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Over the past few years, as the urban population has continued to skyrocket, many states have implemented measures to improve the housing situation in their cities. A good example is the SB 9 Bill of California.
Such measures have made it easier for homeowners to make additions to their properties by building a prefab accessory dwelling unit or doing a lot split to better utilize the available land. This helps ease the housing crisis while giving the property owner an extra source of income.
If you are only hearing of this today, you may be asking yourself “What is SB 9?” State laws and legislature may be complicated at times, but as a California resident, this is something you need to be familiar with.
This article will tackle all there is to know about the SB 9 bill, SB 9 zoning, and SB 9 lot split. By the time you finish reading, you will also know how SB 9 compares with ADUs, and which option is best suited to your needs.
What Is SB 9 and How Does It Work?
What is SB 9? The full name of this California state law is Senate Bill 9. It is also known as the HOME Act or simply SB 9 for short. This bill was passed by California lawmakers in 2021 but only became effective as recently as 2022.
After enjoying a lot of success with the ADU legislation, the state of California decided to implement new SB 9 zoning laws designed to encourage gentle infills that will help alleviate the housing shortage in major urban areas.
When applied correctly, the SB 9 bill allows homeowners the power to take two different kinds of action on their properties, which are:
- Adding a home to the same lot or converting a single family home to a duplex. This can be done without the need for a lot split, which makes the process easier and more cost-effective for the owner.
- Using SB 9 lot split recommendations, homeowners can also split their properties into two parcels or lots. The rules state that the lots must be roughly equal in size and be at least 1,200 square feet each.
SB 9 makes it easier for property owners to manage their land in this way without the requirement of a discretionary hearing, review, or compliance with the California Environmental Quality Act (CEQA).
What Is the Owner Occupancy Requirement to Use SB 9?
The rules regarding using SB 9 extend to owner occupancy. According to the bill, after splitting their property into two, the homeowner has to live in one of the units for at least three years from the time the SB 9 lot split is approved.
To reduce potential investor speculation, the bill goes on to prevent the ministerial splitting of adjacent plots of land by the same owner. If a tenant has lived on a piece of land for more than three years, the SB 9 bill prevents the owner from displacing or evicting them by excluding their home from the property.
Such rules do not usually apply to ADUs, which is part of the reason why many homeowners may prefer adding a home pod to their property rather than using the SB 9 bill.
What Kind of Residence Can You Build After a Lot Split With SB 9?
The same local zoning laws that apply to new homeowners building a house on a piece of property for the first time also apply to building an additional residence after conducting an SB 9 lot split.
This means the owners can build a prefab studio or any other type of residential building as long as they comply with local zoning legislation. These laws are often put in place to govern things such as lot coverage, floor area ratios, and the height of the building. The homeowners must also make sure that the local laws do not preclude the building of a duplex.
However, some gray areas in the SB 9 bill can be interpreted differently by homeowners. A good example is the recommendation that any new building that is built on the split land must be of the same character as the rest of the neighborhood.
SB 9 vs. Add an ADU Comparison
If you have some extra piece of land on your property that you feel is being underutilized, you may be considering adding an extra building there. However, the first thing you will have to decide is whether to go for an SB 9 split or simply purchase an ADU.
Many homeowners find the concept of having a backyard pod to be very appealing, especially considering the many things you can do with such a structure. However, there are also a lot of good things to say about going the SB 9 route.
It helps to look at the bigger picture and consider the similarities and differences between these two options. This article will start by considering the similarities.
ADUs and SB 9: Similarities
SB 9 units and prefab additions have many things in common, such as:
- SB 9 units have a 30-day minimum rental period requirement in all areas of California. The same is true for ADUs, although this rule only applies in certain areas, including Los Angeles County.
- Both ADUs and SB 9 units can be applied to all cities in California, with each city allowed to pass an ordinance with local implementation guidelines.
- When adding an ADU or SB 9 unit, the owner will require a ministerial review process.
- Both units have been approved by California lawmakers in an attempt to ease the housing shortages throughout the state.
Key Differences in Using SB 9 vs. Adding an ADU
As much as SB 9 units and ADUs have many things in common, there are also some key differences that homeowners need to consider before choosing either option, and these are:
Selling Dwelling Units
According to the SB 9 bill, the owner is allowed to sell an SB 9 lot split to a third party either with some units on them or as vacant lots. However, when you construct an ADU on your property, the unit cannot be sold independently without the primary residence.
It is important to note that in October 2024, a state law was passed that allows cities to decide for themselves if they will allow the sale of free-standing ADUs without the primary unit. This means you may be able to do so in 2024 depending on the city you live in.
The SB 9 units are specifically made to be used in single-family zoned properties. That means if your property is part of a multifamily zoning area, you will not be able to use the SB 9 zoning laws even if you have the space to do so.
With ADUs, however, it is a different story. You are allowed to build up to two ADUs on your property even if you are in a multifamily zone.
As mentioned before, the SB 9 bill requires the homeowner to live in one of the units for at least three years from the day the SB 9 split is approved. This is not the case for ADUs, meaning you can build a couple of ADUs and rent them out even if you do not live in the primary residence.
High Fire and Historic Zones
SB 9 zoning is not allowed in all designated high-fire and historic zones. If you have some extra space that you wish to make use of, you can build an ADU instead. The only thing you need to make sure of is that the ADUs are designed according to the local code.
In many areas, any development you make on your property has to be approved by the homeowners association (HOA). This is especially true when it comes to SB 9 units which cannot be built without pre-approval from HOAs.
However, one way to go around that is to build ADUs instead. In California, HOAs do not have the authority to prevent or restrict the development of an ADU on someone's private property.
If you go the SB 9 route, you will not get any impact fee waivers from the state on standard single-family housing. With ADUs, structures under 750 sq ft will have most impact fees waived, making this the cheaper option if you are concerned about the budget.
Separate Utility Metering
If you use the SB 9 bill, you will be building a separate unit that must be able to exist independently of the primary residence you are currently using. This means the unit will require separately connected/metered utilities. You will also have to provide “right of way” improvements for those units.
However, the state of California is a lot more lenient when it comes to ADUs. Homeowners are allowed utility connections “behind the curb,” meaning these can be connected to the primary residence.
Another important difference between SB 9 units and ADUs is the size of the dwelling. In general, most cities allow SB 9 units to be larger, which makes sense considering that the minimum amount of land required for an SB 9 lot split is at least 1,200 square feet.
ADUs, on the other hand, can be much smaller, which is why they are sometimes referred to as tiny home kits.
SB 9/ADU Cost Comparison
How much do tiny houses cost? This is an important question when choosing between building a large SB 9 unit or buying one of the affordable prefab homes available online. The cost of an SB 9 unit is often a lot more than what you would need for an ordinary ADU.
If you consider the design, for example, you will see that an SB 9 unit can require as much as $25,000, while just $10,000 will be enough for an ADU. Unlike ADUs, SB 9 units also need “right of way” work, which will cost you a massive $50,000.
While the cost of the structure itself is usually the same for an ADU and an SB 9 unit, it is the extra costs for permits, design, “right of way” work, and site work that make the latter a lot more expensive.
In the end, you should expect to pay up to $555,000 for an SB 9 unit compared to just $425,000 for an ADU. If you visit Autonomous, you can even get your hands on a great ADU for much less than that.
Which Is Better, ADUs or SB 9?
Choosing between these two structures is not simply a matter of comparing SB 9 zoning laws and the other key differences mentioned in this article. The choice between SB 9/ADU depends on your goals, the type of property you have, and your financial situation.
Both of these options are great when it comes to addressing the housing issue in California and putting a few extra dollars in your pocket. Choosing an SB 9 unit may be a lot more expensive in the beginning, but you will get a larger unit that can bring in a lot more money in rentals, or be sold for a huge lump sum.
An ADU, on the other hand, has the advantage of being cheaper and a lot easier to install. It also comes with a lot of advantages when it comes to connecting the utilities and dealing with HOA regulations. This is why you have to look very closely at your needs and budget before choosing which of these great options between SB 9/ADU to go for.
If you are looking for some inspiration, you can do a little bit of research online to see what types of ADUs and SB 9 units are trending. You can visit Autonomous and take a look at the fascinating range of cheap tiny homes that can be delivered to your doorstep in a matter of weeks.
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