In last week’s column, I referred to recent legislation affecting residential zoning. Here are the details. This fall, Governor Newsom signed Senate Bill 9 (SB9), and in one fell swoop almost entirely ended single-family residential zoning in California. The new law allows people to build as many as two duplexes on lots zoned single-family residential, thereby increasing the density of residentially zoned areas and potentially remaking the character of neighborhoods without any input from the people who live there.
It’s one thing to tell prospective homeowners before they buy a home that the lot next door may end up with a duplex on it. It’s a whole different story to change zoning after people have purchased property at a given price based on the understanding that they are moving into a neighborhood where there will be only one single-family home per lot.
In large part, this is a legacy of Proposition 13, which mostly limited property tax increases to 2 percent a year since 1978 forward. One of the unintended consequences was that over time, the taxes collected from areas zoned R1 (single-family residential) did not keep pace with the cost of government-funded services provided to those areas. Is it any wonder that cities and counties do what they can to slow new single-family residential development?
For the record, I am not in favor of Proposition 13 because it is unfair. There is no reason my neighbor and I should pay different tax rates when our homes are of equal market value, and we benefit from the same government-funded services; the only difference is that one of us purchased our home twenty years before. Without Prop. 13, property tax rates could be evened out among all property owners. This could be done in a revenue-neutral way where long-time property owners would see an increase and new property owners would see a decrease. Sadly, suggesting the repeal of Prop. 13 would probably be political suicide for any elected official.
Before SB9 passed, zoning was in the hands of local government officials. Now, even if local decision-makers want to maintain single-family zoning, the State won’t allow it.
Although a property must meet certain criteria under SB9 before it can be developed into multi-family housing, the whole thing is still a bait and switch. As long as a property owner lives on his parcel for at least three years before splitting it, and the lot is large enough, there’s nothing stopping him from adding a duplex and renting it out.
Anyone who tells you that SB9 is important because it addresses the housing shortage in California is being disingenuous. If government officials wanted to address the housing shortage, they would remove the onerous, unnecessary, and expensive requirements added to the California building code during the last 20 years, requirements like tempered glass, dual-pane windows, indoor fire sprinklers, solar panels and CEQA reviews, which together add at least $75,000 per house. Government officials would also allow more agriculture and range land to be rezoned residential.
We do have a housing shortage, but SB9 certainly isn’t a good solution.
If you have questions about property management or real estate, please contact me at firstname.lastname@example.org or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.
Dick Selzer is a real estate broker who has been in the business for more than 45 years.