What is SB-9 and how does it apply to the properties in Atherton?

What is SB-9?

Enacted on September 16, 2021, Senate Bill (SB) 9 permits "ministerial approval" for the construction of up to two primary homes on a single-family lot. Additionally, it allows for the division of a single-family zoned parcel into two distinct legal parcels, each capable of hosting up to two units. Ministerial approval means that the project is approved at the staff level, as long as it meets predefined standards or objective criteria, without the need for discretionary review or subjective assessment.

How SB-9 applies to properties in Atherton?

In Atherton, SB-9 allows property owners to split single-family residential lots into two parcels and build up to two units on each parcel. Projects benefit from a streamlined ministerial approval process by the Planning Department, avoiding lengthy discretionary reviews. They should follow objective zoning, subdivision, and design criteria. However, properties designated as prime farmland, hazardous waste sites, conservation areas, wetlands, habitats for protected species, or those under conservation easements are ineligible. Additionally, historical preservation restrictions prevent properties in historic districts or those designated as historic from bypassing these rules.

What can homeowners build under SB-9 or Atherton’s HOME Act?

Urban Lot Split under SB-9

Urban Lot Split refers to dividing an already legally established parcel zoned for single-family residential use into a maximum of two new parcels.

In this case you could have the following unit configurations:

A. Lot 1 Single-Family Dwelling (SFD)
Lot 2 Single-Family Dwelling (SFD)

B. Lot 1 Single-Family Dwelling (SFD)
Lot 2 Duplex

C. Lot 1 Duplex
Lot 2 Duplex

D. Lot 1 Single-Family Dwelling (SFD) + Single-Family Dwelling (SFD)
Lot 2 Single-Family Dwelling (SFD)

E. Lot 1 Single-Family Dwelling (SFD) + Single-Family Dwelling (SFD)
Lot 2 Single-Family Dwelling (SFD) + Single-Family Dwelling (SFD)

Two-Unit Development under SB-9

A two-unit development involves constructing two main residential units at the same time or adding another main unit to a lot that already has one existing unit.

You could have the following unit configurations:

• Single-Family Dwelling (SFD) + Single-Family Dwelling (SFD)
• Single-Family Dwelling (SFD) + Single-Family Dwelling (SFD) + ADU (max. size 1,200 sqft) or JADU (max. size 500 sqft)
• Duplex
• Duplex + ADU (max. size 1,200 sqft) or JADU (max. size 500 sqft)
• Duplex + 2 ADU (max. size 1,200 sqft)

Deciding which development option works best for you is not easy, unless you understand their cost and ROI for your property. You need an SB-9 Analysis for each option to make the best decision.

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How large the new units could be and what are the lot contains?

New units under SB-9 can be up to 800 square feet each and can have a maximum height of 16 feet. However, the state of California allows for flexibility in unit size beyond these limits.

What are the setbacks?

The minimum setbacks for new units under SB-9 are 4 feet for both the side and rear yards.

What is the parking requirement under SB-9?

Under SB-9, each dwelling unit should have 1 parking space, which should be at least 10 feet wide by 20 feet deep and entirely on private property. However, no parking is required if the parcel is within half a mile of a high-quality transit corridor or a major transit stop, or if a car share vehicle is available within one block of the parcel.

What are the lot constrains under SB-9?

Under SB-9, an urban lot split can create up to 2 new parcels of nearly equal size, with neither parcel being smaller than 40% of the original lot's area. Each resulting parcel should be at least 1,200 square feet.

Don't leave money on the table by limiting the size of your project to a minimum! SB-9 Analysis calculates for you the maximum building area so you can get the highest return.

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Who and which properties are eligible for SB-9 or HOME Act?

What are the zoning districts for properties eligible for SB-9?

Properties eligible for SB-9 are those zoned for single-family residential use.

Can you disregard the environmental restrictions on the lot?

No, environmental restrictions cannot be overlooked for SB 9 projects in the Town of Atherton. Properties may be disqualified if they include prime farmland, hazardous waste sites, areas designated for conservation in a natural community conservation plan, wetlands, habitats for protected species, or lands under conservation easements.

Can you bypass the Historical Preservation limitations?

No, you cannot bypass historical preservation restrictions. The property should not be designated as historic or situated within a historic district listed on the State Historic Resources Inventory. Additionally, it cannot be categorized as a city or county landmark or included in a historic property or district designated by the Town of Atherton or San Mateo County ordinance.

Is it allowed to demolish an affordable unit?

No, in Atherton, it is prohibited to demolish or modify housing units designated for moderate, low, or very low-income households.

Is it allowed to build in High-Risk Areas?

Maybe. In the Town of Atherton, building in high-risk areas like very high fire severity zones, delineated earthquake fault zones, or one-hundred-year flood zones or floodways may be allowed under certain stringent conditions.

Start by checking if your property is eligible for SB-9 because not all the single-family zoned lots are eligible.

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What are the ownership and development limitations after completing a project using SB-9?

Does the homeowner need to reside on the property?

Yes, the applicant should sign and record an affidavit committing to reside in one of the proposed or existing primary dwelling units or SB 9 units for 3 years following approval of the urban lot split. This obligation does not apply if the applicant is a community land trust or a qualified nonprofit corporation.

Are existing tenants’ rights protected?

Yes, under Atherton’s SB 9, existing tenants' rights are safeguarded. The law prohibits the demolition or alteration of housing subject to rent or price control established by a public entity through its lawful exercise of police power. This protection extends to housing withdrawn from rental or lease within 15 years prior to the lot-split application, as well as housing occupied by tenants within the last 3 years.

What are the rental regulations?

Dwelling units should be rented for at least 31 days and cannot be used as short-term rental units.

How can you get the permits under SB-9 or HOME Act?

Projects subject to SB-9 can move forward using a ministerial permit process, avoiding discretionary review or hearings.

What does ministerial approval mean?

Ministerial approval simplifies housing development by complying with the predetermined guidelines, avoiding discretionary procedures. This approach relies on clear criteria, facilitating permit issuance without extensive reviews or public hearings. Despite its efficiency, approval for lot splits can still take up to 18 months in certain instances.

What are objective standards?

Objective criteria, such as "objective zoning standards," "subdivision criteria," and "design review criteria," are designed to remove subjective judgments by government officials. They rely on standardized benchmarks that developers and officials can apply when submitting proposals. This method ensures consistent and reliable project evaluations, offering homeowners clear and predictable guidelines for their submissions.

What are the steps to get the permits?

To obtain SB 9 permits in Atherton, follow these steps:

• Submit your proposal to the Planning Department.
• Await ministerial review and approval without discretionary hearings.
• Record a parcel map before building permits are issued.
• Address any specific adverse impact findings if raised by Town staff.
• File appeals according to Zoning Code Administration and Permit Provisions.
• Pay all required fees established by City Council resolution.

The permitting process is complex, and you'll need to hire professionals to draft the drawing set and to go through the process for you. SB-9 Analysis comes with referrals to local professionals that can help you complete the project.

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How fast can you complete a project per SB-9?

This information outlines the different phases of the project along with their respective durations.

Feasibility Study with deciding the final scope of the project:
• Maximum of 3 days (CityStructure)
• Weeks if using other resources

Secure Financing: 2 to 3 weeks

Hiring the Team: 2 weeks

Design Process:
• Schematic Design: 1-2 months
• Permit Set / Design Development Drawing Set: 2-3 months
• Construction Drawing Set: 2-3 months

Permit Planning and Building Permits: 9 to 15 months with the possibility of extending further due to departmental backlogs

Construction:
• Lot Split only: 1 year
• Single Family House/Duplex: 1 year
• Accessory Dwelling Unit (ADU): 3 to 6 months

How much does a SB-9 project costs?

In this analysis, we'll explore two scenarios to assess anticipated expenses, property assessments, and potential profits for real estate ventures.

Scenario 1

New 4,000 sq.ft 3-Story Duplex + 1,000 sq.ft ADU

For this first scenario, we recommend building a three-story duplex with a total area of 4,000 square feet, along with a 1,000-square-foot Accessory Dwelling Unit (ADU). The estimated overall cost, which includes construction, permits, and professional fees (excluding land), is $2,149,538. The anticipated market value of the completed property in Atherton is approximately $12,660,000, resulting in a return on investment (ROI) of [($12,660,000 - $2,149,538) / $2,149,538] * 100 = 490%.

Scenario 2

Lot Split with 2 new 4,000 sq.ft 3-story Duplexes

In this second scenario, we suggest splitting the lot to develop two separate three-story duplexes, each with a total area of 4,000 square feet. The estimated cost, excluding land acquisition, is $3,456,019. The projected market value for these duplexes in Atherton is $20,256,000, leading to an ROI of 486%.

Conclusion:

SB-9 real estate developments in Atherton City indicate highly favorable returns on investment, making it an attractive option for consideration.

Balancing costs and market value from the very beginning is key to an SB-9 project with positive returns. SB-9 Analysis gives you all this information for your project.

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