What SB-9’s “lot splits” mean for homeowners in California

Senate Bill 9 (SB-9) is a California state law that enables homeowners to split their single-family residential lots into two separate lots and build up to two new units of housing on each. Under SB-9, an existing parcel of residential real property can be subdivided into newly created parcels through an urban lot split pursuant to the law. SB-9 builds on prior state legislation that has successfully expedited the permitting and construction of accessory dwelling units (ADUs) and junior accessory dwelling units (JADUs).

If you live in California, you’ve likely heard about “lot splits” and SB-9. Here’s a quick recap of what those are and what they mean for homeowners in California.

California Senate Bill 9, or the California Housing Opportunity and More Efficiency (“HOME”) Act, took effect in January 2022. The sole purpose of the so-called “duplex bill” is to maximize housing potential on single-family residential lots through two provisions:

• Two-Unit Development, which enables homeowners to build two housing units on their lot even if it is only zoned for one unit
• Lot Splits, which allow a lot to be split into two separate parcels.

These provisions simplify and expedite the municipal application process, offering an objective, non-discretionary path for homeowners looking to build additional homes on their property. All California cities must comply. Because SB-9 applications are processed ministerially, they are exempt from CEQA review, which helps to expedite project timelines.

California is facing a housing shortage, and single-family zoning is one of the greatest barriers to boosting housing construction. Single-family zoning, which allows only one house per lot, predominates in California - nearly 75% of all developable land in the state is zoned single-family. SB-9 encourages infill development by adding housing to existing neighborhoods rather than developing new land.

Single-family zoning severely limits the types of housing that can be built. It excludes housing types like duplexes and accessory dwelling units (ADUs) that offer benefits to renters and homeowners. These smaller housing types are not only more affordable than most single-family homes but are also better suited for households that would like to live multignerationally, downsize from larger homes, or earn rental revenue from underdeveloped land.

SB-9 is designed to increase housing stock in single-family residential zones by making housing development more straightforward and accessible for homeowners. The law encourages development near major transit stops and high quality transit corridors, supporting increased housing density in areas with robust public transportation.

To pursue lots splits or development under SB-9, properties must meet a handful of requirements determined by a combination of state law, local agency procedures, and objective zoning standards:

• Occupancy. Homeowners who split their lot must commit to living on one of the lots as their primary residence for a minimum of three years.
• Location. To qualify for an urban lot split or a proposed housing development project, the property must be located within a single family residential zone in an urbanized area, as defined by the United States Census Bureau. Properties must not be designated as a city or county landmark, listed on the state historic resources inventory, or subject to a city or county ordinance that protects historic or environmental resources. Properties in high-fire or flood risk areas, or specific environmental zones, are also disqualified.
• Lot sizes. Lots must be at least 2,400 square feet, as the minimum allowed lot size after splitting is 1,200 square feet. Lots must be split fairly evenly at a ratio no greater than 60:40.
• Demolitions. Because the goal of SB-9 is to create more housing rather than remove existing housing, proposed projects cannot require the demolition of any existing rental units that have been leased within the past three years.
• Evictions. Properties with a record of tenant eviction within the last 15 years are not eligible for development under SB-9.
• Protections. SB-9 includes tenant and historic protections to prevent the displacement of tenants and protect historic districts. Properties with recent tenant evictions, or ones that are designated as affordable or rent-controlled housing are ineligible for SB-9 projects.

Applicants must follow the local agency’s adopted procedures for submitting a parcel map or final map, in accordance with the Subdivision Map Act and relevant government code sections. The subdivision map act vests authority in local agencies to review and conditionally approve tentative maps, provided that all statutory provisions establish procedures are met. Local agencies are required to impose only objective zoning, subdivision, and design standards—meaning requirements that do not involve personal or subjective judgment and are uniformly applied to all similar developments.

For properties located within the coastal zone, the coastal development permit process may apply, and coastal resources planning must be considered. In these cases, coastal development permit applications must be processed in addition to the SB-9 application. Properties served by an onsite wastewater treatment system may have additional requirements to ensure adequate infrastructure.

To ensure fair implementation, SB-9 prohibits urban lot splits on parcels where a previously filed final map or parcel map subdivides the same original parcel proposed for the split. Additionally, the law requires that both the development applicant and any qualified nonprofit corporation or community land trust involved in the project hold the necessary property interest in the legal parcel wholly subject to the application.

The law allows qualifying property owners to have two dwelling units per lot. It also allows property owners to split their lots in two, creating the opportunity for up to 4 dwelling units across two lots. A parcel can be subdivided once under the legislation and the owner cannot split adjacent properties. The rental term for any unit created pursuant to SB-9 must be longer than 30 days. These terms ensure that the law is used to increase housing stock without overburdening neighborhoods.

The dwelling units do not need to be attached, leaving a lot of flexibility in how the new homes are configured. Adjacent or connected structures are permitted on parcels, provided they meet building safety standards and can be conveyed separately. Regulations vary by jurisdiction, but potential options for proposed housing development include:

• Two single-family dwellings
• Duplex
• House + attached or detached accessory dwelling unit (ADU)
• House + junior accessory dwelling unit (JADU)

Setbacks for side and rear yards can be up to four feet, depending on local regulations.

Parking requirements are limited to up to one space per unit, and this requirement may be further reduced if the property is located within a high quality transit corridor or near a major transit stop.

SB-9 presents a handful of challenges that aren't unique to the “duplex bill” itself but are worth considering nonetheless.

• Permitting. SB-9 aims to streamline permitting processes, but getting permits approved for any housing development can still be challenging. Jurisdictions can interpret SB-9 in their own ways, and some may still be establishing their new SB-9 application processes. This opens up room for permit delays, which can mean lengthy pre-development timelines before construction can begin.
• Cost. SB-9 projects might be expensive. Extra expenses like impact fees, parcel remapping fees, and costs to adhere to local right-of-way and easement regulations may be required.
• Financing. Because SB-9 is relatively new and there may not be well-established lending practices in place, some mortgage holders and lenders may be hesitant to allow lot splitting or approve funding for novel projects.
• Design Standards. Local ordinances may impose additional design standards like height limits and yard setbacks that projects must comply with, in addition to state law. Projects under SB-9 have a maximum setback requirement of four feet for side and rear setbacks, which local agencies can choose to lessen.
• HOA Rules. Homeowners should consult their Homeowners Association (HOA) rules before proceeding with SB-9 projects, as the law does not override HOA regulations.

As time passes and more SB-9 housing becomes commonplace, permitting staff and lenders will become more familiar with these types of projects. Uniformity in regulations and lending practices should emerge, and these challenges should smooth themselves out.

Regardless, SB-9 not only quadruples the number of dwellings that can be built on a single-family parcel, it quadruples the benefits! It opens up unprecedented opportunities for property owners looking to maximize their property's financial potential through home sales or rentals, for households looking to buy or rent that are locked out of expensive housing markets, and for those looking to live in a multi-generational setting by sharing property with relatives.

SB-9 has the potential to significantly reshape California’s housing market by unlocking new opportunities for infill development in established neighborhoods. By allowing up to four housing units on what was previously a single family parcel, SB-9 can help address the statewide concern of housing shortages and affordability. The law’s focus on single family residential zones—where the majority of California’s developable land is located—means that even modest uptake could result in thousands of new units of housing across the state.

The ability to create new homes near major transit stops and high quality transit corridors supports sustainable growth and reduces reliance on cars, aligning with broader state goals for climate and transportation. As local agencies process more SB-9 applications, the annual housing element report will reflect increased housing production, helping cities and counties meet their state-mandated housing targets.

SB-9 also encourages a greater diversity of housing types, from duplexes to junior accessory dwelling units, making it easier for multigenerational families, first-time buyers, and renters to find suitable homes. By requiring objective standards and limiting the use of personal or subjective judgment in the approval process, SB-9 aims to create a more predictable and equitable path for homeowners and developers.

While some concerns remain about neighborhood character and the pace of change, the law’s protections for historic resources, tenant rights, and environmental areas help balance growth with preservation. Over time, as more urban lot splits and proposed housing developments are completed, SB-9 could help stabilize housing costs, increase fair market value for property owners, and create a more inclusive and resilient California housing market.

AB-1033 and SB-9 allow homeowners to subdivide their lots and build (and sell) extra units, or even a portion of their land. Both laws aim to lessen California's grinding housing crisis by adding extra homes that are more compact and affordably priced. Together, they create a market for approximately $750 billion of backyard land value that restrictive zoning has locked up for decades.

It is important to note that AB-1033 and SB-9 differ in some key details:

• Housing types. SB-9 deals with duplexes and lot splits, not ADUs. While SB-9 allows homeowners to split a portion of their land as-is or build another unit on their property, AB-1033 specifically addresses condo-ized ADUs. Rather than selling a portion of a lot, AB-1099 allows homeowners to sell their ADUs as condos.
• Eligibility. While SB-9 is a statewide requirement–meaning your city must allow you to pursue eligible developments as long as your property meets the qualifications–AB-1033 only gives cities the option to permit condo-ized ADUs. It is up to local jurisdictions whether or not they will allow it.
• Zoning. SB-9 is restricted to lots zoned for single-family, while AB-1033 offers municipalities the flexibility to consider other lot types.

When deciding which option is best for you, consider:

• The size of your lot. ADUs have a size restriction of 1,200 square feet and only three are allowed per lot, while SB-9 provides more flexibility with the sizes and number of homes that are classified as single-family homes or duplexes.
• Extra costs and complexities. Lot splits under SB-9 can be an expensive and lengthy process which may add costs and time to your home redevelopment. Legal expenses and the administrative lift to establish and maintain a homeowners association for a condo-ized ADU under AB-1033 may also add cost and burden.
• The goals of your home redevelopment. While selling a portion of your lot with a house or duplex may bring you a higher return on investment, a condo-ized ADU may better serve your friends and neighbors, like young families seeking entry-level homes or older adults that are looking to downsize.

The choice between the two depends on your specific circumstances and objectives. Both offer paths toward maximizing the value of your property while providing needed housing in your neighborhood.

Contact Type Five to explore your options, discuss your home redevelopment goals, and get started on your home project!