Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.
California New Zoning Laws! Does this mean home builders can no longer build single family homes in California?
One of my subscribers, Dan, asked if I could address the effects of the newly passed zoning laws on California’s residential real estate market. “Essentially, doing away with any new single family homes being built, and how will this affect prices of existing single family homes?”
Dan, you asked some great questions that need to be answered. So let’s get started.
I will first break down the two new bills:
SB 9 allows homeowners to:
- 1 Subdivide any single family parcel into two parcels.
- 2 Have a second home or unit built on the parcel. So for one house on one parcel, you can subdivide the lot into two and end up with two duplexes or four units.
There are specific restrictions and guidelines that must be followed.
- 1 Property owners who choose to split their lot into two separate lots to build a duplex on each half, each lot must be a minimum of 1200 square feet.
- 2 This is for urban areas only.
- 3 One parking spot per unit if the property is not near mass transportation.
- 4 Only one wall of an existing home can be demolished.
Now this does not apply to:
- 1 Properties that are in a fire hazard zone area.
- 2 Properties that are in a historic district.
- 3 Properties that have low-income housing, rent control units, or units with tenants who have been there for three years and more. Also, owners must occupy these units for three years. This is to prevent developers from taking over a neighborhood.
Keep in mind, SB 9 is a state law that imposes requirements on local counties and city’s jurisdictions. So it is possible local cities and counties have their own rules, laws, guidelines that could modify or prevent this from ever happening. When the law is finally in effect, which is next year, we’ll have to see how this plays out.
Regarding SB 10:
This allows single family properties in a high traffic area or near some kind of transportation, in the Bay Area it would be BART, to be rezoned without the requirement of environmental review. This would allow a property owner to tear down their existing property and replace it with a small apartment building up to 10 units. SB 10 has to be voluntarily adopted by each county and city before it can be used.
Of the two bills, the one that will affect the average homeowner is SB 9.
Now, going back to Dan’s question, “Could this bill do away with single family properties or single family residence?”
I didn’t see anything in the verbiage that addressed new construction. I then reached out to a few home builders to get their reaction or assessment of the bill. I spoke to somebody from Lennar Homes. They have several new home projects in California. The person I spoke to was very helpful and stated to her knowledge, this bill does not affect any of their current home building projects. She noted their newest development, which opens to the public next month, Polo Ranch in Scott’s Valley, took 20 years in development due to all the environmental issues they had to work through.
By the way, this is a common issue most home builders have been dealing with for years. To learn more about this and what you can do for more affordable housing, please see my video, “Is California housing Market fixable?“
Now let’s address Dan’s next question. “How would this affect pricing on existing single family homes?”
As a realtor who’s been in this business for over 13 years, a long time homeowner, and landlord, and I have also had a bit of experience as a project manager for home renovation, which includes dealing with local city and county permit offices, I feel confident to say this will not change anything. Let me explain. To subdivide a property into two separate parcels is a huge process and is extremely expensive. Just to separate the utilities, which means relocate electrical, gas, sewage, et cetera, can easily be 100,000 dollars. Remember, the homeowner must stay on the property for three years.
So, this is not an investor who has unlimited resources. Also, current construction costs are sky high, especially due to lack of materials. The bill may help homeowners who want to build a Caseta or ADU, this stands for Accessory Dwelling Unit, on top of their garage or backyard. So, they are not subdividing their lot, just adding a unit or an addition to their property. Again, you’ll have to go through the city or county permit approval process. This can take months and most likely years.
What I do take from this that could be a positive, is it may help cut through all the red tape when getting a permit from the county or city, and hopefully fast track your construction project.
I hope you enjoyed this article. Please let me know if you have any questions. Warren
Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!
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