All you need to know about building on properties in Redwood City under SB-9
Applying SB-9 for property projects in Redwood City can help homeowners reduce their loan balance significantly. With additional funds, you could also add more units to earn rental income or accommodate extended family while staying in your primary residence. To ensure your SB-9 project is effective, begin by familiarizing yourself with eligibility criteria, property restrictions, and the most financially practical SB-9 options for your Redwood City property.
What is SB-9 and how does it apply to the properties in Redwood City?
What is SB-9?
Senate Bill 9 (SB-9) or the California HOME Act requires administrative approval for housing development projects that permit up to two dwelling units on single-family zoned parcels. It also allows for a one-time division of existing single-family lots into two, with the possibility of constructing additional units on the newly created lots.
How SB-9 applies to properties in Redwood City?
SB-9 allows property owners in Redwood City to develop up to two housing units on single-family zoned parcels and to split single-family residential lots into two new parcels. These changes can be made with a ministerial, streamlined approval process, provided the projects meet specific objective standards and criteria, such as zoning regulations and environmental constraints. The goal is to increase housing density and availability while ensuring compliance with the established guidelines.
What can homeowners build under SB-9 or Redwood City’s HOME Act?
Urban Lot Split under SB-9
Under SB-9, an urban lot split involves dividing an existing single-family residential property into two separate parcels, enabling the construction of up to two units, which may include ADUs or JADUs on the newly created parcel.
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
Under SB-9, a two-unit development refers to a project that permits the construction of up to two residential homes on a single-family residential parcel. This includes scenarios where the project adds up to two new housing units or adds one new unit to an existing one. It aligns with existing regulations for ADUs and JADUs without the need for an urban lot split.
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 minimum size requirement for newly constructed residential units in Redwood is 800 square feet, but developers have the flexibility to build larger units under California SB-9 regulations.
What are the setbacks?
Structures that match the size and location of existing buildings are exempt from setback regulations. However, the city has the authority to enforce setbacks of up to 4 feet from side and rear property lines if necessary.
What is the parking requirement under SB-9?
Each unit should have 1 parking space, unless the property is within a half-mile walking distance of a Caltrain Station or El Camino Real.
What are the lot constrains under SB-9?
The lot split under SB-9 requires each newly created lot to be between 40% and 60% of the size of the original lot. Additionally, each resulting lot should be at least 1,200 square feet in 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.
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 located in R-1 and RH zoning districts.
Can you disregard the environmental restrictions on the lot?
No, the property cannot ignore environmental restrictions; it should not be located on farmland, wetlands, a hazardous waste site, land designated for conservation, or a site under conservation easement, nor can it contain habitat for protected species.
Can you bypass the Historical Preservation limitations?
You are not allowed to avoid Historical Preservation limitations in Redwood City if the parcel is located within a historic district, listed on the State Historic Resources Inventory, or designated as a city landmark or historic property according to local ordinances.
Is it allowed to demolish an affordable unit?
No, you cannot demolish or alter an affordable unit in Redwood City if it is subject to 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?
No, construction is not allowed in areas designated as Very High Fire Hazard Severity Zones (VHFHSZ), earthquake fault zones, special flood hazard areas, or regulatory floodways.
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?
Yes, homeowners in Redwood City should reside on the property. To proceed with an urban lot split, homeowners should submit a signed affidavit confirming their intent to occupy one of the housing units as their primary residence for a minimum of three years from the date of approval of the urban lot split.
Are existing tenants’ rights protected?
Yes, SB 9 protects current tenants' rights by preventing the demolition or alteration of housing under certain conditions: Housing under rent or price controls set by public authorities, properties where accommodations have been taken off the rental market within the past 15 years, and housing occupied by tenants within 3 years before the application to develop. Additionally, if a property has had tenants within the last 3 years, no more than 25% of the existing exterior walls can be demolished.
What are the rental regulations?
The rental period for any SB 9 unit created should be longer 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 involves following established protocols to facilitate permit issuance without discretionary reviews or public hearings, with the aim of speeding up the process. However, for lot divisions, approvals may still require an extended period of up to 18 months.
What are objective standards?
"Objective zoning standards," "objective subdivision standards," and "objective design review standards" are employed in zoning, subdivision, and design review processes to remove subjective assessments by government officials. These standards depend on standardized metrics accessible to developers and officials before submission, ensuring projects are evaluated consistently and reliably. This provides homeowners with clear and predictable guidelines for evaluating their proposals.
What are the steps to get the permits?
Here are the steps to obtain SB 9 permits in Redwood City:
- Check Zoning Eligibility:
Confirm that your property is in an R-1 or RH single-family zoning district eligible for SB 9 Projects or Urban Lot Splits using the City's GIS Webpage.
- Prepare Permit Application:
Fill out a Building Permit application and SB 9 Project Checklist for SB 9 Projects. Submit these documents along with construction plans and fees to [email protected].
- Submit for Urban Lot Split:
For new lot splits, complete an Engineering Permit application and SB 9 Urban Lot Split checklist. Submit these to [email protected] along with any required parcel maps and fees.
- Fire Sprinkler Requirement:
Ensure all new units include fire sprinklers. Schedule a fire flow test through the Engineering Department's Fire Flow webpage to assess water availability and assist with sprinkler system design.
- Compliance Documentation:
Some projects may need a deed restriction or affidavit to meet state law requirements. Ensure all necessary documents are prepared and submitted with your application.
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
In this first option, we recommend building a three-story duplex with a total of 4,000 square feet, plus a 1,000-square-foot Accessory Dwelling Unit (ADU). The estimated overall cost, which includes construction, permits, and professional fees (excluding land), is $2,169,675. The expected value of the completed property in Redwood is approximately $6,315,000, giving an ROI of [($6,315,000 - $2,169,675) / $2,169,675] * 100 = 191%.
Scenario 2
Lot Split with 2 new 4,000 sq.ft 3-story Duplexes
For the second option, we suggest dividing the lot to build two separate three-story duplexes, each with 4,000 square feet. The estimated cost, excluding land, is $3,470,914. The anticipated market value for these duplexes in Redwood is $10,104,000, resulting in an ROI of 191%.
Conclusion:
In Redwood City, utilizing SB-9 for property projects can lead to significant financial gains, making it a prime location for those considering new residential developments.