New housing: The ins and outs of SB9

Among the latest of several major land use and housing laws enacted in California is Senate Bill 9, known as SB9. Scheduled to take effect after the first of the year, SB9 amends existing state land-use laws to allow owners of single family residential parcels to split their lot and grants them the right to build up to two residential units on the new lot without a use permit.

In other words, homes on lots with backyards as small as 1,200 sq. ft. can now be subdivided and developed with additional housing. 

The premise of this new law is that additional housing created through this opportunity will help relieve California’s housing shortage. However, any additional housing is not subject to affordability requirements and may be sold or rented at market rates.

According to a study by the Terner Center for Housing Innovation at the University of California at Berkeley, after accounting for physical capacity and financial feasibility, SB9 will enable new development on just 5.4 percent of current single-family parcels; in the City of Sonoma it’s expected that no more than 10 units will be created each year. The reasons for this small number include the remaining restrictions placed upon property owners, and that relatively few residential parcels are suitable for subdivision. 

Among the restrictions is that owners wishing to subdivide their property under SB9 must sign an affidavit that they will occupy their property for at least three years after the subdivision. How such promises are monitored, however, is not specified, nor are the consequences of their violation. Lot sizes after subdivision must be roughly equal in size, and many existing homes are not positioned on a parcel to make that possible. In addition, many residents in owner occupied homes enjoy their backyard privacy and are loath to fill their parcel with up to two more residences.

Some questions remain about who exactly qualifies as a homeowner. Is a homeowner an LLC like those created by Pacaso, with eight shareholders who jointly occupy a home? Jurisdictions regulate land uses, not property owners. As written, SB9 potentially allows the exploitation of residential property for development by commercial interests. As Dan Carigg, retired legislative director of the California League of Cities warns in his commentary on SB9, “At a minimum a developer could create six units by doing the following: (1) First add a junior and separate accessory dwelling unit as permitted by recently-enacted state ADU law; then (2) use Sec. 65852.21 in SB9 to split the single-family home into two units; then (3) apply for an urban parcel split, and build an additional two units on the newly created parcel.” 

It’s not wealthy homeowners living in mini-mansions who are likely to exploit SB9, but commercial developers who target lower-cost properties occupied by working-class owners and renters. Carigg notes that SB9, “will allow most single-family neighborhoods to become the target of ‘buy, flip and split’ speculators who are free to demolish homes and replace them with units jammed up against four-foot setbacks, with little to no parking.”

The City of Sonoma is currently updating its development code to accommodate SB9, with the expectation that some homeowners may want to create duplex buildings on a subdivided lot. Matters of size are being considered in an attempt to limit the visual and other impacts of increased density, but SB9 dictates that duplexes cannot be smaller than 800 sq. ft. The maximum size of duplex units may be limited, with the intention that smaller residences will sell or rent for lower prices, but price is a market-driven process which may or may not result in more affordability. Given the high price of construction and labor, keeping costs down is extremely difficult. Wealthy Bay Area people looking for a second home in the wine country will most likely find Sonoma Valley prices fine. 

Low wage earners, on the other hand, appear increasingly unlikely as tenants or owners. 

Until now, it’s been up to local and county governments to raise affordable housing subsidy revenues, and most, including the City of Sonoma, have been very slow to do so. Accordingly, the pace at which affordable housing has been built has slowed dramatically when compared with the 20 year period from 1991-2011, when state redevelopment funds were available. 

Lacking any substantial state funding for affordable housing or SB9 mandates about affordability, the recent legislation provides nothing in the way of incentives for its creation.

Legislation such as SB9, when combined with other legislation reducing application processing time and allowing ministerial over-the-counter approvals, may find a place in locations that are already densely developed and adjacent to mass transportation like busses and SMART trains. Unless Sonoma and Sonoma Valley become highly urbanized, development resulting from these new state land use rules will likely be minimal; such urbanization requires extensive new infrastructure of roads, water delivery, and waste disposal facilities of enormous cost.

Reportedly, voter signatures for a measure rescinding SB9 are being collected, and this ballot initiative is likely to appear in the election of 2022.

Larry Barnett is vice-chair of the Sonoma Planning Commission.