California Gov. Gavin Newsom, on Sept. 16, 2021, signed into law Senate Bill (SB) 9, a landmark law that would allow for the ministerial approval of certain housing development projects containing up to two dwelling units (i.e., duplexes) on a single-family zoned parcel. The legislation, which was passed by the California Legislature on Sept. 1 and takes effect Jan. 1, 2022, would also allow for the ministerial approval of certain lot splits to allow property owners to construct up to two units on the newly created lots. Below are some steps that single-family homeowners and developers can take to understand SB 9, its qualifying criteria, and implication on future projects.
SB 9 would allow housing development projects containing no more than two dwelling units on a single-family zoned parcel to be permitted on a ministerial basis, upon satisfaction of a number of qualifying criteria that include the following:
If these criteria are satisfied, the local agency must approve the project ministerially (i.e., without discretionary review or hearings). Projects approved ministerially are not subject to the California Environmental Quality Act (CEQA).
In addition to permitting two units on a single family lot, the proposed legislation would allow qualifying lot splits to be approved ministerially pursuant to a parcel map, upon meeting a number of criteria, including many of the same criteria for the two units described above. Additional criteria include the following:
A local agency may require, as conditions of approval:
In addition to the increase in density in single-family zones and lot splits in single-family zones, SB 9 would increase the extension of a map life from 12 months to 24 months and would allow four years of extensions in lieu of three years for subdivision maps with off-site improvements above qualifying costs (Gov't Code Sec. 66452.6).
SB 9 is designed to increase the housing stock in single-family residential zones, as it allows not only two dwelling units per parcel, but also certain lot splits with two housing units on each. SB 9 builds upon prior state legislation that has proven successful in expediting the permitting and construction of ADUs and JADUs. If enacted, SB 9 would offer an alternative path for homeowners to add up to three more dwelling units on their property with minimal regulatory hurdles.
Although the legislation has been heralded for its potential to address the state's housing crisis, others predict a more limited potential. For example, the Terner Center for Housing Innovation at the University of California produced a study indicating that, due to qualifying conditions, physical capacity and financial feasibility, less than 2 percent of single-family lots are likely to be able to use SB 9 for up to the four-unit maximum.1
In addition, local jurisdictions that have been less than acquiescent in adapting to amended state ADU laws may continue to languish in adopting ordinances, checklists and internal practices that comply with the new legal requirements.
Other practical questions will arise if SB 9 is enacted. One such area is how SB 9 will intersect with the rights of lenders/mortgagees of existing single-family properties. If an existing lot is split into two, the newly created second lot would presumably remain encumbered by the existing mortgage(s). Questions have arisen whether lenders would consent to a lot split that might result in the release of security, or whether subordination and non-disturbance agreements are needed between existing and new lender(s)/mortgagee(s), if different regarding the financing the construction of units on the newly created second lot. Other questions have arisen about the extent to which the provisions of SB 9 prevail over the rules governing common interest communities.
Although the extent of SB 9's potential remains to be seen, one thing is for certain: The California Legislature is committed to addressing the state's dire housing crisis, and it views by-right duplexes and lot splits as one weapon to do so.
1 See "Will Allowing Duplexes and Lot Splits on Parcels Zoned for Single-Family Create New Homes? Assessing the Viability of New Housing Supply Under California's Senate Bill 9," Ben Metcalf, David Garcia, Ian Carlton and Kate Macfarlane, Terner Center, July 2021. The low projection of single-family lots utilizing SB 9 was before subsequent amendments to SB 9 were made, among others, to add owner occupancy and a three-year attestation.