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

What is SB-9?

SB-9 (Senate Bill 9) is a law designed to address housing affordability and availability. It allows homeowners to build two homes on a single-family zoned property or split an existing single-family lot into two parcels, each allowing up to two residences. The approval process is streamlined, enabling city officials to approve eligible requests without the lengthy reviews or environmental assessments typically required under CEQA, as well as without public hearings, provided certain development standards are met.

How does SB-9 apply to properties in Encinitas?

In Encinitas, SB-9 allows for lot splits and two-unit residential developments. It also lets the city create local rules with clear development standards to implement SB-9.

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

Urban Lot Split under SB-9

This process allows homeowners to divide a single lot into two parcels under certain conditions. Each new parcel needs to have a minimum area of 1,200 square feet to ensure they are suitable for development. Additionally, the 60:40 rule requires that one parcel is not smaller than 40% of the original lot's size.

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 Residential Development under SB-9 (Duplex)

This option allows for the construction of 2 primary units on a single lot, with the possibility of adding up to two ADUs alongside them.

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?

Each new residential unit has a minimum size of 800 square feet. However, California’s SB-9 allows for units of any size beyond that.

Each lot allows for the development of two housing units, which can include ADUs and JADUs.

What are the setbacks?

New residential units can be built as close as 4 feet from side or rear property lines. Existing units or those rebuilt in the same spot and size can keep their existing setbacks, maintaining the property's layout.

What is the parking requirement under SB-9?

For each new residential unit, 1 off-street parking space is required. However, if the property is within half a mile of a high-quality transit corridor or major transit stop, no parking space is needed.

What are the lot constraints under SB-9?

When homeowners choose urban lot splits, each new parcel has to be at least 1,200 square feet, and the parcels should be roughly equal, with one being no smaller than 40% of the original lot's size. If there’s an existing unit, it needs to be entirely on one of the new parcels, and only 2 parcels can be created from a lot split. After a lot is split, it cannot be split again.

For two-unit residential developments, pathways at least 3 feet wide connect from the right-of-way to main entryways and common areas like open spaces, guest parking, mailboxes, and trash enclosures.

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?

In Encinitas, properties eligible for SB-9 are found in the RR, RR-1, RR-2, R-3, R-5, R-8, and RS-11 zones, all designated for single-family residential use.

Can you disregard the environmental restrictions on the lot?

No. While SB-9 simplifies the approval process, it does not remove environmental restrictions. Projects still need to meet existing city zoning rules, which usually include some environmental assessments, such as Encinitas City’s “Environmental Assessment.”

Can you bypass the Historical Preservation limitations?

No. SB-9 allows for certain residential developments, but it does not override historical preservation rules. Any development has to follow all relevant regulations, including those in Encinitas City’s “Historic Preservation Strategies” and state law.

Is it allowed to demolish an affordable unit?

No. In Encinitas, while SB-9 does not specifically address the demolition of affordable housing, the California HOME Act prohibits demolishing or altering housing that has affordable rents for low- and very low-income individuals and families.

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

Possibly. An Administrative Coastal Development Permit is required for new developments in Coastal Zones. Only properties in the "Coastal Commission Appeal Zone" can be appealed to the Coastal Commission. Thus, while building is allowed under SB-9 in these areas, specific permits and regulations apply.

Is it allowed to build in High-Risk Areas?

Encinitas City’s SB-9 does not specifically mention high-risk areas, but projects should comply with local zoning regulations. These may address concerns like high fire risk and climate change. The California HOME Act also excludes its provisions in very high fire hazard areas, earthquake zones, and floodplains without adequate mitigation. If local authorities restrict construction in an area, SB-9 will not apply.

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

Does the homeowner need to reside on the property?

Yes, the homeowner is required to live on the property as their main residence for at least 3 years if they want to split the lot or develop up to 2 homes. This owner-occupancy requirement is part of the SB-9 rules and is confirmed through a signed affidavit in the application process.

What are the rental regulations?

Yes, if a residential unit was occupied by tenants within the last 3 years, no more than 25% of its exterior walls can be demolished.

Are existing tenants’ rights protected?

Yes, if a residential unit was occupied by tenants in the last 3 years, more than 25% of its exterior walls cannot be demolished.

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

No. SB-9 allows property owners to split a single-family lot into 2 and build up to 2 units on each new lot, allowing for a total of 4 units.

However, creating condominiums involves a different ownership structure, where people share ownership of the land and buildings but own their units. Converting properties into condominiums requires going through the Parcel Map process, which includes filing fees, environmental assessments, public hearings, and appeal periods, unlike the simpler procedures for SB-9 Urban Lot Splits.

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

SB-684 is a newer legislation that allows the building of up to 10 units on urban lots under 5 acres in size. In contrast to SB-9, which mainly focuses on single-family homes, SB-684 applies to multi-family zones and vacant lots within single-family areas. Additionally, SB-684 does not enforce the ownership limitations found in SB-9's regulations.

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, projects under SB-9 can qualify for ministerial approval, which speeds up the development process by following established criteria. This approach minimizes administrative delays and enables quicker approvals without requiring extensive environmental evaluations (CEQA) or public meetings. Nonetheless, even with this faster process, obtaining approval for a lot split can still take as long as 1.5 years.

What are objective standards?

“Objective zoning standards," “objective subdivision standards," and “objective design review standards” are clear and measurable criteria used to assess proposed housing developments. These standards ensure consistency and fairness in the approval process, focusing on concrete factors rather than personal opinions.

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

Under SB-9, objective standards that can be waived include those related to zoning and development regulations, such as setbacks and parking requirements. These standards are quantifiable, providing developers with clear guidelines for their projects.

What are the steps to get the permits?

1. Contact the City Planning Department
Before submitting anything, set up a meeting with the Planning Department by emailing [email protected]. During this meeting, they will check if your project qualifies under SB-9 and answer any questions you have about the application process.

2. Prepare and Submit an Application
Fill out a "Planning Application" and include the "SB-9 Supplement" that outlines your project details.

3. Ensure Compliance with SB-9 Regulations and City Zoning Standards
Your project needs to meet the development standards in the guidelines, such as unit size, setbacks, parking, and open space. Make sure it aligns with Encinitas city zoning rules.

4. Consider the Need for an Administrative Coastal Development Permit
If your property is in the Coastal Zone, you might need an Administrative Coastal Development Permit. Projects in the "Coastal Commission Appeal Zone" could also be subject to appeals from the Coastal Commission.

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: 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 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 this first scenario, we are considering the construction of a 4,000-square-foot, three-story duplex with an additional 1,000-square-foot Accessory Dwelling Unit (ADU). The total estimated cost for this project, which includes construction, permits, and professional fees (excluding land acquisition), is $1,830,381. If located in the New Encinitas area, a sought-after neighborhood in Encinitas, the market value of this development would be around $5,995,000. Consequently, the projected Return on Investment (ROI) for this SB-9 project in New Encinitas is calculated as [($5,995,000 - $1,830,381)/$1,830,381]*100 = 227%

Scenario 2

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

In this second scenario, we plan to subdivide a lot and build two new 4,000-square-foot, three-story duplexes. The total investment required for this project is estimated at $2,958,451, excluding any costs for land acquisition if the land is not already owned.

In the New Encinitas area, the projected market value for this type of development is around $9,592,000, yielding a 224% return on investment (ROI). However, if the project is located in a different part of Encinitas, such as the more affordable Old Encinitas neighborhood, the market value drops to approximately $6,176,000, resulting in a lower ROI.

Conclusion:

SB-9 projects in the New Encinitas area offer robust returns on investment, making it an attractive location for real estate development. Conversely, while SB-9 projects in the Old Encinitas neighborhood also show promising returns, they are slightly lower compared to those in New Encinitas.

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

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Resources

Encinitas Municipal Code