Frequently Asked Questions

ADU

How is SB 9 different than an ADU?

There are several key differences. The most significant is that SB 9 contains the lot split provision, which allows homeowners to subdivide their property into two parcels. Many cities allow SB 9 units to be larger than ADUs, and some allow SB 9 units on the same lot to be sold separately, which is never allowed for ADUs.

There's an ADU on my property. Can I still split my lot with SB 9?

Yes, you can split your lot if you have an ADU. However, the ADU will need to stay on the same lot as the existing house.

Feasibility

Can I split my lot and sell my primary property?

Yes, if you agree to live on the other parcel for a minimum of three years following the lot split.

How many times can I split a single lot?

You can only use SB 9 to split a lot once. However, if you have a large property, you could subdivide your lot with a standard subdivision first, then use SB 9 to split one of the two resulting lots.

You would not be able to split both new lots with SB 9, because the same person (or anyone acting in concert with the same person) cannot use SB 9 to split adjacent properties.

Does my lot qualify for SB 9?

Search your address on our SB 9 Eligibility Search Tool to find out if your property is eligible.
If you live in the City of Los Angeles, you can search your address on ZIMAS to download an SB 9 Eligibility Checklist.

What information do you need from me?

To perform a feasibility study, all we really need is your property's address. Additional information--like photos of the property, your development preferences, and current LTV--are helpful, but not mandatory.

Can my neighbor and I use SB 9 at the same time?

Yes. You and a neighbor can both split your lots at the same time, as long as you're not working together. Senate Bill 9 prevents the same person (or anyone working in concert with the same owner) from splitting neighboring lots.

Timeline

With the Zero-Down development model, when do I get paid?

You receive your share of the profits upon sale of the new property.

What's the process for Homestead's lot split services?

First, Homestead performs a Feasibility Study to evaluate the site conditions and determine the ideal placement for the new lot line(s). We coordinate all third-party specialists (e.g. civil engineer, surveyor, etc), fill out the required documentation, and submit the application on your behalf. We charge a baseline fee for our services, and all fees incurred during the subdivision process are passed along to you with no markup.

What's the turnaround time for Feasibility Reports?

Our current turnaround time is two weeks or less, depending on the complexity of the project and local zoning code.

Do I have to wait three years before I sell the new lot?

You can sell one of the two lots right away. If you want to sell the other lot too, you'll need to live on it for three years first.

Implementation

Which parts of SB 9 are up to the city/local jurisdiction to decide?

Local jurisdictions can set objective standards for SB 9 projects, but these standards may not prevent up to two 800 sq ft units on a lot. Cities may implement objective landscaping and design standards, require that parking spaces be covered, and place limitations on unit height and size (although cities must allow units to be at least 800 sq ft).

Finance

How much can I make with Homestead?

You can make $300k to $1M or more, depending on your property's size, location, and the scope of your project.

How does Homestead's zero-down financing work?

Homestead pays for the lot split and development costs, then handles the sale of the new property. Once the property is sold, you keep 80% of the profits.

With the Zero-Down development model, when do I get paid?

You receive your share of the profits upon sale of the new property.

How much does Homestead make?

Homestead keeps 20% of the sale profits, while the remaining 80% is yours.

Why not split my lot and sell it?

That's definitely an option! If you'd rather split your lot and sell it vacant, consider our Lot Split service. Properties with a new house sell fetch a much higher price than empty lots, so you stand to make more money developing the parcel yourself vs selling it do a developer.

Permitting

Will Homestead do just the permitting for my lot split?

Yes! Our lot split service handles the permitting process, and you end up with a new lot to sell or develop as you please.

What's the process for Homestead's lot split services?

First, Homestead performs a Feasibility Study to evaluate the site conditions and determine the ideal placement for the new lot line(s). We coordinate all third-party specialists (e.g. civil engineer, surveyor, etc), fill out the required documentation, and submit the application on your behalf. We charge a baseline fee for our services, and all fees incurred during the subdivision process are passed along to you with no markup.

Occupancy

Can I Airbnb my new unit?

No, SB 9 requires that all rental terms must be for a minimum of 30 days.

Can I demolish my house?

It depends on the home's rental history.
If the home has been owner occupied or vacant for the last three years, the house can be demolished. However, if it has been rented or leased to tenants at any point in the last three years, you may not demolish the house or change more than 25% of the exterior walls.

Can I rent out the new unit?

You may rent out SB 9 units for a minimum of 30 consecutive days, but be aware that some cities have income caps for SB 9 rentals. Refer to your city's SB 9 City Guide or local SB 9 ordinance to see if there are affordability requirements in your jurisdiction.
If you perform an SB 9 urban lot split, you will need to live on one of the two lots for a minimum of three years following the lot split.

Can I split my lot and sell my primary property?

Yes, if you agree to live on the other parcel for a minimum of three years following the lot split.

If my home was a rental before I bought it, can I still use SB9?

Yes, you can still use SB 9 on a former or current rental property. However, you may not demolish more than 25% of a house until it has been owner occupied or vacant for three years.

Construction

Do I get to pick the style of the new house?

Homestead offers a selection of beautiful designs to choose from.
If your city has placed architectural restrictions on SB 9 units, the new home will have to comply with these standards and options may be limited.

Can't I split my lot myself?

Of course, but it's a lot harder than you might think! It involves hiring a number of specialists, preparing and submitting more than a dozen different documents, and lots of back-and-forth with your local planning department. Hiring Homestead to process your lot split application saves you lots of time and frustration.

Why not develop my lot with my own contractor?

Working with a contractor requires a significant out-of-pocket investment from the homeowner, often upfront. With our zero-down financing model, construction costs are taken out of the sale of the property, with no upfront payment from you. And, unlike most contractors, Homestead skillfully evaluates your yard's potential and creates a development proposal designed to maximize your ROI.