What Real Estate Experts Think of the New California HOME Act

October 3rd, 2023  / Author: Cesar Gomez

Alarmingly low supply in the state of California has been troubling the housing experts and the state government, who have been trying to find solutions for this issue. From higher taxes on vacant homes to LA’s plan to build 500,000 more housing units - there are many ideas addressing this problem.

The latest attempt was a state-wide act that allows the division of single-family property. The California HOME Act, however, collected critiques from many real estate experts and government officials, who are worried that this well-intended law could be a double-edged sword. Those who advocate for this Act deem those concerns as ‘’overreaction’’.

SB9 Law - What Is It?

Senate Bill 9, also known as the California Housing Opportunity and More Efficiency “HOME” Act, or the “duplex bill” went into effect Jan 1, 2022 in California. It is a part of the initiative against the housing crisis in this state, which is more than 3,5 million housing units short but builds only 80,000 units per year.

This bill provides a legal process for single-family property homeowners to subdivide their lot or add another residential unit to their property. Essentially, this is about turning a single-family property into a multi-family property.

Some historical districts were exempted from the SB9 and local governments have the right to impose regional ordinances, however, a community needs to make sure that the limitations do not conflict with the state law. According to some estimates, around half a million properties in California qualify under SB9.

The supporters cite three main benefits that could come from this bill. The first one is addressing the shortage crisis in the housing market, by creating more supply. The second benefit is about building generational wealth, an issue for many people, especially minorities. And, lastly, the supporters claim that taking advantage of this law could bring more rental and ownership opportunities to those who are often exempt from certain neighborhoods.

The Opposition Is Concerned About the Implementation

Those opposing the duplex bill say that it is not well-thought-out, because it will not be beneficial to regular homeowners, but rather to the investors. There are three points that they make against this bill:

  • Building multi-family properties can ruin the character of certain neighborhoods;
  • Having a multi-family building in the neighborhood can decrease the value of single-family homes around it, especially if the parking situation is poor; and
  • Investors are flooding the market, as is - they can use this bill to flip or rent a property after they transform the single-family home into a multi-family unit.

The opposition claims that 71% of all Californians are against this bill, and some local government leaders consider challenging the bill via court, this includes Solana Beach, Torrance, Carson, and Redondo Beach.

Others are protesting against the bill by implementing the ordinance, which is allowed only in certain neighborhoods. Pasadena tried to exempt around 20% of their land from the bill regulations, however, the state government did not allow it.

Proponents Say It Is an Overreaction

Proponents of the bill argue that this bill only allows for the division to happen, it is not encouraged, nor does it cover enough properties for it to be noticeable. Director of communications for California YIMBY, Mathew Lewis said for Hollywood Reporter that ‘’when you scatter (500,000 units) all over the state, what you’re going to see is one to two per neighborhood”.



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