Getting into It with Senate Bill 9

Senate Bill 9 (known more commonly as “SB 9”) is an effort here in California to create more housing.

Here are the basic guidelines:

• You can split your residential lot into two.
• Adding a total of two units per lot.
• The owner must live on the property for at least 3 years.

Is this good for California?  Let’s discuss the practicality of the bill.

1. Can you do this?  The short answer is yes for some lots but not all.  Keep in mind that properties have setbacks.  Setbacks are imaginary lines on a property where a structure can be built so many feet away from the property line.  The idea is if a home catches on fire, then it won’t spread to the next house. Because of this, the bigger question is what can be built if the lot is too small.  For example, you have a 5,000 square foot lot divided and now it’s 2,500 square feet.  Putting two homes on it, even two story, might be a little tricky.  To accomplish this practically, the starting lot would need to be closer to 10,000 square feet.
2. Living on the premise isn’t for everyone.  Yes, I’m a big proponent of house hacking.  But for the average person, it may not make sense.  Plus, developers can’t jump onto this because of the occupancy requirement. 
3. This doesn’t address the cost to build.  So even if the average homeowner would want to do it, where is the money coming from?  Keep in mind on the new lot you are building the two units from scratch.  That means pouring foundations, framing, new roof, solar panels, etc.  To keep the cost down and to meet the setback requirements, it might make more sense to build a two-story duplex.  That could still be in the range of $400 a square foot all in, that’s $560,000 for two 700 square foot units.  And this doesn’t include the second unit for the initial lot where the house is.  Many homeowners don’t have that kind of money and may not have that much equity in their homes to pull this off.

The good news is that the government officials understand that there is a way to create affordable housing through policy.  However, on a practical basis I’m not confident that this will go far.