Bill to Allow Lot Splits and Two-Unit Projects By-Right in Single-Family Zones Passes in Legislature and Awaits Governor Approval

The California State Legislature has passed the widely discussed Senate Bill 9, which would require all local agencies to consider certain proposed two-unit projects and lot splits ministerially. If Gov. Gavin Newsom signs SB 9, the changes will take effect in January 2022.

An SB 9 lot split followed by an SB 9 two-unit project on each of the two new lots would result in four total dwellings on what was formerly one single-family residential lot—all with only ministerial approval. Local agencies should consider implementing objective standards now, and those looking at discretionary approvals in and around residential zones might need to consider this new four-fold by-right development potential.

By-right “Urban Lot Splits”[1]
Under SB 9, local agencies must ministerially approve certain subdivisions of one lot into two without discretionary review or a hearing.

Qualifying Criteria:

1. Each new lot is at least 1,200 square feet, (though the local agency may set a lower minimum).
2. The split results in two new lots of approximately equal size (60/40 split at most).
3. The split does not involve the demolition or alteration of affordable housing, rent-controlled housing, housing that was withdrawn from rent within the last 15 years or housing occupied by a tenant (market-rate or affordable) in the past 3 years.
4. The lot to be split is zoned single-family residential.
5. The lot is not a historic landmark or within a designated historic district.
6. The lot is within an urbanized area or urban cluster, or within a city that has an urbanized area or urban cluster, as identified by the U.S. Census Bureau. (This is most every urban and suburban city in California).
7. The original lot was not established through a prior SB 9 lot split.
8. Neither the owner nor anyone acting in concert with the owner previously subdivided an adjacent parcel through an SB 9 lot split.

Standards
Objective only. Under SB 9, local agencies may only impose objective zoning standards, objective subdivision standards and objective design standards on an eligible project—and even then, only to the extent that the standards do not physically preclude the construction of two units of at least 800 square feet.

Limited parking. Local agencies may require only one off-street parking space per unit—none if the site is close to transit or a car share vehicle location.

Setbacks of four feet or less. Side and rear setbacks are limited to four feet or less generally, but none at all may be imposed on an existing structure or one that is constructed in the same location and to the same dimensions as an existing structure.

Residential only. Local agencies must prohibit non-residential use of the new lots.

Other structures permitted. Proposed adjacent or connected structures must be allowed.

No dedications or offsite improvements. No right-of-way dedications or construction of offsite improvements may be required.

No corrections of nonconformities. Local agencies may not require the correction of nonconforming zoning conditions.

Three-year owner occupancy … by affidavit. The applicant-owner must sign an affidavit stating that the owner intends to occupy one of the housing units as the owner’s principal residence for at least 3 years following the lot split. Community land trusts and qualified nonprofit corporations are exempt. No other owner-occupancy requirement is allowed.

Report to State Department of Housing and Community Development. Local agencies must include the number of SB 9 lot split applications in annual housing element reports.

Limited grounds to deny. A local agency may only deny a qualifying SB 9 lot split if the building official finds that the resulting housing development project would have a specific, adverse impact on public health and safety or the physical environment and there is no feasible, satisfactory mitigation.

By-right Two-Unit Development Projects[2]
In addition to the lot splits described above, SB 9 would require a local agency to ministerially approve a proposed two-unit development project on a lot in a single-family residential zone without discretionary review or a hearing. This applies to building two new units or adding a second one.

Qualifying Criteria
To qualify for a ministerial SB 9 two-unit development approval, criteria are similar to those for a lot split.

1. The site is in a single-family residential zone.
2. The lot is located within an urbanized area or urban cluster, or within a city that has an urbanized area or urban cluster.
3. The project does not involve demolition or alteration of affordable housing, rent-controlled housing, housing that was withdrawn from rent within the last 15 years or housing occupied by a tenant (market-rate or affordable) in the past 3 years.
4. The project does not involve demolition of more than 25 percent of the existing exterior walls of an existing dwelling unless a) the local agency chooses to allow otherwise or b) the site has not been occupied by a tenant in the last 3 years.
5. The site is not a historic landmark or within a designated historic district.

Standards
As with SB 9 lot splits, local agencies may only impose objective zoning standards, objective subdivision standards and objective design standards on an eligible two-unit development project. Even then, it can only be to the extent that the standards do not physically preclude the construction of two units of at least 800 square feet. Local agencies may not require off-street parking if the site is near transit or a car share vehicle location.

STRs Not Allowed
Local agencies must prohibit short-term rentals in any dwelling created under SB 9 (whether through the lot split or two-unit development approval, or both).

ADUs Not Required
SB 9 creates two narrow exceptions from the general requirement that local agencies allow accessory dwelling units and junior accessory dwelling units ministerially: First, when a lot is both created by an SB 9 lot split and developed with an SB 9 two-unit development, a local agency does not need to allow an ADU or JADU. Second, a local agency does not need to allow an ADU or JADU on a lot if there are already two units of any kind on the lot.

CEQA (No) and the Coastal Act (Yes)
Because approval under SB 9 is ministerial, the California Environmental Quality Act does not apply and the bill creates a new statutory exemption for an ordinance adopted to implement SB 9. (Think objective standards.)

The Coastal Act does apply, but the local agency is not required to hold a public hearing on a coastal development permit for an SB 9 approval. The Coastal Act applies in full to SB 9 lot splits and two-unit projects, with one exception—the local agency just can’t hold a public hearing on a CDP.

But Wait, There’s More!
SB 9 also changes the lifespan of tentative subdivision maps. Local agencies may now extend map expiration by an additional year—up to 2 years generally and up to 4 years for maps that are conditioned on significant public improvement obligations.

Takeaways
If SB 9 is signed into law,

1. Local agencies should adopt objective standards for these mandatory, ministerial lot splits and two-unit development projects so that the standards take effect before January;
2. And agencies looking at discretionary approvals in and around residential zones might need to consider this new four-fold by-right development potential.

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