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

What is SB-9?

Senate Bill 9 (SB 9) was passed by the California Legislature and became effective on January 1, 2022. This bill enables staff-level or ministerial approval for housing projects that include up to two dwelling units on parcels zoned for single units. It also allows the ministerial approval of certain lot splits, allowing property owners to build up to two units on each newly created lot.

How SB-9 applies to properties in Burlingame?

SB-9 applies to properties in Burlingame by allowing for ministerial approval of certain housing development projects. This includes the subdivision of single-unit zoned parcels to create up to two new parcels, each eligible for residential development. The legislation aims to streamline the approval process, bypassing traditional discretionary reviews and public hearings, provided the projects meet specific criteria outlined in the law. This enables property owners to potentially increase housing density on their lots, subject to compliance with zoning and other regulatory standards.

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

Urban Lot Split under SB-9

An Urban Lot Split involves partitioning an existing, legally recognized parcel designated for single-family residences into up to two separate 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

Creating two-unit development under SB-9 involves either constructing two primary residences simultaneously or adding a second primary residence to a parcel that already has an 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?

SB-9 permits the construction of up to 2 units on a lot, with each unit being at least 800 square feet. However, the California State bill does not set a maximum unit size. Additionally, any building or structure on the lot should not surpass 30 feet in height.

What are the setbacks?

Setbacks are limited to a maximum of 4 feet. However, no setback is required for existing structures or for new structures built in the same location and with the same dimensions as the existing ones.

What is the parking requirement under SB-9?

In Burlingame, 1 parking space per unit is required, except when the parcel is within a half-mile walking distance of a high-quality transit corridor or a major transit stop, or within one block of a car share facility. Parking is not allowed in the required front setback

What are the lot constrains under SB-9?

Under SB-9, parcels can be divided into up to two new parcels, with one of them required to be at least 40% of the original parcel's size and both new parcels needing to be at least 1,200 square feet. However, ADUs and JADUs are prohibited on parcels resulting from an urban lot split under this law.

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 include those zoned for single-unit residential or R-1 use.

Can you disregard the environmental restrictions on the lot?

No, SB 9 development is not allowed on land designated for conservation under a natural community conservation plan, lands under conservation easements, wetlands, or habitats for protected species.

Can you bypass the Historical Preservation limitations?

You cannot bypass historical preservation limitations if the project site is within a designated historic district or listed on the State Historic Resources Inventory. Additionally, it should not be designated or listed as a city or county landmark, historic property, or district under local ordinances.

Is it allowed to demolish an affordable unit?

It is not allowed to demolish or alter affordable units in Burlingame if the project site is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to moderate, low, or very low-income households.

Is it allowed to build in High-Risk Areas?

No construction is allowed if the project site falls within a very high fire severity zone, a hazardous waste or listed hazardous site, a delineated earthquake fault zone, or certain 100-year flood zones.

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 homeowner should sign an affidavit affirming their intention to occupy one of the housing units as their primary residence for at least 3 years from the approval date of the urban lot split.

Are existing tenants’ rights protected?

Yes, In Burlingame, existing tenants' rights are protected under local regulations, prohibiting the demolition or alteration of housing units occupied by rental tenants within the past 3 years.

What are the rental regulations?

The rental regulations in Burlingame specify that short-term rentals, rented for periods of 30 days or less, are prohibited.

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 in housing development simplifies the process by adhering to established guidelines and bypassing discretionary procedures. This method relies on predefined criteria, facilitating permit issuance without extensive reviews or public hearings. However, even with its streamlined approach, approval for lot splits can still take up to 1 and a half year in certain instances.

What are objective standards?

Objective standards, including zoning regulations, subdivision criteria, and design review guidelines, aim to eliminate subjective judgments from government officials. They utilize standardized benchmarks that developers and officials can use when submitting proposals. This approach ensures consistent and predictable evaluations of projects, providing homeowners with clear guidelines for their submissions.

What are the steps to get the permits?

Here are the steps to apply for an SB 9 project in Burlingame:

• Submit your application to the Planning Division, ensuring all required materials listed in the Submittal Requirements Checklist are included.
• Since the review process is ministerial, there are no public hearings or discretionary reviews required.
• You will receive written notification of your application status within 30 days of submission.
• Approval depends on demonstrating compliance with Burlingame's development standards and regulations.
• If approved, submit a building permit application to the Building Division along with a complete set of plans.

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

In this first scenario, we suggest constructing a three-story duplex with a combined area of 4,000 square feet, plus a 1,000-square-foot Accessory Dwelling Unit (ADU). The total estimated cost, including construction, permits, and professional fees (excluding land), is $2,160,116. The projected market value of the finished property in Burlingame is around $6,530,000, resulting in a return on investment (ROI) of [($6,530,000 - $2,160,116) / $2,160,116] * 100 = 202%.

Scenario 2

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

For this second scenario, we recommend dividing the lot to build two separate three-story duplexes, each with a total area of 4,000 square feet. The estimated cost, excluding land acquisition, is $3,463,498. The projected market value for these duplexes in Burlingame is $10,448,000, resulting in an ROI of 202%.

Conclusion:

Real estate projects with SB-9 in Burlingame City can deliver excellent returns, making it a very appealing choice for anyone looking to develop residential properties.

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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