was signed into law on September 16, 2021 in an effort to address California's housing crisis. The bill legalizes the construction of diverse, middle-income housing on single-family lots within our cities. SB 9 places tools in the hands of homeowners, not developers, that enable them to tap into their property’s equity to build new housing while still maintaining the character of their neighborhood. The bill will go into effect on January 1, 2022 and will continue to evolve as local agencies integrate it into their communities.

What Can I Build? - SB 9

All single-family property owners are eligible to build a second unit within their existing lot. This is perfect for people looking to build a second house for their extended family or for rental-property owners looking to add a second long-term rental unit to their lot. Single-family property owners also have the option of splitting their property, however, they must commit to occupying one lot as their primary residence for a minimum of three years. Once the lot is split, homeowners have a wide variety of options for developing housing on their newly created lots including single-family dwellings, duplex, and ADUs. You are entitled to build a duplex on each lot and, depending on how your local municipality applies the law, up to 2 ADUs on each of the lots (up to 8 total units).

Video Demonstration duplexes, ADUs, and other configurations available through SB9 Law

What Are The Exclusions?

SB9 prioritizes housing development in urban areas and is structured to protect vulnerable ecological areas. To be eligible, a property must be located within a city and be zoned as single-family. The property can not be located within a coastal zone, fire hazard zone, on prime farmland or within other environmentally protected areas. The lot split provision is not allowed for properties that have rent-stablized units or have been rented in the last 3 years. Homeowners interested in splitting their property must also commit to occupying one lot as their primary residence for a minimum of three years. Homestead can help you determine if your property is eligible for SB 9 - click here for a free consultation.

What Are The Benefits?

SB 9 provides homeowners with a wide variety of housing development combinations to optimize their financial potential while maintaining the character of their community. A homeowner looking to access equity within their property could split a lot and sell it or build up to three rental units to ensure long term income. The process of lot splitting also creates opportunities for new homeownership, especially for people who have been locked out of the housing market due to ever-increasing prices. For some homeowners, SB 9 fulfills the dream of multi-generational living by enabling people to share property with aging relatives or adult children. For tenants, every new unit of long-term rental housing on the market helps to alleviate the demand.

An illustration of a homeowner able to sit back and relax while Homestead takes care of all the work converting their garage into an ADU

What Are The Challenges?

Good things don't come easily. The housing development opportunities of SB 9 come with new challenges, particularly in permitting and financing. Local municipalities are processing the provisions of SB 9 and deciding how to implement it within their community so there may be some growing pains throughout the process. Additionally, homeowners may face obstacles to financing  as lenders may be unfamiliar with this new process of housing development and existing mortgagers may object to splitting a lot. Homestead is working hard to analyze and develop strategies for helping homeowners overcome these obstacles and make the most of SB 9.

Homestead Can Help

Our mission at Homestead is to empower homeowners to unlock equity within their property and invest in the future of their community by creating new housing. California Senate Bill 9 supports this mission by allowing homeowners to maximize the social good and financial potential of their existing property. So far, SB 9 analysis has been about how homeowners won't be able to afford to develop their property. Homestead wants to change that: we'll partner with homeowners, finance the project, and develop new housing for them. To learn more about our program, schedule a call with one of our project planners.

Learn More About Homestead's SB 9 Development

Our project planners will talk you through how the new law affects you and your property. If you're interested we'll tell you more about Homestead's zero-down development process.

Schedule a Call