SB9 and ADUs are two acronyms that you’ve probably heard thrown around if you’ve dabbled in the real estate marketplace within the last few years. Both SB9 and ADUs have to do with maximizing the potential of a residential property by utilizing unused square footage. However, when you really dive into the logistics, these two actually don’t have a lot of crossover. SB9 deals with lot splits and duplexes, while ADUs are focused on adding secondary dwelling units to an existing property.
Though both aim to address California’s housing crisis, the implementation and benefits of each are distinct. Not sure which would suit your goals better? Let’s get into the details.
What is SB9?
SB9 stands for Senate Bill 9, which went into effect in 2022. SB9 allows a property owner to do two things:
- Split their lot (lot split provision)
- Add another living space onto the property making it into a duplex property (duplex provision)
Property owners can either use one of these provisions or both in conjunction. Doing both would essentially mean you can have four dwellings on a property that previously only had one. Split properties can either be sold as empty lots or with new construction.
The main objective of SB9 is to create housing density by allowing homeowners to create more units on a single-family lot. So where do ADUs come into the mix?
What is an ADU?
ADU stands for Accessory Dwelling Unit. An ADU is a smaller living dwelling typically built on the same lot as a primary residence. It can be either attached to the main home or a separate, detached structure. They are legally required to come with all of the features of a full sized home; full kitchen, bathroom, bedroom or sleeping area, plumbing, etc.
Thanks to recent regulations, ADUs aren’t only limited to single-family properties. ADUs can also be built on multi-family properties like those with duplexes and even large apartment complexes.
So, this is where the confusion comes in. With ADUs being allowed on multi-family properties, where do they fit in within SB9?
Can I do SB9 and an ADU on the same property?
Yes, you can build up to two detached ADUs on a property that has utilized the SB9 duplex provision only. If you choose to split the lot under the SB9 lot-split provision, you will not be permitted to add an ADU. While we’re all about increasing housing density in favor of more housing, there’s a limit before things start getting too cramped.
This restriction is designed to prevent excessive density increases on properties that have already been split and developed under SB9. In essence, you must decide whether to maximize your property through the duplex provision with two ADUs or pursue the lot split for additional units, but combining both beyond this limit is not allowed.
How does the application process for SB9 differ from building an ADU?
The application process for SB9 and ADUs differ greatly primarily because the former deals with making changes to the property’s lot boundaries meanwhile the latter only affect the property it’s being built on.
The permitting process for ADUs typically takes around three months, more or less depending on your jurisdiction. You will be required to submit a full ADU permit set that shows the full plans for placement of the new structure, utility connections, Title 24, and more. This permit set can usually be drafted and submitted to your local planning department by an ADU designer.
Your planning department may come back with requests for revisions, but any good ADU designer will know how to handle those and keep the permitting process moving along.
Once your application is approved, you’ll receive your building permit, and you can get to building.
Getting approved for SB9 is another story. First, there are strict guidelines to be eligible for SB9. We go into detail about the SB9 requirements here. If your property meets all the marks, you can move onto the application process. Every city has a different procedure, so you’ll want to check with your local planning department for the run-down.
Even if you’re just doing a lot split, the application can be lengthy. The timeline can be anywhere from 18 months to two years. If you’re looking for a quick turnaround, an ADU may be a better option for you. Why is the process so lengthy? A big reason is that SB9 is still very new so a lot of cities are struggling to understand the nuances of splitting properties. But, with improvements coming every year, we foresee this process getting easier as time goes by.
Which is better? SB9 or ADUs?
It’s not a matter of which is better, but rather which works better for your needs.
ADUs (Accessory Dwelling Units) are particularly beneficial for homeowners who want to create additional living space for family members or generate rental income. By building an ADU, homeowners can accommodate multi-generational living arrangements, providing privacy and independence for family members while still keeping them close. Additionally, homeowners can rent out the ADU, creating a source of passive income that can help offset mortgage costs or increase overall property value.
SB9 (Senate Bill 9), on the other hand, primarily benefits investors and developers. By allowing for lot splits and the construction of multiple units on a single property, SB9 opens up opportunities for significant financial gain. Investors can maximize their returns by building and renting multiple units where only one existed before, capitalizing on the high demand for housing in many California markets. This makes SB9 an attractive option for those looking to expand their real estate portfolios or develop new housing projects.
Pro Tip: With AB 1033 in effect, ADUs may be eligible for condo-ization in your city.
But, take this with a grain of salt. ADUs are still wildly popular among investors, especially now that owner occupancy requirements have been banned indefinitely. Alternatively, if you are a homeowner that simply has too large of a backyard and you want to put it to good use, SB9 might be the right path.
Make the right decision with Maxable
Both SB9 and ADUs offer valuable pathways to enhance housing options in California, each catering to different needs and objectives. While ADUs provide homeowners with the opportunity to create additional living space for family or generate rental income, SB9 opens the door for investors and developers to maximize property potential through lot splits and multiple units. Understanding the differences and connections between these options is crucial for making informed decisions about your property.
If you’re considering your own ADU or SB9 plans, it’s essential to consult with an expert who can guide you through the process and help you navigate local regulations. Schedule a call with Maxable today to discuss your vision and get started on your journey toward expanding your housing options!
