In September of 2021, Governer Newsom signed the SB9 and SB10 bills. These will take effect on January 1st, 2022.

These bills essentially change the traditional single-family home zoning throughout much of California. The goal is to increase housing density to address the state’s housing crisis. It will allow owners to build more than one home on lots that, until now, have been designated for one home. It will also give cities more leeway to place small apartment complexes in neighborhoods near public transit.

Malibu is a rare gem. City, county, and coastal regulations make subdividing lots very difficult and there are only a handful of apartment complexes throughout 90265. This has helped Malibu maintain its peaceful, private, and rural feeling which has drawn people to it ever since the creation of the Pacific Coast Highway. SB9 will upend this infrastructure.

This is a complex issue. California’s housing crisis is a real issue and there are loud voices on both sides. Our goal is to break down this new legislation and what it means for our coastal paradise.

An important note: we are neither legislators nor lawyers. Do your research and talk to legal experts.

The Basics of SB9

This is a complex bill with a lot of fine print. Our friends at a title company had their lawyers take a look, as did BKK in their very helpful summary. The findings are summarized below:

1. Will allow an urban lot split for a housing development of a maximum of 2 residential units within a single-family residential zone if it meets the list of SB-9 criteria. You may be reading about 4 units now replacing single-family lots and that’s because it’s in conjunction with existing ADU law, so if you can split 1 residential lot into 2 lots with SB-9, you can then build an ADU on each of the 2 lots which would be 1 unit and 1 ADU on each lot, 2 units on each parcel of the split lot, for a total of 4 units.

2. Criteria include but are not limited to the following:

• • The proposed development would not require demolition or alteration of housing subject to low income.
  • The proposed development would not require demolition of more than 25% of existing exterior structural walls, except as provided.
  • The proposed development is not located within a historic district or designated as a landmark.
  • The property cannot have been leased in the previous 3 years.
  • The lot cannot have previously been subdivided.
  • Lots under 2,400 square feet will not be eligible. Each new subdivided lot must be at least 1,200 square feet, according to the new law.
  • Any unit created as a result of the law cannot be used for short-term rentals. They must be rented for a term longer than 30 days.

3. An applicant for an urban lot split must sign an affidavit stating that they intend to occupy one of the housing units as their principal residence for a minimum of 3 years from the date the split is approved.

4. The expiration date for an approved or conditionally approved tentative map for an urban lot split is extended by SB-9.

5. There are restrictions as to how the proposed development can be built, such as the size and location of the proposed development.

6. The Coastal Act does apply but the local agency does not have to hold a hearing to issue a CDP.

7. The lot split does not need to be even, but it does need to be 60/40 at most.

Los Angeles County

For a fascinating and very in-depth look, this feasibility study conducted by UC Berkely provides a thorough analysis. Here are a few points we found most interesting:

• According to their data, just 10% of Los Angeles would be financially feasible to develop under SB9.
• This is a stark contrast from the 1.21 million eligible parcels out of 1.44 million. This is the most of any county in the study.

Pros and Cons

This year, the median home price in California surpassed $800,000. This is a far cry from Malibu, where the average home price on the Malibu Landside in 2021 is $4.6 million.

There has been an extreme lack of inventory throughout the state. For many, homeownership has become a distant dream. The entire goal of SB9 is to increase inventory and make home prices more affordable. This, by itself, is a good thing. However, it also directly benefits developers and landlords looking to increase their income and property value in a hyper-competitive market.

The biggest strike against this legislation is that it has the potential to destroy neighborhoods, effectively creating an urban sprawl in communities that have long been traditional, single-family homes.

Gentrification is another concern. By potentially doubling or quadrupling the population and housing density in a neighborhood, a flood of new residents will undoubtedly force out people who have long called these places home.

Most importantly, fires are part of living in Malibu and defensible space is critical for homes to be safe during these events. Additionally, our limited access and canyon roads make fighting fires exceptionally difficult. Many areas of Malibu remain incredibly difficult to ensure against fires. Doubling housing density in these communities would be a recipe for disaster and make things that much more difficult for our firefighters.

The 4-foot setback stipulated by SB9 does not comply with Malibu’s recommendation for defensible space.

Fire and Other Caveats for Malibu

There is some misinformation floating around about areas with high fire risks.

The SB10 Bill stipulates that areas of very high fire hazard and flooding risk are exempt. This bill addresses lower-cost housing developments of 10 units or less. However, SB9 has no such restriction on fire hazard zones. If there were, Malibu would essentially be completely exempt from the SB9 Bill.

Under SB9, these new developments must comply with city, county, and any additional regulatory agency requirements, i.e. the Coastal Commission (LCPs). Many of Malibu’s lots, though they would meet the 2,400 square foot requirement, only have a small portion that is buildable.

Lastly, there are significant requirements and setbacks for the septic systems that service most of Malibu. Our current code for new construction stipulates that a detached guest home needs its own septic system. To become a duplex or quadplex, many of these lots would not have the needed room for an additional system, much less 4 systems in total if each of the 2 parcels had a guest home that required its own.

These grey areas have yet to be addressed by the City of Malibu and LA County.

Should Malibu Be Worried

Until our local agencies set forth the “objective standards” of the SB9 developments, it is difficult to say how much this will affect Malibu.

Per SB9, “a local agency may only deny a qualifying SB9 lot split if the building official finds that the resulting housing development project would have a specific, adverse impact on public health and safety or the physical environment and there is no feasible, satisfactory mitigation.”

The environmental and safety aspects of building in Malibu are already very complex, which is why obtaining building permits takes years with a raw parcel of land. Much of Malibu is labeled Environmentally Sensitive Habitat (ESHA) and the building setbacks for these areas are significant. It will be very interesting to see what standards the City of Malibu, County of Los Angeles, and Coastal Commission set forth.

Malibu’s large, flat lots in areas such as Malibu Park and Point Dume are cause for concern for those against the SB9 bill. Should this proceed and be feasible in Malibu, we could begin to see duplex and even quadplex properties on these pieces of land. The question of easements, including beach rights, is unaddressed.

SB9 is not good for Malibu residents who do not want to see it become overdeveloped, which is the majority of us who love Malibu for its peacefulness and wide-open spaces. For developers, builders, and individuals previously priced out of Malibu or unable to find the right property in a certain place, SB9 is welcome news.

Malibu’s geography and strict regulations make it unlikely that it will become the urban sprawl critics are crying out against. However, it has the potential to drastically change some of our neighborhoods for good.

Whatever the outcome, Malibu’s beautiful beaches and rugged mountains will remain. Malibu will remain the paradise we know and love, and we can all do our part to keep it that way.

An important note: we are neither legislators nor lawyers. Do some research and get educated. We would love to hear from you and will amend this article as needed, as well as publish local opinions on this matter.

Get in touch at: 310.230.5771 / russellandtony@compass.com