Monday Market Update: SILVAR®’s Review of New Housing Laws
Could new legislation lead to an inventory boost?
March is nearly halfway through, and the clocks have been sprung forward. As we look ahead into what housing will hold this year, we wanted to share an overview from SILVAR® as to a few new housing laws that could increase local inventory. Just last week, Palo Alto Online published an article titled ‘How these new California real estate laws could boost the region’s housing inventory,’ have you heard of any of these laws or seen them in action?
Split Lots
Senate Bill 450, filed September 19, 2024 and took effect on January 1, 2025. SB 450 reduces the red tape associated with land subdivision in conjunction with SB 9 projects. While Senate Bill 9 streamlined the process for homeowners to create a duplex or subdivide their lot, many cities and counties created loopholes to block this type of development. SB 450 “prohibits a local agency from imposing objective zoning standards, objective subdivision standards, and objective design standards that do not apply uniformly to development within the underlying zone.” Read more here.
Transit Corridors
Assembly Bill 2553 was also signed into law in September of 2024 and is now in effect, with implications for spurring more housing near bus routes and rail lines. It changes the definition of a major transit stop and requires local municipalities to set lower traffic impact mitigation fees for transit-oriented housing developments.
Housing Law Accountability
Senate Bill 1037 took effect as of January 1, 2025 and gives the attorney general power to impose civil penalties on cities and counties that violate certain housing laws. When cities and counties previously ignored state laws that streamlined certain types of new construction or failed to adopt a compliant housing element, the state attorney general had to file a lawsuit and wait for a judge’s ruling. Now local municipalities can be held accountable as soon as they violate a state housing law with a large monthly penalty of $10,000 - $50,000 per month. Those funds would go towards developing affordable housing in that region.
Easing ADU Requirements
ADU’s are considered an important part of the state’s plan to expand affordable housing. As such, AB 2553 expands the amnesty program that enables property owners to apply to legalize existing ADUs without facing harsh penalties or excessive fees. A simplified permit process focuses on ensuring existing ADUs meet basic health and safety standards.
Buyer-Broker Agreements
Related to the NAR® settlement which changed real estate transactions as of August 2024, California Assembly Bill 2992 now requires buyers and their agent to sign a buyer-broker representation agreement before an offer can be made on a property. With intentions of clarity in the agent’s role and transparency in the home buying process, this law should reinforce the trust and confidence that buyers have as they purchase properties in a changing market.
Please note that the above summary is for informational purposes only and is not intended as legal advice.
Cheers to changes for the better in 2025,
Bobbi
Bobbi Decker
DRE#00607999
Broker Associate, Bobbi Decker & Associates
650.346.5352 cell
650.577.3127 efax
www.bobbidecker.com
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