All you need to know about building on properties in Elk Grove City under SB-9
Applying SB 9 for property improvements in Elk Grove City is an effective strategy for homeowners looking to reduce their mortgage debt. Adding extra units can generate rental income or offer room for extended family while you remain in your primary residence. To make your SB 9 project effective, begin by familiarizing yourself with eligibility requirements, understanding how local restrictions impact your property, and determining which SB 9 option best suits your financial goals in Elk Grove City.
What is SB-9 and how does it apply to the properties in Elk Grove?
What is SB-9?
Senate Bill 9 (SB-9) is a California law aimed at mitigating housing shortages by permitting homeowners to divide their single-family residential lots into two and construct up to two homes on each resulting lot, potentially resulting in up to four housing units per property. The law streamlines the approval process, eliminating the need for extensive environmental reviews and discretionary approvals, provided that specific criteria such as lot size and zoning regulations are met. Properties located in historic districts or environmentally sensitive areas are exempt from these streamlined processes. Homeowners can choose to utilize SB-9 based on their property's eligibility and their development objectives.
How SB-9 applies to properties in Elk Grove?
SB-9 applies to properties in Elk Grove by allowing homeowners to divide their lots into two, creating up to four housing units where zoning permits. This legislation streamlines the approval process for such developments, bypassing certain environmental reviews and discretionary approvals under specific conditions. However, properties in historic districts or environmentally sensitive areas may not qualify for these streamlined rules. Homeowners can opt into SB-9 based on their property's eligibility and their development goals, aiming to address housing shortages effectively.
What can homeowners build under SB-9 or Elk Grove’s HOME Act?
Urban Lot Split under SB-9
Under SB-9, an Urban Lot Split involves dividing a single-family residential parcel into two distinct lots.
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 SB-9
A two-unit development refers to a housing project that includes two residential units on a single parcel zoned 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.
How large the new units could be and what are the lot contains?
The size of new units is limited to a maximum of two dwelling units per lot. This includes primary dwelling units, ADUs and JADUs.
What are the setbacks?
Setbacks include a minimum of 4 feet for rear and interior side yards. Existing structures do not require setbacks, but the minimum front and street side yard setbacks of the underlying zoning district should be kept.
What is the parking requirement under SB-9?
In a two-unit residential development under SB-9, each unit should have 1 off-street parking space, which can be either covered or uncovered and located on the same lot as the unit. There are exemptions from providing parking if the lot is within half a mile of a high-quality transit corridor, a major transit stop, or if there's a car share vehicle within one block. Additionally, if an existing garage or parking area is converted or demolished to construct a new unit, at least one replacement parking space per unit is typically required, unless the project qualifies for an exemption from parking requirements.
What are the lot constrains under SB-9?
Under SB-9, the constraints for lot splitting include ensuring that no resulting lot is smaller than 40% of the original lot area, with a minimum size of 1,200 square feet.
Both resulting lots should have a minimum frontage of 20 feet along a public right-of-way. If the original lot's frontage is less than 40 feet, one lot can have 20 feet of frontage while the other accesses the street through a 12-foot wide corridor.
Lots without direct street frontage should also have a 12-foot wide access corridor kept clear of buildings, except for utilities.
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.
Who and which properties are eligible for SB-9 or HOME Act?
What are the zoning districts for properties eligible for SB-9?
In Elk Grove, properties eligible for SB-9 include those zoned as Agricultural Residential (AR) districts (AR-1 through AR-10) and Residential Districts (RD) ranging from RD-1 to RD-15.
Can you disregard the environmental restrictions on the lot?
No, properties located within environmentally sensitive zones cannot bypass these restrictions. These zones include areas such as farmlands, wetlands, designated hazardous waste sites, floodways, conservation areas, and habitats for protected species.
Can you bypass the Historical Preservation limitations?
No, you cannot bypass Historical Preservation regulations in Elk Grove. Properties cannot be designated as historic or located within historic districts listed on the State Historic Resources Inventory. Local ordinances also prevent designation as city or county landmarks or historic properties.
Is it allowed to demolish an affordable unit?
In Elk Grove, it is prohibited to demolish or alter housing that is governed by a recorded covenant, ordinance, or law that limits rents to levels affordable for moderate, low, or very low-income individuals and families.
Is it allowed to build in High-Risk Areas?
Construction in areas identified as high-risk for environmental conditions may be allowed under specific circumstances, subject to stringent regulations. For instance, building in zones susceptible to 100-year floods may proceed if the site has obtained FEMA approval or complies with National Flood Insurance Program criteria. Similarly, development in regulatory floodways is authorized only with certification ensuring no elevation in flood levels.
Start by checking if your property is eligible for SB-9 because not all the single-family zoned lots are eligible.
What are the ownership and development limitations after completing a project using SB-9?
Does the homeowner need to reside on the property?
The applicant should provide an affidavit confirming their intention to reside in one of the lots as their primary residence for at least 3 years following the approval of the urban lot split.
Are existing tenants’ rights protected?
Under SB-9, developments cannot require the demolition or alteration of housing under certain conditions. These include properties subject to rent or price control by a public entity, properties withdrawn from rent or lease under specific sections of the California Government Code within the last 15 years, and housing occupied by tenants within the past 3 years.
What are the rental regulations?
Properties resulting from the subdivision cannot be rented out for periods shorter 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 in housing development refers to a simplified process where developers and local authorities follow specific guidelines. Unlike subjective approaches, this method relies on predetermined criteria, minimizing bureaucratic obstacles. It allows eligible projects to obtain permits without extensive reviews or public hearings. However, even with its streamlined nature, securing approval for a lot split may still take up to 18 months.
What are objective standards?
Objective standards, such as "objective zoning criteria," "subdivision criteria," and "design review criteria," aim to eliminate subjective judgments from government authorities. These standards rely on standardized benchmarks that developers and officials use when submitting proposals. This approach ensures consistent and reliable evaluations of projects, providing homeowners with clear and predictable guidelines for assessing their proposals.
What are the steps to get the permits?
To obtain permits under SB 9 in Elk Grove, follow these steps:
- Understand Local Regulations:
Familiarize yourself with Elk Grove's Planning and Zoning laws, as well as rules regarding accessory dwelling units and housing projects.
- Follow State Guidelines:
Ensure compliance with statewide regulations, including those applicable to charter cities.
- Verify Compliance:
Ensure that your development proposal meets all pertinent requirements, such as rent control, demolition restrictions, site considerations, and regulations for historic districts.
- Compile Documentation:
Gather all necessary paperwork for your housing development or lot split application.
- Submit Application:
Apply by submitting your application to the relevant local agency for ministerial approval.
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.
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 $2,149,040. The anticipated market value of the completed property in Elk Grove is approximately $2,755,000, resulting in a return on investment (ROI) of [($2,755,000 - $2,149,040) / $2,149,040] * 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 $3,457,478. The projected market value for these duplexes in Elk Grove is $4,408,000, leading to an ROI of 28%.
Conclusion:
Projects in Elk Grove City under SB-9 might achieve an ROI below 50%. To lower the chances of financial shortfalls, explore alternative financial strategies or look for land at a considerably reduced rate.