SB9 - California Housing Opportunity and More Efficiency (HOME) Act
sb9
Senate Bill 9, also known as the California Housing Opportunity and More Efficiency (HOME) Act, is a state law aimed at addressing the housing crisis in California. The bill aims to increase the housing supply and diversify the types of housing available. The bill allows for the construction of more housing units, including multi-family housing, and allows for the conversion of existing buildings into housing units. The bill also allows for the construction of more affordable housing units. To implement the bill, cities and municipalities will need to rezone areas for housing development, streamline the permitting process, and work with developers to create new housing units. The bill also requires local governments to consider the impact of new housing developments on existing residents and the environment. Overall, the bill is designed to make it easier for cities and municipalities to build more housing and increase the availability of affordable housing in California.
Senate Bill 9 is a great way to improve housing in the state However, implementing the bill is expensive due to the high costs associated with new construction. Building and energy codes require expensive upgrades such as fire sprinkler systems, solar installations, new sewer and power lines, and green building requirements like landscaping, water conservation, and low-impact development design. In addition, cities such as Los Angeles have implemented linkage fees, which penalize developers for building structures over a certain size, further increasing the costs of new construction. These additional costs make it difficult to build new housing units and make them more expensive for potential buyers. As a result, the high cost of new construction is one of the biggest challenges facing the implementation of SB 9.
SB9, the California Housing Opportunity and More Efficiency (HOME) Act, allows for lot splitting which can have many advantages for developers, property owners, and potential buyers.
Improve Cash flow: By subdividing the current parcel into smaller parcels, homeowners can sell or refinance them separately, which can increase cash flow.
Increased value: Lot splitting can increase the value of the property by creating more housing units on a single parcel of land.
Improve liquidity: Subdividing a parcel of land into smaller lots can improve liquidity by providing more options for buyers and investors.
Increase flexibility: Lot splitting allows developers to build a variety of housing types, catering to different needs and preferences of potential buyers.
Reduce risk: Lot splitting can reduce risk by providing more options for buyers and investors, and by creating more affordable housing options.
Address housing crisis: Lot splitting can create more housing units on a single parcel of land, which can help address the housing crisis in California.
Efficient use of land resources: By subdividing the land, it allows for more efficient use of land resources and can lead to the development of more affordable housing options.
Create opportunities for home owners: This bill benefits homeowners, and homeowners alone. SB 9 contains an owner occupancy requirement, which requires a homeowner to live in one of the units for three years from the time they get approval for a lot split. Additionally, this bill prohibits the development of small subdivisions and prohibits ministerial lot splits on adjacent parcels by the same individual to prevent investor speculation. In fact, allowing for more neighborhood scale housing in California’s communities actually curbs the market power of institutional investors. SB 9 also prevents profiteers from evicting or displacing tenants by excluding properties where a tenant has resided in the past three years.
THE CALIFORNIA HOME ACT
SENATE BILL 9 IS THE PRODUCT OF A MULTI-YEAR EFFORT TO DEVELOP SOLUTIONS TO ADDRESS CALIFORNIA'S HOUSING CRISIS.
Senate Bill 9 is the product of a multi-year effort to develop solutions to address our state’s housing crisis. The Senate Housing Package of bills, ‘Building Opportunities for All,’ establishes opportunities to make real progressive and positive changes in our communities to strengthen the fabric of our neighborhoods with equity, inclusivity, and affordability.
Provides options for homeowners to build intergenerational wealth. SB 9 provides more options for families to maintain and build intergenerational wealth a currency we know is crucial to combatting inequity and creating social mobility. The families who own these properties could provide affordable rental opportunities for other working families who may be struggling to find a rental home in their price range, or who may be looking for their own path to home ownership.
Benefits homeowners NOT institutional investors. Recent amendments require a local agency to impose an owner occupancy requirement as a condition of a homeowner receiving a ministerial lot split. This bill also prohibits the development of small subdivisions and prohibits ministerial lot splits on adjacent parcels by the same individual to prevent investor speculation. In fact, allowing for more neighborhood scale housing in California’s communities actually curbs the market power of institutional investors. SB 9 prevents profiteers from evicting or displacing tenants by excluding properties where a tenant has resided in the past three years.
Establishes a maximum number of units. Recent amendments clarify that this bill would allow no more than four units on what is currently a single-family parcel.
Preserves historic neighborhoods. SB 9 excludes historic and landmark districts.
Respects local control. Homeowners must comply with local zoning requirements when developing a duplex (height, floor area ratios, lot coverage etc.) as long as they do not physically preclude a lot split or duplex. This bill also allows locals to require a percolation test for any duplex proposed to be on septic tanks.
Promotes strategic infill growth. Under this bill, the parcel must be located in a jurisdiction that is part of an urbanized area or urban cluster, as designated by the US Census. This means that it applies only to areas that meet certain population and density thresholds. It excludes the provisions of the bill being used in very high fire hazard severity zones, prime agriculture land, hazardous waste sites, earthquake zones, floodplains that do not have adequate mitigation, and others. At the end of the day, if local governments do not allow people to build homes in an area, then the bill does not apply.
What this bill does: Senate Bill 9 – the California Housing Opportunity and More Efficiency (HOME) Act streamlines the process for a homeowner to create a duplex or subdivide an existing lot. Any new housing created as a result of this bill must meet a specific list of qualifications that protects historic districts, preserves environmental quality and the look of communities, and prevents tenants from being displaced. This legislation will enable homeowners to create intergenerational wealth, and provide access to more rental and ownership options for working families who would otherwise be priced out of neighborhoods.
What’s different from last year: We took what was a good bill – which had widespread support in both the Senate and Assembly at the end of last year and on track to pass before it fell victim to the clock – and improved upon it since reintroducing it as SB 9 this year. We listened to concerns from homeowners, municipalities, and other stakeholders, and have incorporated many amendments make the bill stronger, more clear, and address those concerns. Because of all the variables that make a neighborhood what it is – size of lots, local ordinances, desire of homeowners to even use this option – not everyone will choose to do a lot split or turn their home into a duplex, just like not everyone added an ADU when that good law was enacted.
MYTHS VS. FACTS
What this bill does: Senate Bill 9 – the California Housing Opportunity and More Efficiency (HOME) Act streamlines the process for a homeowner to create a duplex or subdivide an existing lot. To be eligible for the streamlining provided by this bill, a parcel must meet a specific list of qualifications that protects historic districts, preserves the environmental quality and the look of communities, and prevents tenants from being displaced. This legislation will enable homeowners to create intergenerational wealth, and provide access to more rental and ownership options for working families who would otherwise be priced out of neighborhoods.
What’s different from last year: We took what was a good bill – which had widespread support in both the Senate and Assembly at the end of last year and on track to pass before it fell victim to the clock – and improved upon it since reintroducing it as SB 9 this year. We listened to concerns from homeowners, municipalities, and other stakeholders, and have incorporated many amendments to make the bill stronger, more clear, and address those concerns.
Myth: My neighbors are going to be able to build 5 or 6-units next door to my single-family home.
Fact: SB 9 would allow no more than four units on what is currently a single-family parcel. This bill encourages neighborhood scale homes – meaning modifications to a property need to be in keeping with the look of the neighborhood.
Myth:This is going to ruin the look of our neighborhood.
Fact:In many communities across California – including in San Diego – there are beautiful duplexes and triplexes next door to traditional single-family homes. Look at Linda Vista, Hillcrest, North Park – these are communities central to the city and job centers that are coveted places to live. In fact, many are beautiful and well-kept, providing not only a bright spot on the street, but a comfortable place for not just one but two households to call home.
Myth: This bill won’t help expand housing options that are more affordable and help real people.
Fact: The HOME Act builds intergenerational wealth. For homeowners, it provides more options to maintain and build intergenerational wealth – a currency we know is crucial to combatting inequity and creating social mobility. There is no silver bullet to solving the housing crisis that has been decades in the making. SB 9 is one modest tool in the toolbox. This bill allows for more types of housing to create more equitable and inclusive neighborhoods.
Myth: This is a land grab by institutional investors looking to ruin our neighborhoods.
Fact: This bill benefits homeowners, and homeowners alone. SB 9 contains an owner occupancy requirement, which requires a homeowner to live in one of the units for three years from the time they get approval for a lot split. Additionally, this bill prohibits the development of small subdivisions and prohibits ministerial lot splits on adjacent parcels by the same individual to prevent investor speculation. In fact, allowing for more neighborhood scale housing in California’s communities actually curbs the market power of institutional investors. SB 9 also prevents profiteers from evicting or displacing tenants by excluding properties where a tenant has resided in the past three years.
Myth: This bill will destroy historic neighborhoods.
Fact: SB 9 excludes historic and landmark districts.
Myth: This will change local control of land use decisions.
Fact: Homeowners must comply with local zoning requirements when developing a duplex (height, floor area ratios, lot coverage, etc.) as long as they do not physically preclude a duplex. This bill also allows locals to require a percolation test for any duplex proposed to be on septic tanks.
Myth: Under SB 9, a lot split requires a single family home to be demolished.
Fact: This bill provides options for homeowners and does NOT require any demolition. SB 9 contains strong tenant protections to ensure rental housing is not demolished. A recent study shows that the additional housing options provided by SB 9 actually decreases the likelihood of a single family home being torn down and replaced by a larger single family home. Additionally, nearly 97% of all single-family homes would be retained under SB 9. This bill is one way to help solve the state’s housing production crisis. SB 9 provides more pathways to homeownership and expands access to the California dream.
Myth: This bill does not take into consideration environmental and infrastructure concerns.
Fact: Under this bill, the parcel must be located in a jurisdiction that is part of an urbanized area or urban cluster, as designated by the US Census. This means that it applies only to areas that meet certain population and density thresholds. It excludes very high fire hazard severity zones, prime agriculture land, hazardous waste sites, earthquake zones, floodplains that do not have adequate mitigation, and others. At the end of the day, if local governments do not allow people to build homes in an area, then the bill does not apply. Additionally, SB 9 does NOT make any changes to existing law, which specifies a local agency’s ability to impose impact fees.
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