The Truth About SB9: Local Realtor Explains Impact of Senate Bill 9 on Single Family Zoning

You’ve probably heard of a magic bill that allows for more flexibility in the use of your land and potentially offers more available homes for California residents looking to rent. This bill, of course, is Senate Bill 9 or SB9 for short. In 2021, Governor Newsom signed the bill to help address California’s housing shortage. The objective was to streamline the process of splitting lots and/or developing two main units on the same plot.

Dax Nollenberger, real estate agent at Brezsny Associates

(Brezsny Associates)

Opposition to the bill argued that it would be the end of single-family zoning as we know it, as SB9 allows for the rationalization of multiple primaries (or duplexes) on a single lot. Proponents of the bill argued that it would help solve California’s growing housing shortage.

For Santa Cruz, both of these predictions turned out to be quite fanciful.

Before I dive into why it turned out to be less impactful than expected, I want to discuss the benefits of the bill…for those who qualify. There are opportunities for those who understand the bill. For local investment-savvy buyers, you can identify eligible properties and create forced equity by splitting lots or increasing the number of units. For multi-generational families looking to create a family compound, you now have the option of finding land and making it four primary residences (land division required in this case).

Another major benefit is the reduction of red tape. Streamlined processes, especially when it comes to government, are always welcome. If your property meets all of the eligibility requirements, there should be less friction in obtaining approval for development or lot splits. This lessening of friction comes in the form of a lack of hearing and local government approval. However, less red tape does not mean Nope Red ribbon.

The main reason we haven’t seen a major impact yet (my opinion as a local real estate agent) is due to the eligibility requirements for SB9. The list is so long that it prevents many from taking a serious look at it.

Santa Cruz County offers a SB9 pre-selection request which provides an eligibility checklist. The pre-screening request will assess whether your project is eligible for simplified processing on SB9. To access the maps and find the eligibility of your properties, you can visit Santa Cruz County WebGIS Site. The manipulation of the website is complicated, so I have provided an introduction video below.

What becomes clear after adding all the eligibility requirements is that few plots are eligible for SB9 and even fewer make sense as an SB9 candidate. To avoid boring you with a breakdown of each eligible category, I’ll summarize here.

For a property to be eligible: it must be in the urbanized area which is zoned residential, not in a historic district, no Ellis law, no affordable housing or rent control, no tenants occupied for three years, not in a protected area, and no natural hazards.

To convert to SB9: you must ensure that your septic tank complies with current standards, you have not had any tenants for three years (or you cannot demolish more than 25% of the existing load-bearing walls), it cannot be used as a short-term rental once built (Airbnb or otherwise), and must have sufficient parking and standard setbacks. You can develop two main units per plot and no more than four units per project (two main units + ADU + JADU).

To divide a lot using SB9: The property cannot already be divided (by SB9) nor can you divide a property adjacent to a property you have already divided. Properties must be of relatively equal size (40/60 split threshold) and at least 1200 square feet for sewer-served lots or at least 1 acre for septic-system lots. New lots must be residential, cannot have more than 4 units total per project, and the owner must occupy one of the lots as their primary residence for at least three years from the date of approval.

So you can either do:

No splitting: two main units + ADU + JADU,

WHERE

Breakdown of lots: two main units each or one main unit and one ADU each.

In conclusion, this bill may impact residents who own qualifying properties or who may identify qualifying properties. A separate and/or additional house can be a significant added value. That said, the reported impact of SB9 on available housing in Santa Cruz has been overstated. The long list of eligibility requirements contained in this bill does not match Santa Cruz’s topography, zoning, protected areas, natural hazards and available inventory.

If you have a qualifying property or are interested in purchasing a qualifying property and would like advice from a real estate agent, give me a call.

Norman D. Briggs