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

What is SB-9?

SB-9, or Senate Bill 9, aims to simplify the authorization procedure for specific housing constructions in California. It streamlines approvals for these developments, bypassing the need for lengthy environmental reviews (CEQA) or other time-consuming permits typically required by Planning or Historic Preservation Commissions. This process is available if specific criteria are met.

How does SB-9 apply to properties in Paramount?

SB-9 impacts Paramount properties by allowing two units to be built on lots zoned for single-family homes and making it easier to split urban lots. The goal is to increase the housing supply through these changes to local regulations.

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

Urban Lot Split under SB-9

An urban lot split divides a single property into two separate lots within a single-family zone.

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 involves building up to two homes on a property zoned for single-family residences.

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 Paramount City, SB-9 allows the construction of new units up to 800 square feet each. California's SB-9, however, provides more flexibility by not limiting the unit size.

For urban lot splits, a maximum of two primary homes can be built on each newly created lot.

What are the setbacks?

New developments require a minimum side and rear yard setback of 4 feet. Existing structures, or new buildings placed exactly where an old one stood, are exempt from this setback rule.

What is the parking requirement under SB-9?

Parking is set at one off-street space per unit. However, if the lot is within half a mile of a major transit stop or high-quality transit corridor, no parking is required. The same applies if there’s a car-shared vehicle within a block of the property.

What are the lot constraints under SB-9?

For urban lot splits in Paramount, the lot should be divided into two new lots with one not being smaller than 40% of the original size. Each new lot is at least 1,200 square feet in size.

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 limited to the R-1 zone, which is designated for single-family homes.

Can you disregard the environmental restrictions on the lot?

No. In Paramount, properties within environmentally sensitive areas cannot bypass these rules. This includes wetlands, hazardous waste sites unless cleared for residential use, floodways, conservation zones, and habitats for protected species. These regulations help protect important ecological areas from potential harm caused by development.

Can you bypass the Historical Preservation limitations?

No. Two-unit developments and urban lot splits cannot be allowed in historic districts or on properties listed as historic by the State or City. This includes sites designated as landmarks or historic properties according to local laws.

Is it allowed to demolish an affordable unit?

No. You cannot demolish existing housing units for SB-9 developments if those units are subject to agreements or laws that keep rents affordable for low- or very low-income families.

Is it allowed to build in High-Risk Areas?

Possibly. In Paramount, the building is restricted to high or very high fire hazard zones, and earthquake fault zones, unless the project meets specific safety standards. Similarly, construction is not allowed in flood-prone areas without meeting FEMA's criteria or if the area hasn’t been revised by FEMA. Building is also restricted in designated floodways unless a no-rise certification is provided.

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

Does the homeowner need to reside on the property?

Yes, homeowners applying for urban lot splits need to commit to living in one of the housing units as their primary residence for at least 3 years after the approval of the split. However, exemptions apply to community land trusts and certain qualified nonprofit organizations.

What are the rental regulations?

Rental regulations state that any residential units on the property can only be rented for periods longer than 30 days.

Are existing tenants’ rights protected?

Yes. The SB-9 is designed to protect the rights of current tenants. They do not allow the demolition or alteration of housing that is subject to rent or price control set by the city. Additionally, homes occupied by tenants within the last 3 years are protected, ensuring that their residency remains stable.

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

SB-684 is a more recent law that allows the development of as many as 10 housing units on urban lots smaller than 5 acres, covering both multi-family zones and empty lots in single-family neighborhoods. This law provides more options compared to SB-9, which is restricted to single-family properties and enforces ownership restrictions after the development process.

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 that fall under SB-9 are eligible for ministerial approval. This procedure streamlines the housing development process by establishing clear and consistent guidelines. Unlike subjective approaches, ministerial approval relies on defined criteria, helping to eliminate bureaucratic delays. Consequently, projects can obtain permits without undergoing extensive CEQA reviews or public hearings. Still, despite the faster process, acquiring approval for a lot split can take up to 1.5 years.

What are objective standards?

"Objective zoning standards," "objective subdivision standards," and "objective design review standards" are clear rules used to avoid subjective decisions from public officials. These standards are based on external and uniform criteria that are accessible to both developers and officials before submission. This ensures consistent evaluations and provides homeowners with reliable guidelines for their projects.

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

(1) Waivers for setbacks over 4 feet: SB-9 allows exemptions from regulations that demand setbacks more than 4 feet from the side and rear boundaries, which can restrict the construction of two units.

(2) Waivers for other relevant standards: SB-9 also allows for waivers of additional objective criteria that might obstruct the establishment of two units on a property.

What are the steps to get the permits?

To get permits for two-unit residential developments or urban lot splits, follow these steps:

1. Review Regulations and Prepare Application: Start by reviewing local regulations related to two-unit developments and urban lot splits. Gather all necessary documents, including property surveys and architectural plans.

2. Submit Application: Submit your completed application to the appropriate local department, ensuring all required fees are paid at the time of submission.

3. Ministerial and Building Official Review: Your application will undergo a ministerial review based on objective criteria, followed by a review from the Building Official to ensure compliance with building codes and safety standards.

4. Permit Approval or Denial: If the application meets all requirements, it will be approved. If there are issues, you will receive a written explanation for the denial.

5. Record Covenant and Begin Construction: After approval, record a covenant outlining property restrictions and requirements. Once this is done, you can start construction on your two-unit development or urban lot split as per the approved plans.

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?

In this analysis, we will take a look at two scenarios to evaluate expected expenses, property assessments, 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 recommend constructing a three-story duplex with a total area of 4,000 square feet, along with a 1,000-square-foot Accessory Dwelling Unit (ADU). The estimated total cost, including construction, permits, and professional fees (excluding land expenses), is $2,169,882. The projected market value of the completed property in Paramount is around $2,500,000, leading to a return on investment (ROI) of [($2,500,000 - $2,169,882)/$2,169,882]*100 = 15%

Scenario 2

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

For this scenario, we suggest dividing a lot and constructing two distinct three-story duplexes, each with an area of 4,000 square feet. The total projected cost for this development, excluding land acquisition, is $3,473,962. The anticipated market value for these duplexes in Paramount is $4,000,000, resulting in a return on investment (ROI) of 15%.

Conclusion:

Pursuing SB-9 projects in Paramount presents the possibility of an ROI below 50%. To reduce this potential shortfall, consider implementing additional financial strategies or negotiating a significantly lower price for the land.

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

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