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

What is SB-9?

SB-9, or Senate Bill 9, is a California law aimed at streamlining bureaucratic processes related to specific housing projects. It directs local authorities to fast-track the approval of these initiatives through an alternative route, eliminating the need for lengthy environmental assessments, Conditional Use Authorization, or similar discretionary approvals typically sought from bodies like the Planning Commission or Historic Preservation Commission. Participation in SB-9 is optional and entails meeting specific eligibility criteria.

How does SB-9 apply to properties in Monterey Park?

SB-9 affects properties in Monterey Park by simplifying the housing development process. It allows for the creation of additional housing units within single-family zones. Homeowners can navigate the approval process more easily, promoting efficient use of land and increasing housing availability in the community.

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

Urban Lot Split under SB-9

An urban lot split refers to the division of a single property into two separate lots within a zone designated for single-family residential.

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 refers to a housing that includes two residential units on a single lot that is zoned for single-family use.

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 Monterey Park, newly built residential units should be at least 800 square feet in size. In contrast, California's SB 9 offers greater flexibility, with no limitations on unit size, providing developers with more freedom.

A maximum of two units, which can include ADUs and JADUs, is allowed on each lot formed through an urban lot split under SB-9.

What are the setbacks?

The city can require a setback of up to 4 feet from the side and rear lot lines. However, existing structures or those built with the same dimensions and positions as existing ones do not have to follow setback rules.

What is the parking requirement under SB-9?

Under SB-9, each unit requires one off-street parking space, but there are exceptions. Parking requirements can be waived if the property is within half a mile of a high-quality transit corridor or major transit stop, or if there's a car share vehicle available within one block.

What are the lot constraints under SB-9?

SB-9 requires creating two new lots of similar size, with neither being less than 40 percent of the original size. Each new lots need to be at least 6,000 square feet, and the property should not have had a prior urban lot split.

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 zoning districts designated as R-1 and R-2, which are single-family zones.

Can you bypass the Historical Preservation limitations?

No. Historical Preservation limitations apply under SB-9. The property cannot be within a historic district or listed on the State Historic Resources Inventory. It also cannot be designated as a city or county landmark or historic property according to local laws.

Is it allowed to demolish an affordable unit?

No. SB-9 does not allow the demolition of affordable units. The law clearly states that housing under a recorded covenant, ordinance, or law that limits rents for moderate, low, or very low-income families cannot be demolished or altered.

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

Yes. Building on properties within Coastal Zones is allowed, but it needs to follow the rules of the California Coastal Act of 1976. Development in these areas often requires a coastal development permit, which involves meeting specific policies and standards to protect coastal resources and reduce environmental impacts. However, the exact construction rules and conditions can vary based on the act and any local regulations.

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

Does the homeowner need to reside on the property?

Yes, the homeowner has to live on the property. To get approval for an urban lot split, the homeowner needs to sign an affidavit stating their intention to live in one of the housing units as their main residence for at least 3 years after the urban lot split approval.

What are the rental regulations?

According to SB 9, any unit created should be rented for more than 30 days.

Are existing tenants’ rights protected?

Yes. Under SB-9, the rights of existing tenants are protected. The housing proposal aims to prevent the demolition or alteration of various housing types, including homes regulated by rent or price controls and those occupied by tenants within the last 3 years. Additionally, the property cannot be one where rental or lease agreements have been ended by owners in the past 15 years. The proposed project also cannot demolish more than 25% of the existing exterior walls.

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

SB-684 is a newer law than SB-9 that streamlines the development process for creating up to 10 units on urban lots smaller than 5 acres. In contrast to SB-9, which focuses on single-family properties, SB-684 applies to areas zoned for multi-family housing and vacant lots within single-family zones. A significant benefit of SB-684 is the absence of ownership restrictions that SB-9 imposes following development.

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 are eligible for ministerial approval. This approach simplifies housing development by providing straightforward and uniform guidelines. Unlike more subjective methods, ministerial approval is based on predefined criteria, reducing bureaucratic hold-ups. As a result, projects can secure permits without the need for extensive CEQA evaluations or public hearings. However, despite this expedited process, obtaining approval for a lot split can still take as long as 1.5 years.

What are objective standards?

“Objective zoning standards”, “subdivision standards”, and “design review standards” are created to remove the personal judgments of government officials. These criteria rely on clear, standardized benchmarks that developers and officials can access before submitting proposals. This approach ensures consistent and reliable project evaluations, providing homeowners with transparent guidelines for assessing their proposals.

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

1. Exemptions for setbacks related to existing buildings: SB-9 allows waiving setback requirements that prevent the development of two units when current buildings are in the way.

2. Exemptions for setbacks greater than 4 feet: SB-9 also provides for waivers of setback regulations demanding a distance greater than 4 feet from the side and rear property boundaries, as these can restrict the construction of two units.

What are the steps to get the permits?

Here are the steps to obtain permits under SB-9 in Monterey Park:

1. Understand Local Regulations: Start by reviewing the local Planning and Zoning Laws and any rules related to accessory dwelling units and housing developments. Knowing these regulations is crucial for ensuring your project complies.

2. Validate Compliance: After familiarizing yourself with the local rules, check that your proposed development aligns with all requirements. This includes confirming that you meet rent restrictions, demolition limits, site specifications, and guidelines for historic districts.

3. Collect Essential Documents: Gather all necessary paperwork for your housing project or urban lot split application. This may include architectural plans, environmental assessments, financial records, and any other relevant materials to support your application.

4. Lodge the Application: Submit the completed application to the appropriate local authority for ministerial approval. This officially begins the review process and moves you closer to getting the necessary permits.

5. Seek Map Extension (if needed): If a map extension is necessary, request one from the relevant legislative body or advisory agency. This helps ensure you stay on track with regulatory timelines and continue progressing toward project approval.

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 first scenario, we propose constructing a three-story duplex with a total area of 4,000 square feet, complemented by a 1,000-square-foot Accessory Dwelling Unit (ADU). The total estimated expenditure, including construction, permits, and professional fees (excluding land), is $2,183,591. The projected market value for the completed property in Monterey Park is approximately $2,750,000, which leads to a return on investment (ROI) of [($2,750,000 - $2,183,591) / $2,183,591] * 100 = 26%.

Scenario 2

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

For the second scenario, we suggest dividing the lot to build two individual three-story duplexes, each with an area of 4,000 square feet. The estimated cost, excluding land acquisition, is $3,482,400. The projected market value for these duplexes in Monterey Park is $4,400,000, resulting in an ROI of 26%.

Conclusion:

SB-9 projects in Monterey Park present a significant risk of achieving an ROI below 50%. To mitigate this risk, additional financial measures or acquiring land at a substantially reduced price may be necessary.

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

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