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

What is SB-9?

SB-9, known as Senate Bill 9, is a California law designed to tackle housing shortages by allowing homeowners to split their single-family residential lots into two and construct up to two homes on each new lot. This could potentially double the housing capacity of a property. The law simplifies the approval process by bypassing lengthy environmental assessments and discretionary approvals, as long as certain conditions like lot size and zoning rules are met. Properties situated in historical districts or environmentally delicate areas are exceptions to these streamlined rules. Homeowners have the choice to participate in SB-9 based on their property's eligibility and their goals for development.

How SB-9 applies to properties in Galt?

In Galt, SB-9 applies to properties designated for single-family residential use in zoning districts such as R1A, R1B, or R1C. This legislation allows homeowners to split their lots into two, potentially constructing up to two homes on each resulting lot. It streamlines the approval process by bypassing certain discretionary reviews and environmental assessments, provided specific criteria like lot size and zoning regulations are met.

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

Urban Lot Split under SB-9

An "urban lot split" refers to dividing an already legally subdivided lot into two separate 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 Project under SB-9

A "two-unit project" under SB-9 refers to either developing two primary dwelling units simultaneously or, if one primary dwelling unit already exists on the lot, adding a second primary dwelling unit on a legally divided lot.

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?

The total floor area of each new primary dwelling constructed under these provisions should range between 500 and 800 square feet. Existing primary dwellings on the lot that surpass 800 square feet cannot be enlarged beyond their lawful floor area at the time of the two-unit project. However, primary dwellings smaller than 800 square feet can be expanded up to 800 square feet as part of or after the two-unit project.

What are the setbacks?

Setbacks for properties under SB-9 should follow the objective setbacks specified by the underlying zoning regulations. Exceptions include:

• No setback is required for existing legally established structures or new structures built in the same location and dimensions as existing ones.
• Setbacks can be adjusted to ensure up to two units on the lot are at least 800 square feet in size, but no structure can be closer than four feet from a side or rear property line.
• Front setbacks for new dwellings after an urban lot split should be at least 15 feet from the front property line, extending to 20 feet for garage doors.

What is the parking requirement under SB-9?

Under SB-9 regulations, every unit should include at least 1 off-street parking space, except when specific exemptions apply. These exemptions include situations where the property is within a half-mile of a fixed route bus service with frequent peak-hour intervals or within one block of a car-share vehicle location.

What are the lot constrains under SB-9?

The initial lot size should be at least 2,400 square feet, with resulting lots each being a minimum of 1,200 square feet. Additionally, each new lot created should occupy between 40% and 60% of the original lot's total area.

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 typically in single-family residential zones, such as R1A, R1B, or R1C zoning districts.

Can you disregard the environmental restrictions on the lot?

No, projects utilizing SB 9 may face disqualification if the property includes prime farmland, farmland of statewide importance, or land zoned or designated for agricultural protection or preservation. Additionally, restrictions apply to properties containing wetlands, hazardous waste sites not cleared for residential use, land designated for conservation under natural resource protection plans, habitat for protected species, or land under conservation easement.

Can you bypass the Historical Preservation limitations?

No, you cannot bypass the historical preservation restrictions. The property should not be designated as historic or located within a historic district listed on the State Historic Resources Inventory. Additionally, it cannot be assigned as a city or county landmark or included in a designated historic property or district by local ordinance.

Is it allowed to demolish an affordable unit?

No, in Galt, it is not allowed to demolish or alter housing units that are designated for households of moderate, low, or very low income.

Is it allowed to build in High-Risk Areas?

Building in environmentally risky areas may be allowed under specific conditions, but strict guidelines apply. For example, construction can proceed in high fire hazard zones if the site meets required fire mitigation measures. In earthquake fault zones, buildings should comply with seismic protection codes. For areas prone to floods, development is allowed with FEMA-approved revisions or compliance to National Flood Insurance Program criteria. Projects within floodways need a no-rise certification to ensure compliance with federal regulations.

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?

The applicant should submit an affidavit confirming their intention to occupy one of the dwelling units on the resulting lots as their primary residence for at least 3 years following approval of the urban lot split.

Are existing tenants’ rights protected?

Yes, existing tenants' rights are protected under SB 9. The legislation prohibits the demolition or alteration of housing covered by rent or price controls enforced by public entities through their regulatory powers. Additionally, SB 9 safeguards housing withdrawn from rental or lease under the Ellis Act within the past 15 years and housing occupied by tenants within the last 3 years from being affected by urban lot split applications.

What are the rental regulations?

The rental regulations specify that no dwelling unit on the lot can 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 is a streamlined process for housing development where developers and local authorities follow predefined guidelines. Unlike discretionary methods, this approach relies on clear criteria, reducing bureaucratic obstacles. It allows eligible projects to obtain permits without lengthy evaluations or public hearings. However, despite its efficiency, obtaining approval for a lot split can still take up to 18 months in some cases.

What are objective standards?

Objective standards, like "objective zoning criteria," "subdivision criteria," and "design review criteria," aim to eliminate subjective judgments made by government officials. They are based on standardized benchmarks that developers and officials can use when submitting proposals. This approach ensures that project evaluations are uniform and dependable, providing homeowners with clear and predictable guidelines for their submissions.

What are the steps to get the permits?

These are the steps for obtaining permits under SB-9 for both a Two-Unit Project and an Urban Lot Split:

• Application Submission:

Complete the City’s approved application form as an individual property owner, without corporations except for community land trusts or qualified nonprofit corporations. Include a certificate of compliance with the Subdivision Map Act and pay the required fee established by the City Council.

• Review for Completeness:

The City will review the application for completeness within 30 days of submission and notify the applicant of any deficiencies.

• Ministerial Approval:

The Community Development Director reviews and approves the application for both types of projects without unrestricted review.

• Deed Restriction and Documentation:

For a Two-Unit Project, ensure all required documents, such as deed restrictions, are prepared and confirmed before the approval takes effect.

• Final Parcel Map Approval:

For an Urban Lot Split, a tentative parcel map is approved upfront and should be followed by the submission of all necessary documents, including deed restrictions, to finalize the approval.

• Compliance Confirmation:

Demonstrate compliance with all local regulations and ensure all necessary documents are recorded as required.

• Liability and Reimbursement Agreement:

Agree to hold the City harmless from any claims related to the approval and reimburse it for all enforcement costs, including attorneys’ fees.

• Project Implementation:

Once approved and all conditions are met, proceed with the implementation of the project according to the approved plans and conditions.

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 $2,164,302. The anticipated market value of the completed property in Galt is approximately $4,310,000, resulting in a return on investment (ROI) of [($4,310,000 - $2,164,302) / $2,164,302] * 100 = 99%.

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 $3,469,537. The projected market value for these duplexes in Galt is $6,986,000, leading to an ROI of 99%.

Conclusion:

Real estate projects under SB-9 in the City of Galt show promising returns on investment, making it a worthwhile location to consider for development.

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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