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SB9 vs ADU Comparison: Weighing Your Options

May 17, 2024 | 2 comments

Learn about how lot splits and two unit development with SB9 compare to adding accessory dwelling units (ADUs), what are the key points of SB9, what is required to use the law to split your property or add multiple units, and if you can also build an ADU once you split a lot.

In a nutshell, SB9 is uncharted territory and has unfortunately had limited traction in San Diego, likely due to lack of financing options among other reasons. As of February 2024, just 15 SB9 projects have ever been submitted to the City of San Diego, and zero have been approved. The regulations of course will also vary depending on your local jurisdiction. Continue reading for the full data set.

What is SB9 and how does it work?

In an effort to combat the housing crisis, The State of California passed Senate Bill 9, more commonly known as SB9 or the HOME Act. SB9 allows for two different kinds of actions with lots zoned as single family residential:

  1. SB9 allows for converting a single family home to a duplex or adding another single family home to the lot, without requiring a lot split. This provision offers a potentially more cost-effective and less complex alternative for homeowners who wish to add another unit but prefer not to go through the process of splitting their lot.
  2. SB9 also allows for splitting a lot into two parcels, which can be developed and/or sold independently. Lots created must be roughly equally sized lots of a minimum of 1,200 square feet each. Once split, the new separate lots allow the development of a second home or the sale of the second lot.

Previously, lot split approvals would have been “discretionary” by the local jurisdiction, whereas now such action is “ministerial,” requiring no discretionary hearing or review, including compliance with the California Environmental Quality Act (CEQA).

As with many recent accessory dwelling unit (ADU) laws passed in 2017 and 2020, the goal of SB9 is to create more housing stock.

What are SB9 requirements (that could be dealbreakers)?

There are several important restrictions that might immediately disqualify your property from using SB9. Understanding these limitations is crucial for determining whether SB9 is a viable option for your development plans.

High-Risk Areas: Properties located in areas with high risks, such as fire zones, flood plains, earthquake zones, and hazardous waste sites, are not eligible for SB9 development. This also includes historic zones, prime farmland, conservation zones, and habitats for endangered species.

Rental Housing: SB9 housing cannot involve the demolition or alteration of housing that currently has a tenant or has had a tenant in the last three years.

Even Lot Split: The split cannot result in one very large lot and one very small lot (e.g., the split cannot be greater than 60/40).

Owner Occupancy: SB9 requires the property owner to sign an agreement that they will live on one of the lots for at least 3 years. Also, lot splits on adjacent parcels by the same individual or another party acting on their behalf are prohibited.

Lending Complications: With SB9 being so new (and unique to California), you will find most financial institutions do not have clear guidelines for dealing with SB9 lot splits. So it is unlikely that SB9 deals are easily financed, which is likely a key reason there has not been much activity in this space.

Challenges & Considerations for SB9 Projects

SB9 projects carry a higher risk due to the lack of precedent. SB9 is uncharted territory, with few examples of how two-unit developments or lot splits will actually play out. This situation mirrors the early days of ADU law, where ambiguity and evolving regulations presented similar challenges.

It is difficult to get clear answers from the jurisdiction in advance, and any SB9 project will require much more trial and error than an ADU project. While a jurisdiction may offer initial guidance, it’s not binding until the actual plan check process begins. To reach that point, you’ll need a full set of plans—though a few exceptions exist where cities offer preliminary review processes, not all jurisdictions do. As with any new law, there will also be many gray areas for interpretation, especially since it may be the first time the city faces some of these decisions.

This uncertainty can lead to long approval times, unexpected increases in scope and costs, and potential legal challenges. Homeowners considering SB9 for their property development should proceed with caution and be prepared for a potentially complex and prolonged process.

While we typically build ADUs and not primary residences, SB9 is an area we are willing to explore with homeowners who understand these considerations and are comfortable with the uncertainty. We are accustomed to having a high level of confidence in how each ADU project will turn out. Simply by building nearly 100 ADUs, we’ve learned much about what the process and requirements will look like. Unfortunately, it’s not possible to have that same certainty with SB9 with so few examples.

What about the LA law suit with SB9? Is SB9 illegal now?

In April of 2024, a Los Angeles County Superior Court ruled that Senate Bill 9’s mandate is not reasonably related to the production of affordable housing, interferes with local government, and is unconstitutional. This was in response to a 2022 lawsuit brought about by the cities of Del Mar, Redondo Beach, Carson, Torrance, and Whittier.

So what does this mean for SB9 in your area? For now, the state is ordered to cease enforcement of SB 9. This could lead to further headwinds on an SB9 project if your municipality is already less supportive of this kind of development.

Anecdotally, we have seen more stringent interpretations of SB9 rules. In Oceanside, we had previously been advised in writing in July 2023 that some exceptions would be granted as it relates to SB9 – for instance, allowing a pre-existing non-conforming garage to be rebuilt below an SB9 unit. We designed plans based on this information, to be told during the formal plan check process that this would not be allowed. The city apologized, citing that a more narrow interpretation of SB9 was due to pushback from citizens.

How many SB9 projects have been approved in San Diego?

For the City of San Diego as of February 2024, zero projects have been approved using SB9. The city publishes development permit data, which we have analyzed and summarized in the table below for your reference.

SB9 Permitting Data for City of San Diego

Submission DateAddressScopeStatus
3/24/202212340 Aquitaine Ct, San Diego, CA 92130DEL MAR MESA. Parcel Map for a lot split to two parcels per SB9. Lot 6, Map No. 14565.Open
3/24/20223560 Atoll St, San Diego, CA 92111

CLAIRMONT MESA: Combination building permit for a second-floor addition to an existing single-story SDU, Scope to include new detached 2nd dwelling unit, per SB9.

**Cleared Historic on 9/20/2018 under PMT-617061**

Open
4/1/20224210 Gila Av, San Diego, CA 92117CLAIREMONT MESA- Parcel Map for subdivision of land of Lot 177 of Map No.3004 per SB9 regulations.Open
6/3/20221351 Missouri St, San Diego, CAPACIFIC BEACH. Final Map for subdivision of land of Lot 7, Block 1 of North Shore Highlands of Map No. 1969 per SB9 regulations.Open
7/20/20224138 Catalina Pl, San Diego, CA 92107PENINSULA; Parcel map for proposed lot split per SB9.Open
7/22/20226095 Adelaide Av, San Diego, CA 92115MID CITY EASTERN AREA-  Parcel Map with proposed improvements and proposed easement dedication, for a lot split per SB9 regulations. Site has an existing single family residence on sie.Invoice Paid
11/30/20221906 Coolidge St, San Diego, CA 92111LINDA VISTA. Parcel Map for a lot split per SB9.Open
1/17/20231430 1/3 Hilger St, San Diego, CAENCANTO NEIGHBORHOOD- Parcel Map for a proposed SB9 lot split for lot 31.Open
2/6/20231671 Beryl St, San Diego, CA 92109PACIFIC BEACH: Parcel Map for lot split per SB9.Open
4/27/2023EncantoENCANTO NEIGHBORHOODS SB9 Parcel Map for vacant land at APN 552-100-26-00.Open
8/31/20232519 Boundary St, San Diego, CANORTH PARK: Urban Lot Split under SB9 guidelines.Open
9/18/20234594 Jutland Pl, San Diego, CA

CLAIREMONT MESA: Combination Building Permit for the construction of the new 2-story Single Family Residence and a detached garage with an attached 2nd story ADU. Scope of work construction of the 2nd story deck for both new SDU and ADU, as well as the proposed retaining wall.

**The project applies SB9 program to split an existing single family residence property on the newly created rear parcel.

Open
9/18/20234596 Jutland Pl, San Diego, CA

CLAIREMONT MESA: Combination Building Permit for the construction of the new 2-story Single Family Residence and a detached garage with an attached 2nd story ADU. Scope of work construction of the 2nd story deck for both new SDU and ADU, as well as the proposed retaining wall.

**The project applies SB9 program to split an existing single family residence property on the newly created rear parcel.

Invoice Paid
1/18/2024775 Pidgeon St, San Diego, CA 92114**SCOPE CLARIFICATION (2/9/24)** SKYLINE-PARADISE HILLS. Combination building permit for proposed (N) SDU with (attached) ADU, guest quarters & garage(s) along with porches on a lot that will be split from an existing SDU (proposed lot split using SB9 Law).Open
1/18/20244736 Filipo St, San Diego, CA 92115SCOPE CHANGE 3/8/2023- MID-CITY EASTERN AREA- Parcel Map SB9 subdivision of property of Lot 24.Open

So how many units can I build on my property with two unit development?

You could have a total of four dwelling units on a property, including two primary units and one ADU for each unit. So you would have your original primary home, an ADU for that home, a new primary dwelling unit (PDU), and an ADU for that new PDU. You may also be able to first split your lot, meaning you could create a total of 8 units, though restrictions on this vary by city.fire

What is the owner occupancy requirement to use SB9?

SB9 includes an owner occupancy requirement, whereby a homeowner must live in one of the units on the lots for three years from the time they get approval for a lot split or two unit development.

Additionally, the bill prohibits ministerial (over the counter approval) lot splits on adjacent parcels by the same individual to reduce potential investor speculation.

Also, SB9 prevents homeowners from evicting or displacing tenants by excluding properties where a tenant has resided for at least the past three years.

What kind of residence can you build after a lot split with SB9?

Once the lot split has occurred “by right,” homeowners must comply with local zoning requirements when developing another single family residence or duplex (height, floor area ratios, lot coverage, etc.) so long as those local laws do not physically preclude a duplex.

Additionally, in order for a property to be eligible for the streamlining provided by the legislation, the homeowner must create a new unit that is the character with the neighborhood. This may lead to some gray areas when these regulations are interpreted locally.

Note that many cities will have requirements related to parking for new primary dwelling units, which may not be waived like many parking requirements are for ADUs. Often the parking requirements include adding a garage for parking.

What are the key differences if I split my lot with SB9 vs. add an ADU?

You may be weighing your options and wondering what is a better option for your property potential: using SB9 or adding an ADU. Check out a quick summary of the main differences when using SB9 vs adding ADUs, some of which carry significant cost implications (e.g. utility connections for new properties must be connected to a city sewer and city water on the curb’s street side… this kind of “right of way” work is extremely expensive). You’ll also want to consider the different restrictions on owner occupancy and how you can or cannot individually sell the units.

Comparison Chart 1: Key differences in using SB9 vs adding ADU

 

SB9

ADU

Can sell dwelling units separately?Yes, you can use a lot split to create two parcels that can be sold separately, with or without dwellings on themTypically No, ADUs cannot be sold independently of the primary residence, at least as of now. A state law passed in October 2023 will allow cities to decide if they wish to allow sale of ADUs
Applies to multifamily-zoned  property?No, SB9 only applies to single family zoned propertiesYes, build up to two ADUs on a multifamily zoned property
Owner occupancy required?Yes, required for three years if you split your lotNo, waived for ADUs
Allowed in high fire & historic zones?No, prohibited in high fire & historic districtsYes, you are generally allowed to build ADUs in high fire & historic zones when designed to code
HOAs can prohibit?Yes, HOAs may be able to restrict lot splits (SB9 does not address HOAs)No, HOAs cannot prevent the development of an ADU per state law
Waived impact fees?No, SB9 provides no relief on standard single family housing impact fees and permitsYes, most impact fees are waived for structures under 750sqft, and otherwise scaled down
Separate utility metering?Yes, must be separately connected / metered and require “right of way” improvementsNo, ADUs are generally allow utility connections “behind the curb”

Comparison Chart 2: Cost differences in building a new house under SB9 vs adding an ADU of the same size (1200 sqft)

SB9

ADU

Cost Drivers

Design$25,000$10,000SB9 will require a topographical and boundary survey, landscaping plan, as well as potentially a soils report.
Permits$60,000+$15,000Full impact fees apply for SB9, unlike ADUs which have the vast majority waived. Fees include sewer & water buy-in, traffic, school, fire department, plan check etc.
Site Work$45,000$25,000Some site paving and landscaping likely required with SB9 for independent access to the second structure.
Right of Way Work$50,000$0Tying into utilities and street access dedicated to new primary unit under SB9, requiring right of way work (vs. behind the curb).
Structure (1200 sqft, 4BR/2BA)$375,000$375,000
Total$555,000$425,000

Can you use SB9 to split a lot and also build an ADU?

Essentially, ADUs are permitted on SB9 split lots UNLESS a city specifically prohibits the development of ADUs on a SB9 lot split. Per the wording of SB9, “a local agency shall not be required to permit an accessory dwelling unit or junior accessory dwelling unit on parcels.”

Whether you can use SB9 and new ADU laws will vary from city to city. As such, depending on local ordinances, a homeowner could have a maximum of 8 total units (duplex + 2 ADUs on each lot) if the local jurisdiction allows up to 2 ADUs on lots with multifamily units. However, this is not the case in the ADU code for each city.

For example, the City of San Diego approved an ordinance in February 2022 that rolled back ADU laws on properties that have taken advantage of SB9. Homeowners who split their lots under SB9 are now prohibited from using any of the city’s ADU incentives. As such, if a homeowner is allowed to develop an ADU on a SB9 lot split property, the homeowner will also have to follow all accompanying ADU laws approved in that jurisdiction. So if you do a lot split, you may be able to also add an ADU, but only if it meets the underlying zoning in place.

And for Oceanside, revisions adopted in February 2022 state that the owner could split the lot and build two new SB 9 units on the new lot or a primary with an ADU or JADU, as long as the combined total on both lots doesn’t exceed 4 dwelling units.

Can I just split the lot first and then figure it out later? I don’t want to miss the opportunity in case things change.

Proceeding with an SB9 lot split before finalizing your overall development plan may not be advisable for several reasons:

Regulatory Restrictions and Compliance: Under SB9, there are specific requirements and conditions that need to be met for a lot split to be approved. This includes limitations on the size and dimensions of the split lots. Without a comprehensive plan, you might end up with a lot configuration that restricts your ability to build according to your later plans.

Financial Considerations: Lot splits and the subsequent development involve significant financial investment. Without a clear plan for development, you may face unforeseen costs or find that the lot split does not align financially with your long-term goals.

Design and Infrastructure Challenges: Planning the design and infrastructure for a split lot without a clear vision for the overall development can lead to logistical and design challenges. This could affect everything from utility connections to the practicality of construction on each individual lot.

Potential Legal Implications: SB9 has specific rules regarding owner occupancy and rental restrictions. Without a clear plan, you might inadvertently create a lot configuration that complicates compliance with these rules.

So how to assess options?

Our integrated approach, which combines in-house permitting and design with our general contracting expertise, uniquely equips us to navigate the complexities of SB 9 projects. This holistic model streamlines the process, making it more accessible for homeowners to consider SB 9 as a viable option for their property development plans.

Want to discuss your ADU options in more detail? Set up an appointment with us to chat about your property.

The insights shared in this technical blog stem from our profound expertise in the industry, derived from our hands-on involvement in design, development, and implementation. While our utmost effort is dedicated to offering accurate and current information, it is crucial to recognize that the ADU space is continually evolving, potentially affecting the specifics discussed herein.

SnapADU aims to empower our readers with valuable insights and practical knowledge to navigate the dynamic landscape of accessory dwelling units. We encourage you to connect with our experts for personalized guidance and to remain informed about the latest advancements in the field. By staying engaged, you can adapt to the ever-changing nature of ADUs and make informed decisions aligned with your goals.

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2 Comments

  1. Hi, just came across your page. Thanks for publishing. We’re a single family living in Santee. We are looking to either add an ADU or two units, via SB9 and anything we can read to assist us in decision making is helpful. Right now, we’re stuck on the super high costs of submitting an SB9 application. As of late 2023, Santee plans gave us an estimate of nearly $27k just to submit an SB9 application, with all the associated permit fees. They almost treat it as new construction. Whereas, an ADU was estimating nearly $5-7.5k in permit fees and a much faster process. I was surprised to see your analysis and that no SB9s have been done yet. This is really an example of failed bureaucracy. Govn looks to solve a problem while creating 5 other problems. Every step down from legislation apply more and more constraints until they’ve fully strangled things. The fees and process are excessive, and the staff do not seem to be motivated to get these through. What do they have to gain? We’ve done an ADU in 2017, and found the process relatively straight forward and rewarding, and are motivated to build again. We can go the ‘easy’ route by doing just 1 ADU and calling it a day, but we have the space and inclination to do 2 units. Knowing that nearly everyone ~can~ build an ADU/JADU combo, this was our first option. But with the ridiculous restrictions behind JADUs, coupled with the higher value transaction of having a duplex, we’ve been considering SB9 since it was released for consumption. However, the thought of being the guinea pigs at these costs is just terrifying. The time it takes to process, then realize any sort of financial return is scary.

  2. Appreciate you sharing this experience. We just did a quick search to see if we could find Santee permitting records to look for any SB9 projects in progress, but seems there is not a comparable public database like City of San Diego shares.

    You’re exactly right about the “guinea pig” concept in uncharted territory at the intersection of state and local law. SB9 feels very much like ADUs felt 5 years ago, where we learned a lot through trial and error. And unfortunately, it’s difficult to get concrete answers without actually submitting the application, which of course has significant cost. We’ve found the staff to be overwhelmed as well, as often there is not a black and white answer due to the layers of applicable rules. Much of our job as specialized contractors is to do our best to leverage the knowledge we’ve gained across projects, but even with 100+ under our belts, we still come across unique problems each day.

    Happy to chat about your project if helpful — use our contact form.

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