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All You Need to Know About Building on Properties in National City Under SB-9
Using SB-9 for property developments in National City is an excellent way for homeowners to obtain funds to repay a substantial portion of their mortgage. Additionally, if you have the resources to add more units, it can provide rental income or housing for extended family members while you continue residing in the primary home. For a successful SB-9 project, it is important to understand the eligibility criteria, how the regulations affect your property, and which SB-9 option is financially achievable for your property in National City.
What is SB-9 and how does it apply to the properties in National City?
What is SB-9?
To address California's housing shortage, Senate Bill 9 (SB-9) implements a ministerial approval process for certain developments within single-family zoned areas. This means that qualifying projects, such as converting a single-family home into a duplex or subdividing a lot into two, can be approved without discretionary review, environmental impact reports (CEQA), or public hearings. However, projects should follow pre-defined development standards.
How does SB-9 apply to properties in National City?
SB-9 is legislation aimed at increasing housing in single-family neighborhoods, allowing for lot and duplex residences, thereby making it easier to build additional homes on properties, particularly in National City.
What can homeowners build under SB-9 or National City's HOME Act?
Lot Split Subdivision under SB-9
Property owners can split their lots into two separate lots.
Under this option, you could have the following unit configurations:
Not sure if your property is located in a Single-family zoned area?
Duplex Residences under SB-9
SB-9 allows property owners to build duplex residences, which means they can either convert existing buildings or build new ones to create two separate units on each lot.
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 State SB-9 does not set specific size limits for new units, allowing for greater flexibility and giving developers more options for planning and building residential spaces.
Each lot allows the construction of two residential units, which may consist of ADUs and JADUs.
What are the setbacks?
For new buildings, National City may require four-foot side and rear yard setbacks. If there is already a building on the property or if a new structure is built in the same spot as an existing one, setbacks are not required.
What is the parking requirement under SB-9?
New housing projects can have a maximum of one parking space per unit. Exceptions apply if the project is within a half-mile of major transit routes or stops, or one block of car-sharing services.
What are the lot constraints under SB-9?
To qualify for a lot split, each new lot should be at least 40 percent of the original lot's size, with a minimum lot size of 1,200 square feet.
Additionally, property owners cannot split the same lot multiple times in a row, and lot splits cannot happen if the owner has already subdivided a neighboring lot under the same rules.
Development Analysis calculates the max size under SB-9 for the highest return.
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 those zoned as Single Family Residences.
Can you disregard the environmental restrictions on the lot?
No. National City's SB-9 does not specifically detail environmental restrictions, but California's SB-9 do not apply to properties in environmentally sensitive zones. These zones include wetlands, hazardous waste sites, conservation areas, and habitats for protected species. This rule helps protect these important ecological areas from potential damage caused by development.
Can you bypass the Historical Preservation limitations?
No. National City's SB-9 does not specifically address Historical Preservation limitations, but California's SB-9 excludes properties in historic and landmark districts. These districts aim to maintain the historic character of neighborhoods.
Is it allowed to demolish an affordable unit?
No. SB-9 does not allow the demolition of properties designated as affordable housing or housing that tenants have occupied in the last three years.
Is it allowed to build in High-Risk Areas?
Possibly, but it is generally discouraged due to safety concerns. Properties in high fire hazard areas, earthquake fault zones, 100-year flood zones, or floodways usually face restrictions to minimize risks and ensure safety.
According to California SB-9 and the HOME Act, projects in high-risk areas need to comply with local regulations. Ultimately, the local jurisdiction decides whether construction is allowed based on the project’s potential impact and compliance with relevant laws.
What are the limitations after completing a project using SB-9?
Does the homeowner need to reside on the property?
Yes. If a homeowner wants to split the lot, they should live on the property as their main residence for at least 3 years. This owner occupancy requirement is part of the SB-9 guidelines and needs to be confirmed by the applicant with a signed affidavit during the application process.
What are the rental regulations?
Any unit created has to be rented out for more than 30 days.
Are existing tenants’ rights protected?
Yes. SB-9 protects the rights of existing tenants. Properties that have been occupied by tenants within the last 3 years cannot be demolished or changed without meeting specific conditions. This rule helps keep housing stable for tenants in affected areas.
Can condominiums be proposed as part of my Urban Lot Split application?
No. SB-9 allows property owners to divide a single-family lot into two and construct up to two units on each, potentially resulting in four units total.
Condominiums have a different ownership model, involving shared ownership of land and buildings with individual ownership of units. The creation of condominiums through a Parcel Map requires standard procedures, such as filing fees and public hearings, unlike the expedited process for SB-9 Urban Lot Splits.
What is the difference between SB-9 and SB-684?
SB-684 is a newer regulation that allows for the construction of up to 10 units on urban lots that are less than 5 acres. Unlike SB-9, which is primarily aimed at single-family homes, SB-684 is relevant to multi-family zones and vacant lots within single-family areas. Additionally, SB-684 does not include the ownership restrictions that are part of 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, projects under SB-9 can qualify for ministerial approval, allowing them to meet certain conditions that facilitate a quicker development process. This method reduces administrative delays by circumventing extensive environmental assessments and public hearings. However, 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 rules that do not depend on personal opinions from public officials. Instead, they rely on clear, measurable benchmarks that everyone can verify. These standards are transparent and understood by both the applicant and the public official before submitting any plans.
What types of objective standards qualify for a waiver under SB-9?
Certain objective standards, like zoning, subdivision, and design review rules, can be waived under SB-9 if they prevent the construction of housing units that meet specific criteria.
What are the steps to get the permits?
1. Consult the Local Agency: Reach out to the National City Community Development Department to learn about the permitting process for SB-9 projects. They can provide checklists or online resources that outline the necessary steps.
2. Prepare Documentation: Gather the required documents, such as a parcel map for lot splits or a signed affidavit. The local agency will provide a complete list of what you need.
3. Submit Application: Turn in the completed application along with the required fees to the planning department.
4. Await Approval or Denial: Wait for the application results. Since this process is ministerial, approval should happen quickly if all project requirements are met. However, there may still be occasional delays or unexpected issues.
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 propose building a 4,000-square-foot, three-story duplex, along with a 1,000-square-foot ADU. The total estimated cost, which includes construction, permits, and professional fees (excluding land acquisition), is $1,838,468. Located in National City, the market value of the completed property is estimated to be approximately $3,250,000. Therefore, the ROI for this SB-9 project is calculated as [($3,250,000 - $1,838,468)/$1,838,468]*100 = 77%
Scenario 2
Lot Split with 2 new 4,000 sq. ft 3-story Duplexes
In the second scenario, we propose to subdivide a lot and construct two new 4,000-square-foot, three-story duplexes. The projected investment for this development, excluding land acquisition costs, is $2,859,073.
In National City, the estimated market value for this project is $5,200,000, leading to an 82% ROI.
Conclusion:
SB-9 projects in National City show impressive returns on investment, indicating that it is worthwhile to consider undertaking real estate projects in this location, whether through lot split or new construction.