March 25, 2023 Breaking News, Latest News, and Videos

Column: SB 9 Ended R-1 Zoning, but It’s Not Meeting Goals

By Tom Elias

More than a year after it took effect, the landmark housing density law known as SB 9 has drawn many derogatory labels: a usurper of local powers, a neighborhood wrecker, a destroyer of dreams, and more. But the most accurate epithet for it today is something much simpler. So far, it’s a flop.

SB 9, sponsored by San Diego’s Democratic state Sen. Toni Atkins, was intended to help solve the California housing shortage by encouraging owners of current single-family homes to divide their lots in two, with each half eligible for a duplex and an additional dwelling unit, often known as an ADU.

So six housing units are now authorized almost automatically on most single-family properties in this state. The SB 9 sponsors believed when it passed in the fall of 2020 that this would create enormous financial incentives for current homeowners to sell to developers.

After all, a new cottage industry had arisen since permitting of ADUs, also known as “granny units,” became virtually automatic in January 2020, with almost all new homes featuring them and many existing homeowners buying and renting out prefabricated units.

But enthusiasm for the kind of density SB 9 intended to create has not come close to matching the homeowner and developer interest in building ADUs. A report early this year from UC Berkeley’s consistently pro-density Terner Center for Housing Innovation described the law’s impact so far as “limited or nonexistent.”

The failure so far of this law may comfort some homeowners interested in maintaining their roomy lifestyles and the character of their neighborhoods, but the conditions causing it may not be permanent.

For one thing, nothing in SB 9 compels anyone to build as much as a single affordable unit, or any units designated for low-income residents.

With both median home prices and the cost of building a single one-bedroom unit in California both hovering above $800,000, it’s difficult to see how creating bunches of duplexes will be much help to families who currently don’t own homes and thus have not built up many tens of thousands of dollars in equity.

The contrast with building large apartment or condominium complexes is sharp: They must include at least some affordable units. They also can get a “density bonus” allowing them to create more units if they provide more than the required percentage of affordable or low-income ones.

So the market for new duplexes is not hot today, especially in a time of dropping population. Then there’s the matter of financing: Interest on home and construction loans is higher today than almost any time in the last 20 years, as the Federal Reserve Board keeps upping interest rates to stem inflation.

That depresses both home prices and sales everywhere in the nation, including California, and makes it difficult for developers to fund new projects.

There’s also a shortage of construction workers, similar to the dearth of workers that has seen “help wanted” signs appear in thousands of restaurant and store windows.   

All these conditions might be temporary, possibly changing considerably as inflation slows.

But there’s also the matter of reluctance by current homeowners to carve up their properties or sell out and move elsewhere.

The steady rise of California property values over the 14 years since the Great Recession – until it halted or slowed in mid-2021 – has left huge numbers of longtime homeowners flush with equity, sometimes mounting into the millions of dollars.

If they access some of that resource via refinancing or reverse mortgages, a lot of the financial incentive for creating six homes out of one can disappear.

All of which means SB 9 does not figure to become a major housing factor anytime soon.

This has caused its onetime enthusiastic backers to deny they ever saw it as a major part of the solution. One example is Atkins, the state Senate’s president then and now. She told a reporter SB 9 “was never intended to be an overnight fix to our housing shortage…it was intended to increase the housing supply over time.”

It still may do that someday, but reality right now is that SB 9 has not amounted to much.

Email Thomas Elias at tdelias@aol.com. His book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net.

Related Posts

SMa.r.t. Column: Going Bare

March 20, 2023

March 20, 2023

(part 3 of 3 articles) Every City faces periodic interruptions to its normal life. Some interruptions in our City are...

Santa Monica Mall Owner, Macerich, Finds Way Out of Retail Property Crisis

March 19, 2023

March 19, 2023

Move comes amidst a crisis for retail property owners, with loans coming due for refinancing with much higher interest rates...

Historic Santa Monica Property “The Witbeck House” Listed for Sale at $22.5M

March 19, 2023

March 19, 2023

Greene & Greene-designed home features 26,000+ square foot lot with five bedroom home A historic property known as The Witbeck...

New Affordable Housing Complex Completed in Santa Monica’s Pico Neighborhood

March 18, 2023

March 18, 2023

Las Flores offers 73 one-, two-, and three-bedroom apartments at 1834-1848 14th Street By Sam Catanzaro Community Corp. of Santa...

SMa.r.t. Column: The Urgency to Retrofit Earthquake-Deficient Buildings, Part II

March 10, 2023

March 10, 2023

Santa Monica’s earthquake-retrofit laws are being bypassed by some building owners, and the city may have trouble enforcing those ordinances...

Scooter Braun Buys Nearly Century-Old Oceanside Building in Santa Monica for $25.9 Million

March 10, 2023

March 10, 2023

Music entrepreneur buys 1927 four-story brick building at 3355 Barnard Way By Dolores Quintana Scooter Braun, a talent manager and...

Santa Monica Planning Commission Approves Eight-Story Hotel Development on Colorado Avenue

March 10, 2023

March 10, 2023

Hotel would bring 74 rooms to 516 Colorado Avenue A new hotel development has received clearance from the Santa Monica...

Santa Monica Canyon Home Designed by Case Study Architect Listed for $10.5M

March 6, 2023

March 6, 2023

Home originally designed by Case Study architect Thornton M. Abell  By Dolores Quintana A Santa Monica Canyon home originally designed...

New Office Complex Underway at Former Santa Monica Tow Yard Site

March 6, 2023

March 6, 2023

1650 Euclid Street development from Redcar Properties will include three stories of office space A new office complex is set...

SMa.r.t. Column: The Urgency to Retrofit Earthquake-Deficient Buildings

March 6, 2023

March 6, 2023

Recent early-morning tremors off the Malibu coast, and the huge and terrible earthquake in Turkey and Syria have made us...

Kath’s Oscar Forecast 2023 Part One

March 6, 2023

March 6, 2023

FILM REVIEWKATH’S OSCAR FORECAST 2023 PART ONE95th Academy Awards March 12th at 5:00PM on ABC In this column and the...

Brookfield Corp Defaults on $784M Worth of Loans for Two LA Towers

March 6, 2023

March 6, 2023

Brookfield fails to pay a $465 million loan package for the Gas Company Tower at 555 W. 5th St. and...

SMa.r.t. Column: ​​Reinforcing the Future – A Revisit

February 27, 2023

February 27, 2023

Six years go we discussed, in these pages, the city’s then-renewed earthquake-retrofit rules. At the time we argued that the...

Connie Britton and David E. Windsor Win Bidding War for $5.6M Santa Monica Home

February 26, 2023

February 26, 2023

Couple plays $600,000 over the asking price for custom-built home Actress Connie Britton, of White Lotus, Nashville, Friday Night Lights...

Column: The Inevitable Conversions Begin Multiplying

February 25, 2023

February 25, 2023

By Tom Elias It’s a phenomenon from New York to Dallas to Fresno and Los Angeles, one that seemed inevitable...