California’s housing shortage has reached epic proportions in 2022, with inventory plunging, launching prices to historic heights.

The state’s legislators have attempted several fixes in recent years, with Senate Bill (SB) 9 one of the most recent. SB 9 took effect on January 1, 2022, effectively banning single family zoning in California.

SB 9 aims to ease the process and ability of homeowners to create a duplex or subdivide their single-family residential lot into up to four units. The bill’s authors highlighted the new law’s potential to increase affordable housing inventory in a tight real estate market and create additional income streams for homeowners.

However, opponents of increased density have identified and begun to exploit some of the law’s loopholes. For example, properties are exempt when they are located in a:

  • historic district; or
  • site designated as a landmark by the city or county. [Calif. Government Code 65852.21(a)(6)]

The City of Pasadena recently attempted to take advantage of these loopholes by passing an urgency ordinance to exempt much of the city by arbitrarily declaring large areas landmark districts. For reference, passing an urgency ordinance requires the health and safety of residents to be in jeopardy. Since the subdivision of lots does not in fact jeopardize anyone’s safety, this is a clear attempt to sidestep the new law. Further, new landmark districts covering large swathes of the city have been proposed specifically to avoid complying with SB 9, according to the Office of the Attorney General (OAG).

In another completely transparent attempt to avoid SB 9 compliance, another local government — the town of Woodside — recently declared the entire town a mountain lion sanctuary! The state was quick to notify the town’s planning manager that its declaration was unlawful and needed to be amended, according to the OAG. After all, a developed suburban neighborhood isn’t exactly prime mountain lion habitat.

Woodside has since revoked its declaration, but Pasadena is still fighting the state on its ability to declare landmark districts exempt from SB 9. After receiving a notice from the OAG that it was violating SB 9, the Pasadena Planning Commission chose to pass their landmark district exemption, anyway, according to Pasadena Now.

So, what happens next? In this game of zoning regulations chicken, it’s likely the OAG and the City of Pasadena will end up in court.

Related article:

What does the end of single-family zoning look like?

Contentious zoning

Zoning is a fiercely contentious issue for Californians. The ever-worsening housing shortage makes the need for more housing clear for all housing participants — just as long as it’s built “somewhere else.” Now, as new legislation removes power from the grips of not-in-my-backyard (NIMBY) advocates, they aren’t going down without a fight.

California’s housing market has long been held back tight zoning rules, which have instated restrictive:

  • land use regulations;
  • parking restrictions;
  • lot sizes;
  • height restrictions; and
  • permitting costs and times.

With all these restrictions, it’s much easier for builders to stick to single family residences (SFRs), which has resulted in a reduced housing supply. In fact, each year since 2018 there have been more SFRs constructed in California than multi-family units.

The end result is less housing — a supply-and-demand imbalance — which has led to record-high home prices and rents.

The overall cost of a home today is hundreds of thousands of dollars higher due to tight zoning which restricts the housing inventory. Specifically, zoning restrictions alone have driven up home prices by an average of:

The best way to stabilize home prices is to loosen zoning and allow residential construction to rise to meet the level of demand present in individual neighborhoods. This organic growth will gradually occur as California legislation catches up — so long as local governments cooperate.

Related article:

Zoning restrictions cost Bay Area homeowners $400,000+ on a home