What is SB-9 and how does it apply to the properties in San Francisco city?

What is SB-9?

Senate Bill 9 (SB-9) is California’s legislation aimed at simplifying the approval process for particular housing projects. It requires local authorities to facilitate the approval of these projects through a streamlined, ministerial process, which eliminates the need for extensive environmental analysis (CEQA), conditional use authorization, or similar discretionary entitlements from bodies like the Planning Commission or Historic Preservation Commission. SB-9 allows project sponsors to opt for this voluntary program, subject to specific eligibility criteria.

How does SB-9 apply to properties in San Francisco?

In San Francisco, SB-9 applies to properties located within designated residential zoning districts. The bill allows streamlined approval for housing projects within these districts, including lot splits, duplex construction, or a combination of both, under certain conditions.

What can homeowners build under SB-9 (HOME Act) or San Francisco’s Streamlined Housing Development?

Lot Split under SB-9

This option involves dividing your existing single-family property into two separate lots. Each new lot can have its dwelling unit, effectively doubling the residential capacity of your property.

Under this option, you could have the following unit configurations:

Two Unit Developments under SB-9 (Duplex)

This option allows for the construction of a duplex, which is a two-unit residential building sharing a common wall. This approach directly adds two new residential units to your existing lot.

Under this option, you could have the following unit configurations:

Unsure which SB-9 option works best for you and possible for your property?

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How large can each new unit be, and how many can you have per lot?

In San Francisco, the minimum size for the second unit is set at 800 square feet. However, California State SB-9 does not set particular size limits for new units.

Each lot allows for the development of two housing units, which can include ADUs and JADUs.

To reduce shadow effects on nearby properties, the height of the rear building is limited to 20 feet from the ground level. There are also additional rules regarding roof parapets and dormers on rear buildings.

What are the setbacks?

A minimum of 25 feet of open space is required between buildings on different lots.

For lot splits, new construction in the back area should have a minimum 4-foot setback from all interior lot lines.

A minimum 10-foot setback is needed on the upper floor of the front building if it faces a structure in the rear, covering the entire width of the building.

Additionally, roof decks and balconies should be setback 5 feet from all edges of the building.

What is the parking requirement under SB-9?

SB-9 limits parking to one space per residential unit, promoting higher housing density and the use of public transit.

What are the lot constraints under SB-9?

SB-9 allows single-family lots to be divided, but each new lot needs to be at least 1,200 square feet. Each lot should be between 40% and 60% of the original lot's area.

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?

The property should be located in a residential zone intended for single-family homes. In San Francisco, these zones are labeled RH-1, RH-1(D), and RH-1(S).

Can you disregard the environmental restrictions on the lot?

No. In San Francisco, existing environmental regulations still apply. This means that even though decisions are made based on clear standards, environmental rules are likely part of what gets approved. Projects can only be denied if they have a specific negative impact on health, safety, or the environment, which shows that these factors still matter in the approval process. Although SB-9 does not require a CEQA review, there is no mention of projects being exempt from following environmental rules.

Can you bypass the Historical Preservation limitations?

No. Properties in a historic district or labeled as landmarks by local law cannot get SB-9 approval.

Is it allowed to demolish an affordable unit?

No. Demolishing an affordable unit under SB-9 is not allowed. This includes prohibiting the demolition of housing for moderate, low, or very low-income families. Additionally, no more than 25% of the existing exterior walls can be demolished unless the lot has not been occupied by a tenant for the past three years.

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

Does the homeowner need to reside on the property?

Yes, but only for a limited time. For lot split projects, the applicant should sign an affidavit confirming their intention to live in one of the housing units as their main residence for at least 3 years from the date the lot split is approved. This requirement does not apply if the applicant is a community land trust or a qualified nonprofit organization.

What are the rental regulations?

Any new units created under SB-9 should be rented for at least 30 days.

Are existing tenants’ rights protected?

Yes. SB-9 protects existing tenants by preventing projects from demolishing or changing units that have been occupied within the past three years before the application. Additionally, this rule also applies to properties that used the Ellis Act eviction in the last fifteen years.

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

No. SB-9 focuses on quickly approving separate residential units that have the potential for independent ownership, usually as single-family homes on the new lots.

Condominiums involve shared ownership of both the land and the building, with individual ownership of the units inside, so they would not qualify under SB-9 for urban lot splits.

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

SB-684 is a more recent law than SB-9 and allows the construction of as many as 10 units on urban lots under 5 acres. Unlike SB-9, which focuses only on single-family homes, SB-684 is applicable for properties in multi-family zones and vacant lots within single-family neighborhoods. Also, SB-684 does not impose the ownership restrictions that are present in SB-9 after 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 can qualify for ministerial approval, which streamlines the housing development process by providing clear and consistent rules. This type of approval is based on set criteria rather than subjective assessments, which helps reduce bureaucratic delays. As a result, projects can receive permits without lengthy CEQA reviews or public hearings. Nonetheless, even with this expedited process, obtaining approval for a lot split could still take up to 1.5 years.

What are objective standards?

“Objective zoning standards," “objective subdivision standards," and “objective design review standards” are pre-defined criteria to assess SB-9 projects without personal judgment from officials. They typically cover design elements like setbacks, building size, and unit square footage, ensuring a consistent and predictable approval process for SB-9 projects.

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

Under SB-9, objective standards that can be waived include those that limit the construction of two units or prevent either unit from being at least 800 square feet. Typically, the allowed building area should accommodate two units of 800 square feet each while following the standards for rear yard space, open space, front setbacks, and side setbacks.

What are the steps to get the permits?

For Lot Split:

1. Parcel Map Application: Start by filing a Parcel Map application for Lot Split with the San Francisco Public Works Department.

2. SB-9 Supplemental Application & Optional Preliminary Housing Development Application: Submit a completed SB-9 Supplemental Application to the San Francisco Planning Department. You can also choose to submit a Preliminary Housing Development application at the same time, though this is optional.

For Duplex:

1. Building Permit Application: Get a building permit for the new dwelling units from the Department of Building Inspection (DBI). DBI encourages electronic plan reviews for building permit submissions.

2. SB-9 Supplemental Application: In addition to the building permit, submit a completed SB-9 Supplemental Application to the San Francisco Planning Department.

Optional Applications:
You can choose to submit a Preliminary Housing Development application (SB-330) to the San Francisco Planning Department. If your project involves a lot split, you can also optionally apply for a Parcel Map for a Lot Split with San Francisco Public Works.

Electronic Plan Review Instructions:
To use electronic plan review, email [email protected] with the subject line "New In-House Review Permit Request - [Insert your property address]." Attach all required documents to your email. The DBI intake team will review your submission and send you an invoice for the filing fee once your documents are verified.

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 our initial scenario, we are planning a new development comprising a 4,000-square-foot, three-story duplex with an additional 1,000-square-foot ADU. The projected total cost for this project, covering construction, permits, and professional fees (excluding land purchase), is $2,173,794. If this project were situated in Noe Valley, a highly sought-after neighborhood in San Francisco, the market value of the completed building would be around $7,500,000. Therefore, the estimated Return on Investment (ROI) for an SB-9 project in this area is calculated as [($7,500,000 - $2,173,794)/$2,173,794]*100 = 245%

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 anticipated investment for this project is $3,509,852, excluding land acquisition costs if the land is not already owned.

In Noe Valley, the estimated market value for a building of this size is $12,000,000, yielding a 247% ROI. However, in a less affluent San Francisco neighborhood like Monterey Heights, the market value drops to $8,800,000, resulting in a lower ROI.

Conclusion:

SB-9 projects in Noe Valley show excellent returns on investment, making it a highly attractive area for real estate development. In contrast, Monterey Heights has a lower, yet still profitable, ROI for SB-9 projects, making it a viable investment option as well.

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

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