Introduction

In the face of California’s escalating housing crisis, innovative legislative responses are crucial. Senate Bill 9 (SB9), known as the California Housing Opportunity and More Efficiency (HOME) Act, emerges as a pivotal solution. Enacted on January 1, 2022, SB9 empowers homeowners to play a direct role in alleviating the housing shortage by facilitating the construction of additional residential units on their property. This legislation aims not just to expand the housing supply but also to unlock new economic opportunities for property owners, thereby fostering more inclusive and diverse communities across the state.

The Law

SB9 introduces a transformative approach to residential development in California. By enabling the subdivision of lots and the addition of up to three new residential units on single-family zoned properties, SB9 directly addresses the urgent need for more accessible housing. This law streamlines the process, offering a path to development that circumvents the conventional, often prohibitive, discretionary review by implementing a “ministerial approval” process. This expedited procedure ensures that qualifying projects can proceed without the delays typically associated with planning permissions, provided they adhere to certain criteria.

Key Provisions

A cornerstone of SB9 is its simplification of the approval process for qualifying additions and lot splits. Key to this is the requirement for one of the units on a newly subdivided lot to be owner-occupied for at least three years post-development. This stipulation is designed to encourage the creation of long-term housing solutions rather than speculative development. Additionally, SB9 mandates that projects meet “objective zoning standards,” ensuring that new developments harmonize with existing community planning guidelines while still facilitating increased density.

Eligibility

SB9’s benefits are accessible to homeowners under specific conditions. Eligibility is contingent upon the property being situated in an urbanized, single-family residential zone. Restrictions apply to properties located within historic districts, high fire risk areas, flood zones, and lands designated as prime farmland, reflecting SB9’s consideration for environmental and cultural preservation. Furthermore, homeowners must not have engaged in “no fault” evictions within the last 15 years, a provision that safeguards tenants’ rights amidst the expansion of housing development.

Benefits

The enactment of SB9 heralds a multitude of advantages across the housing spectrum:

• For Homeowners: SB9 presents a viable avenue for increasing property value and generating steady rental income, thereby enhancing financial security. It opens up possibilities for multigenerational living arrangements, providing space for family members while maintaining privacy.
• For Communities: The increase in housing supply catalyzed by SB9 can stimulate new homeownership opportunities, contributing to the vitality and diversity of neighborhoods. This growth in accessible housing options is a step toward more sustainable and inclusive community development.
• For Tenants: By potentially increasing the number of rental units on the market, SB9 aims to alleviate the pressure on housing demand. This could lead to more affordable rental prices and greater availability, easing the strain on California’s rental market.

Each of these benefits underscores the transformative potential of SB9, positioning it as a significant legislative tool in the fight against California’s housing shortage.

Challenges

Despite the promising advantages of SB9, several hurdles could affect its implementation and the realization of its full potential:

• Permitting Complexities: Navigating the intricacies of new legislation can be daunting. Local jurisdictions may have varying interpretations of SB9, leading to differences in permitting processes. This variability requires homeowners and developers to be well-informed about specific local requirements, which can add layers of complexity to project planning and execution.
• Financing Difficulties: Financial institutions may be initially hesitant to lend for projects under a newly enacted law, given the unfamiliarity with SB9-specific developments. This can pose challenges for homeowners and investors seeking to finance their projects, necessitating a need for innovative financing solutions and educational outreach to financial entities about the opportunities SB9 presents.
• Community Impact Concerns: The potential increase in density might raise concerns among existing communities regarding the preservation of neighborhood character and infrastructure capacity. It’s crucial to approach these concerns with sensitivity and a commitment to engaging in open dialogue with community members, emphasizing the benefits of increased housing availability and diversity.

Conclusion

Senate Bill 9 represents a significant step forward in addressing California’s housing crisis. By simplifying the process for homeowners to add units or split lots, SB9 opens up new avenues for increasing the state’s housing stock. While challenges exist, the potential benefits for homeowners, communities, and tenants are substantial. As the law continues to be implemented, it will be essential to monitor its impact and adapt strategies to maximize its effectiveness.

Let’s Collaborate

Are you a homeowner or investor interested in exploring the opportunities SB9 presents? Whether you’re considering adding a unit to your property or embarking on a lot split, our team is here to guide you through the process. From understanding local requirements to navigating financing options, we’re committed to helping you unlock the potential of your property under SB9. Contact us today to learn more about how we can support your SB9 project, or sign up for our newsletter to stay updated on the latest developments and resources.