What is SB-9 and how does it apply to the properties in Unincorporated Los Angeles County?

What is SB-9?

SB-9, or Senate Bill 9, is designed to speed up the approval process for certain housing projects in California. It gives local governments a faster way to approve projects without needing extensive environmental reviews (like CEQA), Conditional Use Permits, or other approvals from bodies like the Planning or Historic Preservation Commission. Homeowners can choose to participate if they meet certain conditions.

How does SB-9 apply to properties in Unincorporated Los Angeles County?

SB-9 allows homeowners in Unincorporated Los Angeles County to build up to two main units on a lot zoned for single-family homes. This includes building duplexes or dividing the lot to add more units. To qualify, the project has to follow zoning rules, environmental guidelines, and protect tenant rights. The approval is done through a simplified process that uses clear criteria to evaluate proposals, making it easier to develop housing while ensuring all rules are followed.

What can homeowners build under SB-9 or Unincorporated Los Angeles County’s HOME Act?

Urban Lot Split under SB-9

An urban lot split refers to the division of a single-family zoned lot into two separate lots, each capable of accommodating individual structures or dwellings.

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-Dwelling Units under SB-9

A two-dwelling unit refers to a property that contains two separate living units, which can be constructed on a lot. These units can be built separately as detached structures or together as part of a duplex, where the units are attached.

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?

California’s SB-9 does not set specific size limits for new units created through an urban lot split. This allows flexibility in unit sizes, with no restrictions tied to SB-9.

However, each parcel can only have up to two residential units, including Accessory Dwelling Units (ADUs) or Junior ADUs (JADUs).

What are the setbacks?

For new construction, side and rear setbacks need to be at least four feet, unless local regulations allow for less. Additionally, requirements for space between buildings are waived as long as the units meet safety codes and can be sold separately.

What is the parking requirement under SB-9?

Each main dwelling unit is typically required to have one off-street covered parking space. However, there are exceptions. No parking is needed if the lot is within ½ mile of a high-quality transit corridor or major transit stop, or if there is a car share service within a block of the lot.

What are the lot constraints under SB-9?

New lots created by an urban lot split are required to follow specific rules. Each new lot should be close to equal size, with a split ratio of up to 40-60, and each lot is at least 1,200 square feet. Additionally, a parcel cannot be subdivided if it was previously split under SB-9, and the owner or anyone associated with it cannot split or propose splitting an adjacent parcel.

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 in certain zoning districts, including Zone R-1 or R-A, as well as specific plan zones like the West Carson TOD Specific Plan's West Carson Residential 1 zone, the Willowbrook TOD Specific Plan's Willowbrook Residential 1 zone, and the Connect Southwest LA TOD Specific Plan's CSLA Residential 1 zone.

Can you disregard the environmental restrictions on the lot?

No, environmental restrictions for SB-9 development cannot be ignored. These restrictions include areas identified as Prime Farmland or Farmland of Statewide Importance, wetlands as defined by the U.S. Fish and Wildlife Service, Significant Ecological Areas, exposure to hazardous materials in designated hazardous waste sites, and lands under conservation easement. Additionally, critical habitats designated by state or federal agencies are protected.

Can you bypass the Historical Preservation limitations?

No, Historical Preservation limitations cannot be bypassed under SB-9. Projects cannot be located in designated historic districts or on properties listed on the State Historic Resources Inventory or recognized as County landmarks or historic sites.

Is it allowed to demolish an affordable unit?

No, demolishing an affordable unit is not allowed under SB-9. The project cannot involve tearing down or altering units that have recorded covenants, ensuring they remain affordable for moderate, lower, or very low-income households.

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

No, building on properties within Coastal Zones is not allowed under the County’s SB-9 regulations.

Is it allowed to build in High-Risk Areas?

Maybe. Building in high-risk areas poses challenges that need careful consideration under SB-9. Risks include potential wildfires in Very High Fire Hazard Severity Zones, increased seismic activity in earthquake fault zones, special flood hazard areas (100-year flood zones), and regulatory floodways designated by FEMA. Development may still be allowed under certain conditions if strict safety measures are put in place to address these risks.

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

Does the homeowner need to reside on the property?

Yes, under SB-9 regulations, the homeowner needs to live on the property. The applicant has to sign an Owner Occupancy Affidavit, confirming their intention to occupy one of the units created for at least three years from the date of the urban lot split.

What are the rental regulations?

Under SB-9 regulations, no unit can be used for short-term rentals, which are defined as rental periods of 30 consecutive days or less.

Are existing tenants’ rights protected?

Yes, existing tenants' rights are protected under SB-9 regulations. The project cannot involve the demolition or alteration of certain types of dwelling units, including rent-controlled units, units that have been occupied by tenants in the three years before the application date, and units that have been removed from the rental market under the Ellis Act within 15 years before the application.

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

SB-684 is a newer bill than SB-9, and it streamlines the development process of up to 10 units on urban lots that are smaller than 5 acres. As opposed to SB-9, SB-684 is applicable on properties that are within multi-family zoning areas or on vacant lots within single-family zoning areas. The great part about SB-684 is that it doesn't have the ownership limitations that SB-9 imposes after development.

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

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

What does ministerial approval mean?

Ministerial approval streamlines the housing development process by giving developers and local authorities clear and straightforward guidelines. Unlike subjective methods, it strictly follows set criteria, reducing bureaucratic hurdles. This process allows qualifying projects to get permits without lengthy environmental reviews or public hearings. By removing subjective assessments, ministerial approval speeds up housing projects. However, even with this efficiency, getting approval for a lot split can still take up to 1.5 years.

What are objective standards?

“Objective zoning standards," “subdivision standards," and “design review standards” aim to eliminate the personal opinions of government officials. These criteria rely on clear and standardized benchmarks that developers and officials can check before submission. This ensures consistency and reliability in project evaluations, giving homeowners clear and predictable guidelines for assessing their proposals.

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

Under SB-9, certain planning, zoning, and subdivision standards can be waived. These waivers apply if enforcing these standards would physically stop the construction of up to two units per lot or if they would prevent either unit from having at least 800 square feet of floor area.

What are the steps to get the permits?

To get permits, the following steps are required:

1. One Stop: Attend a conceptual design review to get guidance on your project’s scope.

2. Case Intake: Submit all necessary materials and fees by appointment.

3. Interdepartmental Subdivision Team: Analyze the tentative design and SB 9 requirements to gain tentative map approval.

4. Final Map: Get clearance from the Department of Public Works (DPW) for the final design and project requirements.

5. Ministerial Site Plan Review: Have architectural plans reviewed for compliance before submitting them to DPW. Record the final map before starting any construction. After recording the final map, a Ministerial Site Plan Review can approve the proposed development. DPW will then issue the construction permits.

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 our initial scenario, we're considering the development of a new 4,000 square feet, 3-story duplex with a 1,000 square feet Accessory Dwelling Unit (ADU). The estimated total project cost, including construction, permit costs, and professional fees (excluding land acquisition), is $2,137,990. If this project were located in the White Heather area, a desirable neighborhood in the Unincorporated Los Angeles County area, the market value of such a building would be approximately $7,500,000. As a result, the projected Return on Investment (ROI) for an SB-9 project in this neighborhood of the Unincorporated Los Angeles County area is calculated as [($7,500,000 - $2,137,990) / $2,137,990] * 100 = 250%.

Scenario 2

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

In the second scenario, we're considering subdividing a lot and constructing two new 4,000-square-foot, 3-story duplexes. This project is expected to require an investment of $3,450,539, plus land acquisition costs if you don't already own the land.

In the White Heather area, a building of this size has an estimated market value of $12,000,000, resulting in an ROI of 248%. In contrast, if you invest in a different location in Unincorporated Los Angeles County, such as the lower-end Indian Springs neighborhood, the market value of such a project is only $4,800,000, leading to a lower ROI.

Conclusion:

Real estate developments under SB-9 in the White Heather region show promising returns on investment, suggesting that this area is a favorable option for such projects. On the other hand, pursuing SB-9 projects in the Indian Springs area presents a higher risk of achieving an ROI below 50%. To manage this risk, it's advisable to implement extra financial safeguards or secure land at a significantly reduced cost. While opportunities in White Heather appear advantageous, investors should exercise caution with projects in the Indian Springs area.

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

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