By David M. Greenwald
A year ago, Governor Newsom signed into law SB 9. Critics feared that SB 9 would destroy single-family neighborhoods while proponents hoped it would inspire new housing in the form of more affordable duplexes.
As the Sacramento Bee noted this week, “Proponents hailed it as a major step toward addressing California’s housing crisis and helping more Californians afford to purchase homes in desirable neighborhoods. Opponents called the measure a “radical density experiment” that would upend neighborhoods without allowing any community input.”
But a report found that nothing has changed so far.
“I think the people that have been pushing for this for so long were just glad to get it through,” said Lee Ohanian, an economics professor at UCLA and senior fellow at the Hoover Institute (as reported in the Bee). “But it really ends up being much to do about nothing.”
The Bee surveyed areas in the Sacramento and Central Valley and found that while cities are required to report on the number of SB 9 projects, the participation has been low.
The Be found: “The cities of Davis, Stockton, Modesto, Merced and Bakersfield have not received a single application. Fresno has one. Three applications were submitted in Elk Grove, though one was deemed ineligible because it was located in a designated wetland, which is exempt under the law.”
Sacramento actually eliminated single-family zoning ahead of the statewide measure and “has had some success in encouraging homeowners to build accessory dwelling units (ADUs) on their properties. The city allows up to two ADUs totaling 1,200 square feet on a parcel that already has a primary residential structure. After streamlining the permitting process for the units, the number of ADUs built in the city has doubled in recent years.”
While alarm bells went off when SB 9 was proposed, these results confirm the analysis by the Terner Center from 2021.
David Garcia, policy director at the Terner Center wrote in the Bee in 2021, “A recent analysis by UC Berkeley found that SB 9 could play a role in the state’s overall housing solution, but financial and geographic factors will limit its impact to just a small percentage of the state’s single-family homes.”
While the bill “has attracted fierce opposition in recent months,” he argues, “Research has shown, however, that the changes proposed in SB 9 would not lead to the wholesale changes that opponents fear.”
In their analysis, Ben Metcalf, David Garcia, Ian Carlonton and Kate MacFarlane write: “SB 9 has potential to expand the supply of smaller-scaled housing, particularly in higher-resourced, single-family neighborhoods. In this way, SB 9 builds on recent state legislation that opened up access to accessory dwelling units (ADUs) for virtually all California single-family parcels.
“What distinguishes SB 9 is that it allows for the development of new, for-sale homes, either on a newly subdivided lot or through the conversion of existing single-family homes into multiple units. This ability to create duplexes and/or split the lot and convey new units with a distinct title would allow property owners to pursue a wider range of financing options than are available for ADU construction to build these new homes.”
“Yet, the likelihood of creating new housing and homeownership opportunities as a result of SB 9 largely depends on local context,” they write. “While Senate Bill 9 does not apply to single-family parcels in historic districts, fire hazard zones, and rural areas, local market prices and development costs play a large role in determining where there is financial viability for the addition of new homes.”
So, what is the impact?
This analysis, the most detailed one yet on the impact of SB 9, “finds that SB 9’s primary impact will be to unlock incrementally more units on parcels that are already financially feasible under existing law, typically through the simple subdivision of an existing structure.”
However, in contrast to fears by many homeowners: “Relatively few new single-family parcels are expected to become financially feasible for added units as a direct consequence of this bill.”
The study found that “the vast amount of single-family parcels across the state would not see any new development,” said Garcia.
That appears to be exactly what happened.
In fairness, however, a year into a new law is probably not the appropriate interval for analysis. Especially given the cost of construction, rising interest rates, and the state of the economy and the market at the moment.
That’s a point raised by the Bee analysis as well, “Experts say narrow interest in the law is due to a combination of factors: high-interest rates and construction costs, regulatory loopholes and efforts by communities to limit the feasibility of small developments.”
As passed, SB 9 was meant to spell the end of single-family zoning, opening the door to allow the construction of up to four units on lots that previously only were permitted to have a single home.
The Bee notes, “The legislation marked a historic shift from the land use classification that defined the American suburb, born from the mindset that each residential lot should come with a stand-alone home on a peaceful street with plenty of elbow room and green space.
“But beneath that suburban idyll were often exclusionary housing practices. In California and across the country, single-family zoning was a means of barring lower-income residents and people of color from living in neighborhoods with good schools and other public services.”
In his seminal work, Color of Law, Richard Rothstein, who has spoken in Davis, and whose daughter recently spoke at Bet Haverim, details how single family zoning was used to create segregation.
Single family zoning, he explained in chapter 3 for example, was “developed in part to evade a prohibition on racially explicit zoning.” What it did was attempt to keep out Blacks from white neighborhoods, “by making it difficult for lower-income families, large numbers of whom were African Americans, to live in expensive white neighborhoods.”
SB 9 could become a tool to undo that, but right it appears costs are too high to convert existing homes into duplexes and four-plexes, but that might not be the best test of the law. The best test of the law may be moving forward, preventing new developments from becoming single-family zoning.