City of Pasadena

All You Need to Know About Building on Properties in Pasadena Under SB-9

Using SB-9 for real estate developments in Pasadena gives homeowners a great chance to secure funds to pay off a large part of their mortgage. If you can add more units, this can also create rental income or provide housing for extended families while you live in the main home. To make your SB-9 project successful, it is important to know the eligibility criteria, understand how restrictions affect your property, and identify which SB-9 option is financially beneficial for properties in Pasadena.

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

What is SB-9?

Senate Bill 9 (SB-9) is designed to make the approval process for certain housing projects in California more efficient. It facilitates the approval of these developments without the necessity for extensive environmental assessments (CEQA) or other typically lengthy permits from Planning or Historic Preservation Commissions, provided specific conditions are satisfied.

How does SB-9 apply to properties in Pasadena?

In Paramount, SB-9 allows for the construction of two units on single-family zoned lots and simplifies the process of urban lot splits. The aim is to enhance the housing supply by modifying local regulations.

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

Urban Lot Split under SB-9

An Urban Lot Split involves dividing an existing property for single-family homes into two lots to allow for the construction of up to two different residential units.

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 Development under SB-9

This option allows for the construction of two primary residential units on a single lot zoned for single-family homes.

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?

Under Pasadena's SB-9, a new dwelling unit's maximum size is limited to 800 square feet. However, California State’s SB-9 allows for units of any size.

Through an urban lot split, two units can be developed on a single lot, which may also include ADUs and JADUs.

What are the setbacks?

Buildings should be at least 4 feet away from the side and corner property lines. The same 4-foot setback applies to the rear of the property.

What is the parking requirement under SB-9?

Under SB-9, one uncovered parking space is required for each new dwelling unit. However, there are exceptions. No parking is required if the property is within a half-mile walk of a major transit corridor or transit stop. If a car-share vehicle is available within a block, parking requirements are also waived.

What are the lot constraints under SB-9?

Each new lot created should be at least 40% of the size of the original lot and have a minimum area of 1,200 square feet. For detached dwelling units on the same site, there needs to be at least 10 feet of space between them, measured from wall to wall.

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?

SB-9 applies to properties in RS (Single-Family Residential) and RM-12 (Multifamily Residential) Districts.

Can you disregard the environmental restrictions on the lot?

No, while Pasadena's SB-9 regulations do not specifically mention environmental restrictions, California's SB-9 does not apply to properties in environmentally sensitive areas. These areas include wetlands, hazardous waste sites, floodways, conservation areas, and habitats for protected species.

Can you bypass the Historical Preservation limitations?

No, in Pasadena, construction is not allowed on historic sites or in historic districts. Historic districts include properties on the National Historic Register, State Historic Resources Inventory, individual historic landmarks, or designated Landmark Districts. However, new adjacent or connected homes may be allowed if they meet building codes, allow for separate ownership, and comply with zoning standards.

Is it allowed to demolish an affordable unit?

SB-9 regulations do not allow the demolition or alteration of affordable housing units that have a recorded covenant or law. These units need to remain affordable for people and families with moderate, low, or very low incomes.

Is it allowed to build in High-Risk Areas?

SB-9 regulations state that a site cannot be within an earthquake fault zone, in a special flood hazard area for the 100-year flood, or a regulatory floodway. These rules aim to reduce risks from natural disasters and environmental hazards to protect residents and properties.

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

Does the homeowner need to reside on the property?

Yes. A homeowner applying for an urban lot split needs to sign an affidavit stating their intention to live in one of the new housing units as their primary home for at least 3 years after the Urban Lot Split is approved. This requirement does not apply to "community land trust" applicants.

What are the rental regulations?

Units developed under SB-9 cannot be rented for less than 30 consecutive days.

Are existing tenants’ rights protected?

Yes. To protect tenant rights and avoid displacement, SB-9 includes important measures. Properties that have had Ellis Act evictions in the past 15 years cannot use SB-9.

Additionally, units that are rent-controlled or under price control are also protected. Units occupied by tenants within the last 3 years cannot be demolished or altered, showing that SB-9 is committed to tenant welfare.

Can condominiums be proposed as part of my Urban Lot Split application?

Yes, you can include condominiums in your Urban Lot Split application. This means you can divide the existing lot into separate parcels and plan for building condominium units on those parcels. Condominiums allow individuals to own their units in a multi-unit complex while sharing ownership and responsibility for common areas.

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

SB-684 is a more recent law that allows the construction of up to 10 housing units on urban lots under 5 acres, applicable to both multi-family zones and vacant lots in single-family neighborhoods. In contrast, SB-9 is limited to single-family properties and imposes ownership restrictions after the development process, offering fewer options.

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. This method simplifies the process of housing development by setting clear and consistent standards. In contrast to more subjective methods, ministerial approval is based on established criteria, which helps to reduce bureaucratic delays. As a result, projects can secure permits without needing lengthy CEQA assessments or public meetings. However, even with this expedited approach, the approval timeline for a lot split can still extend up to 1.5 years.

What are objective standards?

“Objective zoning standards”, “objective subdivision standards”, and “objective design review standards” refer to criteria that do not depend on personal judgments from officials. Instead, they are based on consistent, external benchmarks that are available to both the developer and officials before submission. This ensures consistency and predictability in project evaluations, giving homeowners clear expectations about their proposals.

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

(1) Setback waivers for distances beyond 4 feet: SB-9 allows exceptions to regulations that require setbacks greater than 4 feet from side and rear property lines, as these can limit the construction of two units.

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

What are the steps to get the permits?

To get permits under SB-9 in Pasadena, follow these steps:

1. Check Local Rules: Review the local Planning and Zoning Law, as well as any rules for accessory dwelling units and housing developments.

2. Confirm Compliance: Ensure your proposed development meets all requirements, including rent levels, demolition limits, location factors, and rules for historic districts.

3. Gather Documents: Collect all necessary paperwork for your housing development or urban lot split application.

4. Submit Your Application: Send your application to the appropriate local agency for ministerial approval.

5. Request Map Extensions: If needed, ask for an extension on the tentative map expiration date from the relevant agency.

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 the first scenario, we propose constructing a 4,000-square-foot, three-story duplex along with a 1,000-square-foot Accessory Dwelling Unit (ADU). The estimated total cost for this project, which includes construction, permits, and professional fees (excluding land acquisition), is $2,167,444. In the sought-after Muir Heights area of Pasadena, the market value of this completed property is estimated to be around $3,500,000. This results in a projected Return on Investment (ROI) of 61%, calculated as [($3,500,000 - $2,167,444)/$2,167,444]*100 = 61%

Scenario 2

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

In the second scenario, we plan to subdivide a lot and build two new 4,000-square-foot, three-story duplexes. The projected investment for this development is $3,496,995, excluding land acquisition costs.

In the Muir Heights area, the estimated market value for this project is $5,600,000, resulting in an ROI of 60%. Conversely, if the project is located in a different part of Pasadena, such as the more affordable Washington Square neighborhood, the market value would be approximately $5,200,000, leading to a lower ROI.

Conclusion:

SB-9 developments in the Muir Heights area demonstrate impressive returns on investment, positioning it as a favorable choice for real estate projects. On the other hand, investments in the Washington Square neighborhood yield more modest returns, making it a more cautious option for real estate development, whether through lot splitting or new construction.

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