In the ever-evolving landscape of California real estate, Senate Bill 9 (SB9) has emerged as a game-changer for homeowners and potential buyers alike. As the housing market adapts to new regulations, understanding SB9's owner occupancy requirements is crucial for anyone looking to leverage this law's benefits.
"SB9's owner occupancy requirement strikes a balance between increasing housing supply and maintaining neighborhood stability. SB9 is a powerful tool for homeowners, but it requires careful consideration and planning."
Atisha Varshney, AICP,
Principal at Forward City Labs
What is SB9?
Senate Bill 9, which went into effect on January 1, 2022, allows homeowners in single-family residential zones to split their property into two lots and/or build up to four housing units on a single-family lot. This law aims to address California's housing crisis by increasing density in residential neighborhoods.
Understanding SB9 Owner Occupancy Requirements
One of the key aspects of SB9 is its owner occupancy requirement. Here's what you need to know:
- Three-Year Commitment: The property owner must sign an affidavit stating their intention to occupy one of the housing units as their principal residence for a minimum of three years from the date of approval of the lot split.
- Exceptions: This requirement doesn't apply if the property owner is a "community land trust" or a "qualified nonprofit corporation."
- No Previous SB9 Projects: The owner occupancy requirement applies to owners who haven't used SB9 to split lots or add units on any other parcels.
- Verification: Local agencies may impose owner occupancy standards and require annual verification of owner occupancy.
Impact on Homeowners and Buyers
The owner occupancy requirement has several implications:
- Investment Opportunity: It allows homeowners to create additional housing units while maintaining their primary residence, potentially generating rental income.
- Increased Property Value: By enabling lot splits and additional units, SB9 can significantly increase a property's value.
- Affordable Housing Solution: It provides an avenue for creating more affordable housing options in single-family neighborhoods.
- Limited Speculator Activity: The requirement discourages property speculators from buying and immediately selling or renting out all units.
Challenges and Considerations
While SB9 offers significant opportunities, there are challenges to consider:
- Local Regulations: Cities and counties may have additional requirements or restrictions.
- Financial Investment: Developing additional units requires substantial upfront costs.
- Long-Term Commitment: The three-year occupancy requirement may not suit all homeowners' plans.
- Market Dynamics: The impact on neighborhood character and property values is still unfolding.
How to Comply with SB9 Owner Occupancy Requirements
If you're considering using SB9 to develop your property, here are steps to ensure compliance:
- Consult Local Authorities: Check with your city or county planning department for specific local requirements.
- Prepare the Affidavit: Draft and sign an affidavit stating your intention to occupy one unit as your primary residence for at least three years.
- Plan for Verification: Be prepared to provide annual proof of occupancy if required by your local agency.
- Document Your Timeline: Keep records of when you begin the SB9 process to track your three-year commitment.
The Future of SB9 and Owner Occupancy
As SB9 is relatively new, its long-term impacts are still unfolding. Some potential future developments include:
- Refinement of Requirements: The state may adjust owner occupancy rules based on early implementation experiences.
- Legal Challenges: The law may face legal scrutiny, potentially affecting its provisions.
- Local Adaptations: Cities and counties may develop more specific guidelines for implementing SB9.
Conclusion
California Senate Bill 9 represent a significant shift in California's approach to single-family zoning. For homeowners and potential buyers, it offers new opportunities to create additional housing and potentially generate income. However, it's crucial to understand the requirements, consider the long-term commitment, and stay informed about local regulations and market trends.
As California continues to grapple with its housing crisis, laws like SB9 play a vital role in expanding housing options. By understanding and complying with the owner occupancy requirements, homeowners can contribute to this solution while potentially benefiting from increased property value and rental income.
Remember, while SB9 opens up new possibilities, it's always advisable to consult with legal and real estate professionals before making significant property decisions. Stay informed, plan carefully, and you'll be well-positioned to navigate the opportunities presented by SB9.
