Serving CA, WA, OR, and GA.
Schedule a free appointment with one of our ADU experts.
Book a callImagine a world where small multifamily developers can quickly turn underutilized urban lots into vibrant communities of homes. California's SB 684 is set to make this vision a reality. Effective from July 1, 2024, this groundbreaking legislation aims to streamline the approval process for infill development projects of up to 10 homes on qualifying multifamily-zoned sites.
For small developers and homeowners looking to dip their toes into property development, understanding SB 684 could be a game-changer. Whether you're a seasoned developer or a homeowner considering venturing into real estate, this post will guide you through the nuances of SB 684 and its potential benefits.
SB 684 is California's Senate Bill aimed at simplifying the approval process for small-scale multifamily developments. Specifically, it offers a ministerial pathway, meaning fewer bureaucratic hurdles and faster approvals. Here's a closer look at its key provisions:
One of the most significant advantages of SB 684 is that it makes market-rate developments more feasible. By streamlining the approval process and reducing the need for subsidies, developers can focus on creating dense, affordable housing options. This law encourages the development of "gentle density" communities, making it viable to build up to 10 homes on lots previously overlooked for multifamily housing.
For developers with qualifying parcels, SB 684 offers a compelling strategy for building entry-level, attainable homes. The streamlined process and reduced regulatory burdens mean that projects can move from conception to completion more quickly, making it easier to deliver housing where it's needed most.
The ministerial approval process under SB 684 is designed to be swift. Without the need for discretionary reviews or public hearings, developers can expect to get their projects approved in a matter of months rather than years. The CEQA exemption further reduces time and costs, making it easier for developers to get shovels in the ground.
One of the most critical elements of SB 684 is its requirement for CEQA-exempt ministerial approval. This means that eligible projects can bypass the often lengthy and costly California Environmental Quality Act (CEQA) review process, making it easier and faster to get projects approved.
For a parcel to qualify under SB 684, it must be no larger than 5 acres and substantially surrounded by urban uses. Additionally, the lot must have access to public water and sewer systems, ensuring that new developments are adequately serviced.
SB 684 sets specific criteria for the size and configuration of new homes. The average floorspace for new homes cannot exceed 1,750 square feet, and the minimum parcel size is 600 square feet. These standards are designed to encourage the development of smaller, more affordable homes.
SB 684 aims to create more affordable housing options. By allowing for the development of smaller homes on underutilized lots, the legislation helps address the housing shortage in California. This approach creates opportunities for first-time homebuyers and those looking for more affordable housing options.
Infill development promotes sustainability by making better use of existing urban infrastructure. By building on underutilized lots, developers can reduce the need for new infrastructure, which in turn reduces the environmental impact. Additionally, smaller homes typically require less energy to heat and cool, contributing to overall energy efficiency.
SB 684 encourages the development of "pocket neighborhoods" or "cottage courts," which blend seamlessly into existing communities. These smaller, denser developments offer a more human-scale alternative to large apartment complexes, preserving the character of neighborhoods while still providing much-needed housing.
The bill limits ministerial streamlining to parcels that are not located on:
Some key policy issues raised include:
Let's consider a proposed 10-unit development in a suburban area of a growing California city. The project is planned on a 1-acre infill lot previously zoned for multifamily use. Each unit will be a townhome-style dwelling with 1,400 square feet of living space, featuring 3 bedrooms and 2.5 bathrooms.
The developer aims to price these homes competitively at $450 per square foot, resulting in a purchase price of $630,000 per unit. This is notably below the median home price in the area, which stands at $750,000 as of March 2024.
By utilizing modular construction techniques and taking advantage of SB 684's streamlined approval process for projects of 10 units or fewer, the developer estimates that the entire project - from initial application to final sale - can be completed within 20 months. This accelerated timeline significantly reduces carrying costs and financial risks.
The estimated monthly cost of ownership, including mortgage payments (assuming a 30-year fixed mortgage at 4.5% interest with 10% down payment), property taxes, insurance, and HOA fees, would be approximately $4,100. This makes these homes an attractive option for local families, as it's comparable to the average rent for a 3-bedroom apartment in the area, which is around $3,800 per month.
This 10-unit project demonstrates how SB 684 could facilitate the creation of moderately-priced housing in desirable locations, helping to address California's ongoing housing affordability challenges while staying within the bill's unit limit for streamlined approvals.
SB 684 offers a unique opportunity for small multifamily developers and homeowners in California. By streamlining the approval process and encouraging the development of smaller, more affordable homes, this legislation can help address the state's housing shortage while promoting sustainable, community-friendly development.
If you're a homeowner or small developer, now is the time to explore how SB 684 can benefit your projects. The streamlined approval process and the potential for compelling returns make this legislation a game-changer in the world of small multifamily development. Don't miss out on the opportunity to be part of California's housing solution.
Not sure where to start with your ADU project?
Explore your ADU possibilities with Gather.
