We’ve been receiving many inquiries about Senate Bill 9 (SB 9) and how it will impact HOAs in California.   As you may be aware, Governor Newsom recently signed SB 9, which will take effect on January 1, 2022.  SB 9 requires cities and counties to ministerially approve certain two-unit projects and lot splits on lots zoned single-family. This means that local agencies have lost significant authority over the development and construction of homes in single-family zones, and we may see a huge increase in construction and population density in such zones.  Although SB 9 is silent about common interest developments, there is justified concern that SB 9 may be interpreted or expanded in the future to strip HOAs of similar powers and negatively impact their communities.

SB 9 in a Nutshell.  SB 9 adds two new sections to the California Government Code.  First, Section 65852.21 will permit the division or partial or full tear down of an existing single-family home to create or construct two separate homes.  It will require a proposed housing development containing no more than 2 residential units within a single-family zone to be considered ministerially by a city, without discretionary review or a hearing if it meets certain criteria, including that the housing development would not demolish or alter housing that is subject to an affordable housing covenant or ordinance, which is subject to rent control, or which has been occupied by a tenant within the last 3 years.   Homes created in this manner may not be rented out as short-term rentals. 

SB 9 also adds Section 66411.7, which requires local agencies to ministerially approve a parcel map for an urban lot split as long as both newly created parcels are no smaller than 1200 square feet (with exceptions).  As with the above, the proposed urban lot split must not demolish or alter housing subject to an affordable housing covenant or law, which is subject to rent control, or which has been occupied by a tenant in the last 3 years.  The applicant for the lot split will be required to sign an affidavit that they intend to occupy one of the housing units as their principal residence for a minimum of 3 years, but it is unclear how this would be enforced.

Taken together, these two sections mean that an existing single-family lot could be split into two new residential lots, with two homes or a duplex placed on each of those lots.  In other words, whereas the single-family lot was originally intended for 1 home, there is the potential for 4 homes to be located in its place, and it could be even higher if accessory dwelling units are also added. This could significantly increase housing and population density in single-family neighborhoods.  Unfortunately and unsurprisingly, the State Legislature is not addressing how existing transportation and utility infrastructure will be upgraded to meet the needs of the increased population.

Effect on HOAs. SB 9 is completely silent when it comes to common interest developments.  It does not state whether they will be subject to or exempt from this law.  Senator Toni Atkins is the San Diego Democrat who authored SB 9.  In a letter to the Senate dated August 30, 2021, she wrote:

“My office has consulted with Legislative Counsel, and SB 9 would not override CID or HOA restrictions.  Specifically, SB 9 is silent on the issue, meaning the bill contains no provisions that supersede HOA or CID governing documents.  As we have seen with other housing legislation, SB 9 would have to contain an explicit and proactive provision to override those rules.  This bill does not.”

It is unfortunate that SB 9 does not contain an express exception for HOAs, as this leaves open the possibility that CC&R restrictions prohibiting lot splits will be subject to challenge on public policy grounds.  The State Legislature has also demonstrated a tendency to overregulate, and a propensity to eventually apply housing-related laws to common interest developments (examples: AB 670 on accessory dwelling units, and SB 326 the balcony inspection bill).  This raises the legitimate concern that the Legislature may seek to apply SB 9 to homeowner associations in the near future.

Recommendations.  The CC&Rs of many planned developments prohibit owners from splitting or subdividing their lots, or from adding a second home on their lot.  If your community has such a prohibition, you should continue to enforce it until such time that the Legislature expressly prevents you from doing so.  If your planned development does not have such a prohibition, you should certainly consider amending your CC&Rs to prohibit lot splits.  That way you would stand prepared in case homeowners and developers try to turn your single-family lots into multi-family duplexes.

Please let us know if you have any questions, and if you would like us to evaluate your governing documents.

Community Legal Advisors Inc.
Michael J. Alti, Esq.
michael@attorneyforhoa.com