Senate Bill 9 is a California state law that enables homeowners to split their single-family residential lot into two separate lots and build up to two new housing units on each.
“SB 9 is about opening the door for more families to pursue their version of the California Dream—whether that's building a home for an elderly parent, creating a new source of income, or buying that first house. It's about opportunity.”
— Senator Toni Atkins
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Author of SB 9
The Law
Senate Bill 9, also called the California Housing Opportunity and More Efficiency (“HOME”) Act, was signed into law on September 16, 2021. The so-called "duplex bill" is part of an initiative to address California's housing crisis. SB 9 provides a legal, streamlined process for homeowners to subdivide their urban single-family residential lot and/or build additional residential units on their property.
Specifically, SB 9 alters the municipal review process for two-unithousing developments on single-family lots and for the subdivision of property. Where the review process used to be discretionary (subjective, case-by-case), it is now subject to ministerial approval (objective, consistently applied). This change is intended to simplify and expedite the permitting process, making it easier and more accessible for homeowners to build additional housing on their property.
Senate Bill 9 went into effect statewide on January 1, 2022 and all California cities must comply. However, local governments are allowed to impose their own objective design standards and limitations, as long as they don't directly conflict with the state law. A few cities have received formal reprimands from the State Attorney General for adopting ordinances that violate the requirements and intentions of SB 9.
Context: The Housing Crisis
California is confronting a shortage of affordable housing—particularly in urban areas like Los Angeles—which is increasing rental burden and driving displacement throughout the state. It is estimated that California will need 3.5 million additional units of housing by 2025 to meet the demand; however, fewer than 80,000 new homes are currently built per year.
State legislation passed in 2017 legalized the building of accessory dwelling units in all California cities, regardless of zoning. The resulting ADU boom has helped increase the number of new housing units built over the past few years. And yet, it's still nowhere near enough to meet the demand.
One of the greatest challenges facing housing construction is the predominance of single-family zoning, which allows only one house per lot. Almost 66% of all California residences are single-family housing and nearly 75% of all developable land is zoned single-family. This severely limits the types of housing that can be built and pushes the boundaries of urban expansion ever outward.
Some argue that single-family zoning is intrinsically linked with the "California Dream" of owning a family home with a big private backyard. However, due to soaring housing costs in a highly competitive market, that dream is far out of reach for a growing number of Californians.
Aside from limiting accessibility, the single-family model no longer serves the needs of our modern lifestyle. Multigenerational households, communal living, and the rise of remote work are transforming the ways we live together in cities. It’s time for our zoning rules to reflect this change.
What Can I Build?
Qualifying urban properties in single-family zones can now add a second unit with SB 9. This provision is a great option for homeowners looking to build additional housing for their extended family. It's also beneficial for rental-property owners who want to add a second long-term rental unit.
Single-family property owners can also utilize SB 9 to subdivide their property into two lots of roughly equal size.
However, homeowners who split their property must commit to occupying one of the lots as their primary residence for a minimum of three years. Once the lot is split, homeowners have a wide variety of options for developing housing on their newly created lots. These possibilities include single-family dwellings, duplexes, and/or ADUs (depending on local guidelines).
SB 9 gives qualifying property owners the right to a maximum total of 4 units across the two lots. Some cities allow for even more units; be sure to check our SB 9 City Guides to find out how many units you can build in your jurisdiction.
What Are The Exclusions?
SB 9 is structured to encourage housing development in urban environments while protecting vulnerable populations and ecological areas. To be eligible, a property must be located within an urban area and zoned for single-family use. The property cannot be located within an historic zone, flood zone*,fire hazard zone*, earthquake fault zone*, hazardous waste site*, on prime farmland, or within other environmentally protected areas like conservation zones and endangered species habitats.
Zones marked with an asterisk (*) may be eligible for SB 9 if jurisdiction allows and all safety requirements are met
Proposed SB 9 projects cannot require the alteration or demolition of any rent-controlled or moderate, low, or very low income housing. Alteration and demolition is also prohibited for any units occupied by a rental tenant within the past three years.
Senate Bill 9 does not apply to properties that have a record of tenant eviction within the last 15 years.
SB 9 opens up a wide variety of housing development options for property owners to optimize their property's financial potential while maintaining the character of their community.
A homeowner looking to access equity within their property could split their lot and either sell the new lot or build up to three rental units to ensure long-term income.
The urban lot split provision also creates opportunities for new homeownership, especially for people who have been locked out of the housing market due to ever-increasing prices.
For some homeowners, SB 9 fulfills the dream of multigenerational living by enabling them to share property with aging relatives or adult children.
And for tenants, every new unit of long-term rental housing on the market helps to alleviate the demand.
What Are The Challenges?
The major challenges concerning SB 9 development are essentially the same challenges homeowners tend to encounter with any home renovation or construction project: permitting and financing. Because SB 9 is so new and groundbreaking, however, these obstacles become slightly more nuanced.
Permitting Difficulties
Even with a streamlined process, getting a permit approved for a construction project is still a hassle. To make matters more complicated, every city can interpret and implement SB 9 in their own way. A homeowner looking to develop their property under SB 9 must first understand the limitations and requirements specific to their area's local ordinance. Refer to Homestead’s SB 9 City Guides to learn more about your local requirements.
Furthermore, many cities have yet to establish an application process for SB 9 projects. This can sometimes lead to permitting delays. As time passes and Senate Bill 9 becomes more familiar, this issue will resolve itself. Until then, housing advocates are working hard to make sure cities process SB 9 applications, as the law requires.
Financing Difficulties
Property owners may face obstacles to funding SB 9 projects. Securing financing is often a challenge for homeowners looking to renovate or develop their property, but the uncharted territory of a new law can further complicate matters.
With no established lending practices in place, some lenders might be reluctant to approve funding for SB 9 projects. It's also possible that certain mortgage holders may object to lot splitting. Again, these challenges will likely decrease over time, as Senate Bill 9 becomes more commonplace.
How we can help
With Homestead, any homeowner can easily look up their address to check their SB 9 eligibility with our search tool.
Our comprehensive guidebooks and resources were created to help educate homeowners about SB 9 and the lot split process. We want to make this as easy as possible for you, while empowering you to make the best decision for your property. That's why we've partnered with Yardsworth to help simplify the lot split.
With Yardsworth you can quickly profit from an SB 9 lot split through their land purchase program. Additionally, if you're looking to build a new home on your land, their team can help make the permitting and lot split process effortless.
We are passionate supporters of SB 9 and its potential to help homeowners and improve the livability of our cities. Our goal is to offer homeowners a straightforward route to financial security while empowering them to contribute to resolving California's housing crisis. Our partnership with Yardsworth is in place to help you realize your SB 9 Lot Split goals.
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