As you’re probably well aware, Californians face a pretty serious housing shortage. In our newsletter last month, we showed how Sacramento County, for example, has only seen about half the number of new housing units needed to house the growth in households in the past decade.
Note: this article was featured in our October 2021 email newsletter.
Last month, Governor Newsom signed SB 9, which aims to relieve some of the housing shortage in California by allowing more infill development in residential neighborhoods. Specifically, it would allow owners of single-family homes in urban areas to:
- Subdivide their lot into two lots, with a minimum lot size of 1,200 square feet.
- Build a second home on the newly divided lot.
- Each home could also include an accessory dwelling unit (ADU, also called “granny flats” or guest houses).
Whether you love this or hate it, it’s now the law, so we want you to know how it works. Here’s an explainer graphic from an advocacy group that lobbied for the bill:
There are other provisions, including allowing local governments to reject proposals that harm health and safety or to require parking if the home isn’t near a transit stop. Homeowners would need to live in one of the units for at least three years and can’t rent one of them as a short-term rental (think AirBnB). There are other caveats about rent control and other issues, but this looks like a major change in housing policy. See a summary of the new law here. Or a more detailed description here.
So, if you’ve been thinking of doing some kind of real estate investment, purchasing a rental home, helping a family member buy an affordable home, etc., you might just be able to do it with the property you already own. Obviously, this isn’t for everyone, but it’s an interesting idea!