Capitola in December 2020
Capitola Village in December 2020.
(Kevin Painchaud / Lookout Santa Cruz)

Are Santa Cruzans dividing up their lots? A look at SB 9 one month in, as new law gets digested

Senate Bill 9, signed into law last fall by Gov. Gavin Newsom, allows California homeowners and property owners to either subdivide their lots or build duplexes. The law officially went into effect Jan. 1 — but how much of an impact has it made locally, if at all?

The What: Senate Bill 9 — allowing California homeowners to either subdivide their lots or build duplexes on their properties — officially went into effect on Jan. 1. Yet for many parts of Santa Cruz County, homeowners are just starting to assess their interest — and local planning departments believe it could take a few years to see the bill’s impact on the housing stock.

The So What: The bill is meant to be another “tool in the toolkit,” experts say, aiming to solve the state’s continued housing shortage. SB 9 comes at a time when other housing-focused bills have seen a slight rise in popularity, including:

  • Senate Bill 10: Increases zoning for up to 10 residential units for any parcel if located in a transit-supported area.
  • Senate Bill 330: Prohibits local jurisdictions from enacting regulations that would in effect reduce the legal limit on new housing within their district lines.
  • Senate Bill 35: Requires streamlining for developments with affordable units in jurisdictions that have not met their regional housing needs allocation (RHNA) goals.
(Via California YIMBY)

Backgrounder: Like much of the rest of the state, Santa Cruz County has seen continued shortfalls in terms of both housing availability and affordability. Statewide laws like SB 9 aim to address those issues quickly, but each municipality requires specifics that make the process more complex — and lead to sharp increases in each area’s RHNA needs.

Locally, that means Santa Cruz could be looking at a 457% uptick in the units needed compared to the current housing cycle. If the county doesn’t meet the targets, developers could invoke SB 35 to streamline projects and give officials less of a chance to have a say in housing developments.

What cities have seen: Locals are just beginning to figure out how they can utilize the bill on their properties — and planners say that is par for the course.

Watsonville Associate Planner Sarah Wikle said her department has fielded only a handful of inquiries thus far, which could also be due to updates to the city’s accessory dwelling unit (ADU) ordinance in January 2020.

“We’ve seen a huge influx of ADU applications,” she said, mentioning that any lot over 12,000 square feet can create two detached ADU units.

Watsonville Community Development Director Suzi Merriam said the city had 97 applications for ADUs in 2021 due to the relatively easy process to learn about developing ADUs and adhere to objective standards. (The state defines objective standards, in part, as those that “involve no personal or subjective judgement by a public official.”)

Yet the rise in popularity took time; Wilke noted that there was initial interest in ADUs once the law went into effect in January 2020, but it took six to eight months for the state to release updates on local builds.

Because of Capitola’s limited stock — less than a dozen vacant lots — Community Development Director Katie Herlihy said she doesn’t believe SB 9 will greatly affect the city’s development.

“One of the regulations within SB 9 is that when you create a lot split, the parcels have to be divided in a manner that neither lot gets less than 40% of the existing lot,” she said. “To subdivide and be able to subdivide the lot and meet that requirement is very challenging.”

In the city of Santa Cruz — possibly the area with most potential for SB 9 in the county — Principal Planner Samantha Haschert said it’s still a little too early to see how the bill would affect the area.

“I would say there are maybe 20 homeowners interested in the bill ... but I think people are really trying to see if this is a viable option,” she said.

Multiple messages to Scotts Valley Assistant Planner Olivia Beers went unreturned.

What about unincorporated county regions? While each city has been planning out how to address SB 9, there’s a greater question for unincorporated parts of the county like the San Lorenzo Valley, Live Oak, Aptos and La Selva Beach. These areas, which make up half of the county’s population and much of its open space, are overseen by the county planning department, which has provided some guidance on SB 9.

County Principal Planner Stephanie Hansen considers the law an added benefit that, over time, will “fit well into the fabric of the community.” But she hasn’t seen a mad rush to subdivide parcels across unincorporated areas, and said she thinks it’s more of an opportunity statewide to increase the housing stock.

“If you have enough property and meet objective standards, you should be able to get something approved, regardless of whether you’re in one urban area or another,” she said.

Senate Bills 9 and 10, which would allow for increased density in single-family-zoned areas, are poised to be signed...

Hansen said the county is working on further guidance on addressing SB 9 locally and has worked within existing codes to formulate what property owners should know. She believes SB 9 policies will take time to take off, as ADUs did.

“Much like ADUs, these initiatives will be revised and refined, so we want to help people within our existing codes and policies,” she said.

SB 9 or ADU: Merriam said Watsonville had 97 applications for ADUs in 2021, and that’s due to the relatively easy process to learn about developing ADUs and adhering to objective standards. However, it also shows that ADUs are just one piece of the puzzle for the county at large to solve the housing shortage.

Herlihy said Capitola saw an increased interest as well, but not as sharp as other, less developed parts of the county. From 2018 to 2020, there have been 11 ADUs developed; she expects the numbers to have increased in 2021, and to pair with SB 9 updates as they come in.

“We expect to see more SB 9 projects, but due to the level of planning there’s a lag time,” she said. “We’re trying to put guidance out there now and organize the codes.”

What to expect in the future: Different planning departments have already begun organizing cheat sheets for local residents to learn more about the SB 9 process if they are interested in applying and developing their parcels.

Haschert said the city of Santa Cruz’s guide is a “living document” and will continue to be updated as the process evolves; residents can find more information here.