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

What is SB-9?

SB-9, known as Senate Bill 9, is a California law designed to address housing shortages by allowing homeowners to split their single-family residential lots into two and build up to two homes on each new lot. This could potentially create up to four housing units per property. The legislation simplifies the approval process by skipping lengthy environmental reviews and discretionary approvals, as long as certain criteria like lot size and zoning rules are satisfied. Properties in historic districts or environmentally sensitive areas are exceptions to these streamlined rules. Homeowners have the choice to opt into SB-9 based on their property's eligibility and their development goals.

How SB-9 applies to properties in Citrus Heights?

SB 9, effective from January 1, 2022, in Citrus Heights, allows property owners in single-family residential zones like RD-1 through RD-5 and designated Special Planning Areas to apply for permits to split their lots into two and construct up to two new homes per lot. This could potentially result in up to four units per property. However, properties with environmental restrictions such as flood zones, conservation areas, wildlife habitats, or conservation easements are ineligible. Development should follow specific standards including setbacks, parking requirements, and occupancy restrictions, ensuring compliance with local zoning laws and SB 9 regulations.

What can homeowners build under SB-9 or Citrus Heights’ HOME Act?

Urban Lot Split under SB-9

It involves splitting a single lot into two separate lots within an area designated for single-family residential use.

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 Units under SB-9

A two-unit development describes a housing project that consists of two residential units within a single lot designated for zoning intended for single-family residential use.

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?

Under SB 9, there is no specific maximum size limit for new housing units. The size is determined by objective development standards such as lot coverage, setbacks, access, and parking requirements. However, a minimum of two living units, each at least 800 square feet in size, is allowed regardless of these standards.

What are the setbacks?

Setbacks for SB 9 developments include a minimum of four feet for side and rear setbacks. Existing structures are exempted from setback requirements.

What is the parking requirement under SB-9?

Parking requirements under SB-9 require 1 parking space per unit, with exemptions available in specific circumstances.

What are the lot constrains under SB-9?

The urban lot split requires creating two lots that are approximately equal in size, ensuring that one lot is no smaller than 40% of the size of the other. Additionally, the minimum lot size requirement for urban lot splits is set at 1200 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 in Citrus Heights are located in RD-1 through RD-5 zones and Special Planning Areas that accommodate single-family residences.

Can you disregard the environmental restrictions on the lot?

No, projects seeking to use SB 9 may be disqualified if the property includes areas designated as flood zones or floodways, conservation areas, potential wildlife habitats, land with special status plant species, or land encumbered by conservation easements.

Can you bypass the Historical Preservation limitations?

No, Historical Preservation regulations in Citrus Heights cannot be avoided. Properties cannot be designated as historic or located within historic districts listed on the State Historic Resources Inventory. Local ordinances also prohibit designation as city or county landmarks or historic properties.

Is it allowed to demolish an affordable unit?

"No, in Citrus Heights, it is not allowed to demolish or alter units covered by agreements, ordinances, or regulations that ensure affordable rents for moderate, low, or very low-income individuals and families.

Is it allowed to build in High-Risk Areas?

Building in areas prone to high-risk environmental conditions may be allowed under certain conditions, but strict guidelines apply. For example, construction in zones vulnerable to 100-year floods is acceptable if the site has received approval from FEMA or meets the standards of the National Flood Insurance Program. Similarly, development in regulatory floodways is authorized only with a certification ensuring no increase in flood levels. These measures aim to protect vulnerable areas and ensure the safety of residents and neighboring properties from potential environmental risks.

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?

Under SB 9 regulations in Citrus Heights, the applicant should sign a sworn statement declaring their intent to reside in one of the newly created parcels as their primary residence for a minimum of three years. Additionally, the property owner seeking subdivision cannot own any adjacent property or coordinate with neighboring landowners during the subdivision process.

What are the rental regulations?

Short-term renting of residential units in Citrus Heights is restricted, prohibiting durations of less than 30 days.

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 refers to a simplified procedure for housing development, wherein developers and local authorities follow specific guidelines. Unlike subjective approaches, ministerial approval follows predetermined criteria, minimizing bureaucratic hurdles. This streamlined process enables eligible projects to acquire permits without extensive assessments or public hearings. However, even with its efficiency, securing approval for a lot split may still require up to 18 months.

What are objective standards?

Objective standards, including criteria such as "objective zoning criteria," "subdivision criteria," and "design review criteria," are designed to remove subjective assessments made by government authorities. These standards rely on standardized benchmarks that developers and officials can refer to when submitting proposals. This method ensures that evaluations of projects are consistent and reliable, offering homeowners transparent and predictable guidelines for their proposals.

What are the steps to get the permits?

Following these steps will guide you through the process of obtaining SB 9 permits in Citrus Heights effectively:

• Prepare Your Application Package:

Gather all required documents, including a map prepared by a licensed surveyor, as outlined in the city's application checklist.

• Check Eligibility:

Contact the Planning Division to confirm that your property qualifies for the Urban Lot Split under SB 9.

• Submit Your Application:

Use the city's application portal to submit your completed application package.

• Pay the Deposit:

Include a $5,000 deposit with your application to cover the review process fees.

• Application Review:

The Planning Division will review your application. Any unused funds from the deposit will be refunded after the review is complete.

• Follow Up:

Monitor communications from the Planning Division regarding your application status and any additional requirements.

• Receive Approval:

Upon approval, you will receive notification from the Planning Division allowing you to proceed with your SB 9 project.

• Begin Development:

Start the development process according to the approved SB 9 plans and guidelines.

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 $2,156,497. The anticipated market value of the completed property in Citrus Heights is approximately $2,765,000, resulting in a return on investment (ROI) of [($2,765,000 - $2,156,497) / $2,156,497] * 100 = 28%.

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 $3,461,276. The projected market value for these duplexes in Citrus Heights is $4,424,000, leading to an ROI of 28%.

Conclusion:

Real estate projects in Citrus Heights City under SB-9 could result in a return on investment of less than 50%. To reduce the risk of financial setbacks, think about implementing additional financial strategies or acquiring land at a much lower cost.

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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