When Gov. Gavin Newsom signed SB 9 and SB 10 into law, the headlines read, “It’s the end to single-family zoning.” However, contrary to popular belief, SB 9 does not prohibit the building of single-family homes, but rather offers a choice to existing homeowners of how they can develop their property.
Prior to the passage of SB 9, homeowners could have a maximum of three homes on their parcel—the primary home, plus a full-size ADU as well as an attached junior ADU. SB 9 would allow for a maximum of four homes total or two homes per parcel if the lot was split.
SB 9 is sometimes referred to as the “duplex law,” and critics claim entire neighborhoods of single-family homes could transition to duplexes. First, many of our neighborhoods already have duplexes located throughout our neighborhoods in plain sight. They are designed to blend into the neighborhood and look like the surrounding single-family homes. Second, in actuality, under SB 9 homeowners could split their existing lot into two parcels and build one single-family home on each parcel. They also have the option to preserve their existing single-family home or convert it into a duplex.
I’ve also heard a common misconception that the new construction would not fit in with the existing neighborhoods. However, SB 9 projects would be subject to administrative review by the local government to ensure they are consistent with the existing neighborhood look and feel.
In addition to design considerations, zoning rules, setbacks of four feet or more, building quality and health and safety requirements would also be reviewed. Properties designated as historical landmark districts or farmlands will not be able to re-develop the property utilizing SB 9. Local government agencies could also require one off-street parking space per unit. SB 9 does not supersede housing developments that have their own covenants, conditions and restrictions prohibiting SB 9 type developments.
Lawmakers took great care in crafting this bill to limit the ability of large developers to purchase multiple lots at the same time and significantly change the neighborhood. For example, a property lot may only be split once and the lot splits must be approximately equal. In addition, an owner is prohibited from splitting their lot if an adjoining lot has already been split. The owner must also sign an affidavit that they will occupy one of the units as their primary residence for at least three years.
SB 9 prohibits the demolition of more than 25% of the exterior walls of the existing structure in most scenarios. Duplex conversions under SB 9 are not allowed if the unit was rented within the last three years, under any sort of rent control or price restriction or utilized an Ellis Act eviction in the past 15 years. Short-term rentals are prohibited as well.
SB 10 is very different from SB 9 in that SB 10 only authorizes local governments to rezone neighborhoods for increased housing density if that local government chooses to do so. SB 10 would allow for up to 10 units per parcel and, if adopted, would not be subject to consideration under the California Environmental Quality Act. Only urban infill parcels or parcels located near high-quality public transportation or job-rich areas would be eligible.
Densification of our neighborhoods has been a very heated discussion lately, and while SB 9, and to a lesser extent SB 10, should result in some much-needed housing production, we should not expect sweeping changes.
The Turner Center at UC Berkeley released a study that looked at the potential impact of SB 9 using current land values and development costs. The study found that it would not make a lot of financial sense for homeowners to split their lots and build, given the cost of building and the return they would get on their expenses. The study also found that when building more than one unit, the proposed investment is expected to be feasible in only about 5% of the existing single-family parcels—about 410,000 lots—out of the more than 7.5 million single-family lots throughout all of California.
We can all agree that housing is just too expensive and it will continue to be as long as demand significantly outpaces supply. SB 9 and SB 10 are not end-all solutions to our housing supply crisis. We are restricted by green belts so we must continue to look for underutilized land for infill projects. What SB 9 does do is offer new homeownership opportunities and a pathway to housing security and generational wealth.
San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. His column appears every fourth Thursday of the month. Contact Neil at [email protected] or follow @neilvcollins on Twitter.