California’s housing crisis has driven policymakers to create laws that encourage residential density, including Senate Bill 9 (SB 9) and Accessory Dwelling Unit (ADU) legislation. While both laws aim to increase housing supply, their rules differ—especially when it comes to rental properties. So, can you build an ADU on a property that is currently rented under SB 9? Let’s break it down.

Understanding SB 9 and ADU Laws

What is SB 9?

SB 9, also known as the California Housing Opportunity and More Efficiency (HOME) Act, allows homeowners to:

• Subdivide a single-family lot into two separate parcels.
• Build up to two residential units per lot, meaning a total of four units could be possible after a lot split.

The law is designed to streamline small-scale residential development by removing local government discretion and expediting approvals for qualifying projects. However, it also includes tenant protections to prevent displacement.

What is an ADU?

An Accessory Dwelling Unit (ADU) is a self-contained living space that can be built on a residential lot. ADUs can be attached, detached, or converted spaces (e.g., a garage conversion). Unlike SB 9, California’s ADU laws generally allow ADUs on rental properties without restrictions based on past tenancy.

Can You Build an ADU on a Rental Property Under SB 9?

The answer depends on whether you are splitting the lot or simply adding an ADU:

✅ If You’re Adding an ADU (Without a Lot Split)

You can build an ADU on a rented property under California’s ADU laws, which are separate from SB 9. Since ADU laws do not restrict rental properties, landlords and homeowners can construct an ADU even if the main house is currently rented.

🚫 If You’re Using SB 9 to Split the Lot

You cannot use SB 9 to split a lot if the property has been rented in the past three years. SB 9 includes tenant protections that prevent landlords from evicting tenants or redeveloping recently rented properties to take advantage of lot-splitting benefits.

Key Takeaways

• ADU laws allow ADUs on rental properties.
• SB 9 does NOT allow lot splits on properties rented within the past three years.
• You can still build an ADU without SB 9’s lot-splitting provision.
• If you own a single-family rental property, ADUs are your best option for increasing density and rental income.

Final Thoughts

For property owners looking to maximize rental income or housing opportunities, ADUs remain the most flexible option. SB 9 provides another pathway for increasing housing supply, but it comes with stricter requirements, particularly regarding rental history.

Before proceeding with an ADU or lot split, check with your local city or county for zoning rules, permitting requirements, and any additional restrictions.

Need help navigating California’s housing laws? Stay informed and consult local experts to make the most of your property investments!