California SB-50 Creating New Opportunities?

Question

Just curious as to what people are thinking about SB-50 and the changes it would make to single family zoning throughout the state of California. Could open up some interesting opportunities to those of us in markets like the Bay Area that currently don't make economic sense for things like buy and hold.

Ryan Heywood · Answer

What I found interesting is the ban on demolition of single family for transformation into multifamily, as well as a restriction on structure size increase at 15% I understand that this is to help preserve neighborhood character, but seem that it may encourage “slumlord-style” splitting of single family homes. Might raise the value of unbuilt lots.

The HOA angle is something to take into consideration, where I live old CC&Rs prevent ADU construction. Originally I thought it was a detriment, but if this passes it very well may boost the equity.

Ramon Flores · Answer

@Ryan Heywood Thank you for making me aware of this. If this passes I may switch to building fourplexes in L.A. This can have positive and negative consequences. I have seen myself how multifamily housing has ruined once beautiful neighborhoods in the South Bay. This is great for investors but BAD if you live in a SFH next to one.

Imagine someone builds these around your home and suddenly, there is nowhere to park on the street. Renters may attract low quality people into the neighborhoods and then property values start dropping. A home with an HOA community will suddenly be more desirable.