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

What is SB-9?

The California Senate Bill 9 (SB9), also known as the California HOME (Housing Opportunity and More Efficiency) Act, was enacted by Governor Newsom on September 16, 2021. It focuses on simplifying the housing development process. SB9 requires that a proposed housing development with no more than two residential units in a single-family residential zone be considered through a ministerial process, bypassing discretionary review or hearings, provided it meets specific criteria.

How SB-9 applies to properties in Millbrae?

SB-9 applies to properties in Millbrae by allowing for the creation of up to two additional residential units on a single-family lot through an urban lot split. This legislation enables property owners to bypass certain discretionary review processes, streamlining the approval for new housing units. However, local ordinances and zoning regulations in Millbrae may further specify conditions and limitations for implementing SB-9.

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

Urban Lot Split under SB-9

An urban lot split refers to dividing an existing parcel into no more than two individual parcels, provided all specified criteria and standards are met.

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 Residential Development under SB-9

Two-unit residential development refers to a project that involves the creation of up to two new dwelling units or the addition of one new dwelling unit to an existing primary dwelling 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 SB 9 dwelling units should follow the maximum size allowed by the underlying zoning district, with a minimum size of 800 square feet. If an SB 9 project does not comply with the zoning standards, each unit is limited to 800 square feet. Despite these guidelines, California's SB-9 permits any unit size.

Under SB 9, ADUs and JADUs are allowed on lots created by an urban lot split. Local agencies are not required to approve more than two units (including ADUs and JADUs) on such lots. This allows local agencies the choice to limit development on these properties to a maximum of two units through the adoption of an SB 9 implementing ordinance.

What are the setbacks?

Setbacks for SB 9 dwelling units are:

• Front: 20 feet.
• Interior and street side: 4 feet, unless matching the location and dimensions of an existing legal dwelling.
• Rear: 4 feet, with the same exception as above.
• All unit parts, including eaves and projections, should meet setback requirements, except ADUs, which follow ADU-specific standards.

What is the parking requirement under SB-9?

Each SB 9 dwelling unit should include 1 garage parking space unless:

• The parcel is within half a mile of a high-quality transit corridor stop or major transit stop.
• There is a designated car-share vehicle parking area within one block.

Garage spaces should measure 10 by 20 feet, be unobstructed, and located on the same lot as the unit. Parking is not allowed in the front yard setback, and tandem parking does not count. Each garage space should have direct access to a paved vehicular access way for safe entry and exit.

What are the lot constrains under SB-9?

An urban lot split can create up to two new parcels of roughly equal size, with one parcel no smaller than 40% of the original lot. Each new parcel should be at least 1,200 square feet.

Parcels created through an urban lot split that front a public street should have a minimum frontage of 25 feet. Flag lots or lots with a narrow strip extending to a street (less than 25 feet) are not allowed.

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?

The zoning districts eligible for SB-9 in Millbrae include R-1LL and R-1.

Can you disregard the environmental restrictions on the lot?

Environmental restrictions cannot be disregarded on a lot if it falls under specific categories such as prime farmland, wetlands, designated conservation areas, habitat for protected species, or lands under conservation easements. These restrictions are required to protect sensitive ecological resources and species as defined by federal and state laws.

Can you bypass the Historical Preservation limitations?

No, it is not allowed to disregard Historical Preservation limitations in Millbrae if the parcel is placed within a historic district, listed on the State Historic Resources Inventory, or designated as a city landmark or historic property under city ordinances.

Is it allowed to demolish an affordable unit?

No, it is prohibited to demolish or alter an affordable unit if it is governed by a recorded covenant, ordinance, or law that requires affordable rent levels for moderate, low, or very low-income individuals and families.

Is it allowed to build in High-Risk Areas?

Possibly, because development is restricted in high-risk areas such as very high fire hazard zones, hazardous waste sites, earthquake fault zones, and special flood hazard areas designated by FEMA. Exceptions may apply based on mitigation measures or clearances from relevant state and federal authorities.

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 applying for an urban lot split in Millbrae should provide a signed affidavit, approved by the city attorney, affirming their intention to live in one of the newly created housing units as their primary residence for at least 3 years following the approval of the lot split.

Are existing tenants’ rights protected?

Yes, SB-9 ensures existing tenants' rights are safeguarded by prohibiting the demolition or alteration of housing. These include housing under rent or price controls enforced by public entities, and parcels where accommodations have been withdrawn from rent or lease under California Government Code Chapter 12.75 within the past 15 years before the development application. Additionally, SB-9 protects housing occupied by tenants within the last 3 years from demolition or alteration.

What are the rental regulations?

Rental regulations for SB-9 dwelling units require that any rental or lease should be for a minimum period of 30 consecutive 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 involves following set guidelines to streamline permit issuance without discretionary reviews or public hearings. This approach aims to expedite the process but can still take up to 18 months for approvals in specific cases involving lot divisions.

What are objective standards?

Objective standards include zoning regulations, subdivision criteria, and design review guidelines designed to remove subjective judgments by government officials. These standards rely on uniform criteria used by developers and officials when submitting proposals, ensuring evaluations of projects are consistent, predictable, and fair.

What are the steps to get the permits?

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

• Familiarize Yourself with Local Regulations:

Start by thoroughly reviewing Millbrae's Planning and Zoning Laws and ordinances that govern ADUs and housing developments. Understanding these rules is essential as they provide the framework for project compliance.

• Ensure Compliance:

After understanding local ordinances, verify that the proposed development meets all requirements. This includes confirming adherence to rent controls, restrictions on demolition, site specifications, and any guidelines applicable to historical areas.

• Gather Required Documentation:

Collect all necessary paperwork for the housing project or urban lot split application. This might include architectural designs, environmental assessments, financial documents, and other relevant materials to support your application.

• Submit Your Application:

Send the completed application to the relevant local authority for ministerial approval. This marks the beginning of the formal review process and moves your project closer to obtaining the required permits.

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 option, we recommend constructing a three-story duplex totaling 4,000 square feet, along with an additional 1,000-square-foot Accessory Dwelling Unit (ADU). The total estimated cost, including construction, permits, and professional fees (excluding the land), is $2,152,239. The projected value of the completed property in Millbrae is around $4,935,000, resulting in a return on investment (ROI) of [($4,935,000 - $2,152,239) / $2,152,239] * 100 = 129%.

Scenario 2

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

For the second option, we suggest splitting the lot to construct two separate three-story duplexes, each with 4,000 square feet. The estimated cost, excluding the land, is $3,457,009. The anticipated market value for these duplexes in Millbrae is $7,896,000, resulting in an ROI of 128%.

Conclusion:

SB-9 projects in the City of Millbrae demonstrate strong return on investment, indicating that it is worthwhile to consider undertaking a real estate project in this location.

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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