California's had an affordable housing crisis ever since I can remember, which is the reason my family and I made the heart-wrenching decision to leave. When people find out I'm from the Golden State, they often ask me how people can afford to live there. That's something I never could figure out. And I'm not alone. For the first time in over a century, California's population has declined.
Maybe Senate Bill 9, by changing the zoning laws for single-family homes, can help make California a more affordable place to live. Make no mistake: SB 9 is a highly controversial bill but one that's likely to pass.
What is Senate Bill 9?
California's Senate Bill 9 would do away with zoning for single-family homes only. Single-family homes can still exist in California and can still be built, but this legislation would allow multifamily and subdivided lots to coexist in what's always been single-family home country.
The bill applies to new construction and to homeowners of single-family homes who can, if the bill passes, convert their home into a duplex or divide their property into two lots.
There's also the issue of accessory dwelling units (ADUs), which are already legal in many California neighborhoods. With the passage of SB 9, "Property owners could develop more units on lots than what would have been previously possible," says Caitlin Bigelow, CEO of Maxable, an ADU company, adding, "It's exciting to see."
About single-family zoning
California's single-family home lifestyle has been around for a long time. In fact, the concept began in California; areas zoned for only single-family homes began in 1916 in Berkeley, partly to keep "undesirables" out. (Single-family housing is the most expensive housing type.) And to this day, 83% of the Bay Area is single-family housing, while the figure nationally is 75%.
One only needs to look around Los Angeles and San Francisco to see there's a huge homeless problem. Combine that with the sprawl that is California (replete with lawns that need watering in a state with an ongoing drought problem), and you have a powder keg ready to explode. Ignoring California's problems and hoping for a return to a simpler life is probably unrealistic at this point.
The arguments for and against SB 9
People against the bill are, you guessed it, single-family homeowners. They don't want the "character" of their neighborhood changed, and they make arguments such as neighborhoods as we know them will end. They also worry about their property value decreasing, which is a valid concern. More home density in an area means more competition, which usually drives down prices.
People who support SB 9 say the bill can lead to homeownership for more people and can make housing more affordable.
How SB 9 helps people become real estate investors
Under SB 9, people in California can now afford to become real estate investors by converting their home into a duplex or by putting another home on their lot. If you want to put an ADU on your property, Bigelow says to "do your research." She adds: "You want to understand what the regulations are in your neighborhood. ADU legislation varies by jurisdiction."
The Millionacres bottom line
Many California homeowners are house poor -- with a median house price of $811,170 as of July, millions of homeowners are spending too much of their income on housing. Spending more than 30% is considered unaffordable, and more than 4 million California households fit into that category.
It looks as if California real estate is changing, and the changes could present some interesting investment opportunities, both for would-be homeowners and for mom-and-pop investors.