HomeMy WebLinkAboutItem 6a. SB 9 Presentation - Staff MemoMemorandum
Date: November 24, 2021
To: City Council
From: Michael Codron, Community Development Director
Prepared By: Teresa McClish, Housing Policy and Programs Manager
Owen Goode, Assistant Planner
Olivia Bergin, Planning Intern
Subject: Senate Bill 9
Overview
On September 16, 2021, California Governor Gavin Newson approved Senate Bill No. 9 (SB-9)
with the goal of increasing the state’s housing supply while providing for increased home-
ownership opportunities. While the new law is also intended to promote “affordability,” it only does
this through increased supply and does not require affordable housing as a component of any
project.
SB-9 makes two important changes to the Government Code with respect to land zoned R-1
(Low-Density Residential). The first change allows for more “by right” urban infill development –
specifically requiring jurisdictions to ministerially approve up to two primary residences on a given
R-1 lot. The second allows for an “urban lot split,” which would allow for the two residences to be
built on separate lots so that they can be sold independently, creating additional home-ownership
opportunities. It is important to note that SB-9 does not combine with Accessory Dwelling Unit
requirements, which allow up to three units to be on a lot (primary residence, ADU and Junior
ADU). SB-9 only requires that local agencies allow up to two primary residences of 800 square
feet each.1 SB-9 specifically relieves local agencies from other Government Code requirements
related to Accessory Dwelling Units and Junior Accessory Dwelling Unit requirements when an
urban lot split is pursued.2
SB-9 will go into effect on January 1, 2022. The State Department of Housing and Community
Development (HCD) is expected to publish a guidance memo on implementation and enforcement
of SB-9, but there is no timetable for publication of the memo. In the meantime, staff has been
researching the issues and engaging with planners locally and across the State to better
understand the full range of development opportunities created by SB-9 and how the City may
want to respond with a local ordinance to guide implementation. While some jurisdictions, notably
Santa Barbara, are pursuing emergency ordinances, this is not currently recommended for the
City of SLO given the significant eligibility constraints for pursuing an SB-9 project, and other high-
priority work currently underway on the Inclusionary Housing Ordinance update.
1 See Government Code Section 65852.21 (b)(2)(A):
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9
2 See Government Code Section 65852.21(f):
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9
Item 6a
SB‐9 Implementation Memo : 11/24/2021 : Page 2
Eligibility
Like SB-35 before it, SB-9 includes eligibility criteria that significantly limits where the new rules
can be implemented and who is eligible to pursue an SB-9 project. A summary of these eligibility
requirements follows.
Owner-Occupancy
SB-9 has significant owner-occupancy requirements to ensure stability in neighborhoods and
prevent speculation and lot accumulation for the purpose of infill development. Any property
included in a project that intends to take advantage of SB-9 rules cannot demolish or significantly
alter any unit that has been occupied by a tenant during the previous three years. In addition,
owner-occupancy of one of the units is required for three years following development.
Approximately half of all of the City’s R-1 lots are currently used as rental properties and would
not be immediately eligible for SB-9 development.
Exclusion Areas
SB 9 cross references Government Code Section 65913.4 created by SB-35 (e.g. proposed SB-
9 development must satisfy the requirements of subparagraphs (B) to (K), inclusive of paragraph
(6) of subdivision (a) of Government Code Section 65913.4). SB-9 defines exclusion areas as
areas that include the following designations:
Prime farmland or farmland of statewide importance;
Wetlands;
Land within the very high fire hazard severity zone, unless the development complies with
state mitigation requirements;
Hazardous waste sites;
Sites within earthquake fault zones;
Land within the 100-year floodplain or a floodway;
Land identified for conservation under a natural community conservation plan, or lands
under conservation easement;
Habitat for protected species; or
Sites located within a historic or landmark district, or a site that has a historic property or
landmark under state or local law, as specified.
The City is in the process of mapping these exclusion areas, which together with the owner-
occupancy requirements will further reduce the number of properties that can participate in an
SB-9 development.
Urban Lot Split Requirements
To qualify for ministerial, or “by-right” approval, the proposed lot split must meet the following
criteria:
The lot split must result in two lots of approximately equal size (60/40 split at most);
Each new lot must be at least 1,200 square feet (unless the local agency adopts a lower
minimum);
The lot to be split cannot have been established through a prior SB-9 lot split;
Item 6a
SB‐9 Implementation Memo : 11/24/2021 : Page 3
Neither the lot owner nor anyone acting “in concert with” the owner has previously
subdivided an adjacent parcel through a SB-9 lot split;
The uses on the resulting lots would be residential;
The property has not had a tenant on the premises during the past three years; and
The applicant records an agreement that requires them to live in one of the resulting units
for three years unless the applicant is a qualified non-profit or community land trust.
Projects Must Be Consistent with City Objective Design Standards
The objective design standards recently added to the City’s Zoning Regulations will apply to SB-
9 projects. However, the new law includes some provisions that would require the City to relax its
requirements. For example, if there is an existing dwelling unit on a property that has less than
standard setbacks, the City cannot require greater setbacks for the new development. SB-9
allows for new buildings to be developed with a maximum 4-foot setback, where the City’s normal
standard is 5 feet. In addition, the City cannot impose standards that would prevent the ability of
the project to include up to two dwellings, minimum 800 square feet each.
Parking Requirements
The City may require one parking space per unit because there are no qualifying “high quality”
transit facilities within our jurisdiction, nor formal car share programs.
ADU’s and Impact Fees
As previously mentioned, SB-9 projects do not combine with the ADU law to allow more than
three units per lot (which can currently be accomplished under local regulations). Overall, there
are significant benefits to pursuing an ADU project rather than an SB-9 project. Specifically, an
ADU project can net an additional unit (three versus two), ADU projects are exempt from impact
fees, and ADU projects are exempt from owner-occupancy requirements. In addition, far more
properties in the City are eligible for ADUs.
New development proposed under SB-9 must pay all City impact fees, making SB-9 development
relatively expensive when compared to ADU development. As a result, staff believes that property
owners in the City will continue to pursue ADU projects over SB-9 projects, unless an urban lot
split is pursued allowing for cost recovery through the sale of one of the resulting homes (with
owner-occupancy required for the other).
Statistical Analysis Ongoing
City staff is coordinating with our Geographic Information Systems (GIS) team and leveraging
recent research that was provided by the Terner Center for Housing Innovation at UC Berkeley
to provide a statistical analysis of potential SB-9 project sites. This work is ongoing, and results
will be shared with the community once it is completed. The final product will identify lots where
SB-9 development is technically feasible. Staff intends to perform a fine grain level of analysis to
take into consideration properties that would be limited from pursuing SB-9 projects due to
Homeowner’s Association requirements (e.g. Stoneridge), and townhome developments that may
technically qualify but practically do not have sufficient land available to support new
development.
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SB‐9 Implementation Memo : 11/24/2021 : Page 4
Next Steps
City staff will be making a presentation on SB-9 to the Planning Commission on December 8th.
The City Council may also wish to discuss SB-9 on a future agenda.
Should a majority of City Council members direct staff to prepare an emergency ordinance to
address SB-9 development standards, staff would like the opportunity to discuss “trade-offs” with
the City Council. Specifically, staff is currently prioritizing the Inclusionary Housing Ordinance
update for completion in August 2022. Staff recommends that the SB-9 implementing ordinance
follow the Inclusionary Housing Ordinance update.
In the meantime, staff is tracking the work of other jurisdictions on this topic. The cities of
Atascadero, Santa Barbara, Mill Valley, Palo Alto, and Cupertino are pursuing ordinances now.
Staff will track these efforts and is also looking out for the expected guidance memo from HCD,
which will help us identify the appropriate scope for a local ordinance on SB-9 implementation.
Item 6a
Item 6a Staff Presentation 12/08/2021
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Senate Bill 9: Overview
Staff Presentation
12/08/2021
Presentation Overview
What is SB9?
Background
Eligibility
Anti-Displacement Standards
Lot Splits
Objective Standards
Exclusion Areas
Development Comparisons (SB9 vs.
ADU’s)
Next Steps
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Item 6a Staff Presentation 12/08/2021
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Background
Signed by Governor Newsom September 2021
Requires ministerial approval (pass/fail checklist) of:
1.Two (2) residential units on a parcel within a R-1
residential zone;
2.Subdividing one (1) lot into two (2) lots within a R-1 zone
and development of two units on each parcel (four total
units)
Development must meet eligibility criteria
Not subject to the California Environmental Quality Act
(CEQA)
Becomes effective January 1, 2022
Statutory Eligibility – Anti-Displacement Requirements
Cannot involve the demolition or alteration of structures if the
property contains:
Affordable housing; or
Housing occupied by a tenant within the last three (3) years
Rent controlled housing; or
Housing withdrawn from the rental market in the past fifteen (15) years
Source: Goldfarb Lipman Attorneys – SB 9 Webinar
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Item 6a Staff Presentation 12/08/2021
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Owner Occupied
Homes
City GIS Staff compiled data
on owner occupied and tenant
occupied homes within the R1
Zone
An estimated 4,160 units of
the 8,068 units within the R1
Zone are owner occupied
(51.6%)
Nearly half of the R1 Zones
are subject to tenant occupied
restrictions attached to SB9
Statutory (SB9) Eligibility Specific to Lot Splits
The lot split must result in two lots of approximately
equal size (60/40 split at most);
Each new lot must be at least 1,200 square feet (unless
the local agency adopts a lower minimum);
The lot to be split cannot have been established
through a prior SB 9 lot split
Neither the lot owner nor anyone acting “in concert with”
the owner has previously subdivided an adjacent parcel
through a SB 9 lot split (no assemblage);
Applicant must sign affidavit stating that one of the units
will be owner occupied for the next 3 years
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Item 6a Staff Presentation 12/08/2021
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Statutory (SB9) Objective Standards
Setback of four feet from side and rear lot lines.
Off-street parking of one space per unit
No short-term rental units (less than 30 days)
3-year Owner-Occupied requirement when SB9
lot split is approved
No ADU or JADU allowed in conjunction with a
SB9 project
City Objective Standards
In addition to Statutory Standards, SB9 authorizes cities to
impose Objective Zoning Standards, Objective Design
Standards, Subdivision Standards as long as those
standards do not:
1.Physically preclude the construction of 2 units on either
resulting parcels;
2.Physically preclude either of the 2 units from being at least
800 square feet in floor area
On December 7, 2021, the City Council adopted Objective
Design Standards (Effective January 5, 2022)
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Item 6a Staff Presentation 12/08/2021
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Fire Hazard and
R-1 Zones
Minimal overlap with
Very High Fire
Hazard Zones and R-
1 Zones
Staff Presentation 12/08/2021
Statutory Exclusions (SB9)
Prime farmland or farmland of statewide importance;
Wetlands;
Land within the very high fire hazard severity zone, unless the development complies with
state mitigation requirements;
Hazardous waste sites;
Sites within earthquake fault zones;
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Item 6a Staff Presentation 12/08/2021
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Statutory Exclusions Continued (SB9)
Land within the 100-year floodplain or a floodway (unless mitigated);
Land identified for conservation under a natural community conservation plan, or lands
under conservation easement;
Habitat for protected species; or
Sites located within a historic or landmark district, or a site that has a historic property or
landmark under state or local law, as specified.
The parcel cannot have been created from a previous lot split as provided by this policy.
Cities have authority to deny projects that are a threat public health and safety (under
65852.21.D)
Jurisdictions Pursuing Urgency Ordinances
Some jurisdictions pursuing urgency
ordinances include:
City of Santa Barbara
City of Atascadero
City of Paso Robles
City of Cupertino
City of Palo Alto
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Item 6a Staff Presentation 12/08/2021
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Comparison SB 9 and Accessory Dwelling Unit Law
Requirements Senate Bill 9 Local ADU Law
Owner Occupancy Yes, 3-year
requirement
No Owner Occupancy
Required
Alteration of Existing
Structures
Restrictions No Restrictions
Impact Fees Yes No
Objective Design
Standards
Must comply with
recently approved City
ODS
Exempt from new ODS
– current standards
apply
Parking Requirement 1-space/SB9 unit none
Next Steps
Housing is a Major City Goal in the 21-23 Financial Plan
Major City Goal Work Program Includes:
Update of the Inclusionary Housing Ordinance
Update of the Subdivision Regulations
Housing Element Policy and Program for Missing Middle Housing (SB9 is not
inconsistent)
HE Policy 5.3 – Encourage the development of a variety of “missing middle”
housing types.
HE Program 5.4 – Evaluate and implement “missing middle” housing types
(e.g. duplex, triplex, quadplex, cottages, etc.) to increase housing options in
the City within three years of adopting the Housing Element.
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