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

What is SB-9?

SB-9 (Senate Bill 9) aims to streamline the approval process for certain housing projects in California. It requires local authorities to fast-track approval for these developments by bypassing environmental reviews (like CEQA) and avoiding the need for conditional use permits or other approvals from commissions such as Planning or Historic Preservation. Participation depends on meeting specific criteria.

How does SB-9 apply to properties in Hermosa Beach?

SB-9 significantly impacts property development in Hermosa Beach by allowing increased residential growth and lot subdivision. It allows single-family lots to have two single-family homes, referred to as "two-unit development ". Additionally, it allows the splitting of existing single-family lots into two lots, known as "urban lot splits," through a simplified process.

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

Urban Lot Split under SB-9

An urban lot split allows a single lot to be divided into two in a single-family property, each eligible for individual construction or development.

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 Development under SB-9

A two-unit development allows for building up to two homes or adding a second home on a lot that is specifically zoned for single-family housing.

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 Hermosa Beach City, SB-9 allows for new residential units but limits each unit to a maximum of 800 square feet. However, California’s SB 9 offers more flexibility with no size limits on units, giving developers more freedom to design and build homes within the legal guidelines.

Up to two homes can be built on lots. This can include a combination of primary units, ADUs, and JADUs.

What are the setbacks?

Hermosa Beach may require up to a four-foot setback from the side and rear property lines. However, no setback is required for any existing structure, or one built in the same location and dimensions as an existing one.

What is the parking requirement under SB-9?

Parking rules depend on certain conditions. Each unit may need one off-street parking space, but these rules do not apply if the lot is within a half-mile walk of a high-quality transit corridor or major transit stop. Parking is also not required if there's a car-shared vehicle within one block.

What are the lot constraints under SB-9?

Under Hermosa Beach’s SB-9 guidelines, a lot can be split into two with both lots being roughly equal in size. One of the new ones cannot be smaller than 40% of the original size. Each new lot should also be at least 1,200 square feet.

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?

Can you bypass the Historical Preservation limitations?

No, Historical Preservation rules still apply. The project should comply unless it is confirmed that the property is not located in a historical district, on the State Historic Resources Inventory, or a designated landmark or historic property based on local regulations.

Is it allowed to demolish an affordable unit?

No. Under SB 9, demolishing or altering housing that is rent-controlled or reserved for moderate, low, or very low-income families is not allowed.

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

Yes, but construction in Coastal Zones is regulated by the California Coastal Act of 1976. You will likely need a coastal development permit, which ensures compliance with policies to protect coastal resources and address environmental concerns.

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. Anyone applying for an urban lot split should submit an affidavit confirming they will occupy one of the units as their primary residence for at least 3 years following the lot split approval.

What are the rental regulations?

Units created under this rule should be rented out for more than 30 days. Short-term rentals are not allowed.

Are existing tenants’ rights protected?

Yes, tenants’ rights are protected to a certain extent. The development rules aim to prevent the demolition or alteration of housing under rent control or price restrictions. Housing that has been occupied by tenants for the last 3 years is also protected. Additionally, if a property owner has used withdrawal rights to remove rental units in the past 15 years, that property cannot be redeveloped under SB-9. The development cannot involve demolishing more than 25% of the existing exterior walls.

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

SB-684, a newer legislation than SB-9, allows the construction of as many as 10 units on urban lots smaller than 5 acres. Unlike SB-9, which is limited to single-family homes, SB-684 applies to multi-family zones and vacant plots within single-family neighborhoods. A notable benefit of SB-684 is that it does not have any post-construction ownership restrictions, unlike 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 ministerial approval, which simplifies the housing development process by providing clear and consistent standards. This objective approach reduces bureaucratic delays and enables faster permit issuance without requiring extensive CEQA evaluations or public hearings. However, obtaining approval for 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 clear, measurable rules that do not rely on individual opinions. These standards give developers and officials consistent, predictable guidelines to follow when assessing a project, ensuring fairness in the process.

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

SB-9 permits the waiver of specific objective standards, such as:

• Setback regulations for existing buildings that obstruct the construction of two units.
• Setback requirements greater than 4 feet from side and rear property lines, which could limit the ability to build two units.

What are the steps to get the permits?

To get permits under SB-9, applicants generally follow these steps:

1. Review Local Regulations: Check local planning, zoning laws, and ordinances related to housing projects and accessory dwelling units.

2. Verify Compliance: Ensure your project aligns with requirements like rent restrictions, demolition rules, location specifics, and historic district guidelines.

3. Compile Application Materials: Gather the necessary documents for your housing development or lot split.

4. Submit Application: Submit your application to the local agency for ministerial approval.

5. Extend Tentative Map if Applicable: If needed, request an extension for the tentative map expiration from the local legislative body.

6. Monitor Legal Developments: Stay updated on legal challenges or moratoriums that might affect the approval process.

7. Ensure Compliance with Legal Requirements: Remember that SB-9 applies to all cities, including charter cities, as it addresses statewide housing concerns.

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 this scenario, we suggest constructing a three-story duplex with a total area of 4,000 square feet, in addition to a 1,000-square-foot Accessory Dwelling Unit (ADU). The anticipated overall cost for this project, encompassing construction, permits, and professional services (excluding the cost of land), is $2,170,161. The projected market value of the finished property in Hermosa Beach is approximately $6,500,000, which translates to a return on investment (ROI) of [($6,500,000 - $2,170,161)/$2,170,161]*100 = 200%

Scenario 2

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

For this scenario, we recommend splitting a lot to develop two separate three-story duplexes, each covering 4,000 square feet. The total estimated cost for this project, excluding land expenses, is $3,472,680. The projected market value for these duplexes in Hermosa Beach is $10,400,000, yielding an ROI of 200%.

Conclusion:

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

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

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Resources

Hermosa Beach Municipal Code