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California HOME Act SB9

How Property Owners and Developers Can Take Advantage of the California HOME Act (SB9)

What is SB9?

California SB9 is a key piece of legislation that allows property owners in urban areas to subdivide their single-family lots into two parcels and build up to four residential units. This presents an excellent opportunity for developers and property owners to increase density and property value.

Does My Property Qualify for SB9?

There are specific criteria related to zoning, lot size, and location that determine eligibility. Our team can help you assess if your property qualifies and guide you through the process. Get in touch with us here.

Why California SB9 and Modular Homes Are the Perfect Match

The California HOME Act (SB9) offers exciting opportunities for property owners and developers by allowing the subdivision of single-family lots into two parcels, potentially enabling up to four residential units on one lot. This legislation opens new doors for urban development, but understanding how to navigate its provisions is crucial. Combined with the flexibility and efficiency of modular homes, SB9 presents an even greater opportunity for maximizing land use.

Here’s a step-by-step guide to help property owners and developers fully take advantage of SB9 and modular construction.

1. Place an ADU First, Then Split the Lot
- The Order Matters: In order to fully take advantage of SB9, property owners should place an ADU on the property before splitting the lot. This order is essential because the law allows for one ADU per lot, and placing an ADU on your lot first and then splitting the lot means you can place an additional ADU on your newly divided parcel thus maximizing the utility of SB9. Alternatively, if you split the lot first you can’t then retroactively go back and add an ADU on the lot where you already have your main unit.
- Why It Works: Adding an ADU makes the land more valuable and provides a residential unit immediately, which can be crucial in the subdividing process.
2. Owner Occupancy Requirement
- The rule of 3: SB9 has a key stipulation that requires the property owner to live in one of the units for a minimum of three years. This owner-occupancy rule helps avoid speculation and ensures that the property is used for long-term residential purposes.
- Plan for Your Residency: If you’re planning to sell or rent out one of the units in the future, keep the owner-occupancy requirement in mind when strategizing your investment.
3. Sell Off the Other Lot for Profit
- Subdivision Profits: Once the lot is subdivided, you could sell off one of the new parcels, potentially making a profit. SB9 opens up the opportunity for property owners to capitalize on their land by creating separate parcels that can be sold to other buyers or developers.
- Profitable Exit Strategy: If you’ve divided the lot and added an ADU, you may sell one of the parcels as a standalone lot, significantly increasing your return on investment.
4. Monetize the Units to Pay Off the Mortgage
- Turn It Into a Money Printer: By splitting the lot and adding an ADU, you could rent out one of the units while living in the other, effectively offsetting mortgage costs. Renting out units in a property subdivided under SB9 could generate consistent rental income, making it easier to pay off your mortgage.
- Profit from Multiple Units: Depending on the size of your lot, you could potentially create two single-family homes and additional ADUs. This means you could turn a single-family property into multiple income-generating units, improving the property’s cash flow.
5. Reach Out to Your City for Specific Guidelines
- Local Zoning Regulations Matter: While SB9 allows for the subdivision of single-family lots, local jurisdictions may have specific zoning and permitting requirements that vary by city or county. It’s crucial to reach out to your local city planning office to determine whether your property qualifies and to get clarity on the application process.
- We Can Help: Working with an experienced team, like LiveLarge, can assist you in navigating the local requirements and ensuring that you’re taking full advantage of the opportunities SB9 offers.
6. Maximize the Potential of Larger Lots
- Additional ADUs and Homes: If your lot is large enough, SB9 allows you to build not just two single-family homes but also more ADUs, enabling you to create up to four residential units on a single lot. With a large enough lot, you could turn a single-family home into multiple units, opening up further development opportunities.
- Optimizing Land Use: If you have a spacious property, consider the possibilities of adding several ADUs to increase the density and maximize rental or resale opportunities.

Ready to Maximize the Potential of SB9?

California SB9 presents a unique opportunity to increase the density of your property, and LiveLarge is here to help you take full advantage of that potential. Whether you’re looking to develop multifamily units, standalone ADUs, or mixed-use properties, our modular homes provide an efficient, sustainable, and profitable solution.

Let’s work together to turn your SB9 project into a successful development. Contact us today to discover how LiveLarge’s modular homes can help you build smarter, faster, and more sustainably.

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