(1)Under the Planning and Zoning Law, the legislative body of a city or county may adopt ordinances that, among other things, regulate the use of buildings, structures, and land, as provided. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agencys processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps.

Existing law requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements. Existing law requires the local agency to require an applicant for an urban lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split. Existing law authorizes a local agency to adopt an ordinance to implement these provisions, as provided.

This bill would instead require the local agency to require an applicant to select one of 2 sets of owner-occupancy requirements. The first option would be for the applicant to sign, under penalty of perjury, the above-described affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years. The 2nd option would be for the applicant to sign an affidavit, under penalty of perjury, stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy within 3 years from the date of the approval of the urban lot split and to require, as a condition of sale to a home buyer, require that one of the units on both parcels of an urban lot split remain owner occupied for 3 years, beginning on the date a parcel or unit is conveyed by the applicant to a home buyer. By expanding the scope of the crime of perjury and increasing the duties of local agencies, the bill would impose a state-mandated local program.

This bill would impose prescribed recording and notice requirements on this 2nd owner-occupancy requirement, require the home buyer designated by the applicant to satisfy this 2nd owner-occupancy requirement to provide the applicant with an affidavit or declaration, under penalty of perjury, stating the home buyer intends to occupy the parcel as their primary residence for 3 years, as provided. The bill would provide that, for the purposes of either owner-occupancy requirement, an applicant may be the managing or authorized member, who is a natural person, of a limited liability company or the trustee or beneficiary of a living trust a trustee of a living trust of a natural person or a limited liability company of a natural person, except that a managing or authorized member of a limited liability company shall not be an applicant if the parcel being subdivided is within the boundaries of the 2025 Palisades or Eaton Fires in the County of Los Angeles. The bill would provide that an applicant for an urban lot split who is a managing or authorized member of a that is a limited liability company who that violates these provisions would be liable for civil penalties.

(2)Existing law requires that specified disclosures be made upon any transfer by sale, exchange, real property sales contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with improvements, of any single-family residential property.

This bill would require the seller of an urban lot split subject to the second owner-occupancy requirement described above to disclose, in writing, any owner-occupancy requirement for three years after the conveyance of an urban lot split unit.

This bill would repeal its provisions on January 1, 2032.

(3)This bill would make legislative findings and declarations as to the necessity of a special statute for the boundaries of the 2025 Palisades and Eaton Fires in the County of Los Angeles.

(4)This bill would incorporate additional changes to Section 66411.7 of the Government Code proposed by AB 2601 to be operative only if this bill and AB 2601 are enacted and this bill is enacted last.

(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

(1)Under the Planning and Zoning Law, the legislative body of a city or county may adopt ordinances that, among other things, regulate the use of buildings, structures, and land, as provided. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agencys processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps.

Existing law requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements. Existing law requires the local agency to require an applicant for an urban lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split. Existing law authorizes a local agency to adopt an ordinance to implement these provisions, as provided.

This bill would instead require the local agency to require an applicant to select one of 2 sets of owner-occupancy requirements. The first option would be for the applicant to sign, under penalty of perjury, the above-described affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years. The 2nd option would be for the applicant to sign an affidavit, under penalty of perjury, stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy within 3 years from the date of the approval of the urban lot split and to require, as a condition of sale to a homebuyer, home buyer, that one of the units on both parcels of an urban lot split remain owner occupied for 3 years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. home buyer. By expanding the scope of the crime of perjury and increasing the duties of local agencies, the bill would impose a state-mandated local program.

This bill would impose prescribed recording and notice requirements on this 2nd owner-occupancy requirement, as provided. The bill would provide that, for the purposes of either owner-occupancy requirement, an applicant may be the managing or authorized member, who is a natural person, of a limited liability company or the trustee or beneficiary of a living trust of a natural person, except that a managing or authorized member of a limited liability company shall not be an applicant if the parcel being subdivided is within the boundaries of the 2025 Palisades or Eaton Fires in the County of Los Angeles. The bill would provide that an applicant for an urban lot split who is a managing or authorized member of a limited liability company who violates these provisions would be liable for civil penalties.

This bill would additionally prohibit a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertaking any course of conduct, that applies to a project solely or partially on the basis that the project is an urban lot split, including, but not limited to, restricting the eligibility of an applicant of an urban lot split.

(2)Existing law requires that specified disclosures be made upon any transfer by sale, exchange, real property sales contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with improvements, of any single-family residential property.

This bill would require the seller of an urban lot split subject to the second owner-occupancy requirement described above to disclose, in writing, any owner-occupancy requirement for three years after the conveyance of an urban lot split unit.

This bill would repeal its provisions on January 1, 2032.

(3)This bill would make legislative findings and declarations as to the necessity of a special statute for the boundaries of the 2025 Palisades and Eaton Fires in the County of Los Angeles.

(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

(1)Under the Planning and Zoning Law, the legislative body of a city or county may adopt ordinances that, among other things, regulate the use of buildings, structures, and land, as provided. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agencys processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps.

Existing law requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements. Existing law requires the local agency to require an applicant for an urban lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split. Existing law authorizes a local agency to adopt an ordinance to implement these provisions, as provided.

This bill would instead require the local agency to require an applicant to select one of 2 sets of owner-occupancy requirements. The first option would be for the applicant to sign, under penalty of perjury, the above-described affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years. The 2nd option would be for the applicant to sign an affidavit, under penalty of perjury, stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy within 3 years from the date of the approval of the urban lot split and to require, as a condition of sale to a homebuyer, that one of the units on both parcels of an urban lot split remain owner occupied for 3 years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. By expanding the scope of the crime of perjury and increasing the duties of local agencies, the bill would impose a state-mandated local program.

This bill would impose prescribed recording and notice requirements on this 2nd owner-occupancy requirement, as provided. The bill would provide that, for the purposes of either owner-occupancy requirement, an applicant may be the managing or authorized member, who is a natural person, of a limited liability company or the trustee or beneficiary of a living trust of a natural person, except that a managing or authorized member of a limited liability company shall not be an applicant if the parcel being subdivided is within the boundaries of the 2025 Palisades or Eaton Fires in the County of Los Angeles. The bill would provide that an applicant for an urban lot split who is a managing or authorized member of a limited liability company who violates these provisions would be liable for civil penalties.

This bill would additionally prohibit a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertaking any course of conduct, that applies to a project solely or partially on the basis that the project is an urban lot split, including, but not limited to, restricting the eligibility of an applicant of an urban lot split.

(2)Existing law requires that specified disclosures be made upon any transfer by sale, exchange, real property sales contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with improvements, of any single-family residential property.

This bill would require the seller of an urban lot split subject to the second owner-occupancy requirement described above to disclose, in writing, any owner-occupancy requirement for three years after the conveyance of an urban lot split unit.

This bill would repeal its provisions on January 1, 2032.

(3)This bill would make legislative findings and declarations as to the necessity of a special statute for the boundaries of the 2025 Palisades and Eaton Fires in the County of Los Angeles.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

(1)Under the Planning and Zoning Law, the legislative body of a city or county may adopt ordinances that, among other things, regulate the use of buildings, structures, and land, as provided. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agencys processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps.

Existing law requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements. Existing law requires the local agency to require an applicant for an urban lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split. Existing law authorizes a local agency to adopt an ordinance to implement these provisions, as provided.

This bill would instead require the local agency to require an applicant to select one of 2 sets of owner-occupancy requirements. The first option would be for the applicant to sign, under penalty of perjury, the above-described affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years. The 2nd option would be for the applicant to sign an affidavit, under penalty of perjury, stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy and to require, as a condition of sale to a homebuyer, that one of the units on both parcels of an urban lot split remain owner occupied for 3 years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. By expanding the scope of the crime of perjury and increasing the duties of local agencies, the bill would impose a state-mandated local program.

This bill would impose prescribed recording and notice requirements on this 2nd owner-occupancy requirement, as provided. The bill would provide that, for the purposes of either owner-occupancy requirement, an applicant may be the managing or authorized member member, who is a natural person, of a limited liability company or the trustee of a living trust. trust of a natural person, except that a managing or authorized member of a limited liability company shall not be an applicant if the parcel being subdivided is within the boundaries of the 2025 Palisades or Eaton Fires in the County of Los Angeles. The bill would provide that an applicant for an urban lot split who is a managing or authorized member of a limited liability company who violates these provisions would be liable for civil penalties.

This bill would additionally prohibit a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertaking any course of conduct, that applies to a project solely or partially on the basis that the project is an urban lot split, including, but not limited to, restricting the eligibility of an applicant of an urban lot split.

(2)Existing law requires that specified disclosures be made upon any transfer by sale, exchange, real property sales contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with improvements, of any single-family residential property.

This bill would require the seller of an urban lot split subject to the second owner-occupancy requirement described above to disclose, in writing, any owner-occupancy requirement for three years after the conveyance of an urban lot split unit.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Under the Planning and Zoning Law, the legislative body of a city or county may adopt ordinances that, among other things, regulate the use of buildings, structures, and land, as provided. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agencys processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps.

Existing law requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements. Existing law requires the local agency to require an applicant for an urban lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split. Existing law authorizes a local agency to adopt an ordinance to implement these provisions, as provided.

This bill would instead require the local agency to require an applicant to either sign select one of 2 sets of owner-occupancy requirements. The first option would be for the applicant to sign, under penalty of perjury, the above-described affidavit requiring owner-occupancy or for the applicant stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years. The 2nd option would be for the applicant to sign an affidavit, under penalty of perjury, stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy and to require, as a condition of sale to a homebuyer, that one of the units on both parcels of an urban lot split remain owner occupied for 3 years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. By expanding the scope of the crime of perjury and increasing the duties of local agencies, the bill would impose a state-mandated local program.

This bill would impose prescribed recording and notice requirements on this 2nd owner-occupancy requirement, as provided. The bill would provide that, for the purposes of either owner-occupancy requirement, an applicant may be the managing or authorized member of a limited liability company or the trustee of a living trust. The bill would provide that an applicant for an urban lot split who is a managing or authorized member of a limited liability company who violates these provisions would be liable for civil penalties.

This bill would additionally prohibit a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertaking any course of conduct, that applies to a project solely or partially on the basis that the project is an urban lot split, including, but not limited to, restricting the eligibility of an applicant of an urban lot split.

Existing law requires that specified disclosures be made upon any transfer by sale, exchange, real property sales contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with improvements, of any single-family residential property.

This bill would require the seller of an urban lot split subject to the second owner-occupancy requirement described above to disclose, in writing, any owner-occupancy requirement for three years after the conveyance of an urban lot split unit.

Under the Planning and Zoning Law, the legislative body of a city or county may adopt ordinances that, among other things, regulate the use of buildings, structures, and land, as provided. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agencys processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps.

Existing law requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements. Existing law requires the local agency to require an applicant for an urban lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split. Existing law authorizes a local agency to adopt an ordinance to implement these provisions, as provided.

This bill would require the local agency to require an applicant to either sign the above-described affidavit requiring owner-occupancy or for the applicant to require, as a condition of sale to a homebuyer, that all one of the units on both parcels of an urban lot split remain owner occupied for 3 years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. By increasing the duties of local agencies, the bill would impose a state-mandated local program.

This bill would impose prescribed recording and notice requirements on this 2nd owner-occupancy requirement, as provided. The bill would provide that, for the purposes of either owner-occupancy requirement, an applicant may be the managing or authorized member of a limited liability company or the trustee of a living trust.

This bill would additionally prohibit a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertaking any course of conduct, that applies to a project solely or partially on the basis that the project is an urban lot split, including, but not limited to, restricting the eligibility of an applicant of an urban lot split.

Existing law requires that specified disclosures be made upon any transfer by sale, exchange, real property sales contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with improvements, of any single-family residential property.

This bill would require the seller of an urban lot split subject to the second owner-occupancy requirement described above to disclose, in writing, any owner-occupancy requirement for three years after the conveyance of an urban lot split unit.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Under the Planning and Zoning Law, the legislative body of a city or county may adopt ordinances that, among other things, regulate the use of buildings, structures, and land, as provided. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agencys processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps.

Existing law requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements. Existing law requires the local agency to require an applicant for an urban lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of 3 years from the date of the approval of the urban lot split. Existing law authorizes a local agency to adopt an ordinance to implement these provisions, as provided.

This bill would make a nonsubstantive change to that provision. require the local agency to require an applicant to either sign the above-described affidavit requiring owner-occupancy or for the applicant to require, as a condition of sale to a homebuyer, that all of the units on both parcels of an urban lot split remain owner occupied for 3 years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. By increasing the duties of local agencies, the bill would impose a state-mandated local program.

Under the Planning and Zoning Law, the legislative body of a city or county may adopt ordinances that, among other things, regulate the use of buildings, structures, and land, as provided. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of a local agency and sets forth procedures governing the local agencys processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps.

Existing law requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements.

This bill would make a nonsubstantive change to that provision.

 THIRD READING  

Bill No: AB 2005

Author: Ahrens (D), et al.

Amended: 8/28/26 in Senate

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 5-1, 6/10/26

AYES: Durazo, Arreguín, Ashby, Cervantes, Laird

NOES: Seyarto

NO VOTE RECORDED: Choi

SENATE HOUSING COMMITTEE: 6-2, 6/30/26

AYES: Arreguín, Cabaldon, Caballero, Cortese, Durazo, Padilla

NOES: Seyarto, Ochoa Bogh

NO VOTE RECORDED: Gonzalez, Grayson

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SENATE FLOOR: 18-11, 8/25/26

AYES: Allen, Arreguín, Ashby, Blakespear, Cabaldon, Caballero, Cervantes, Cortese, Dahle, Durazo, Laird, Limón, McGuire, McNerney, Padilla, Richardson, Weber Pierson, Wiener

NOES: Alvarado-Gil, Grayson, Grove, Jones, Menjivar, Niello, Ochoa Bogh, Seyarto, Strickland, Umberg, Valladares

NO VOTE RECORDED: Archuleta, Becker, Choi, Gonzalez, Hurtado, Pérez, Reyes, Rubio, Smallwood-Cuevas, Stern, Wahab

ASSEMBLY FLOOR: 66-1, 5/14/26 - See last page for vote

SUBJECT: Housing developments: urban lot split: owner-occupancy

SOURCE: Author

DIGEST:

This bill revises owner-occupancy requirements for an urban lot split under SB 9 (Atkins, Chapter 162, Statutes of 2021) until January 1, 2032.

Senate Floor Amendments of 8/28/26 delete requirements for a notice of owner-occupancy and a deed restriction requiring owner-occupancy on subsequent owners and instead require the buyer of a parcel or unit to provide to the applicant an affidavit or declaration that they will occupy the parcel for three years. The amendments also revise the entities that can be applicants for an urban lot split and delete the limitation on local agencies adding requirements solely or partially on the basis of the project being an urban lot split.

ANALYSIS:

Existing law:

1. Allows, under the California Constitution, cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.”
2. Requires, under SB 9, a city or county to ministerially approve either or both of the following, as specified:
   1. A housing development of no more than two units (duplex) in a single-family zone; or,
   2. The subdivision of a parcel zoned for residential use, into two approximately equal parcels (urban-lot split), as specified.
3. Authorizes a city or county to impose objective zoning, subdivision, and design review standards that do not conflict with state standards, except:
   1. A city or county shall not impose objective standards that would physically preclude the construction of up to two units or that would physically preclude either of the two units from being at least 800 square feet in floor area. A city or county may, however, require a setback of up to four feet from the side and rear lot lines; and,
   2. A city or county shall not require a setback for an existing structure or a structure constructed in the same location and to the same dimensions as the existing structure.
4. Requires a city or county to ministerially approve a parcel map for an urban-lot split only if the local agency determines that the parcel map for the urban-lot split meets specified requirements.
5. Provides that a local government shall not be required to permit more than two units on a parcel.
6. Requires an applicant for an urban-lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban-lot split.

This bill:

1. Adds the option for an applicant of an SB 9 urban-lot split to select a different owner occupancy requirement, which shall be imposed as a condition of approval of a parcel map for the lot split, as follows:
   1. The applicant signs an affidavit stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy within 3 years from the date of the approval of the urban lot split.
   2. The applicant requires that one of the units on each parcel of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed.
   3. If the applicant selects this option, a home buyer of a parcel or unit designated by the applicant to satisfy the owner-occupancy requirement must provide to the applicant an affidavit or declaration, under penalty of perjury, stating that the home buyer intends to occupy the parcel or unit as the home buyer’s primary residence for three years beginning on the date of the conveyance. A failure to comply with this requirement does not invalidate any transfer of title or affect the validity of the parcel.
   4. The local agency records a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split.
   5. The parcel or unit being purchased is subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period.
   6. The homebuyer records a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
2. Requires all applicants for SB 9 urban-lot splits to sign an affidavit, under penalty of perjury, stating that they intend to comply with the owner occupancy requirement.
3. Allows a natural person who is a trustee of a living trust of a natural person or a LLC of a natural person to be the applicant for an urban-lot split under SB 9.
4. Provides that an applicant that is an LLC that violates the SB 9 owner occupancy requirements shall be liable for civil penalties.
5. Excludes the boundaries of the 2025 Palisades or Eaton Fires in Los Angeles County from the bill.
6. Requires the seller of an urban-lot split under SB 9 to disclose, in writing, any owner occupancy requirement for three years after the conveyance of an urban-lot split if the seller is the managing or authorized member of a LLC or the trustee of a living trust.
7. Sunsets the provisions of SB 9 that are added by this bill on January 1, 2032.

Background

Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public—including land use authority.

Planning and Zoning Law. State law provides additional powers and duties for cities and counties regarding land use. The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area the plan covers. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans.

Subdivision Map Act. The Subdivision Map Act (or Map Act) governs how local officials regulate the division of real property into smaller parcels for sale, lease, or financing. Cities and counties adopt local subdivision ordinances to carry out the Map Act and local requirements. City councils and county boards of supervisors use the Map Act to control a subdivision's design and improvements. Local subdivision approvals must be consistent with city and county general plans.

Under the Subdivision Map Act, cities and counties can attach scores of conditions. The Map Act allows local officials to require, as a condition of approving a proposed subdivision, the dedication of property within a subdivision for streets, alleys, drainage, utility easements, and other public easements and improvements. Once subdividers comply with those conditions, local officials must issue final maps. For smaller subdivisions that create four or fewer parcels, local officials usually use parcel maps, but they can require tentative parcel maps followed by final parcel maps. The Map Act also constrains the dedications and improvements that local cities and counties can require as a condition of a subdivision of four or fewer lots to only the dedication of rights-of-way, easements, and the construction of reasonable offsite and onsite improvements for the parcels being created.

Senate Bill 9 (Atkins, 2021). SB 9 requires cities and counties to permit ministerially either or both of the following, as long as they meet specified conditions:

• A housing development of no more than two units (a duplex).
• The subdivision of a parcel into two approximately equal parcels (urban lot split).

To be eligible, a development or parcel to be subdivided must be located within an urbanized area or urban cluster, as defined by the United States Census and cannot be located on specified types of sites with certain environmental conditions.

SB 9 requires a city or county to permit a housing development containing no more than two units ministerially in single family zones if the development meets certain conditions, including the requirements on eligible parcels above. A development can include adding one unit to an existing unit, or constructing two new units. In combination, SB 9’s provisions allow up to four units to be built in areas where local zoning currently only allows one home.

Owner-occupancy requirements. Among other conditions, SB 9 requires that an applicant for an urban lot split submit a sworn affidavit to the city or county stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban lot split. It also prohibits a local agency from imposing other owner occupancy standards.

Because housing developers focus on selling properties to other owners after they complete construction, SB 9’s owner-occupancy requirement effectively prohibits anyone other than an owner-occupant from building the maximum of four units allowed by the law.

Recent reports on SB 9’s effectiveness. In July 2021, as SB 9 was proceeding through the legislative process, the Terner Center for Housing Innovation at UC Berkeley (Terner Center) completed an analysis that estimated it could make approximately 700,000 units financially feasible to construct. The report emphasized that this number represents a maximum potential number of units, and was not a forecast of the number of units that would be developed.

After one year of SB 9 implementation, the Terner Center evaluated SB 9’s effectiveness through another report. The report found that SB 9’s impact has been limited, and some larger cities have only seen a few, if any, applications for lot splits or new units. According to the report:

We found that SB 9 activity is limited or non-existent in these thirteen cities (Table 1). Los Angeles had the most overall activity, with 211 applications for new units under SB 9 in 2022. The state’s other large cities all reported very few applications for lot splits or new units. For example, the city of San Diego reported receiving just seven applications for new SB 9 units in 2022. To put these numbers into context, the city of San Diego permitted over 5,000 new homes in all of 2021 and Los Angeles permitted just under 20,000 new homes in 2021.

The report listed a variety of changes that could increase use of the law, including:

• Establishing more flexible standards for new home design—such as larger maximum home sizes and heights—and limiting extra costs—such as impact fees, particularly for single-family home to duplex conversions; and
• Revisiting the owner-occupancy requirement to encourage higher usage, while maintaining proper guardrails to protect against speculation by institutional investors and displacement in vulnerable communities.

In 2024, the Legislature amended SB 9 to address some of the early barriers to low utilization of the law through SB 450 (Atkins, Chapter 286, Statutes of 2024). SB 450 added a 60-day review period for SB 9 applications, removed the ability of local agencies to deny certain SB 9 projects, prohibited a local agency from imposing standards on SB 9 projects that do not apply to the underlying zoning district, gave the Department of Housing and Community Development (HCD) explicit enforcement authority over SB 9, and strengthened the statewide concern findings that applied SB 9 to charter cities. However, SB 450 did not modify the law’s owner-occupancy requirements.

Uptake in recent years has increased: HCD’s Annual Progress Report dashboard reports, as of June 2026, that 1,671 SB 9 projects have been submitted statewide, with 862 projects submitted in the City of Los Angeles alone. The author wants to further encourage the use of SB 9 to build additional units.

Comments

Purpose of the bill. According to the author, “California’s housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

“However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

“In my district, I still need to rent because the average price of a first-time home exceeds $ 1 million. AB 2005 can help create greater equity in homeownership, removing barriers that unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market.”

There’s gold in them thar hills. The urban lot split provisions of SB 9 attempt to strike a balance between encouraging widespread, but less visible, densification of single-family zones and the desire to keep community ties intact. It allows homeowners to build generational wealth by splitting off a portion of their lot to be used to develop new housing, while keeping them in their home and the community they have connections to. SB 9’s current owner-occupancy requirement allows urban lot splits in these circumstances, but prevents developers, who may have more expertise and capacity to build new units but do not occupy the units they build, from maximizing the number of units built through SB 9. AB 2005 revises the owner-occupancy requirement to allow sale of units developed using an urban lot split to future homeowners who occupy the property. This could enable more SB 9 units to be built, which are smaller and therefore may sell for cheaper than the currently available homes. Opponents of the measure are concerned that this could lead to displacement of vulnerable residents if investors see a profitable opportunity and flip less-expensive housing into more expensive new homes that are unaffordable to existing community members.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 8/30/26)

Abundant Housing Los Angeles
Bay Area Council
California Apartment Association

California Yimby
Casita Coalition
Circulate Planning & Policy
East Bay for Everyone
East Bay Yimby
Equitable Land Use Alliance (ELUA)
Families and Homes San Jose
Fieldstead and Company, INC.
Grow the Richmond
Housing Action Coalition
Mountain View Yimby
Napa-solano for Everyone
New California Coalition
Northern Neighbors Sf
Peninsula for Everyone
San Francisco Yimby
San Jose Yimby
San Mateo Forward
Santa Cruz Yimby
Santa Rosa Yimby
South Bay Yimby
Spur
Student Homes Coalition
Sv@home Action Fund
The Two Hundred for Homeownership
Ventura County Yimby
Yes! in Redwood City
Yimby Action
Yimby Los Angeles
Yimby Monterey Peninsula
Yimby Slo

OPPOSITION: (Verified 8/30/26)

California Association of Realtors

Sustainable Community Development Corporation

United Neighbors

ASSEMBLY FLOOR: 66-1, 5/14/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bennett, Berman, Bonta, Bryan, Calderon, Caloza, Carrillo, Chen, Connolly, Davies, Dixon, Elhawary, Ellis, Fong, Gabriel, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NOES: DeMaio

NO VOTE RECORDED: Arambula, Bauer-Kahan, Boerner, Castillo, Flora, Gallagher, Johnson, Macedo, Muratsuchi, Patel, Celeste Rodriguez, Sanchez, Schiavo

Prepared by: Anton Favorini-Csorba / L. GOV. / (916) 651-4119

8/30/26 15:44:38

**** END ****

 THIRD READING  

Bill No: AB 2005

Author: Ahrens (D), et al.

Amended: 8/19/26 in Senate

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 5-1, 6/10/26

AYES: Durazo, Arreguín, Ashby, Cervantes, Laird

NOES: Seyarto

NO VOTE RECORDED: Choi

SENATE HOUSING COMMITTEE: 6-2, 6/30/26

AYES: Arreguín, Cabaldon, Caballero, Cortese, Durazo, Padilla

NOES: Seyarto, Ochoa Bogh

NO VOTE RECORDED: Gonzalez, Grayson

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 66-1, 5/14/26 - See last page for vote

SUBJECT: Housing developments: urban lot split: owner-occupancy

SOURCE: Author

DIGEST:

This bill revises owner-occupancy requirements for an urban lot split under SB 9 (Atkins, Chapter 162, Statutes of 2021) until January 1, 2032.

Senate Floor Amendments of 8/19/26 address chaptering conflicts with AB 2601 (Lee).

ANALYSIS:

Existing law:

1. Allows, under the California Constitution, cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.”
2. Requires, under SB 9, a city or county to ministerially approve either or both of the following, as specified:
   1. A housing development of no more than two units (duplex) in a single-family zone; or,
   2. The subdivision of a parcel zoned for residential use, into two approximately equal parcels (urban-lot split), as specified.
3. Authorizes a city or county to impose objective zoning, subdivision, and design review standards that do not conflict with state standards, except:
   1. A city or county shall not impose objective standards that would physically preclude the construction of up to two units or that would physically preclude either of the two units from being at least 800 square feet in floor area. A city or county may, however, require a setback of up to four feet from the side and rear lot lines; and,
   2. A city or county shall not require a setback for an existing structure or a structure constructed in the same location and to the same dimensions as the existing structure.
4. Requires a city or county to ministerially approve a parcel map for an urban-lot split only if the local agency determines that the parcel map for the urban-lot split meets specified requirements.
5. Provides that a local government shall not be required to permit more than two units on a parcel.
6. Requires an applicant for an urban-lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban-lot split.

This bill:

1. Adds the option for an applicant of an SB 9 urban-lot split to select a different owner occupancy requirement, which shall be imposed as a condition of approval of a parcel map for the lot split, as follows:
   1. The applicant signs an affidavit stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy within 3 years from the date of the approval of the urban lot split.
   2. The applicant requires, as a condition of sale to the homebuyer, that one of the units on each parcel of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed.
   3. The local agency records a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split.
   4. The parcel or unit being purchased is subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period.
   5. The homebuyer records a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
2. Requires all applicants for SB 9 urban-lot splits to sign an affidavit, under penalty of perjury, stating that they intend to comply with the owner occupancy requirement.
3. Allows a natural person who is the managing or authorized member of a limited liability company (LLC) or the trustee or beneficiary of a living trust to be the applicant for an urban-lot split under SB 9.
4. Provides that an applicant for an urban-lot split who is the managing or authorized member of an LLC who violates the SB 9 owner occupancy requirements shall be liable for civil penalties.
5. Excludes the boundaries of the 2025 Palisades or Eaton Fires in Los Angeles County from the bill.
6. Prohibits a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis of the project being an SB 9 lot split, including, but not limited to, restricting the eligibility of an applicant for an urban-lot split.
7. Requires the seller of an urban-lot split under SB 9 to disclose, in writing, any owner occupancy requirement for three years after the conveyance of an urban-lot split if the seller is the managing or authorized member of a LLC or the trustee of a living trust.
8. Sunsets the provisions of SB 9 that are added by this bill on January 1, 2032.

Background

Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public—including land use authority.

Planning and Zoning Law. State law provides additional powers and duties for cities and counties regarding land use. The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area the plan covers. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans.

Subdivision Map Act. The Subdivision Map Act (or Map Act) governs how local officials regulate the division of real property into smaller parcels for sale, lease, or financing. Cities and counties adopt local subdivision ordinances to carry out the Map Act and local requirements. City councils and county boards of supervisors use the Map Act to control a subdivision's design and improvements. Local subdivision approvals must be consistent with city and county general plans.

Under the Subdivision Map Act, cities and counties can attach scores of conditions. The Map Act allows local officials to require, as a condition of approving a proposed subdivision, the dedication of property within a subdivision for streets, alleys, drainage, utility easements, and other public easements and improvements. Once subdividers comply with those conditions, local officials must issue final maps. For smaller subdivisions that create four or fewer parcels, local officials usually use parcel maps, but they can require tentative parcel maps followed by final parcel maps. The Map Act also constrains the dedications and improvements that local cities and counties can require as a condition of a subdivision of four or fewer lots to only the dedication of rights-of-way, easements, and the construction of reasonable offsite and onsite improvements for the parcels being created.

Senate Bill 9 (Atkins, 2021). SB 9 requires cities and counties to permit ministerially either or both of the following, as long as they meet specified conditions:

• A housing development of no more than two units (a duplex).
• The subdivision of a parcel into two approximately equal parcels (urban lot split).

To be eligible, a development or parcel to be subdivided must be located within an urbanized area or urban cluster, as defined by the United States Census and cannot be located on specified types of sites with certain environmental conditions.

SB 9 requires a city or county to permit a housing development containing no more than two units ministerially in single family zones if the development meets certain conditions, including the requirements on eligible parcels above. A development can include adding one unit to an existing unit, or constructing two new units. In combination, SB 9’s provisions allow up to four units to be built in areas where local zoning currently only allows one home.

Owner-occupancy requirements. Among other conditions, SB 9 requires that an applicant for an urban lot split submit a sworn affidavit to the city or county stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban lot split. It also prohibits a local agency from imposing other owner occupancy standards.

Because housing developers focus on selling properties to other owners after they complete construction, SB 9’s owner-occupancy requirement effectively prohibits anyone other than an owner-occupant from building the maximum of four units allowed by the law.

Recent reports on SB 9’s effectiveness. In July 2021, as SB 9 was proceeding through the legislative process, the Terner Center for Housing Innovation at UC Berkeley (Terner Center) completed an analysis that estimated it could make approximately 700,000 units financially feasible to construct. The report emphasized that this number represents a maximum potential number of units, and was not a forecast of the number of units that would be developed.

After one year of SB 9 implementation, the Terner Center evaluated SB 9’s effectiveness through another report. The report found that SB 9’s impact has been limited, and some larger cities have only seen a few, if any, applications for lot splits or new units. According to the report:

We found that SB 9 activity is limited or non-existent in these thirteen cities (Table 1). Los Angeles had the most overall activity, with 211 applications for new units under SB 9 in 2022. The state’s other large cities all reported very few applications for lot splits or new units. For example, the city of San Diego reported receiving just seven applications for new SB 9 units in 2022. To put these numbers into context, the city of San Diego permitted over 5,000 new homes in all of 2021 and Los Angeles permitted just under 20,000 new homes in 2021.

The report listed a variety of changes that could increase use of the law, including:

• Establishing more flexible standards for new home design—such as larger maximum home sizes and heights—and limiting extra costs—such as impact fees, particularly for single-family home to duplex conversions; and
• Revisiting the owner-occupancy requirement to encourage higher usage, while maintaining proper guardrails to protect against speculation by institutional investors and displacement in vulnerable communities.

In 2024, the Legislature amended SB 9 to address some of the early barriers to low utilization of the law through SB 450 (Atkins, Chapter 286, Statutes of 2024). SB 450 added a 60-day review period for SB 9 applications, removed the ability of local agencies to deny certain SB 9 projects, prohibited a local agency from imposing standards on SB 9 projects that do not apply to the underlying zoning district, gave the Department of Housing and Community Development (HCD) explicit enforcement authority over SB 9, and strengthened the statewide concern findings that applied SB 9 to charter cities. However, SB 450 did not modify the law’s owner-occupancy requirements.

Uptake in recent years has increased: HCD’s Annual Progress Report dashboard reports, as of June 2026, that 1,671 SB 9 projects have been submitted statewide, with 862 projects submitted in the City of Los Angeles alone. The author wants to further encourage the use of SB 9 to build additional units.

Comments

1. Purpose of the bill. According to the author, “California’s housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

“However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

“In my district, I still need to rent because the average price of a first-time home exceeds $ 1 million. AB 2005 can help create greater equity in homeownership, removing barriers that unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market.”

1. There’s gold in them thar hills. The urban lot split provisions of SB 9 attempt to strike a balance between encouraging widespread, but less visible, densification of single-family zones and the desire to keep community ties intact. It allows homeowners to build generational wealth by splitting off a portion of their lot to be used to develop new housing, while keeping them in their home and the community they have connections to. SB 9’s current owner-occupancy requirement allows urban lot splits in these circumstances, but prevents developers, who may have more expertise and capacity to build new units but do not occupy the units they build, from maximizing the number of units built through SB 9. AB 2005 revises the owner-occupancy requirement to allow sale of units developed using an urban lot split to future homeowners who occupy the property. This could enable more SB 9 units to be built, which are smaller and therefore may sell for cheaper than the currently available homes. Opponents of the measure are concerned that this could lead to displacement of vulnerable residents if investors see a profitable opportunity and flip less-expensive housing into more expensive new homes that are unaffordable to existing community members.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 8/20/26)

Abundant Housing Los Angeles
Bay Area Council
California Apartment Association

California Yimby
Casita Coalition
Circulate Planning & Policy
East Bay for Everyone
East Bay Yimby
Equitable Land Use Alliance (ELUA)
Families and Homes San Jose
Fieldstead and Company, INC.
Grow the Richmond
Housing Action Coalition
Mountain View Yimby
Napa-solano for Everyone
New California Coalition
Northern Neighbors Sf
Peninsula for Everyone
San Francisco Yimby
San Jose Yimby
San Mateo Forward
Santa Cruz Yimby
Santa Rosa Yimby
South Bay Yimby
Spur
Student Homes Coalition
Sv@home Action Fund
The Two Hundred for Homeownership
Ventura County Yimby
Yes! in Redwood City
Yimby Action
Yimby Los Angeles
Yimby Monterey Peninsula
Yimby Slo

OPPOSITION: (Verified 8/20/26)

California Association of Realtors

California Bankers Association

California Escrow Association

California Land and Title Association

California’s Credit Unions

Sustainable Community Development Corporation

United Neighbors

ASSEMBLY FLOOR: 66-1, 5/14/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bennett, Berman, Bonta, Bryan, Calderon, Caloza, Carrillo, Chen, Connolly, Davies, Dixon, Elhawary, Ellis, Fong, Gabriel, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NOES: DeMaio

NO VOTE RECORDED: Arambula, Bauer-Kahan, Boerner, Castillo, Flora, Gallagher, Johnson, Macedo, Muratsuchi, Patel, Celeste Rodriguez, Sanchez, Schiavo

Prepared by: Anton Favorini-Csorba / L. GOV. / (916) 651-4119

8/20/26 14:28:40

**** END ****

 THIRD READING  

Bill No: AB 2005

Author: Ahrens (D), et al.

Amended: 8/11/26 in Senate

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 5-1, 6/10/26

AYES: Durazo, Arreguín, Ashby, Cervantes, Laird

NOES: Seyarto

NO VOTE RECORDED: Choi

SENATE HOUSING COMMITTEE: 6-2, 6/30/26

AYES: Arreguín, Cabaldon, Caballero, Cortese, Durazo, Padilla

NOES: Seyarto, Ochoa Bogh

NO VOTE RECORDED: Gonzalez, Grayson

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 66-1, 5/14/26 - See last page for vote

SUBJECT: Housing developments: urban lot split: owner-occupancy

SOURCE: Author

DIGEST:

This bill revises owner-occupancy requirements for an urban lot split under SB 9 (Atkins, Chapter 162, Statutes of 2021) until January 1, 2032.

Senate Floor Amendments of 8/11/26 require the applicant using the authority granted by the bill to require the sale within three years of the approval of the lot split, and make other minor changes.

ANALYSIS:

Existing law:

1. Allows, under the California Constitution, cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.”
2. Requires, under SB 9, a city or county to ministerially approve either or both of the following, as specified:
   1. A housing development of no more than two units (duplex) in a single-family zone; or,
   2. The subdivision of a parcel zoned for residential use, into two approximately equal parcels (urban-lot split), as specified.
3. Authorizes a city or county to impose objective zoning, subdivision, and design review standards that do not conflict with state standards, except:
   1. A city or county shall not impose objective standards that would physically preclude the construction of up to two units or that would physically preclude either of the two units from being at least 800 square feet in floor area. A city or county may, however, require a setback of up to four feet from the side and rear lot lines; and,
   2. A city or county shall not require a setback for an existing structure or a structure constructed in the same location and to the same dimensions as the existing structure.
4. Requires a city or county to ministerially approve a parcel map for an urban-lot split only if the local agency determines that the parcel map for the urban-lot split meets specified requirements.
5. Provides that a local government shall not be required to permit more than two units on a parcel.
6. Requires an applicant for an urban-lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban-lot split.

This bill:

1. Adds the option for an applicant of an SB 9 urban-lot split to select a different owner occupancy requirement, which shall be imposed as a condition of approval of a parcel map for the lot split, as follows:
   1. The applicant signs an affidavit stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy within 3 years from the date of the approval of the urban lot split.
   2. The applicant requires, as a condition of sale to the homebuyer, that one of the units on each parcel of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed.
   3. The local agency records a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split.
   4. The parcel or unit being purchased is subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period.
   5. The homebuyer records a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
2. Requires all applicants for SB 9 urban-lot splits to sign an affidavit, under penalty of perjury, stating that they intend to comply with the owner occupancy requirement.
3. Allows a natural person who is the managing or authorized member of a limited liability company (LLC) or the trustee or beneficiary of a living trust to be the applicant for an urban-lot split under SB 9.
4. Provides that an applicant for an urban-lot split who is the managing or authorized member of an LLC who violates the SB 9 owner occupancy requirements shall be liable for civil penalties.
5. Excludes the boundaries of the 2025 Palisades or Eaton Fires in Los Angeles County from the bill.
6. Prohibits a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis of the project being an SB 9 lot split, including, but not limited to, restricting the eligibility of an applicant for an urban-lot split.
7. Requires the seller of an urban-lot split under SB 9 to disclose, in writing, any owner occupancy requirement for three years after the conveyance of an urban-lot split if the seller is the managing or authorized member of a LLC or the trustee of a living trust.
8. Sunsets the provisions of SB 9 that are added by this bill on January 1, 2032.

Background

Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public—including land use authority.

Planning and Zoning Law. State law provides additional powers and duties for cities and counties regarding land use. The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area the plan covers. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans.

Subdivision Map Act. The Subdivision Map Act (or Map Act) governs how local officials regulate the division of real property into smaller parcels for sale, lease, or financing. Cities and counties adopt local subdivision ordinances to carry out the Map Act and local requirements. City councils and county boards of supervisors use the Map Act to control a subdivision's design and improvements. Local subdivision approvals must be consistent with city and county general plans.

Under the Subdivision Map Act, cities and counties can attach scores of conditions. The Map Act allows local officials to require, as a condition of approving a proposed subdivision, the dedication of property within a subdivision for streets, alleys, drainage, utility easements, and other public easements and improvements. Once subdividers comply with those conditions, local officials must issue final maps. For smaller subdivisions that create four or fewer parcels, local officials usually use parcel maps, but they can require tentative parcel maps followed by final parcel maps. The Map Act also constrains the dedications and improvements that local cities and counties can require as a condition of a subdivision of four or fewer lots to only the dedication of rights-of-way, easements, and the construction of reasonable offsite and onsite improvements for the parcels being created.

Senate Bill 9 (Atkins, 2021). SB 9 requires cities and counties to permit ministerially either or both of the following, as long as they meet specified conditions:

• A housing development of no more than two units (a duplex).
• The subdivision of a parcel into two approximately equal parcels (urban lot split).

To be eligible, a development or parcel to be subdivided must be located within an urbanized area or urban cluster, as defined by the United States Census and cannot be located on specified types of sites with certain environmental conditions.

SB 9 requires a city or county to permit a housing development containing no more than two units ministerially in single family zones if the development meets certain conditions, including the requirements on eligible parcels above. A development can include adding one unit to an existing unit, or constructing two new units. In combination, SB 9’s provisions allow up to four units to be built in areas where local zoning currently only allows one home.

Owner-occupancy requirements. Among other conditions, SB 9 requires that an applicant for an urban lot split submit a sworn affidavit to the city or county stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban lot split. It also prohibits a local agency from imposing other owner occupancy standards.

Because housing developers focus on selling properties to other owners after they complete construction, SB 9’s owner-occupancy requirement effectively prohibits anyone other than an owner-occupant from building the maximum of four units allowed by the law.

Recent reports on SB 9’s effectiveness. In July 2021, as SB 9 was proceeding through the legislative process, the Terner Center for Housing Innovation at UC Berkeley (Terner Center) completed an analysis that estimated it could make approximately 700,000 units financially feasible to construct. The report emphasized that this number represents a maximum potential number of units, and was not a forecast of the number of units that would be developed.

After one year of SB 9 implementation, the Terner Center evaluated SB 9’s effectiveness through another report. The report found that SB 9’s impact has been limited, and some larger cities have only seen a few, if any, applications for lot splits or new units. According to the report:

We found that SB 9 activity is limited or non-existent in these thirteen cities (Table 1). Los Angeles had the most overall activity, with 211 applications for new units under SB 9 in 2022. The state’s other large cities all reported very few applications for lot splits or new units. For example, the city of San Diego reported receiving just seven applications for new SB 9 units in 2022. To put these numbers into context, the city of San Diego permitted over 5,000 new homes in all of 2021 and Los Angeles permitted just under 20,000 new homes in 2021.

The report listed a variety of changes that could increase use of the law, including:

• Establishing more flexible standards for new home design—such as larger maximum home sizes and heights—and limiting extra costs—such as impact fees, particularly for single-family home to duplex conversions; and
• Revisiting the owner-occupancy requirement to encourage higher usage, while maintaining proper guardrails to protect against speculation by institutional investors and displacement in vulnerable communities.

In 2024, the Legislature amended SB 9 to address some of the early barriers to low utilization of the law through SB 450 (Atkins, Chapter 286, Statutes of 2024). SB 450 added a 60-day review period for SB 9 applications, removed the ability of local agencies to deny certain SB 9 projects, prohibited a local agency from imposing standards on SB 9 projects that do not apply to the underlying zoning district, gave the Department of Housing and Community Development (HCD) explicit enforcement authority over SB 9, and strengthened the statewide concern findings that applied SB 9 to charter cities. However, SB 450 did not modify the law’s owner-occupancy requirements.

Uptake in recent years has increased: HCD’s Annual Progress Report dashboard reports, as of June 2026, that 1,671 SB 9 projects have been submitted statewide, with 862 projects submitted in the City of Los Angeles alone. The author wants to further encourage the use of SB 9 to build additional units.

Comments

1. Purpose of the bill. According to the author, “California’s housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

“However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

“In my district, I still need to rent because the average price of a first-time home exceeds $ 1 million. AB 2005 can help create greater equity in homeownership, removing barriers that unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market.”

1. There’s gold in them thar hills. The urban lot split provisions of SB 9 attempt to strike a balance between encouraging widespread, but less visible, densification of single-family zones and the desire to keep community ties intact. It allows homeowners to build generational wealth by splitting off a portion of their lot to be used to develop new housing, while keeping them in their home and the community they have connections to. SB 9’s current owner-occupancy requirement allows urban lot splits in these circumstances, but prevents developers, who may have more expertise and capacity to build new units but do not occupy the units they build, from maximizing the number of units built through SB 9. AB 2005 revises the owner-occupancy requirement to allow sale of units developed using an urban lot split to future homeowners who occupy the property. This could enable more SB 9 units to be built, which are smaller and therefore may sell for cheaper than the currently available homes. Opponents of the measure are concerned that this could lead to displacement of vulnerable residents if investors see a profitable opportunity and flip less-expensive housing into more expensive new homes that are unaffordable to existing community members.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 8/19/26)

Abundant Housing Los Angeles
Bay Area Council
California Apartment Association

California Yimby
Casita Coalition
Circulate Planning & Policy
East Bay for Everyone
East Bay Yimby
Equitable Land Use Alliance (ELUA)
Families and Homes San Jose
Fieldstead and Company, INC.
Grow the Richmond
Housing Action Coalition
Mountain View Yimby
Napa-solano for Everyone
New California Coalition
Northern Neighbors Sf
Peninsula for Everyone
San Francisco Yimby
San Jose Yimby
San Mateo Forward
Santa Cruz Yimby
Santa Rosa Yimby
South Bay Yimby
Spur
Student Homes Coalition
Sv@home Action Fund
The Two Hundred for Homeownership
Ventura County Yimby
Yes! in Redwood City
Yimby Action
Yimby Los Angeles
Yimby Monterey Peninsula
Yimby Slo

OPPOSITION: (Verified 8/19/26)

California Association of Realtors

California Bankers Association

California Escrow Association

California Land and Title Association

California’s Credit Unions

Sustainable Community Development Corporation
United Neighbors

ASSEMBLY FLOOR: 66-1, 5/14/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bennett, Berman, Bonta, Bryan, Calderon, Caloza, Carrillo, Chen, Connolly, Davies, Dixon, Elhawary, Ellis, Fong, Gabriel, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NOES: DeMaio

NO VOTE RECORDED: Arambula, Bauer-Kahan, Boerner, Castillo, Flora, Gallagher, Johnson, Macedo, Muratsuchi, Patel, Celeste Rodriguez, Sanchez, Schiavo

Prepared by: Anton Favorini-Csorba / L. GOV. / (916) 651-4119

8/19/26 11:21:38

**** END ****

 THIRD READING  

Bill No: AB 2005

Author: Ahrens (D), et al.

Amended: 8/11/26 in Senate

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 5-1, 6/10/26

AYES: Durazo, Arreguín, Ashby, Cervantes, Laird

NOES: Seyarto

NO VOTE RECORDED: Choi

SENATE HOUSING COMMITTEE: 6-2, 6/30/26

AYES: Arreguín, Cabaldon, Caballero, Cortese, Durazo, Padilla

NOES: Seyarto, Ochoa Bogh

NO VOTE RECORDED: Gonzalez, Grayson

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 66-1, 5/14/26 - See last page for vote

SUBJECT: Housing developments: urban lot split: owner-occupancy

SOURCE: Author

DIGEST:

This bill revises owner-occupancy requirements for an urban lot split under SB 9 (Atkins, Chapter 162, Statutes of 2021) until January 1, 2032.

Senate Floor Amendments of 8/11/26 require the applicant using the authority granted by the bill to require the sale within three years of the approval of the lot split, and make other minor changes.

ANALYSIS:

Existing law:

1. Allows, under the California Constitution, cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.”
2. Requires, under SB 9, a city or county to ministerially approve either or both of the following, as specified:
   1. A housing development of no more than two units (duplex) in a single-family zone; or,
   2. The subdivision of a parcel zoned for residential use, into two approximately equal parcels (urban-lot split), as specified.
3. Authorizes a city or county to impose objective zoning, subdivision, and design review standards that do not conflict with state standards, except:
   1. A city or county shall not impose objective standards that would physically preclude the construction of up to two units or that would physically preclude either of the two units from being at least 800 square feet in floor area. A city or county may, however, require a setback of up to four feet from the side and rear lot lines; and,
   2. A city or county shall not require a setback for an existing structure or a structure constructed in the same location and to the same dimensions as the existing structure.
4. Requires a city or county to ministerially approve a parcel map for an urban-lot split only if the local agency determines that the parcel map for the urban-lot split meets specified requirements.
5. Provides that a local government shall not be required to permit more than two units on a parcel.
6. Requires an applicant for an urban-lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban-lot split.

This bill:

1. Adds the option for an applicant of an SB 9 urban-lot split to select a different owner occupancy requirement, which shall be imposed as a condition of approval of a parcel map for the lot split, as follows:
   1. The applicant signs an affidavit stating they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy within 3 years from the date of the approval of the urban lot split.
   2. The applicant requires, as a condition of sale to the homebuyer, that one of the units on each parcel of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed.
   3. The local agency records a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split.
   4. The parcel or unit being purchased is subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period.
   5. The homebuyer records a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
2. Requires all applicants for SB 9 urban-lot splits to sign an affidavit, under penalty of perjury, stating that they intend to comply with the owner occupancy requirement.
3. Allows a natural person who is the managing or authorized member of a limited liability company (LLC) or the trustee or beneficiary of a living trust to be the applicant for an urban-lot split under SB 9.
4. Provides that an applicant for an urban-lot split who is the managing or authorized member of an LLC who violates the SB 9 owner occupancy requirements shall be liable for civil penalties.
5. Excludes the boundaries of the 2025 Palisades or Eaton Fires in Los Angeles County from the bill.
6. Prohibits a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis of the project being an SB 9 lot split, including, but not limited to, restricting the eligibility of an applicant for an urban-lot split.
7. Requires the seller of an urban-lot split under SB 9 to disclose, in writing, any owner occupancy requirement for three years after the conveyance of an urban-lot split if the seller is the managing or authorized member of a LLC or the trustee of a living trust.
8. Sunsets the provisions of SB 9 that are added by this bill on January 1, 2032.

Background

Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public—including land use authority.

Planning and Zoning Law. State law provides additional powers and duties for cities and counties regarding land use. The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area the plan covers. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans.

Subdivision Map Act. The Subdivision Map Act (or Map Act) governs how local officials regulate the division of real property into smaller parcels for sale, lease, or financing. Cities and counties adopt local subdivision ordinances to carry out the Map Act and local requirements. City councils and county boards of supervisors use the Map Act to control a subdivision's design and improvements. Local subdivision approvals must be consistent with city and county general plans.

Under the Subdivision Map Act, cities and counties can attach scores of conditions. The Map Act allows local officials to require, as a condition of approving a proposed subdivision, the dedication of property within a subdivision for streets, alleys, drainage, utility easements, and other public easements and improvements. Once subdividers comply with those conditions, local officials must issue final maps. For smaller subdivisions that create four or fewer parcels, local officials usually use parcel maps, but they can require tentative parcel maps followed by final parcel maps. The Map Act also constrains the dedications and improvements that local cities and counties can require as a condition of a subdivision of four or fewer lots to only the dedication of rights-of-way, easements, and the construction of reasonable offsite and onsite improvements for the parcels being created.

Senate Bill 9 (Atkins, 2021). SB 9 requires cities and counties to permit ministerially either or both of the following, as long as they meet specified conditions:

• A housing development of no more than two units (a duplex).
• The subdivision of a parcel into two approximately equal parcels (urban lot split).

To be eligible, a development or parcel to be subdivided must be located within an urbanized area or urban cluster, as defined by the United States Census and cannot be located on specified types of sites with certain environmental conditions.

SB 9 requires a city or county to permit a housing development containing no more than two units ministerially in single family zones if the development meets certain conditions, including the requirements on eligible parcels above. A development can include adding one unit to an existing unit, or constructing two new units. In combination, SB 9’s provisions allow up to four units to be built in areas where local zoning currently only allows one home.

Owner-occupancy requirements. Among other conditions, SB 9 requires that an applicant for an urban lot split submit a sworn affidavit to the city or county stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban lot split. It also prohibits a local agency from imposing other owner occupancy standards.

Because housing developers focus on selling properties to other owners after they complete construction, SB 9’s owner-occupancy requirement effectively prohibits anyone other than an owner-occupant from building the maximum of four units allowed by the law.

Recent reports on SB 9’s effectiveness. In July 2021, as SB 9 was proceeding through the legislative process, the Terner Center for Housing Innovation at UC Berkeley (Terner Center) completed an analysis that estimated it could make approximately 700,000 units financially feasible to construct. The report emphasized that this number represents a maximum potential number of units, and was not a forecast of the number of units that would be developed.

After one year of SB 9 implementation, the Terner Center evaluated SB 9’s effectiveness through another report. The report found that SB 9’s impact has been limited, and some larger cities have only seen a few, if any, applications for lot splits or new units. According to the report:

We found that SB 9 activity is limited or non-existent in these thirteen cities (Table 1). Los Angeles had the most overall activity, with 211 applications for new units under SB 9 in 2022. The state’s other large cities all reported very few applications for lot splits or new units. For example, the city of San Diego reported receiving just seven applications for new SB 9 units in 2022. To put these numbers into context, the city of San Diego permitted over 5,000 new homes in all of 2021 and Los Angeles permitted just under 20,000 new homes in 2021.

The report listed a variety of changes that could increase use of the law, including:

• Establishing more flexible standards for new home design—such as larger maximum home sizes and heights—and limiting extra costs—such as impact fees, particularly for single-family home to duplex conversions; and
• Revisiting the owner-occupancy requirement to encourage higher usage, while maintaining proper guardrails to protect against speculation by institutional investors and displacement in vulnerable communities.

In 2024, the Legislature amended SB 9 to address some of the early barriers to low utilization of the law through SB 450 (Atkins, Chapter 286, Statutes of 2024). SB 450 added a 60-day review period for SB 9 applications, removed the ability of local agencies to deny certain SB 9 projects, prohibited a local agency from imposing standards on SB 9 projects that do not apply to the underlying zoning district, gave the Department of Housing and Community Development (HCD) explicit enforcement authority over SB 9, and strengthened the statewide concern findings that applied SB 9 to charter cities. However, SB 450 did not modify the law’s owner-occupancy requirements.

Uptake in recent years has increased: HCD’s Annual Progress Report dashboard reports, as of June 2026, that 1,671 SB 9 projects have been submitted statewide, with 862 projects submitted in the City of Los Angeles alone. The author wants to further encourage the use of SB 9 to build additional units.

Comments

1. Purpose of the bill. According to the author, “California’s housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

“However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

“In my district, I still need to rent because the average price of a first-time home exceeds $ 1 million. AB 2005 can help create greater equity in homeownership, removing barriers that unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market.”

1. There’s gold in them thar hills. The urban lot split provisions of SB 9 attempt to strike a balance between encouraging widespread, but less visible, densification of single-family zones and the desire to keep community ties intact. It allows homeowners to build generational wealth by splitting off a portion of their lot to be used to develop new housing, while keeping them in their home and the community they have connections to. SB 9’s current owner-occupancy requirement allows urban lot splits in these circumstances, but prevents developers, who may have more expertise and capacity to build new units but do not occupy the units they build, from maximizing the number of units built through SB 9. AB 2005 revises the owner-occupancy requirement to allow sale of units developed using an urban lot split to future homeowners who occupy the property. This could enable more SB 9 units to be built, which are smaller and therefore may sell for cheaper than the currently available homes. Opponents of the measure are concerned that this could lead to displacement of vulnerable residents if investors see a profitable opportunity and flip less-expensive housing into more expensive new homes that are unaffordable to existing community members.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 8/12/26)

Abundant Housing Los Angeles
Bay Area Council
California Yimby
Casita Coalition
Circulate Planning & Policy
East Bay for Everyone
East Bay Yimby
Equitable Land Use Alliance (ELUA)
Families and Homes San Jose
Fieldstead and Company, INC.
Grow the Richmond
Housing Action Coalition
Mountain View Yimby
Napa-solano for Everyone
New California Coalition
Northern Neighbors Sf
Peninsula for Everyone
San Francisco Yimby
San Jose Yimby
San Mateo Forward
Santa Cruz Yimby
Santa Rosa Yimby
South Bay Yimby
Spur
Student Homes Coalition
Sv@home Action Fund
The Two Hundred for Homeownership
Ventura County Yimby
Yes! in Redwood City
Yimby Action
Yimby Los Angeles
Yimby Monterey Peninsula
Yimby Slo

OPPOSITION: (Verified 8/12/26)

California Association of Realtors
Sustainable Community Development Corporation
United Neighbors

ASSEMBLY FLOOR: 66-1, 5/14/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bennett, Berman, Bonta, Bryan, Calderon, Caloza, Carrillo, Chen, Connolly, Davies, Dixon, Elhawary, Ellis, Fong, Gabriel, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NOES: DeMaio

NO VOTE RECORDED: Arambula, Bauer-Kahan, Boerner, Castillo, Flora, Gallagher, Johnson, Macedo, Muratsuchi, Patel, Celeste Rodriguez, Sanchez, Schiavo

Prepared by: Anton Favorini-Csorba / L. GOV. / (916) 651-4119

8/12/26 16:18:54

**** END ****

SENATE COMMITTEE ON HOUSING

Senator Jesse Arreguín, Chair

2025 - 2026 Regular

Bill No: AB 2005 Hearing Date: 6/30/2026

SUBJECT: Housing developments: urban lot split: owner-occupancy

DIGEST: This bill creates an alternative compliance pathway for the owner-occupancy requirement of SB 9 (Atkins, Chapter 162, Statutes of 2021).

ANALYSIS:

Existing law, pursuant to SB 9 (Atkins):

1. Requires a city or county to ministerially approve either or both of the following, as specified:
   
   1. A housing development of no more than two units (duplex) in a single-family zone; or,
   2. The subdivision of a parcel zoned for residential use, into two approximately equal parcels (urban-lot split), as specified.
2. Authorizes a city or county to impose objective zoning, subdivision, and design review standards that do not conflict with state standards, except:
   
   1. A city or county shall not impose objective standards that would physically preclude the construction of up to two units or that would physically preclude either of the two units from being at least 800 square feet in floor area. A city or county may, however, require a setback of up to four feet from the side and rear lot lines; and,
   2. A city or county shall not require a setback for an existing structure or a structure constructed in the same location and to the same dimensions as the existing structure.
3. Prohibits a city or county from requiring more than one parking space per unit for either a proposed duplex or a proposed lot split. Prohibits a city or county from imposing any parking requirements if the parcel is located within one-half mile walking distance of either a high-quality transit corridor or a major transit stop, or if there is a car share vehicle located within one block of the parcel.
4. Authorizes a local agency to deny a housing project otherwise authorized by SB 9 if the building official makes a written finding based upon the preponderance of the evidence that the housing development project would have a specific, adverse impact upon health and safety or the physical environment and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact
5. Requires a city or county to include the number of units constructed and the number of applications for lot splits under this bill, in its Annual Progress Report (APR) to the Department of Housing and Community Development (HCD).
6. Requires a city or county to ministerially approve a parcel map for an urban-lot split only if the local agency determines that the parcel map for the urban-lot split meets specified requirements.
7. Provides that a local government shall not be required to permit more than two units on a parcel.
8. Requires an applicant for an urban-lot split to sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban-lot split.

This bill:

1. Requires the seller of an urban-lot split under SB 9 to disclose, in writing, any owner occupancy requirement for three years after the conveyance of an urban-lot split if the seller is the managing or authorized member of a limited liability company (LLC) or the trustee of a living trust.
2. Adds the option for an applicant of an SB 9 urban-lot split to select a different owner occupancy requirement, which shall be imposed as a condition of approval of a parcel map for the lot split, as follows:
   1. The applicant shall require, as a condition of sale to the homebuyer, that one of the units on each parcel of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed.
   2. The local agency must record a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split.
   3. The parcel or unit being purchased shall be subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period.
   4. The homebuyer shall record a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
3. Requires all applicants for SB 9 urban-lot splits to sign an affidavit, under penalty of perjury, stating that they intend to comply with the owner occupancy requirement.
4. Allows a natural person who is the managing or authorized member of an LLC or the trustee of a living trust to be the applicant for an urban-lot split under SB 9.
5. Provides that an applicant for an urban-lot split who is the managing or authorized member of an LLC who violates the SB 9 owner occupancy requirements shall be liable for civil penalties.
6. Provides that an applicant for an urban-lot split who is the managing or authorized member of an LLC is not eligible to be an applicant for a parcel within the boundaries of the 2025 Palisades or Eaton Fires in Los Angeles County.
7. Provides that a local agency shall not adopt or impose any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis of the project being an SB 9 lot split, including, but not limited to, restricting the eligibility of an applicant for an urban-lot split.
8. Sunsets the provisions of SB 9 that are added by this bill in 2032

Background

SB 9 (Atkins, 2021). In 2021, the Governor signed SB 9 (Atkins, Chapter 162, Statutes of 2021), which allowed up to four homes on lots where currently only one exists. It did so by allowing existing single-family homes to be converted into duplexes; it also allowed single-family parcels to be subdivided into two lots, while allowing up to two units to be constructed on each newly formed lot. According to the Terner Center, that bill had the potential to allow for the development of nearly 6 million new housing units.

The Terner Center evaluated the use of SB 9 through the end of 2022 (one year from its enacted date of January 1, 2022). Researchers collected data from 13 jurisdictions and found that SB 9 activity was relatively limited. For example, Los Angeles had the most activity, with 211 applications for new units under SB 9 in 2022. The state’s other large cities all reported very few applications for lot splits or new units. For example, the City of San Diego reported receiving just seven applications for new SB 9 units in 2022.^[1]

Despite these initial reports, it is too early to draw any conclusions about SB 9’s overall impact, as homeowners and local governments are still learning about the provisions in the bill. Similarly, it took a couple years for accessory dwelling unit application and construction to increase after reforms took effect on January 1, 2017.

Comments

1. Author’s Statement. “California’s housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home. However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation. In my district, I still need to rent because the average price of a first-time home exceeds $ 1 million. AB 2005 can help create greater equity in homeownership, removing barriers that unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market.”
2. SB 9: Owner-occupancy requirements. SB 9 requires that an individual seeking to exercise an urban-lot split agree to occupy one of the units on the resulting lot split for three years. The inclusion of an owner-occupancy requirement was debated as the policy of streamlining urban-lot splits initially went through the Legislature. Prior to SB 9’s passage, SB 1120 (Atkins 2020) would have authorized urban-lot splits in a very similar manner. SB 1120 passed in both the Senate and the Assembly without any owner-occupancy requirements but ultimately failed passage due to legislative deadlines. Senator Atkins reintroduced the urban-lot split concept in SB 9, which moved through both houses of the Legislature with a permissive owner-occupancy requirement that mirrored the requirements of Accessory Dwelling Unit (ADU) law that existed at the time. Specifically, early versions of SB 9 only temporarily authorized local agencies to impose owner-occupancy requirements on individuals executing urban-lot splits. Ultimately, the permissive authority was amended into a permanent requirement that local agencies impose 3-year owner-occupancy requirements on individuals executing urban-lot splits.
3. SB 9 and ADU law. ADU law and SB 9 are complementary strategies aimed at increasing density on single-family parcels, but they operate under different frameworks. Under current law, ADUs may be used in combination with SB 9 so long as the total number of units built on each parcel created through an urban-lot split does not exceed two units. In practice, this allows the two laws to work in concert to create various combinations of up to four units on an existing single-family parcel. For example, the duplex provisions of SB 9 could be used with ADU law to create four units (a duplex and two ADUs) on an existing lot. Alternatively, the duplex and subdivision provisions of SB 9 could be used in concert with ADU law to convert an existing parcel into two parcels with two units (either a two duplexes or two primary unit and two ADU) on each of the new parcels. The owner-occupancy provisions of SB 9 are only triggered under the second scenario where an urban-lot split occurs. An applicant that is using only the duplex provisions of SB 9 and ADU law to develop four units on an existing parcel that is not subdivided is not subject to the owner-occupancy requirements that are triggered when a lot is split.

SB 9 allows an applicant to build four units on an existing parcel, the applicant can reside on the parcel and lease several of the units, lease out all four units, or sell the entire parcel as one single property (individual buildings on an undivided parcel of land cannot be sold separately unless the jurisdiction allows for separate conveyance of ADUs) without triggering any owner-occupancy requirements. The same applicant could subdivide the original lot and build two units on each lot, but only if they agree to reside in one of the four units for a period of three years. In practice the same architectural and engineering design could be used for either version of the project (four units on one parcel, or four units across two parcels). Whether the recorded map archived at the county assessor’s office shows the buildings occupying one parcel or two does not change the physical appearance or character of the development.

This bill allows for an applicant to sell both properties created by an urban-lot split, if they require the purchasers of each property to occupy the property as their primary residence. This alternative requires a higher degree of owner occupancy than SB 9 currently requires. SB 9 currently allows an urban-lot split to occur if one of the properties is occupied by the applicant that subdivided the original parcel, the second parcel may be leased or sold an another individual or entity. This bill allows an urban-lot split applicant to either reside in a unit on one of the newly subdivided properties, or to sell both properties to separate buyers that agree to occupy one of the units on each parcel as their principal residences. The alternative created by this bill could foster higher degrees of homeownership than existing law allows or requires under SB 9.

1. Opposition. The California Association of Realtors argues that AB 2005 opens SB 9 to abuse by large-scale speculative development, and that speculative investors will view penalties associated with violating the owner-occupancy provisions of AB 2005 as the cost of doing business.
2. Double Referral. This bill was also referred to the Local Government Committee where it was approved by a 5-1 vote on June 10, 2026.

Related/Prior Legislation

SB 677 (Wiener, 2025) — would have, among other provisions, removed the owner occupancy provisions from SB 9. This bill was amended to deal with another subject matter.

SB 450 (Atkins, Chapter 286, Statutes of 2024) — amended the process established by SB 9 (Atkins), Chapter 162, Statutes of 2021 for the ministerial approval by a local agency of a duplex in a single-family zone and the lot split of a parcel zoned for residential use into two parcels.

AB 1033 (Ting, Chapter 752, Statutes of 2023) —allows cities and counties to allow ADUs to be sold separately or conveyed from the primary residence as condominiums.

SB 9 (Atkins, Chapter 162, Statutes of 2021) — required ministerial approval of a housing development of no more than two units in a single-family zone (duplex), the subdivision of a parcel zoned for residential use into two parcels (lot split), or both.

SB 1120 (Atkins, 2020) — would have required ministerial approval of duplexes and specified subdivision maps. This bill died on the Senate Floor (Unfinished Business).

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

POSITIONS: (Communicated to the committee before noon on Wednesday, June 24^th, 2026.)

SUPPORT:

Abundant Housing Los Angeles

Bay Area Council

California Yimby

Casita Coalition

Circulate Planning & Policy

Circulate Planning & Policy

East Bay Yimby

Fieldstead and Company, INC.

Grow the Richmond

Housing Action Coalition

Mountain View Yimby

Napa-solano for Everyone

New California Coalition

Northern Neighbors Sf

Peninsula for Everyone

San Francisco Yimby

San Jose Yimby

San Mateo Forward

Santa Cruz Yimby

Santa Rosa Yimby

South Bay Yimby

SPUR

Student Homes Coalition

Sv@home Action Fund

The Two Hundred for Homeownership

Ventura County Yimby

Yes! in Redwood City

Yimby Action

Yimby Los Angeles

Yimby Monterey Peninsula

Yimby Slo

OPPOSITION:

California Association of Realtors

City of Belmont

United Neighbors

-- END --

1. Muhammad Alameldin and David Garcia, "State Law, Local Interpretation: How Cities Are Implementing Senate Bill 9," Terner Center for Housing Innovation, June 8, 2022, accessed April 9, 2025, https://ternercenter.berkeley.edu/research-and-policy/state-law-local-interpretation-senate-bill-9/. ↑

SENATE COMMITTEE ON LOCAL GOVERNMENT

Senator María Elena Durazo, Chair

2025 - 2026 Regular

Housing developments: urban lot split: owner-occupancy

Revises owner-occupancy requirements for an urban lot split.

Background

Planning and approving new housing is mainly a local responsibility. The California Constitution allows cities and counties to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws.” It is from this fundamental power (commonly called the police power) that cities and counties derive their authority to regulate behavior to preserve the health, safety, and welfare of the public—including land use authority.

Planning and Zoning Law. State law provides additional powers and duties for cities and counties regarding land use. The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area the plan covers. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans.

Subdivision Map Act. The Subdivision Map Act (or Map Act) governs how local officials regulate the division of real property into smaller parcels for sale, lease, or financing. Cities and counties adopt local subdivision ordinances to carry out the Map Act and local requirements. City councils and county boards of supervisors use the Map Act to control a subdivision's design and improvements. Local subdivision approvals must be consistent with city and county general plans.

Under the Subdivision Map Act, cities and counties can attach scores of conditions. The Map Act allows local officials to require, as a condition of approving a proposed subdivision, the dedication of property within a subdivision for streets, alleys, drainage, utility easements, and other public easements and improvements. Once subdividers comply with those conditions, local officials must issue final maps. For smaller subdivisions that create four or fewer parcels, local officials usually use parcel maps, but they can require tentative parcel maps followed by final parcel maps. The Map Act also constrains the dedications and improvements that local cities and counties can require as a condition of a subdivision of four or fewer lots to only the dedication of rights-of-way, easements, and the construction of reasonable offsite and onsite improvements for the parcels being created.

Senate Bill 9 (Atkins, 2021). SB 9 requires cities and counties to permit ministerially either or both of the following, as long as they meet specified conditions:

• A housing development of no more than two units (a duplex).
• The subdivision of a parcel into two approximately equal parcels (urban lot split).

To be eligible, a development or parcel to be subdivided must be located within an urbanized area or urban cluster, as defined by the United States Census and cannot be located on any of the following:

• Prime farmland or farmland of statewide importance;
• Wetlands;
• Land within the very high fire hazard severity zone, unless the development complies with state mitigation requirements;
• A hazardous waste site;
• An earthquake fault zone;
• Land within the 100-year floodplain or a floodway;
• Land identified for conservation under a natural community conservation plan, or lands under conservation easement;
• Habitat for protected species; or
• Specified kinds of historic sites.

SB 9 requires a city or county to permit a housing development containing no more than two units ministerially in single family zones if the development meets certain conditions, including the requirements on eligible parcels above. A development can include adding one unit to an existing unit, or constructing two new units.

SB 9 also requires a city or county to ministerially approve or deny a parcel map or a tentative and final map for an urban lot split that meets specified requirements. In addition to the requirements for eligible parcels that apply to both duplexes and urban lot splits, the urban lot split must meet the following requirements:

• The parcel map subdivides an existing parcel to create two new parcels of approximately equal size, such that one parcel cannot be smaller than 40 percent of the size of the original lot;
• Both newly created parcels are no smaller than 1,200 square feet, unless the local agency adopts a smaller minimum lot size;
• The parcel being subdivided is located within a residential zone;
• The proposed lot split would not require demolition or alteration of rent-restricted housing, housing where an owner has exercised their rights under the Ellis Act within the past 15 years, or housing that has been occupied by tenants in the past three years; and
• The parcel being subdivided was not previously created through an urban lot split, and none of the adjoining parcels were created by an urban lot split and owned by the same owner or anyone working in concert with the owner.

SB 9 allows a city or county to approve the lot split only if it conforms to all applicable objective requirements of the Map Act, unless otherwise specified.

In combination, SB 9’s provisions allow up to four units to be built in areas where local zoning currently only allows one home.

Owner-occupancy requirements. Among other conditions, SB 9 requires that an applicant for an urban lot split submit a sworn affidavit to the city or county stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban lot split. It also prohibits a local agency from imposing other owner occupancy standards.

Because housing developers focus on selling properties to other owners after they complete construction, SB 9’s owner-occupancy requirement effectively prohibits anyone other than an owner-occupant from building the maximum of four units allowed by the law.

Recent reports on SB 9’s effectiveness. In July 2021, as SB 9 was proceeding through the legislative process, the Terner Center for Housing Innovation at UC Berkeley (Terner Center) completed an analysis that estimated it could make approximately 700,000 units financially feasible to construct. The report emphasized that this number represents a maximum potential number of units, and was not a forecast of the number of units that would be developed.

After one year of SB 9 implementation, the Terner Center evaluated SB 9’s effectiveness through another report. The report found that SB 9’s impact has been limited, and some larger cities have only seen a few, if any, applications for lot splits or new units. According to the report:

We found that SB 9 activity is limited or non-existent in these thirteen cities (Table 1). Los Angeles had the most overall activity, with 211 applications for new units under SB 9 in 2022. The state’s other large cities all reported very few applications for lot splits or new units. For example, the city of San Diego reported receiving just seven applications for new SB 9 units in 2022. To put these numbers into context, the city of San Diego permitted over 5,000 new homes in all of 2021 and Los Angeles permitted just under 20,000 new homes in 2021.

The report listed a variety of changes that could increase use of the law, including:

• Establishing more flexible standards for new home design—such as larger maximum home sizes and heights—and limiting extra costs—such as impact fees, particularly for single-family home to duplex conversions; and
• Revisiting the owner-occupancy requirement to encourage higher usage, while maintaining proper guardrails to protect against speculation by institutional investors and displacement in vulnerable communities.

In 2024, the Legislature amended SB 9 to address some of the early barriers to low utilization of the law through SB 450 (Atkins). SB 450 added a 60-day review period for SB 9 applications, removed the ability of local agencies to deny certain SB 9 projects, prohibited a local agency from imposing standards on SB 9 projects that do not apply to the underlying zoning district, gave the Department of Housing and Community Development (HCD) explicit enforcement authority over SB 9, and strengthened the statewide concern findings that applied SB 9 to charter cities. However, SB 450 did not modify the law’s owner-occupancy requirements.

Uptake in recent years has increased: HCD’s Annual Progress Report dashboard reports, as of June 2026, that 1,671 SB 9 projects have been submitted statewide, with 862 projects submitted in the City of Los Angeles alone. The author wants to further encourage the use of SB 9 to build additional units.

Proposed Law

Assembly Bill 2005 revises the owner-occupancy requirements for an urban lot split. Specifically, AB 2005 allows an urban lot split to proceed without the owner-occupancy requirement if the applicant for an urban lot split signs an affidavit stating that they intend to sell both parcels of an urban lot split after issuance of a certificate of occupancy and shall require, as a condition of sale to a homebuyer, that one of the units on both parcels of an urban lot split remain owner occupied for three years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. If an applicant uses this option,

• The local agency must record a notice of the owner-occupancy requirement as a condition of ministerial approval of the urban lot split;
• A parcel or unit being purchased must be subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period; and
• The homebuyer must record a notice of owner-occupancy as a condition to acquiring title to a parcel or unit.

The bill allows an applicant for an urban lot split to be the managing or authorized member of a limited liability company or the trustee of a living trust. A seller that is a limited liability company or trustee of a living trust to disclose the owner-occupancy requirement in a real-estate transaction, and an applicant for an urban lot split who is the managing or authorized member of a limited liability company who violates the requirements of the bill is liable for civil penalties.

AB 2005 also prohibits a local agency from taking an action that applies to a project solely or partially on the basis that the project is an urban lot split, including, but not limited to, restricting the eligibility of an applicant of an urban lot split, and makes other conforming and technical changes.

Comments

1. Purpose of the bill. According to the author, “California’s housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

“However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

“In my district, I still need to rent because the average price of a first-time home exceeds $ 1 million. AB 2005 can help create greater equity in homeownership, removing barriers that unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market.”

2. There’s gold in them thar hills. The urban lot split provisions of SB 9 attempt to strike a balance between encouraging widespread, but less visible, densification of single-family zones and the desire to keep community ties intact. It allows homeowners to build generational wealth by splitting off a portion of their lot to be used to develop new housing, while keeping them in their home and the community they have connections to. SB 9’s current owner-occupancy requirement allows urban lot splits in these circumstances, but prevents developers, who may have more expertise and capacity to build new units but do not occupy the units they build, from maximizing the number of units built through SB 9. AB 2005 revises the owner-occupancy requirement to allow sale of units developed using an urban lot split to future homeowners who occupy the property. This could enable more SB 9 units to be built, which are smaller and therefore may sell for cheaper than the currently available homes. Opponents of the measure are concerned that this could lead to displacement of vulnerable residents if investors see a profitable opportunity and flip less-expensive housing into more expensive new homes that are unaffordable to existing community members. To afford an opportunity to review the effect of these owner-occupancy requirement changes on community makeup, the Committee may wish to consider amending AB 2005 to include a sunset.

3. Disaster recovery. In early January 2025, extremely dry conditions and high winds in Los Angeles resulted in two of the most destructive wildfires in state history. The Palisades fire, which started on January 7^th, burned a total of 23,448 acres and damaged or destroyed almost 8,000 structures in the Pacific Palisades and Topanga State Park area of west Los Angeles. The Eaton fire consumed 14,021 acres and damaged or destroyed more than 10,000 structures, including significant portions of the unincorporated community of Altadena. The fires destroyed about half of all properties in both Palisades and Altadena and caused the deaths of 30 people. Governor Newsom declared a state of emergency the day the fires started, put into place protections against price gouging, and issued an executive order prohibiting landlords in Los Angeles from evicting tenants for violating their leases by providing shelter in their unit for residents displaced by the fires. The Governor also issued executive orders aimed at promoting and streamlining the construction of temporary shelters and the rebuilding of structures destroyed by the fires. On July 30, 2025, the Governor issued Executive Order N-32-25, which authorized Los Angeles County to condition or deny SB 9 projects in very high fire hazard severity zone within the boundaries of those fires. Because Altadena exists largely outside the boundaries of the very high fire hazard severity zone, SB 9 remains in force there. Since the fires, community members have raised concerns about investors purchasing lots with plans to develop in a way that may not be consistent with the needs or desires of the community. AB 2005 allows limited liability companies to apply for an urban lot split, which could make it easier for builders to purchase lots and develop them. On the one hand, opening up more parcels to SB 9 development may help build more homes faster in disaster-affected areas, adding sorely needed housing units. On the other hand, it could enable unscrupulous investors to take advantage of especially vulnerable individuals that are recovering from a disaster. Should AB 2005 do more to ensure that disaster-affected communities don’t experience unintended consequences?

4. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because AB 2005 imposes new duties on local officials, Legislative Counsel says that it imposes a new state mandate. AB 2005 disclaims the state’s responsibility for providing reimbursement by citing local governments’ authority to charge for the costs of implementing the bill’s provisions.

5. Related legislation. AB 2601 (Lee) requires cities and counties to process urban lot splits, entitlements, and building permits for SB 9 projects concurrently. AB 2601 is currently pending in the Senate Housing Committee.

6. Coming and going. The Senate Rules Committee has ordered a double referral of AB 2005: first to the Committee on Local Government, which has jurisdiction over local permitting, and second to the Committee on Housing.

Assembly Actions

Assembly Housing and Community Development Committee: 11-0

Assembly Local Government Committee: 10-0

Assembly Appropriations Committee: 14-0

Assembly Floor: 66-1

Support and Opposition

(6/5/26)

Support: Abundant Housing Los Angeles
Bay Area Council
California Yimby
Circulate Planning & Policy
East Bay for Everyone
Equitable Land Use Alliance (ELUA)
Families and Homes San Jose
Fieldstead and Company, INC.
Housing Action Coalition
Spur
Sv@home Action Fund
The Two Hundred for Homeownership

Opposition: California Association of Realtors
United Neighbors

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2005

Author:(Ahrens)

As Amended Ver:May 7, 2026

Majority vote

SUMMARY

Creates an alternative compliance pathway for the owner-occupancy requirement of SB 9 (Atkins), Chapter 162, Statutes of 2021.

Major Provisions

1. Requires the seller of an urban lot split under SB 9 to disclose, in writing, any owner occupancy requirement for three years after the conveyance of an urban lot split if the seller is the managing or authorized member of a limited liability company (LLC) or the trustee of a living trust.
2. Adds the option for an applicant of an SB 9 urban lot split to select a different owner occupancy requirement, which shall be imposed as a condition of approval of a parcel map for the lot split, as follows:
   1. The applicant shall require, as a condition of sale to the homebuyer, that one of the units on each parcel of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed to the homebuyer;
   2. The local agency must record a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split;
   3. The parcel or unit being purchased shall be subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period; and
   4. The homebuyer shall record a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
3. Allows the managing or authorized member of an LLC or the trustee of a living trust to be the applicant for an urban lot split under SB 9.
4. Provides that a local agency shall not adopt or impose any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis of the project being an SB 9 lot split, including, but not limited to, restricting the eligibility of an applicant for an urban lot split.

COMMENTS

California's Housing Crisis: California's housing crisis is a half-century in the making.^[1] After decades of underproduction, supply is far behind demand, and housing and rental costs are soaring. As a result, millions of Californians must make hard decisions about paying for housing at the expense of food, health care, child care, and transportation, directly impacting the quality of life in the state. ^[2] One in three households in the state doesn't earn enough money to meet their basic needs. ^[3] In 2024, over 187,000 Californians experienced homelessness on a given night.^[4]

To meet this housing need, HCD determined that California must plan for more than 2.5 million new homes, and no less than one million of those homes must be affordable to lower-income households, in the 6^th Regional Housing Needs Allocation (RHNA) cycle. By contrast, housing production in the past decade has been under 100,000 units per year – including less than 10,000 units of affordable housing per year.^[5] Increasing the overall supply of housing, both market-rate and deed-restricted affordable, is essential to reducing upward pressure on rents and home prices, and to creating a more stable, accessible housing market for Californians across income levels.

The state's housing crisis is not equally experienced by all Californians. Testimony by the UC Berkeley Terner Center to this Committee showed that the impacts of the housing crisis are significantly more severe for lower-income individuals, single-earner households, Black and Latino Californians, younger and older populations, and those who reside in, or aspire to live and work in, the state's highest-cost regions.^[6] As it pertains to homeownership, homeownership rates have fallen to historic lows. The median home price in California now exceeds $800,000, effectively locking out many working families from the ownership market.

SB 9: In 2021, the Governor signed SB 9 (Atkins), Chapter 162, Statutes of 2021, which allowed up to four homes on lots where currently only one exists. It did so by allowing existing single-family homes to be converted into duplexes. It also allowed single-family parcels to be subdivided into two lots, while allowing for a new two-unit building to be constructed on the newly formed lot.

SB 9 has the potential to help address the state's multi-million unit housing deficit. According to a 2021 study from the UC Berkeley Terner Center for Housing Innovation, the passage of SB 9 increased the amount of market-feasible homes statewide by 700,000.^[7] However, a 2023 analysis from the Terner Center determined that, in its first year, the effect of the law was relatively limited.^[8] Los Angeles had the most activity, with 211 applications for new units under SB 9 in 2022. The state's other large cities all reported very few applications for lot splits or new units. For example, the City of San Diego reported receiving just seven applications for new SB 9 units in 2022.

There are multiple reasons for this slow uptake. It often takes a few years for construction to catch up with changes to land use policy. Also, higher interest rates greatly increased the cost to finance a second unit, adding a chilling effect to the housing market. SB 450 (Atkins), Chapter 286, Statutes of 2024, amended SB 9 to address some of the early barriers to low utilization of SB 9. SB 450 (Atkins) added a 60-day review period for SB 9 applications, removed the ability of local agencies to deny certain SB 9 projects, prohibited a local agency from imposing standards on SB 9 projects that do not apply to the underlying zoning district, gave HCD explicit enforcement authority over SB 9, and strengthened the statewide concern findings that applied SB 9 to charter cities. The provisions of SB 450 became effective on January 1, 2025, so it is too early to judge the impact of those changes on SB 9 uptake.

SB 9 Owner Occupancy Requirements: SB 9 contains an owner-occupancy requirement for lot splits. Under current law, a local agency must require an applicant for an urban lot split to sign an affidavit stating that they intend to occupy one of the resulting housing units as their principal residence for at least three years following approval of the lot split. This requirement does not apply to applicants that are "community land trusts" or "qualified nonprofit corporations."

HCD has interpreted SB 9's owner-occupancy provision to mean that a living trust, limited liability company, or other legal entity cannot serve as the applicant, even when the beneficiary owner or member is the current owner-occupant of the property. Furthermore, the current statute requires the existing homeowner to serve as the project applicant, who then must be solely responsible for obtaining local approvals, including navigating the subdivision process. This may prove daunting for existing homeowners and may discourage them from pursuing SB 9 projects.

This Bill: This bill revises the provisions of SB 9 related to owner-occupancy requirements for urban lot splits. Specifically, this bill requires a local agency to condition approval of an urban lot split on the applicant selecting one of two owner-occupancy options: either the existing requirement that the applicant occupy one of the units as their principal residence for at least three years, or a new alternative requiring that one of the homes on each lot created through the SB 9 lot split remain owner-occupied for three years following their sale to a homebuyer, enforced through recorded deed restrictions and notice requirements. This three-year owner occupancy requirement would begin on the date a parcel or unit is conveyed to the homebuyer, and stays with the property for three years, meaning if the first purchaser sells the property before that three-year expiration period, the owner occupancy requirement would pass on to the subsequent purchaser.

This bill additionally allows a managing or authorized member of an LLC or a trustee of a living trust to apply for an SB 9 urban lot split, and requires local agencies to record and enforce owner-occupancy requirements associated with this new homebuyer-based owner-occupancy pathway. This bill also requires sellers of units resulting from this new SB 9 owner-occupancy pathway to provide written disclosure of the three-year owner-occupancy restriction upon conveyance, and prohibits local agencies from imposing owner-occupancy requirements beyond those established in statute.

Proponents of this bill maintain that it will improve the usability of SB 9 by allowing homeowners to utilize common ownership structures, such as trusts and LLCs, and by creating a pathway for partnerships with builders, which may increase the number of feasible projects and expand small-scale homeownership opportunities. The alternative owner-occupancy option may also help ensure that newly created units are ultimately occupied by homeowners, rather than serving as investor rental units. On the other hand, opponents may argue that shifting the owner-occupancy requirement away from the applicant and onto future homebuyers could weaken SB 9's original anti-speculation guardrails and introduce additional complexity in enforcement, particularly with respect to tracking and enforcing deed restrictions over time.

According to the Author

"California's housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

By removing these barriers, AB 2005 helps unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market."

Arguments in Support

The Bay Area Council writes in support: "The practice of placing a single-family home into a living trust or a limited liability company is a common practice in retirement and estate planning. Yet because a trust or LLC cannot sign the required owner-occupancy affidavit, some homeowners are unable to effectively use SB 9. AB 2005 would amend current law to close this gap and allow members of an LLC or trustees of a living trust who are primary residents of a single-family home to apply for urban lot splits.

The bill shifts the owner-occupancy requirement from the applicant to the homebuyer of the newly created unit, removing barriers and increasing opportunities for entry-level homeowners to partner with experienced builders and local developers. AB 2005 clarifies the intent of current law, empowering existing homeowners to build on their current properties and creating scalable solutions for Californians across the state."

Arguments in Opposition

The California Association of Realtors writes in opposition: "AB 2005 (Ahrens) places SB 9 (Atkins, 2021) protections established to ensure homeowners benefit from the generational wealth building opportunity created by streamlining urban lot splits in jeopardy. To enact SB 9 required extended and detailed negotiation among stakeholders. Those discussions resulted in the establishment of guardrails intended to protect homeowners and communities and reduce gentrification risks. Those guardrails reflected the input of members of communities who have been historically subject to policies that resulted in displacement of residents and rapid gentrification."

FISCAL COMMENTS

According to the Assembly Committee on Appropriations:

1. HCD estimates minor and absorbable costs.
2. Costs to cities and counties of an unknown amount to provide an additional owner-occupancy compliance pathway for urban lot splits proposed under SB 9. These costs are not state-reimbursable because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates

VOTES

ASM HOUSING AND COMMUNITY DEVELOPMENT: 11-0-1

YES: Haney, Patterson, Ward, Caloza, Garcia, Kalra, Lee, Quirk-Silva, Tangipa, Wicks, Wilson

ABS, ABST OR NV: Ta

ASM LOCAL GOVERNMENT: 10-0-0

YES: Carrillo, Ta, Johnson, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward, Wilson

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Hoover, Aguiar-Curry, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

ABS, ABST OR NV: Arambula

UPDATED

VERSION: May 7, 2026

CONSULTANT: Dori Ganetsos / H. & C.D. / (916) 319-2085 FN: 0002494

1. California Department of Housing and Community Development, A Home for Every Californian: 2022 Statewide Housing Plan. March 2022, https://storymaps.arcgis.com/stories/94729ab1648d43b1811c1698a748c136 ↑

2. IBID. ↑

3. IBID. ↑

4. U.S. Department of Housing and Urban Development, Point in Time Counts. https://www.huduser.gov/portal/datasets/ahar/2023-ahar-part-1-pit-estimates-of-homelessness-in-the-us.html ↑

5. https://www.hcd.ca.gov/policy-research/housing-challenges.shtml ↑

6. UC Berkeley Terner Center Testimony by Ben Metcalf, Managing Director, at the State Housing Production Legislation: Actions, Outcomes, and Opportunities Informational Hearing, February 12, 2025 ↑

7. https://ternercenter.berkeley.edu/wp-content/uploads/2021/07/SB-9-Brief-July-2021-Final.pdf ↑

8. https://ternercenter.berkeley.edu/research-and-policy/sb-9-turns-one-applications/ ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 2005

Author:(Ahrens)

As Amended Ver:May 7, 2026

Majority vote

SUMMARY

Creates an alternative compliance pathway for the owner-occupancy requirement of SB 9 (Atkins), Chapter 162, Statutes of 2021.

Major Provisions

1. Requires the seller of an urban lot split under SB 9 to disclose, in writing, any owner occupancy requirement for three years after the conveyance of an urban lot split if the seller is the managing or authorized member of a limited liability company (LLC) or the trustee of a living trust.
2. Requires all applicants for SB 9 urban lot splits to sign an affidavit, under penalty of perjury, stating that they intend to comply with the owner occupancy requirement.
3. Adds the option for an applicant of an SB 9 urban lot split to select a different owner occupancy requirement, which shall be imposed as a condition of approval of a parcel map for the lot split, as follows:
   1. The applicant shall require, as a condition of sale to the homebuyer, that one of the units on each parcel of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed to the homebuyer;
   2. The local agency must record a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split;
   3. The parcel or unit being purchased shall be subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period; and
   4. The homebuyer shall record a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
4. Allows the managing or authorized member of an LLC or the trustee of a living trust to be the applicant for an urban lot split under SB 9.
5. Provides that an applicant for an urban lot split who is the managing or authorized member of an LLC who violates the SB 9 owner occupancy requirements shall be liable for civil penalties.
6. Provides that a local agency shall not adopt or impose any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis of the project being an SB 9 lot split, including, but not limited to, restricting the eligibility of an applicant for an urban lot split.

COMMENTS

California's Housing Crisis: California's housing crisis is a half-century in the making.^[1] After decades of underproduction, supply is far behind demand, and housing and rental costs are soaring. As a result, millions of Californians must make hard decisions about paying for housing at the expense of food, health care, child care, and transportation, directly impacting the quality of life in the state. ^[2] One in three households in the state doesn't earn enough money to meet their basic needs. ^[3] In 2024, over 187,000 Californians experienced homelessness on a given night.^[4]

To meet this housing need, HCD determined that California must plan for more than 2.5 million new homes, and no less than one million of those homes must be affordable to lower-income households, in the 6^th Regional Housing Needs Allocation (RHNA) cycle. By contrast, housing production in the past decade has been under 100,000 units per year – including less than 10,000 units of affordable housing per year.^[5] Increasing the overall supply of housing, both market-rate and deed-restricted affordable, is essential to reducing upward pressure on rents and home prices, and to creating a more stable, accessible housing market for Californians across income levels.

The state's housing crisis is not equally experienced by all Californians. Testimony by the UC Berkeley Terner Center to this Committee showed that the impacts of the housing crisis are significantly more severe for lower-income individuals, single-earner households, Black and Latino Californians, younger and older populations, and those who reside in, or aspire to live and work in, the state's highest-cost regions.^[6] As it pertains to homeownership, homeownership rates have fallen to historic lows. The median home price in California now exceeds $800,000, effectively locking out many working families from the ownership market.

SB 9: In 2021, the Governor signed SB 9 (Atkins), Chapter 162, Statutes of 2021, which allowed up to four homes on lots where currently only one exists. It did so by allowing existing single-family homes to be converted into duplexes. It also allowed single-family parcels to be subdivided into two lots, while allowing for a new two-unit building to be constructed on the newly formed lot.

SB 9 has the potential to help address the state's multi-million unit housing deficit. According to a 2021 study from the UC Berkeley Terner Center for Housing Innovation, the passage of SB 9 increased the amount of market-feasible homes statewide by 700,000.^[7] However, a 2023 analysis from the Terner Center determined that, in its first year, the effect of the law was relatively limited.^[8] Los Angeles had the most activity, with 211 applications for new units under SB 9 in 2022. The state's other large cities all reported very few applications for lot splits or new units. For example, the City of San Diego reported receiving just seven applications for new SB 9 units in 2022.

There are multiple reasons for this slow uptake. It often takes a few years for construction to catch up with changes to land use policy. Also, higher interest rates greatly increased the cost to finance a second unit, adding a chilling effect to the housing market. SB 450 (Atkins), Chapter 286, Statutes of 2024, amended SB 9 to address some of the early barriers to low utilization of SB 9. SB 450 (Atkins) added a 60-day review period for SB 9 applications, removed the ability of local agencies to deny certain SB 9 projects, prohibited a local agency from imposing standards on SB 9 projects that do not apply to the underlying zoning district, gave HCD explicit enforcement authority over SB 9, and strengthened the statewide concern findings that applied SB 9 to charter cities. The provisions of SB 450 became effective on January 1, 2025, so it is too early to judge the impact of those changes on SB 9 uptake.

SB 9 Owner Occupancy Requirements: SB 9 contains an owner-occupancy requirement for lot splits. Under current law, a local agency must require an applicant for an urban lot split to sign an affidavit stating that they intend to occupy one of the resulting housing units as their principal residence for at least three years following approval of the lot split. This requirement does not apply to applicants that are "community land trusts" or "qualified nonprofit corporations."

HCD has interpreted SB 9's owner-occupancy provision to mean that a living trust, limited liability company, or other legal entity cannot serve as the applicant, even when the beneficiary owner or member is the current owner-occupant of the property. Furthermore, the current statute requires the existing homeowner to serve as the project applicant, who then must be solely responsible for obtaining local approvals, including navigating the subdivision process. This may prove daunting for existing homeowners and may discourage them from pursuing SB 9 projects.

This Bill: This bill revises the provisions of SB 9 related to owner-occupancy requirements for urban lot splits. Specifically, this bill requires a local agency to condition approval of an urban lot split on the applicant selecting one of two owner-occupancy options: either the existing requirement that the applicant occupy one of the units as their principal residence for at least three years, or a new alternative requiring that one of the homes on each lot created through the SB 9 lot split remain owner-occupied for three years following their sale to a homebuyer, enforced through recorded deed restrictions and notice requirements. This three-year owner occupancy requirement would begin on the date a parcel or unit is conveyed to the homebuyer, and stays with the property for three years, meaning if the first purchaser sells the property before that three-year expiration period, the owner occupancy requirement would pass on to the subsequent purchaser.

This bill additionally allows a managing or authorized member of an LLC or a trustee of a living trust to apply for an SB 9 urban lot split, and requires local agencies to record and enforce owner-occupancy requirements associated with this new homebuyer-based owner-occupancy pathway. This bill also requires sellers of units resulting from this new SB 9 owner-occupancy pathway to provide written disclosure of the three-year owner-occupancy restriction upon conveyance, and prohibits local agencies from imposing owner-occupancy requirements beyond those established in statute.

Proponents of this bill maintain that it will improve the usability of SB 9 by allowing homeowners to utilize common ownership structures, such as trusts and LLCs, and by creating a pathway for partnerships with builders, which may increase the number of feasible projects and expand small-scale homeownership opportunities. The alternative owner-occupancy option may also help ensure that newly created units are ultimately occupied by homeowners, rather than serving as investor rental units. On the other hand, opponents may argue that shifting the owner-occupancy requirement away from the applicant and onto future homebuyers could weaken SB 9's original anti-speculation guardrails and introduce additional complexity in enforcement, particularly with respect to tracking and enforcing deed restrictions over time.

According to the Author

"California's housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

By removing these barriers, AB 2005 helps unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market."

Arguments in Support

The Bay Area Council writes in support: "The practice of placing a single-family home into a living trust or a limited liability company is a common practice in retirement and estate planning. Yet because a trust or LLC cannot sign the required owner-occupancy affidavit, some homeowners are unable to effectively use SB 9. AB 2005 would amend current law to close this gap and allow members of an LLC or trustees of a living trust who are primary residents of a single-family home to apply for urban lot splits.

The bill shifts the owner-occupancy requirement from the applicant to the homebuyer of the newly created unit, removing barriers and increasing opportunities for entry-level homeowners to partner with experienced builders and local developers. AB 2005 clarifies the intent of current law, empowering existing homeowners to build on their current properties and creating scalable solutions for Californians across the state."

Arguments in Opposition

The California Association of Realtors writes in opposition: "AB 2005 (Ahrens) places SB 9 (Atkins, 2021) protections established to ensure homeowners benefit from the generational wealth building opportunity created by streamlining urban lot splits in jeopardy. To enact SB 9 required extended and detailed negotiation among stakeholders. Those discussions resulted in the establishment of guardrails intended to protect homeowners and communities and reduce gentrification risks. Those guardrails reflected the input of members of communities who have been historically subject to policies that resulted in displacement of residents and rapid gentrification."

FISCAL COMMENTS

According to the Assembly Committee on Appropriations:

1. HCD estimates minor and absorbable costs.
2. Costs to cities and counties of an unknown amount to provide an additional owner-occupancy compliance pathway for urban lot splits proposed under SB 9. These costs are not state-reimbursable because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates

VOTES

ASM HOUSING AND COMMUNITY DEVELOPMENT: 11-0-1

YES: Haney, Patterson, Ward, Caloza, Garcia, Kalra, Lee, Quirk-Silva, Tangipa, Wicks, Wilson

ABS, ABST OR NV: Ta

ASM LOCAL GOVERNMENT: 10-0-0

YES: Carrillo, Ta, Johnson, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward, Wilson

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Hoover, Aguiar-Curry, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

ABS, ABST OR NV: Arambula

UPDATED

VERSION: May 7, 2026

CONSULTANT: Dori Ganetsos / H. & C.D. / (916) 319-2085 FN: 0002528

1. California Department of Housing and Community Development, A Home for Every Californian: 2022 Statewide Housing Plan. March 2022, https://storymaps.arcgis.com/stories/94729ab1648d43b1811c1698a748c136 ↑

2. IBID. ↑

3. IBID. ↑

4. U.S. Department of Housing and Urban Development, Point in Time Counts. https://www.huduser.gov/portal/datasets/ahar/2023-ahar-part-1-pit-estimates-of-homelessness-in-the-us.html ↑

5. https://www.hcd.ca.gov/policy-research/housing-challenges.shtml ↑

6. UC Berkeley Terner Center Testimony by Ben Metcalf, Managing Director, at the State Housing Production Legislation: Actions, Outcomes, and Opportunities Informational Hearing, February 12, 2025 ↑

7. https://ternercenter.berkeley.edu/wp-content/uploads/2021/07/SB-9-Brief-July-2021-Final.pdf ↑

8. https://ternercenter.berkeley.edu/research-and-policy/sb-9-turns-one-applications/ ↑

Date of Hearing: May 6, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2005

Author:(Ahrens) – As Amended Ver:April 9, 2026

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill changes the owner-occupancy requirements for urban lot splits under SB 9 (Atkins), Chapter 162, Statutes of 2021, by adding an alternative compliance pathway.

Specifically, this bill:

1. Requires the seller of an urban lot split pursuant to SB 9, to disclose in writing any owner-occupancy requirements for three years after the conveyance of an urban lot split unit.
2. Requires a local agency to provide an applicant for an SB 9 urban lot split an additional option for meeting the owner occupancy requirements by allowing the applicant to require, as a condition of sale to the homebuyer, that one of the units of both parcels of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed to the homebuyer, subject to the following:
   1. The local agency must record a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split.
   2. The parcel or unit being purchased must be subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period.
   3. The homebuyer must record a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice must state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, must occupy the parcel or unit or designate the parcel or unit as their primary residence.
3. Allows an applicant for an SB 9 urban lot split to be a managing or authorized member of a limited liability company or the trustee of a living trust.
4. Prohibits a local agency from imposing or adopting any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis that the project is an SB 9 urban lot split, including, but not limited to, restricting the eligibility of an applicant.

FISCAL EFFECT:

1. HCD estimates minor and absorbable costs.
2. Costs to cities and counties of an unknown amount to provide an additional owner-occupancy compliance pathway for urban lot splits proposed under SB 9. These costs are not state-reimbursable because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates

COMMENTS:

1. Purpose. According to the author:

SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home. However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. [This bill] clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

1. Background. Existing law, authorized by SB 9 (Atkins), Chapter 162, Statutes of 2021, requires a local agency to ministerially approve a parcel map for an urban lot split if the development or parcel meets specified requirements. SB 9 requires the local agency to require an applicant for an urban lot split to sign an affidavit stating the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban lot split. SB 9 also requires the existing homeowner to serve as the project applicant, who then must be solely responsible for obtaining local approvals, including navigating the subdivision process.

According to the author, HCD has interpreted SB 9’s owner-occupancy provision to mean that a living trust, limited liability company, or other legal entity cannot serve as the applicant, even when the beneficiary owner or member is the current owner-occupant of the property.

1. Support and Opposition. Supporters, including the California Home Building Alliance and others, maintain the bill will improve the usability of SB 9 by allowing homeowners to utilize common ownership structures, such as trusts and LLCs, and by creating a pathway for partnerships with builders, which may increase the number of feasible projects and expand small-scale homeownership opportunities. They also assert the alternative owner-occupancy option may help ensure that newly created units are ultimately occupied by homeowners, rather than serving as investor rental units.

Opponents, the California Association of Realtors, argue that shifting the owner-occupancy requirement away from the applicant and onto future homebuyers could weaken SB 9’s original anti-speculation guardrails and introduce additional complexity in enforcement, particularly with respect to tracking and enforcing deed restrictions over time.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 22, 2026

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Juan Carrillo, Chair

ABPCA Bill Id:AB 2005 (

Author:Ahrens) – As Amended Ver:April 9, 2026

SUBJECT: Housing developments: urban lot split: owner-occupancy

SUMMARY: Creates an alternative compliance pathway for the owner-occupancy requirement of SB 9 (Atkins), Chapter 162, Statutes of 2021. Specifically, this bill:

1. Requires the seller of an urban lot split pursuant to SB 9 (SB 9 split), to disclose in writing any owner-occupancy requirements for three years after the conveyance of an urban lot split unit.
2. Requires a local agency to provide two pathways to meet the owner occupancy requirements of an SB 9 split. In addition to requiring an applicant for an SB 9 split to sign an affidavit stating that the applicant of the SB 9 split intends to occupy one of the units as their principal residence for at least three years from the date of the split in existing law, this bill requires local agencies to also provide the following option:
   1. An applicant for an SB 9 split shall require, as a condition of sale to a homebuyer, that one of the units on both parcels of an SB 9 split remains owner occupied for three years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. If an applicant selects this option, all of the following are required:
      1. The local agency records a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for an SB 9 split.
      2. A parcel or unit being purchased is subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period.
      3. The homebuyer records a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
   2. Allows a managing or authorized member of a limited liability company or the trustee of a living trust to apply for an SB 9 split.
3. Prohibits a local agency from imposing or adopting any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis that the project is an SB 9 split, including, but not limited to, restricting the eligibility of an applicant of an SB 9 split.
4. Provides that no reimbursement is required by this bill pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code (GOV).
5. Makes technical and conforming changes.

EXISTING LAW:

1. Requires streamlined and ministerial approval by a local agency of a duplex in a single-family zone [Government Code (GOV) Section 65852.21], and the urban lot split of a parcel zoned for residential use into two parcels, each at least 40% of the original lot’s size (GOV § 66411.7). Specifically:
   1. Prohibits an urban lot split if the lot was previously split under SB 9, and prohibits an owner or related party from splitting adjacent lots to prevent circumvention of the two-lot limit. (GOV § 66411.7)
   2. Provides that an application for a duplex or an urban lot split must be considered and approved or denied by the local agency within 60 days of the date the local agency receives a completed application. Further provides that:
      1. If a local agency denies an application for a duplex or urban lot split, the permitting agency must provide, in writing, a full set of comments to the applicant, with a list of items that are defective or deficient, and a description of how the application can be remedied by the applicant; and
      2. If the local agency has not approved or denied the application within 60 days and the application meets all qualifying criteria, the application is deemed approved. (GOV § 66411.7 & 65852.21)
   3. Prohibits a local agency from imposing objective standards on a proposed duplex that do not apply uniformly to developments within the underlying zoning district. Otherwise, allows a local agency to adopt or impose objective zoning standards, objective subdivision standards, and objective design standards on development authorized by this section as follows:
      1. If those standards are more permissive than applicable standards in the underlying zone;
      2. If the standards would not physically preclude the construction of up to two units or physically preclude either of the two units from being at least 800 square feet in floor area;
      3. A city or county may require a setback of up to four feet from the side and rear lot lines; and
      4. A city or county may not require setbacks for an existing structure or a structure constructed in the same location and to the same dimensions as an existing structure. (GOV § 66411.7 & 65852.21)
   4. Allows a local agency to impose objective standards for a proposed lot split so long as they are related to the design or to the improvements of a parcel. (GOV 66411.7)
   5. Requires an applicant for an urban lot split to sign an affidavit stating they intend to occupy one of the housing units as their primary residence for at least three years following the lot split. (GOV § 66411.7)
   6. Prohibits units created by SB 9 from being used as short-term rentals (i.e., they must be rented for terms longer than 30 days). (GOV § 66411.7 & 65852.21)
   7. Requires the Department of Housing and Community Development (HCD) to notify a local agency if it has taken an action in violation of SB 9 and authorizes HCD to notify the Attorney General (AG) if the local agency is in violation of SB 9, at HCD’s discretion. (GOV § 65585 & 65585.1)

FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.

COMMENTS:

1. Bill Summary. This bill revises the provisions of SB 9 related to owner-occupancy requirements for urban lot splits. Under existing law, SB 9 requires an applicant for an urban lot split to sign an affidavit stating they intend to occupy one of the housing units as their primary residence for at least three years following the lot split. This bill provides an alternative pathway to meeting an owner occupancy requirement under SB 9. The applicant has the option to either use the existing requirement in existing law or require, as condition of sale to the homebuyer, that one of the units on both parcels of an urban lot split remain owner occupied for three years. If the applicant chooses to use the new option created by this bill, the three-year owner occupancy requirement would begin on the date a parcel or unit is conveyed to the homebuyer as deed restriction and stays with the property for three years. If the first purchaser of the property with an owner occupancy deed restriction then sells the property before that three-year expiration period, the owner occupancy requirement would pass on to the subsequent purchaser.
   
   This bill also requires sellers of units resulting from this new SB 9 owner-occupancy pathway to provide written disclosure of the three-year owner-occupancy restriction upon conveyance.
   
   This bill additionally allows a managing or authorized member of an LLC or a trustee of a living trust to apply for an SB 9 urban lot split. The bill prohibits a local agency from adopting or imposing any requirement, process, practice, or procedure, or undertaking any course of conduct, that applies to a project solely or partially on the basis that the project is an urban lot split, including, but not limited to, restricting the eligibility of an applicant of an urban lot split.
   
   This bill is author sponsored.
2. Author’s Statement. According to the author, “California’s housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

“However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

“By removing these barriers, AB 2005 helps unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market.”

1. Planning and Zoning Law. Cities and counties enact zoning ordinances to implement their general plans. Zoning determines the type of housing that can be built. In addition, before building new housing, housing developers must obtain one or more permits from local planning departments and must also obtain approval from local planning commissions, city councils, or county board of supervisors. Some housing projects can be permitted by city or county planning staff ministerially, or without further approval from elected officials. Projects reviewed ministerially require only an administrative review designed to ensure they are consistent with existing general plan and zoning rules, as well as meeting standards for building quality, health, and safety. Most large housing projects are not allowed ministerial review; instead, these projects are vetted through both public hearings and administrative review. Most housing projects that require discretionary review and approval are subject to review under the California Environmental Quality Act, while projects permitted ministerially generally are not.
2. Subdivision Map Act. The Subdivision Map Act (Map Act) governs how local officials regulate the division of real property into smaller parcels for sale, lease, or financing. Cities and counties adopt local subdivision ordinances to carry out the Map Act and local requirements. City councils and county boards of supervisors use the Map Act to control a subdivision's design and improvements. Local subdivision approvals must be consistent with city and county general plans.
   
   Under the Map Act, cities and counties can attach scores of conditions. The Map Act allows local officials to require, as a condition of approving a proposed subdivision, the dedication of property within a subdivision for streets, alleys, drainage, utility easements, and other public easements and improvements. Once subdividers comply with those conditions, local officials must issue final maps. For smaller subdivisions that create four or fewer parcels, local officials usually use parcel maps, but they can require tentative parcel maps followed by final parcel maps. The Map Act also constrains the dedications and improvements that local cities and counties can require as a condition of a subdivision of four or fewer lots to only the dedication of rights-of-way, easements, and the construction of reasonable offsite and onsite improvements for the parcels being created.
3. SB 9- Duplexes and Subdivisions. In 2021, the Governor signed SB 9 (Atkins), Chapter 162, Statutes of 2021, which allowed up to four homes on lots where currently only one exists. It did so by allowing existing single-family homes to be converted into duplexes. It also allowed single-family parcels to be subdivided into two lots, while allowing for a new two-unit building to be constructed on the newly formed lot. Under SB 9, the total number of units that can be built on a formerly single-family zoned lot is capped at four. Under existing law, ADUs may be built in combination with SB 9 so long as the total number of units on a lot does not exceed four. Property owners may use both SB 9 and ADUs to achieve the maximum allowed density in a configuration that best suits their site and circumstances, for example, two primary units under SB 9 and one ADU per unit. Furthermore, SB 9 explicitly prohibits the owner of the parcel being subdivided from also subdividing the adjacent parcels under SB 9 in order to limit its applicability to a two-lot, four-unit cap.
4. Related Legislation. AB 2601 (Lee) makes several changes to the permitting and subdivision processes for small-scale and missing middle housing developments. AB 2601 is pending in this committee.
   
   AB 1751 (Quirk-Silva) establishes the Missing Middle Townhome Ownership Act, creating a streamlined, ministerial approvals pathway for townhome development on residentially zoned lots. AB 1751 is pending in this committee.
5. Arguments in Support. The Home Building Alliance writes in support, “The bill creates a more practical pathway for homeowners to successfully deliver housing by allowing them to partner with experienced builders and small developers. Most homeowners do not have the expertise or financial capacity to independently manage subdivision, financing, and construction. AB 2005 enables these partnerships while preserving strong safeguards against speculative activity.

“Importantly, AB 2005 helps create something that is largely missing from today’s housing market: attainable, entry-level homeownership opportunities. By maintaining owner-occupancy requirements and enabling the production of smaller homes, the bill supports the creation of ‘protected ownership inventory’ that is effectively reserved for homeowners rather than investors.

“The bill also maintains all of SB 9’s existing anti-displacement protections, including restrictions on demolishing tenant-occupied or rent-restricted housing. By empowering existing homeowners to build on their property—rather than forcing them to sell—AB 2005 can help reduce displacement pressures while supporting long-term wealth building.”

1. Arguments in Opposition. The California Association of Realtors writes in opposition, “AB 2005 (Ahrens), which seeks to eliminate local control by mandating all cities and counties allow corporate and other investors to take advantage of the state’s ‘urban lot split’ streamlining process in our state’s most affordable neighborhoods, which was intentionally limited to owner occupants. AB 2005 will lead to rapid gentrification in our state’s most vulnerable and under-resourced communities.

“AB 2005 (Ahrens) places SB 9 (Atkins, 2021) protections established to ensure homeowners benefit from the generational wealth building opportunity created by streamlining urban lot splits in jeopardy. To enact SB 9 required extended and detailed negotiation among stakeholders. Those discussions resulted in the establishment of guardrails intended to protect homeowners and communities and reduce gentrification risks. Those guardrails reflected the input of members of communities who have been historically subject to policies that resulted in displacement of residents and rapid gentrification.”

REGISTERED SUPPORT / OPPOSITION:

Support

Abundant Housing Los Angeles
Bay Area Council
California YIMBY
Circulate Planning & Policy
Equitable Land Use Alliance (ELUA)
Families and Homes San Jose
Fieldstead and Company, INC.
Housing Action Coalition
Spur
SV@Home
SV@Home Action Fund
The Two Hundred for Homeownership

Opposition

California Association of Realtors

Analysis Prepared by: Linda Rios / L. GOV. / (916) 319-3958

Date of Hearing: April 8, 2026

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

Matt Haney, Chair

ABPCA Bill Id:AB 2005 (

Author:Ahrens) – As Amended Ver:March 19, 2026

SUBJECT: Housing developments: urban lot split: owner-occupancy

SUMMARY: Creates an alternative compliance pathway for the owner-occupancy requirement of SB 9 (Atkins), Chapter 162, Statutes of 2021. Specifically, this bill:

1. Requires the seller of an urban lot split under SB 9 to disclose, in writing, any owner occupancy requirement for three years after the conveyance of an urban lot split if the seller is the managing or authorized member of a limited liability company (LLC) or the trustee of a living trust.
2. Adds the option for an applicant of an SB 9 urban lot split to select a different owner occupancy requirement, which shall be imposed as a condition of approval of a parcel map for the lot split, as follows:
   1. The applicant shall require, as a condition of sale to the homebuyer, that all of the units of both parcels of the lot split remain owner-occupied for three years, beginning on the date the parcel or unit is conveyed to the homebuyer;
   2. The local agency must record a notice of the owner-occupancy requirement as a condition of ministerial approval of the parcel map for the lot split;
   3. The parcel or unit being purchased shall be subject to a recorded deed restriction imposing the owner-occupancy requirement on any subsequent homebuyer who purchases the parcel or unit during the three-year period; and
   4. The homebuyer shall record a notice of owner-occupancy as a condition to acquiring title to a parcel or unit. The notice shall state that the homebuyer, and any subsequent homebuyer who purchases the parcel or unit during the three-year period, is required to occupy the parcel or unit or designate the parcel or unit as their primary residence.
3. Allows the managing or authorized member of an LLC or the trustee of a living trust to be the applicant for an urban lot split under SB 9.
4. Provides that a local agency shall not adopt or impose any requirement, process, practice, or procedure, or undertake any course of conduct, that applies to a project solely or partially on the basis of the project being an SB 9 lot split, including, but not limited to, restricting the eligibility of an applicant for an urban lot split.

EXISTING LAW:

1. Requires the streamlined and ministerial approval by a local agency of a duplex in a single-family zone (Government Code (GOV) Section 65852.21), and the urban lot split (subdivision) of a parcel zoned for residential use into two parcels, each at least 40% of the original lot’s size (GOV 66411.7). Specifically:
   1. Prohibits an urban lot split if the lot was previously split under SB 9, and prohibits an owner or related party from splitting adjacent lots to prevent circumvention of the two-lot limit. (GOV 66411.7)
   2. Provides that an application for a duplex or a lot split must be considered and approved or denied by the local agency within 60 days of the date the local agency receives a completed application. Further provides that:
      1. If a local agency denies an application for a duplex or lot split, the permitting agency must provide, in writing, a full set of comments to the applicant, with a list of items that are defective or deficient, and a description of how the application can be remedied by the applicant; and
      2. If the local agency has not approved or denied the application within 60 days and the application meets all qualifying criteria, the application is deemed approved. (GOV 66411.7 & 65852.21)
   3. Prohibits a local agency from imposing objective standards on a proposed duplex that do not apply uniformly to developments within the underlying zoning district. Otherwise, allows a local agency to adopt or impose objective zoning standards, objective subdivision standards, and objective design standards on development authorized by this section as follows:
      1. If those standards are more permissive than applicable standards in the underlying zone;
      2. If the standards would not physically preclude the construction of up to two units or physically preclude either of the two units from being at least 800 square feet in floor area;
      3. A city or county may require a setback of up to four feet from the side and rear lot lines; and
      4. A city or county may not require setbacks for an existing structure or a structure constructed in the same location and to the same dimensions as an existing structure. (GOV 66411.7 & 65852.21)
   4. Allows a local agency to impose objective standards for a proposed lot split so long as they are related to the design or to the improvements of a parcel. (GOV 66411.7)
   5. Requires an applicant for an urban lot split to sign an affidavit stating they intend to occupy one of the housing units as their primary residence for at least three years following the lot split. (GOV 66411.7)
   6. Prohibits units created by SB 9 from being used as short-term rentals (i.e., they must be rented for terms longer than 30 days). (GOV 66411.7 & 65852.21)
   7. Requires the Department of Housing and Community Development (HCD) to notify a local government if it has taken an action in violation of SB 9 and authorizes HCD to notify the Attorney General (AG) if the local government is in violation of SB 9, at HCD’s discretion. (GOV 65585 & 65585.1)

FISCAL EFFECT: Unknown.

COMMENTS:

Author’s Statement: According to the author, “California’s housing shortage—and the growing homeownership crisis—requires solutions at many scales. SB 9 was designed to enable small, incremental housing production led by homeowners, creating opportunities for more attainable, entry-level ownership in existing neighborhoods. It also allows homeowners to unlock value within their own property that is otherwise inaccessible unless they sell and leave their home.

However, implementation has revealed unintended technical barriers that prevent some responsible homeowners from participating, particularly those who use common estate planning tools. AB 2005 clarifies the law, so it works as intended, ensuring these homeowners are not excluded while maintaining strong protections against investor speculation.

By removing these barriers, AB 2005 helps unlock small-scale housing production, expand access to entry-level homeownership, and support long-term wealth building for California families who are increasingly being priced out of the market.”

California’s Housing Crisis: California’s housing crisis is a half-century in the making.^[1] After decades of underproduction, supply is far behind demand, and housing and rental costs are soaring. As a result, millions of Californians must make hard decisions about paying for housing at the expense of food, health care, child care, and transportation, directly impacting the quality of life in the state. ^[2] One in three households in the state doesn’t earn enough money to meet their basic needs. ^[3] In 2024, over 187,000 Californians experienced homelessness on a given night.^[4]

To meet this housing need, HCD determined that California must plan for more than 2.5 million new homes, and no less than one million of those homes must be affordable to lower-income households, in the 6^th Regional Housing Needs Allocation (RHNA) cycle. By contrast, housing production in the past decade has been under 100,000 units per year – including less than 10,000 units of affordable housing per year.^[5] Increasing the overall supply of housing, both market-rate and deed-restricted affordable, is essential to reducing upward pressure on rents and home prices, and to creating a more stable, accessible housing market for Californians across income levels.

The state’s housing crisis is not equally experienced by all Californians. Testimony by the UC Berkeley Terner Center to this Committee showed that the impacts of the housing crisis are significantly more severe for lower-income individuals, single-earner households, Black and Latino Californians, younger and older populations, and those who reside in, or aspire to live and work in, the state’s highest-cost regions.^[6] As it pertains to homeownership, homeownership rates have fallen to historic lows. The median home price in California now exceeds $800,000, effectively locking out many working families from the ownership market.

SB 9: In 2021, the Governor signed SB 9 (Atkins), Chapter 162, Statutes of 2021, which allowed up to four homes on lots where currently only one exists. It did so by allowing existing single-family homes to be converted into duplexes. It also allowed single-family parcels to be subdivided into two lots, while allowing for a new two-unit building to be constructed on the newly formed lot.

SB 9 has the potential to help address the state’s multi-million unit housing deficit. According to a 2021 study from the UC Berkeley Terner Center for Housing Innovation, the passage of SB 9 increased the amount of market-feasible homes statewide by 700,000.^[7] However, a 2023 analysis from the Terner Center determined that, in its first year, the effect of the law has been relatively limited.^[8] Los Angeles had the most activity, with 211 applications for new units under SB 9 in 2022. The state’s other large cities all reported very few applications for lot splits or new units. For example, the City of San Diego reported receiving just seven applications for new SB 9 units in 2022.

There are multiple reasons for this slow uptake. It often takes a few years for the construction process to catch up with changes to land use policy. Also, higher interest rates greatly increased the cost to finance a second unit, adding a chilling effect to the housing market. The City of San Diego has a generous local ADU program, providing a local pathway to increasing missing-middle housing which is less restrictive than the provisions of SB 9. SB 450 (Atkins), Chapter 286, Statutes of 2024, amended SB 9 to address some of the early barriers to low utilization of SB 9. SB 450 (Atkins) added a 60-day review period for SB 9 applications, removed the ability of local agencies to deny certain SB 9 projects, prohibited a local agency from imposing standards on SB 9 projects that do not apply to the underlying zoning district, gave HCD explicit enforcement authority over SB 9, and strengthened the statewide concern findings that applied SB 9 to charter cities. The provisions of SB 450 became effective on January 1, 2025, so it is too early to judge the impact of those changes on SB 9 uptake.

SB 9 Owner Occupancy Requirements: SB 9 contains an owner-occupancy requirement for lot splits. Under current law, a local agency must require an applicant for an urban lot split to sign an affidavit stating that they intend to occupy one of the resulting housing units as their principal residence for at least three years following approval of the lot split. This requirement does not apply to applicants that are “community land trusts” or “qualified nonprofit corporations.”

HCD has interpreted SB 9’s owner-occupancy provision to mean that a living trust, limited liability company, or other legal entity cannot serve as the applicant, even when the beneficiary owner or member is the current owner-occupant of the property. Furthermore, the current statute requires the existing homeowner to serve as the project applicant, who then must be solely responsible for obtaining local approvals, including navigating the subdivision process. This may prove daunting for existing homeowners and may discourage them from pursuing SB 9 projects.

SB 9 Versus ADU Law: ADU law and SB 9 are complementary strategies aimed at increasing density on single-family parcels, but they operate under different frameworks. Under current law, ADUs may be used in combination with SB 9 so long as the total number of units on a lot does not exceed four. Property owners may use both tools to achieve the maximum allowed density in a configuration that best suits their site and circumstances, for example, two primary units under SB 9 and one ADU per new lot. Through the ADU pathway, a property owner of a single-family home would be able to build four units (one single-family home, one junior ADU, one detached ADU, and one conversion ADU) on that same property. A key distinction between SB 9 and ADU law is that, through ADU law, unless a local jurisdiction has opted-in to for-sale provisions, all of the resulting ADUs would be rental units, while the second lot created under SB 9 would be for-sale.

The distinctions between SB 9 and ADU law may influence which pathway a property owner chooses when seeking to increase density, based on factors such as cost, design flexibility, and regulatory requirements. SB 9 projects often require compliance with local development standards such as height limits and objective design guidelines, and may be subject to proportionate impact fees and infrastructure upgrades, particularly for lot splits. In contrast, ADUs benefit from fewer local restrictions and exemptions from certain fees, especially for units under 750 square feet. Furthermore, SB 9 contains the aforementioned owner-occupancy requirement, and requires the property owner to be the applicant for an SB 9 development, whereas ADU law explicitly prohibits local governments from imposing such a requirement. As a result, some property owners may prefer to pursue multiple ADUs rather than an SB 9 lot split, especially if their goal is to add rental units without added costs or design requirements.

This Bill: This bill revises the provisions of SB 9 related to owner-occupancy requirements for urban lot splits. Specifically, this bill requires a local agency to condition approval of an urban lot split on the applicant selecting one of two owner-occupancy options: either the existing requirement that the applicant occupy one of the units as their principal residence for at least three years, or a new alternative requiring that all of the homes created through the SB 9 lot split remain owner-occupied for three years following their sale to a homebuyer, enforced through recorded deed restrictions and notice requirements. This three-year owner occupancy requirement would begin on the date a parcel or unit is conveyed to the homebuyer, and stays with the property for three years, meaning if the first purchaser sells the property before that three-year expiration period, the owner occupancy requirement would pass on to the subsequent purchaser.

This bill additionally allows a managing or authorized member of an LLC or a trustee of a living trust to apply for an SB 9 urban lot split, and requires local agencies to record and enforce owner-occupancy requirements associated with this new homebuyer-based owner-occupancy pathway. This bill also requires sellers of units resulting from this new SB 9 owner-occupancy pathway to provide written disclosure of the three-year owner-occupancy restriction upon conveyance, and prohibits local agencies from imposing owner-occupancy requirements beyond those established in statute.

Proponents of this bill maintain that it will improve the usability of SB 9 by allowing homeowners to utilize common ownership structures, such as trusts and LLCs, and by creating a pathway for partnerships with builders, which may increase the number of feasible projects and expand small-scale homeownership opportunities. The alternative owner-occupancy option may also help ensure that newly created units are ultimately occupied by homeowners, rather than serving as investor rental units. On the other hand, opponents may argue that shifting the owner-occupancy requirement away from the applicant and onto future homebuyers could weaken SB 9’s original anti-speculation guardrails and introduce additional complexity in enforcement, particularly with respect to tracking and enforcing deed restrictions over time.

Policy Considerations:

• All Units. This bill requires, in order to use this alternative owner-occupancy pathway, that “all units on both parcels of an urban lot split remain owner occupied for three years.” Under current law, the property owner applicant must reside in just one of the resulting units, and you can construct up to four units on what was previously a single-family lot (two lots, each with two units). It is unclear how, under the current structure of SB 9, one could achieve owner occupancy on all four units without subdividing the lot into four, which is not permitted under SB 9.
  
  The Committee may wish to consider an amendment so that one unit on each of the resulting lots, rather than all units, are subject to this owner occupancy requirement in order to maintain the existing structure of SB 9.

Arguments in Support: The Bay Area Council writes in support: “SB 9 was designed to benefit homeowners by providing a streamlined pathway to create small-scale housing opportunities on existing residential parcels. However, it has been interpreted by the Department of Housing and Community Development (HCD) in a way that limits eligible applicants when applying for urban lot splits. Currently, a living trust or limited liability company (LLC) may not serve as the applicant and, therefore, HCD effectively requires the existing individual homeowner to be included as part of the applicant group in every SB 9 urban lot split project.

The practice of placing a single-family home into a living trust or a limited liability company is a common practice in retirement and estate planning. Yet because a trust or LLC cannot sign the required owner-occupancy affidavit, some homeowners are unable to effectively use SB 9. AB 2005 would amend current law to close this gap and allow members of an LLC or trustees of a living trust who are primary residents of a single-family home to apply for urban lot splits.

The bill shifts the owner-occupancy requirement from the applicant to the homebuyer of the newly created unit, removing barriers and increasing opportunities for entry-level homeowners to partner with experienced builders and local developers. AB 2005 clarifies the intent of current law, empowering existing homeowners to build on their current properties and creating scalable solutions for Californians across the state.”

Arguments in Opposition: None on file.

Committee Amendment: The Committee may wish to consider the following amendment:

66411.7(g)(1)(A)(ii) An applicant for an urban lot split shall require, as a condition of sale to a homebuyer, that all one of the units on both parcels of an urban lot split remain owner occupied for three years, beginning on the date a parcel or unit is conveyed by the applicant to a homebuyer. If an applicant selects the option in this clause, all of the following shall be required:

Related Legislation:

SB 2601 (Lee) of this legislative session. Makes numerous changes to the processing of subdivisions under existing law, including SB 9, and authorizes the primary dwellings associated with an urban lot split to be developed or converted as condominiums, including allowing condominium conversion of an existing unit, pursuant to applicable state and local condominium law.

SB 450 (Atkins), Chapter 286, Statutes of 2024. Amended the process established by SB 9 (Atkins), Chapter 162, Statutes of 2021 for the ministerial approval of a duplex in a single-family zone and the lot split of a parcel zoned for residential use into two parcels.

SB 9 (Atkins), Chapter 162, Statutes of 2021. Required the ministerial approval by a local agency of a duplex in a single-family zone and the lot split of a parcel zoned for residential use into two parcels.

Double-Referred: This bill was also referred to the Committee on Local Government, where it will be heard should it pass out of this Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Bay Area Council
California YIMBY
Equitable Land Use Alliance
Families and Homes San Jose
Housing Action Coalition
SPUR
SV@Home Action Fund
The Two Hundred for Homeownership

Opposition

None on file.

Analysis Prepared by: Dori Ganetsos / H. & C.D. / (916) 319-2085

1. California Department of Housing and Community Development, A Home for Every Californian: 2022 Statewide Housing Plan. March 2022, https://storymaps.arcgis.com/stories/94729ab1648d43b1811c1698a748c136 ↑

2. IBID. ↑

3. IBID. ↑

4. U.S. Department of Housing and Urban Development, Point in Time Counts. https://www.huduser.gov/portal/datasets/ahar/2023-ahar-part-1-pit-estimates-of-homelessness-in-the-us.html ↑

5. https://www.hcd.ca.gov/policy-research/housing-challenges.shtml ↑

6. UC Berkeley Terner Center Testimony by Ben Metcalf, Managing Director, at the State Housing Production Legislation: Actions, Outcomes, and Opportunities Informational Hearing, February 12, 2025 ↑

7. https://ternercenter.berkeley.edu/wp-content/uploads/2021/07/SB-9-Brief-July-2021-Final.pdf ↑

8. https://ternercenter.berkeley.edu/research-and-policy/sb-9-turns-one-applications/ ↑