The California housing crisis, characterized by soaring prices and limited supply, has long been a significant obstacle for prospective homeowners and a challenge for policymakers. However, recent legislative efforts aim to address these issues. Two pivotal pieces of legislation, Senate Bill 9 (SB 9) and Senate Bill 450 (SB 450), have been passed to facilitate increased housing density and affordability. This guide examines the implications of these laws for California's housing landscape.

Historical Context

To understand the significance of SB 9 and SB 450, it's important to consider the evolution of California's housing legislation:

• 2017: Housing Package, including SB 35, streamlines approvals for certain housing projects
• 2019: AB 68 and SB 13 ease restrictions on Accessory Dwelling Units (ADUs)
• 2021: SB 9 passes, allowing duplexes and lot splits in single-family zones
• 2023: SB 450 passes, refining and enhancing SB 9 provisions

This timeline illustrates California's ongoing efforts to address its housing challenges through legislative action.

Understanding Senate Bill 9 (SB 9)

Senate Bill 9, which took effect in 2022, represents a significant shift in California's approach to single-family zoning. This bill introduces two key provisions that expand options for property owners:

• Duplex Conversion: SB 9 permits homeowners to convert their single-family residences into duplexes, effectively doubling the housing capacity of the property.
• Lot Splitting: The legislation allows for the division of single-family lots into two separate parcels, with the potential for constructing up to two housing units on each resulting lot.

Importantly, these provisions can be combined, allowing for a potential quadrupling of housing units on what was originally a single-family lot. For instance, a homeowner could split their lot and construct duplexes on both resulting parcels, transforming a single-family home into four distinct housing units.

The primary objective of SB 9 is to increase housing supply without drastically altering the character of existing neighborhoods. This approach to densification, often referred to as "gentle density" or "hidden density," aims to create additional housing units while maintaining the overall aesthetic and feel of established communities.

While the law applies to most single-family properties in California, it includes specific exemptions, such as homes in designated historic districts or those that would require the demolition of rent-controlled or covenant-restricted housing. These exemptions serve to protect certain types of existing housing and preserve areas of historical significance.

Senate Bill 450 (SB 450): Refining and Enhancing SB 9

While SB 9 laid the groundwork for increased housing density, its implementation revealed certain challenges for homeowners. Senate Bill 450, enacted in 2023, serves as a complementary piece of legislation designed to address these issues and streamline the application of SB 9. Key enhancements include:

• Clarification of lot split regulations
• Simplification of the approval process for SB 9 projects
• Increased flexibility for local jurisdictions in implementing the law

These refinements aim to broaden the accessibility of SB 9's provisions, potentially catalyzing a more significant impact on California's housing inventory.

Benefits of SB 9 and SB 450

The enactment of SB 9 and its subsequent refinement through SB 450 present several potential advantages for California's housing landscape:

• Increased Housing Supply: By facilitating the creation of additional dwelling units on existing residential lots, these laws have the potential to significantly augment the state's housing inventory. According to a study by the Terner Center for Housing Innovation at UC Berkeley, SB 9 could enable the creation of up to 700,000 new housing units statewide.
• Enhanced Affordability: The introduction of more housing units, particularly in desirable neighborhoods, may exert downward pressure on housing costs. While not a panacea for California's affordability crisis, these laws could contribute to a more balanced housing market, potentially opening up opportunities for both renters and prospective homeowners.
• Property Owner Empowerment: These legislative measures provide property owners with increased flexibility in utilizing their real estate assets. The option to create additional units for rental income or to accommodate multi-generational living arrangements could offer financial and practical benefits to homeowners.
• Sustainable Urban Development: By promoting infill development in existing residential areas, SB 9 and SB 450 align with principles of sustainable urban planning. This approach can help curb urban sprawl, reduce transportation-related emissions, and make more efficient use of existing infrastructure.

Addressing Potential Concerns

While SB 9 and SB 450 offer promising solutions to California's housing challenges, they have also sparked debates and raised concerns among some stakeholders:

• Neighborhood Character: Critics argue that increased density could alter the aesthetic and social fabric of established neighborhoods. However, proponents contend that the laws' provisions for maintaining street-facing facades and limiting the scale of new construction will help preserve community character.
• Infrastructure Strain: There are concerns about the potential impact on local infrastructure, including water systems, sewage, and electrical grids. Policymakers and urban planners will need to carefully monitor and address these challenges as implementation progresses.
• Parking and Traffic: The potential for increased population density has raised questions about parking availability and traffic congestion. While the laws do not mandate additional parking for new units, local jurisdictions retain some flexibility in addressing these issues.
• Tenant Protections and Displacement: It's crucial to note that SB 9 explicitly excludes properties currently occupied by tenants from eligibility for development under its provisions. This restriction serves as a safeguard against the displacement of existing residents and helps mitigate concerns about property speculation leading to tenant evictions. Properties where tenants have resided within the past three years are also ineligible, further reinforcing these protections. Despite these protections, some stakeholders remain concerned about the potential indirect effects of the law on the rental market and neighborhood dynamics. Ongoing monitoring and potential adjustments to the legislation may be necessary to address any unforeseen consequences and ensure that the benefits of increased housing supply are balanced with the need to protect vulnerable residents.
• Equity and Access: Questions have been raised about who will primarily benefit from these new development opportunities. While the laws aim to increase housing supply across diverse neighborhoods, there are concerns that the financial requirements for undertaking such projects might limit participation to more affluent property owners. Policymakers may need to consider additional measures to ensure equitable access to the benefits of these laws across different socioeconomic groups.

Leveraging SB 9 and SB 450

For property owners interested in taking advantage of these new laws, the following steps are recommended:

• Eligibility Assessment: Utilize resources such as the free SB 9 eligibility assessment tool available at Opulands.com/sb9. This tool provides a preliminary evaluation of a property's potential for SB 9 development and can identify potential conflicts with eligibility criteria. However, it's crucial to understand that this assessment is for informational purposes only and should not be the sole basis for decision-making.
• Local Jurisdiction Consultation: Given the variability in local implementation of these state laws, it is imperative to engage with local planning departments. These consultations can provide clarity on specific local regulations, zoning requirements, and approval processes.
• Professional Expertise: Engaging with architects, contractors, and planning consultants who are well-versed in SB 9 and local zoning laws is advisable. These professionals can provide valuable insights into project feasibility, design considerations, and regulatory compliance. Opulands may offer referrals to SB 9 consultants in specific geographic areas.
• Comprehensive Planning: Develop a holistic plan that considers not only the physical alterations to the property but also financial implications, potential impact on property values, and long-term management of additional units.

The Future of California's Housing Landscape

SB 9 and SB 450 represent significant steps in California's ongoing efforts to address its housing crisis. As these laws are implemented, their impact on housing supply, affordability, and urban development patterns will become clearer. It's likely that additional refinements and complementary policies will emerge as policymakers, urban planners, and communities gain experience with these new housing options.

While these laws alone may not solve California's complex housing challenges, they signify a shift towards more flexible and diverse housing options in traditionally single-family neighborhoods. As the state continues to grapple with housing affordability and supply issues, the outcomes of these legislative initiatives will likely inform future policy decisions and urban planning strategies.

Comparison with Other Jurisdictions

California's approach with SB 9 and SB 450 is part of a broader trend of cities and states reconsidering single-family zoning:

• Oregon: In 2019, Oregon became the first state to eliminate single-family zoning in cities with more than 10,000 residents.
• Minneapolis: The city eliminated single-family zoning in 2018, allowing up to three units on any residential lot.

These examples illustrate that California's efforts are part of a global rethinking of urban density and housing policy.

Conclusion

California's SB 9 and SB 450 mark a notable evolution in the state's approach to housing policy, aiming to increase housing supply and affordability through targeted densification of single-family neighborhoods. As with any significant policy shift, their implementation will require careful monitoring, potential adjustments, and ongoing dialogue between policymakers, property owners, and communities.

For California homeowners and potential buyers, these laws present new opportunities and considerations. Staying informed about these evolving housing policies, understanding local implementations, and seeking professional guidance when considering property modifications will be crucial in navigating this changing landscape.

As California continues to address its housing challenges, the impact and effectiveness of SB 9 and SB 450 will undoubtedly be subjects of ongoing analysis and debate. These laws represent not just a change in housing policy, but a reimagining of how established neighborhoods can evolve to meet the changing needs of California's diverse population.