City of Oceanside
All You Need to Know About Building on Properties in Oceanside Under SB-9
Using SB-9 for real estate developments in Oceanside provides homeowners with an excellent opportunity to secure funds for repaying a significant portion of their mortgage. Additionally, if you have the resources to build more units, it can create rental income or offer housing for extended family members while you stay in the main residence. To ensure the success of an SB-9 project, it is important to understand the eligibility requirements, how the regulations affect your property, and which SB-9 option is financially advantageous for properties in Oceanside.
What is SB-9 and how does it apply to the properties in Oceanside City?
What is SB-9?
Senate Bill 9 or SB-9 focuses on improving housing affordability and accessibility. It simplifies the approval process for certain housing developments in California by instructing local governments to expedite these projects through an alternative method. This allows them to avoid lengthy environmental assessments (CEQA), Conditional Use Permits, and similar reviews from Planning or Historic Preservation Commissions. Participation in this program is voluntary and subject to specific eligibility criteria.
How does SB-9 apply to properties in Oceanside?
In Oceanside, SB-9 allows the construction of two-unit homes and homeowners to split their lots into two. This means there is the potential for a total of four residential units—two on each lot. The law includes local regulations and established criteria to simplify the application process for homeowners.
What can homeowners build under SB-9 or Oceanside’s HOME Act?
Urban Lot Split under SB-9
Urban lot splits involve dividing a single property 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?
Two-Unit Developments under SB-9
Two-unit developments allow building two residential units, such as duplexes or two single-family homes, on a lot 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?
California State SB-9 does not impose specific size restrictions on new units, which provides more flexibility and gives developers additional options for planning and constructing residential spaces.
Each lot can have two residential units, which can include ADUs and JADUs.
What are the setbacks?
If a structure already exists on the property or a new one is placed in the same spot as an existing one, setbacks are not needed. For new structures, Oceanside City requires a four-foot setback on the sides and rear yards.
What is the parking requirement under SB-9?
Parking regulations allow one parking space per residential unit. However, exceptions exist for projects within a half-mile walking distance of high-quality transit corridors or major transit stops.
What are the lot constraints under SB-9?
The lots should meet size requirements, with a minimum size of 1,200 square feet. Additionally, lots created from an urban lot split should be similar in size, with a maximum split ratio of 60:40 between them.
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 in single-family zoning districts in Oceanside are eligible for SB-9. These include R-1, RS, RE, and some PD properties.
Can you disregard the environmental restrictions on the lot?
No. The city of Oceanside considers environmental restrictions such as farmland, wetlands, hazardous waste sites, wildlife habitat areas, or conservation easements when determining eligibility for a housing development or lot split under SB-9.
Can you bypass the Historical Preservation limitations?
No. SB-9 does not allow bypassing historical preservation rules. If a property is in a historic district, listed on the State Historic Resources Inventory, or designated as a landmark or historic property by local regulations, it cannot be developed under SB-9.
Is it allowed to demolish an affordable unit?
No. Under SB-9, you cannot demolish or change a unit if it meets specific criteria, such as being deed-restricted as affordable, subject to rent control, or tenant-occupied within the last three years. Additionally, you cannot demolish more than 25 percent of the exterior walls unless the unit has been vacant for the last three years or local laws allow more demolition.
Is it allowed to build on a property in Coastal Zones?
Yes, but certain conditions apply. Construction in Coastal Zones should follow Coastal Act regulations, including getting a coastal permit and meeting all Local Coastal Program and California Coastal Act requirements. However, SB-9 projects in these areas do not require a public hearing.
Is it allowed to build in High-Risk Areas?
Possibly. New SB-9 development is not allowed on sites in or near high-risk areas, including high fire hazard zones, earthquake fault zones, 100-year flood zones, or floodways.
What are the limitations after completing a project using SB-9?
Does the homeowner need to reside on the property?
Yes. Under Oceanside’s SB-9, the homeowner should sign a statement confirming their intention to live in one of the housing units as their main home for at least 3 years from the approval date of the urban lot split.
What are the rental regulations?
Short-term rentals are not allowed. Any unit created under SB-9 should be rented for more than 30 days.
Are existing tenants’ rights protected?
Yes. Existing tenants' rights are protected under SB-9. A project cannot require the demolition or changes to any housing unit if it has been occupied by tenants in the past three years. This rule ensures that current tenants are not negatively impacted by the development.
Can condominiums be proposed as part of my Urban Lot Split application?
No. SB-9 allows homeowners to split a single-family lot into two and build up to two units on each, totaling four units. Condominiums have a different ownership structure, requiring standard procedures like filing fees and environmental reviews, unlike the streamlined process for SB-9 Urban Lot Splits.
What is the difference between SB-9 and SB-684?
SB-684 is a more recent regulation that permits the development of up to 10 units on urban lots smaller than 5 acres. In contrast to SB-9, which mainly targets single-family residences, SB-684 applies to multi-family zones and vacant lots in single-family neighborhoods. Moreover, SB-684 does not impose the ownership limitations found in 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 be eligible for ministerial approval, allowing them to meet specific requirements that speed up the development process. This approach minimizes delays by bypassing lengthy environmental reviews and public hearings, although a lot split approval might still take up to 1.5 years.
What are objective standards?
“Objective zoning standards”, “objective subdivision standards”, and “objective design review standards” are specific criteria set by local agencies for development, subdivision, and design that are applied fairly without personal judgment from officials.
What types of objective standards qualify for a waiver under SB 9?
Local agencies can waive certain development standards to help with project development, except for two specific cases:
Setbacks for Existing Structures: Local agencies cannot require setbacks for existing structures or buildings rebuilt in the same spot and dimensions. If a building is reconstructed on the same footprint, setbacks are not needed.
Four-Foot Side and Rear Setbacks: SB-9 sets a maximum four-foot requirement for side and rear setbacks. While local agencies can allow a smaller setback, they cannot enforce a greater one. Existing side and rear setbacks for single-family residential zones do not apply, and these four-foot setback standards cannot be changed.
What are the steps to get the permits?
1. Review Eligibility: Check that the property meets SB-9 criteria, including zoning and eligibility for two-unit developments or urban lot splits.
2. Prepare Documentation: Collect all necessary documents, such as property surveys, site plans, and any required statements, including the intention to occupy one of the units as a main residence for at least three years.
3. Submit Application: Submit the permit application along with the gathered documents to the planning department for processing.
4. Assessment of Impact Fees: Identify and pay any impact fees associated with adding units or splitting lots.
5. Permit Approval: If the application meets all criteria and passes the review, the permit will be granted, allowing the development to move forward.
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 scenario, we're considering the development of a 4,000-square-foot, three-story duplex with an additional 1,000-square-foot Accessory Dwelling Unit (ADU). The estimated total cost for this project, including construction, permits, and professional fees (excluding land acquisition), is $1,828,353. If situated in the Ocean Hills neighborhood of Oceanside, which is highly desirable, the market value of this development would be approximately $2,410,000. Therefore, the projected Return on Investment (ROI) for this SB-9 project in Ocean Hills is calculated as [($2,410,000 - $1,828,353)/$1,828,353]*100 = 32%
Scenario 2
Lot Split with 2 new 4,000 sq. ft 3-story Duplexes
In the second scenario, we plan to split a lot and construct two new 4,000-square-foot, three-story duplexes. The total investment for this project is estimated at $2,961,273, not including any land acquisition costs if the land is not already owned.
In the Ocean Hills area, the estimated market value for this type of development is around $3,856,000, offering a 30% return on investment (ROI). However, if the project were located in a different part of Oceanside, such as the more affordable San Luis Rey neighborhood, the market value would decrease to about $2,376,000, leading to a negative ROI.
Conclusion:
SB-9 projects in the Ocean Hills area show strong investment returns, making it a promising location for real estate development. Conversely, projects in the San Luis Rey neighborhood pose a risk of negative ROI. To counter this risk, additional financial precautions or acquiring land at a very favorable price would be necessary. While Ocean Hills presents a solid investment opportunity, caution is advised when considering real estate ventures in San Luis Rey.