Unlocking New Revenue Streams with SB 9: A Guide for Multifamily Property Owners

Last Updated: April 30, 2024By Tags:

Greetings! I’m Seth Phillips, founder of ADU Gold, and I’m here to discuss an exciting opportunity for your multifamily portfolio: Senate Bill 9 (SB 9). This innovative California legislation empowers homeowners to convert single-family properties into multi-unit dwellings, creating a unique chance to unlock additional revenue streams.

SB 9: Expanding Your Investment Horizons

Traditionally, Los Angeles’ single-family zoning limited development options. SB 9 disrupts this by allowing single-lot properties to accommodate up to five total units. Here’s how it breaks down:

  • Duplex Development: Convert a single-family home into a two-unit duplex, instantly doubling the potential rental income. You also have the option of scraping the lot and building a new duplex instead of converting, potentially creating a more modern and efficient unit.
  • Accessory Dwelling Units (ADUs): Additionally construct up to three ADUs. These self-contained secondary units are highly sought-after by renters, providing significant rental income potential. (Important Note: All cities in California must allow a total of 4 units. The City of Los Angeles goes above this requirement and allows 5 units total.)

Now, imagine applying this to neighboring single-family properties near your existing multifamily buildings or anywhere else in the City of Los Angeles. SB 9 unlocks the potential to significantly increase housing options and generate substantial new revenue streams within your investment portfolio.

The Financial Allure of SB 9

The financial benefits of SB 9 are compelling:

  • Increased Rental Income: With additional units, your total rental income can grow considerably. Consider the potential of a duplex generating double the rent compared to a single-family home, or the additional income from Three well-designed ADUs.
  • Enhanced Property Value: Properties with more units often command higher valuations. By strategically utilizing SB 9 development, you could see a significant appreciation in the overall value of your investment portfolio.
  • Long-Term Investment: The additional rental income generated by SB 9 development can contribute to a more stable and secure long-term investment strategy.

Beyond the Numbers: Multifamily Owners Advantage

As multifamily owners, you possess a distinct advantage in navigating SB 9. Your expertise in multifamily property management translates seamlessly to overseeing ADU or duplex development. You can leverage your existing knowledge of tenant relations, maintenance procedures, and local rental markets to ensure successful implementation of SB 9 projects. Additionally, your experience managing larger properties can be valuable when considering the overall project scope and potential tenant base for new units.

Beyond Bricks and Mortar: Community Impact

The benefits of SB 9 extend beyond your portfolio. By increasing housing options, particularly through well-designed ADUs and duplexes, SB 9 can contribute to a more vibrant and diverse community. More residents mean a potential increase in foot traffic for local businesses, fostering a stronger sense of neighborhood. Additionally, SB 9 has the potential to alleviate the housing shortage in Los Angeles, making it easier for young families, professionals, and students to find quality housing options.


Taking the Next Step

SB 9 presents a unique opportunity to expand your investment horizons, generate significant new revenue streams, and contribute positively to the Los Angeles community. Here’s how to get started:

  • Connect with an ADU Specialist: Make sure they specialize in navigating the complexities of SB 9 development, from feasibility studies to construction expertise. They will help you explore the possibilities and determine the best approach for your specific properties.
  • Research City Guidelines: Familiarize yourself with the specific requirements and regulations outlined by the City of Los Angeles for SB 9 development. Utilize the resources provided by the Los Angeles Department of City Planning: https://planning.lacity.gov/]

By proactively exploring SB 9, you can unlock new financial opportunities, contribute to addressing the housing shortage, and solidify their position as leaders in the Los Angeles multifamily market. Let’s work together to turn this innovative legislation into a win-win situation for both your portfolio and the greater Los Angeles community.

Written by Seth Phillips

Founder and Head of ADU Gold Licensed Broker/Agent 34 Years with 13 years of Real Estate Development experience. Seth has been a part of over 100 Home Renovation projects, and 10+ Million Dollar home developments.

Seth Phillips Founder ADU Gold





Email Subscription

By submitting this form, you are consenting to receive marketing emails from: Apartment News Publications. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact