How Will These Senate Bills Affect You?

SB 9 and 10 are some of the most controversial to get passed in California in recent years. It might be some time until we know how local goverments will interpret them with local builders, investors and homeowners but here is what we know now...

Senate Bill 9

The more influential of the two bills, SB 9 allows for a homeowner to bypass single-family residential zoning, split the lot, and build up to four units on the total land.

For example, you own a 6,000 sqft lot in Pacific Beach, you can now split the lot into two 3,000 sqft lots. Then, you can build a single-family home on each lot, as well as, an ADU or second unit for a total of 4 units on a lot that was originally meant for one unit.

The question is, will this make living more affordable or simply increase home values for people who already own property.

Increase Prices?

We know that property with more features (such as an ADU) will garner more attention and therefore more money from prospective buyers.

The option of subsidizing your mortgage with ADU rental income is a great way to increase your affordability and house hack your way into owning real estate for less.

However, it comes with an increased price tag as compared to a similar home without that option.

Decrease Value?

Not everyone wants to live on a lot with two homes, while a stranger rents the other unit. People also like space, privacy, and quiet. 

If a current homeowner has purchased a home in such a neighborhood for those reasons, it is very likely that the homeowner would move out if the neighboring housing begins to multiply and increase the density. 

This ultimately could drive down the home values in said neighborhood.

Restrictions for SB 9

There are some restrictions involved with this bill including two big ones which are that the owner has to agree to live on the property for at least 3 years. The other being that the living sqft for each lot has to be equal to or more than 1,200sqft as well as follow all local building codes.

Senate Bill 10

Allows the city to zone for smaller, lower-cost housing developments. It enables jurisdictions that want to opt-in and upzone urbanized areas close to transit, allowing up to 10 units per parcel without and CEQA oversight.

It might allow municipalities to upzone parcels and override existing zoning with little public review or input.

Said areas need to be near high traffic transit zones but it will be up to the local governments to interpret the bill.

The major concern with this bill other than more dense urban areas is potential building on environmentally or historically designated areas.

Have more questions about SB 9 and 10? Feel free to reach out to us we would love to be your local real estate resource!