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

What is SB-9?

SB-9, or California Senate Bill 9, is a state law passed to increase housing density and affordability. It simplifies the process for property owners to create small residential units on their existing lots. This method eliminates the need for extensive environmental assessments (CEQA), conditional use permits, and other discretionary approvals from agencies like the Planning Commission or Historic Preservation Commission. Participation is optional, but projects must fulfill specific criteria to qualify.

How does SB-9 apply to properties in Downey?

In Downey, homeowners can benefit from SB-9 by splitting their properties into two separate lots and constructing two housing units on each lot. This allows for a total of four units, provided they follow certain regulations, including minimum lot size requirements and zoning compliance.

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

Urban Lot Split under SB-9

An urban lot split refers to the process of dividing an existing lot designated for single-family homes into two lots.

Under this option, you could have the following unit configurations:

Not sure if your property is located in a Single-family zoned area?

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Two-Unit Project under SB-9

A two-unit project involves constructing either two primary homes or adding a second primary home to a lot that already has an existing unit.

Under this option, you could have the following unit configurations:

How large can each new unit be, and how many can you have per lot?

In Downey City, each primary dwelling unit can range from 500 to 800 square feet. However, California State SB-9 allows for units of any size to be built.

After an urban lot split, each lot can have a maximum of two dwelling units. This includes primary homes, ADUs, and JADUs.

What are the setbacks?

All structures need to be at least 4 feet away from side and rear property lines. Existing structures are exempt from setbacks if they are legally established, or if new structures match the size and location of existing ones.

What is the parking requirement under SB-9?

For new primary dwelling units built after an urban lot split, there should be at least one off-street parking space per unit, typically in a garage, unless certain exceptions apply.

These exceptions include lots located within half a mile of a bus corridor with service every 15 minutes during peak hours, or near a rail or bus rapid transit station, ferry terminal, or a hub for multiple bus routes with similar service frequency. Another exception applies if the lot is within one block of a car-share vehicle location.

What are the lot constraints under SB-9?

The lot split needs to be at least 2,400 square feet in size. Each new lot created from the split should have a minimum size of 1,200 square feet. Additionally, each lot's size should be between 40% and 60% of the original lot's area.

Development Analysis calculates the max size under SB-9 for the highest return.

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Who and which properties are eligible for SB-9 or the HOME Act?

Which zoning designations are eligible for SB-9?

Properties eligible for SB-9 are located within residential zoning districts such as R-1.

Can you disregard the environmental restrictions on the lot?

No, SB-9 rules in Downey do not apply to properties in environmentally sensitive areas. These include wetlands, hazardous waste sites unless cleared for residential use, floodways, conservation areas, and habitats for protected species. This rule helps protect important ecological areas from the negative impacts of development.

Can you bypass the Historical Preservation limitations?

No. For a property to qualify under SB-9, it cannot be designated as a historic property or be located in a historic district listed on the State Historic Resources Inventory. It also cannot be part of a site identified by ordinance as a City or County landmark or as a historic property or district.

Is it allowed to demolish an affordable unit?

No, SB-9 regulations prohibit demolishing or altering affordable housing units that are income-restricted for moderate, low, or very low-income households.

Is it allowed to build on a property in Coastal Zones?

While SB-9 regulations in Downey City do not specifically address buildings in coastal areas, it is a good idea to consult the planning department directly. Coastal zones often have stricter building codes than urban areas, so it is important to understand and follow local rules before starting any construction.

Is it allowed to build in High-Risk Areas?

Yes, construction is allowed in high-risk areas, but specific conditions and strict regulations exist to manage potential hazards.

• Construction is allowed only in very high fire hazard zones if the site follows all required fire safety measures.
• Construction in earthquake fault zones is allowed only if it meets seismic safety building codes.
• Building is allowed in a 100-year flood hazard area if the site has received a Letter of Map Revision from FEMA or meets National Flood Insurance Program requirements.
• Construction in a regulatory floodway is permitted only if the site has a no-rise certification for all development.

What are the limitations after completing a project using SB-9?

Does the homeowner need to reside on the property?

Yes. When applying for an urban lot split, the homeowner has to sign an affidavit stating they will occupy one of the new dwelling units as their main home for at least 3 years after the lot split is approved.

What are the rental regulations?

Rentals cannot be for less than 30 days.

Are existing tenants’ rights protected?

Yes, existing tenants’ rights are protected. Any housing that was occupied by a tenant in the last 3 years cannot be demolished or altered. This protects tenants from being displaced.

Properties that had Ellis Act evictions in the past 15 years are not eligible under SB-9, further protecting existing occupants. Additionally, units under rent or price control have these protections as well.

Can condominiums be proposed as part of my Urban Lot Split application?

No, building condominiums as part of an Urban Lot Split application is not allowed. This means that dividing ownership for shared living, like condominiums, is prohibited under SB-9 regulations.

What is the difference between SB-9 and SB-684?

SB-684, a more recent law, simplifies the process for constructing up to 10 units on urban lots under 5 acres. Unlike SB-9, which is limited to single-family properties, SB-684 can be applied to multi-family zoning districts and vacant lots in single-family zones. A significant advantage of SB-684 is its lack of post-development ownership restrictions found in SB-9.

Below we compared SB-9 and SB-684 for you to understand the development framework outlined by each bill.

How to get permits under SB-9 or the HOME Act?

Does SB-9 projects qualify for a ministerial approval process and what does it mean?

Yes, SB-9 projects can qualify for a ministerial approval process, which simplifies the housing development process by providing clear and consistent guidelines. This means projects can obtain permits more quickly without extensive CEQA reviews or public hearings. However, finalizing a lot split may still take up to a year and a half.

What are objective standards?

“Objective zoning standards”, “objective subdivision standards”, and “objective design review standards” are rules used in zoning and development that do not rely on the personal judgment of officials. Instead, they are based on consistent, external benchmarks that both developers and officials can access before submitting a project. This approach ensures fairness and predictability in evaluating projects, giving homeowners clear expectations about the results of their proposals.

What types of objective standards qualify for a waiver under SB 9?

Under SB-9, certain objective standards may be waived if they:

• Hinder the development of two units, each at least 500 square feet.
• Impose setback requirements on existing buildings that obstruct the construction of two units.
• Require setbacks that are more than 4 feet from the side and rear lot lines, which could restrict the ability to develop two units.

What are the steps to get the permits?

To get permits in Downey, follow these steps:

1. Application Process: All owners with a mortgage interest in the lot should sign the application and parcel map. Submit the application using the city's approved form, secure a certificate of compliance with the Subdivision Map Act, and pay the necessary fee.

2. Requirements: Ensure the project aligns with zoning regulations, lot location rules, and historic property guidelines. It should not affect protected housing and must meet unit standards, fire-hazard mitigation measures, and architectural guidelines.

3. Notice of Construction: Notify adjacent property owners in writing at least 30 business days before construction begins.

4. Deed Restriction: Record a deed restriction that prohibits short-term rentals, non-residential use, and separate conveyance of dwellings, while requiring owner occupancy.

5. Specific Adverse Impacts: The city may reject the application if it poses specific adverse effects on public health, safety, or the environment without feasible solutions.

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 using CityStructure Analysis

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

Entitlements and Building Permits: 6 to 9 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 an SB-9 project cost?

This analysis will examine two scenarios to evaluate expected expenses, property valuations, and potential profits for real estate projects.

Scenario 1

New 4,000 sq. ft 3-Story Duplex + 1,000 sq. ft ADU

In the first scenario, we suggest building a 4,000-square-foot, three-story duplex along with a 1,000-square-foot Accessory Dwelling Unit (ADU). The total estimated cost for this project, including construction, permits, and professional fees (excluding land costs), is $2,159,580. In Downey, the market value of the completed property is expected to be around $3,000,000, yielding an ROI of [($3,000,000 - $2,159,580)/$2,159,580]*100 = 39%

Scenario 2

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

In the second scenario, we plan to subdivide a lot and construct two new 4,000-square-foot, three-story duplexes. The estimated total investment for this development is $3,463,308, excluding land acquisition costs.

In Downey, the projected market value for these duplexes is $4,800,000, resulting in an ROI of 39%.

Conclusion:

SB-9 projects in the City of Downey carry the risk of an ROI under 50%. To reduce this risk, it's important to take extra financial precautions or secure the land at a very advantageous price.

See how much it will cost you to improve your property per SB-9

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Resources

Downey Municipal Code