What is SB-684 and how it can help

In the ever-evolving landscape of real estate and business regulation, staying informed about new legislation is crucial for both small business owners and homeowners. One such piece of legislation that promises to bring significant changes is California Senate Bill 684 (SB-684). This bill, effective from July 1, 2024, is poised to streamline housing development and provide opportunities for those looking to build smaller homes on multifamily-zoned land.

Introduction to SB-684

SB-684 is a transformative piece of housing legislation aimed at addressing California's housing crisis by making it easier to develop infill housing projects. These projects can include up to 10 homes on qualifying multifamily-zoned lots. The bill's primary goal is to create more affordable housing options without the lengthy and often cumbersome approval processes traditionally associated with such developments.

Key Elements of SB-684

1. Ministerial Approval: SB-684 mandates CEQA-exempt ministerial approval for up to 10 units of housing on qualified infill sites. This means no discretionary review or public hearing is required, significantly speeding up the approval process.
2. Lot Criteria: The lot must be no more than 5 acres, substantially surrounded by qualified urban uses, and served by public water and municipal sewer systems.
3. Housing Specifications: New homes cannot exceed an average total area of 1,750 square feet, and subdivided parcels must be at least 600 square feet.
4. Ownership Flexibility: Subdivided housing units can be constructed under various ownership models, including fee-simple ownership, common interest developments, housing cooperatives, or community land trusts.
5. Approval Timelines: Local authorities must approve or deny completed applications within 60 days, or the application is deemed approved by default.
6. Exemptions and Limitations: The local authorities cannot apply standards that would hinder development densities suitable for lower-income households and are limited in imposing setbacks, parking, and other restrictions.

For developers and property owners, SB-684 offers a streamlined pathway to develop small-scale housing projects, thereby filling a critical gap in the housing market.

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Understanding the Provisions of SB-684

How It Helps Small Businesses

For small business owners in the real estate sector, SB-684 presents several noteworthy advantages:

1. Streamlined Approvals: The ministerial approval process eliminates the need for discretionary reviews and public hearings, drastically reducing the time and cost involved in getting projects off the ground.
2. Cost Savings: The CEQA exemption alone can save developers significant amounts of money and time, allowing for faster project completion and quicker returns on investment.
3. Market-Rate Developments: The law encourages the development of market-rate housing that is naturally more affordable due to smaller lot sizes and home sizes, making it easier for developers to create profitable projects without relying on government subsidies.
4. Gentle Density: SB-684 encourages "gentle density" through the development of pocket neighborhoods and cottage courts, which can be more appealing and less disruptive to existing communities compared to large-scale apartment complexes.

Implications for Homeowners

Homeowners looking to maximize the value of their properties will find several benefits under SB-684:

1. Increased Property Value: By subdividing their lots and developing additional homes, homeowners can significantly increase the value of their properties.
2. Affordable New Housing: Smaller homes on subdivided lots are more likely to be priced at attainable levels, making them accessible to a broader range of buyers or renters. For example, a new single-family home could be priced around $680,000, which is relatively affordable compared to the median price of existing homes in California.
3. Community Benefits: Increased density can lead to more vibrant, walkable communities with better access to local amenities and services, enhancing the overall quality of life for residents.

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Hypothetical Development Under SB-684

Imagine a 10-home development located in a major urban metro area on a well-located infill parcel. The project could include the following characteristics:

• Parcel Size: 30,000 square feet (~0.7 acres), subdivided into 10 lots at approximately 3,000 square feet each.
• Home Specifications: 1,600 square foot two-story homes with attached garages, each featuring 3 bedrooms and 2 bathrooms.
• Business Plan: Homes sold on fee-simple lots to end-buyers at attainable price points, around $680,000 each.

The approval process for such a development would be expedited due to the ministerial approval requirements, and the construction could be efficiently carried out using volumetric prefab homes. This approach not only speeds up the build process but also reduces risks and costs. The entire project, from approval to sell-down, could be completed within 24 months.

Call to Action

If you're a small business owner or homeowner interested in leveraging the benefits of SB-684, we encourage you to explore this opportunity further. Engage with local representatives, seek professional advice, and consider how this legislation can help you achieve your development goals.

At Gatheradu, we're excited about the potential of SB-684 to foster the development of critically needed housing in infill locations. Our prefab homes are ideally suited for these projects, and we can assist developers with site design and subdivision processes.

For more information on how Gatheradu can help you take advantage of SB-684, Schedule a free consultation for more information.

Final Thoughts

California Senate Bill 684 is a groundbreaking piece of legislation that promises to streamline housing development, making it easier for small business owners and homeowners to build affordable, attainable homes. By understanding the provisions and benefits of SB-684, you can position yourself to take full advantage of this opportunity, whether you're looking to develop a small-scale housing project or maximize the value of your property.

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