With California's new lot-split law in effect, Atherton has received four applications to subdivide properties and build new homes since late February. And the town expects more to come.
Although property owners have yet to apply for building permits to start work on the sites, the applications mark the first step in the process to add homes under Senate Bill 9 (SB 9). This comes at a time when residents have expressed concern about more development in town.
The first application, filed with the town on Feb. 22, seeks to subdivide 78 Cebalo Lane, adding another home on the southeast portion of the about 40,000 square foot lot. The property, on a cul-de-sac off of Selby Lane, was last sold in November 2021 for about $4.5 million, according to Sotheby's International Realty.
The second is at 2 Lowery Drive, in the Lindenwood neighborhood, received by the town on Feb. 25. The owner would like to build two new single family houses, each with one attached smaller unit. The home sold for $5.6 million in December 2021, according to Compass real estate group.
The town received a third application for 125 Glenwood Ave. on March 31. The most recent application was for 94 Palmer Lane, submitted on Wednesday, May 4. The Palmer Lane home sold in March for about $4.8 million, according to Zillow.
The projects rely on SB 9, the state duplex law that took effect in January, that requires local agencies to grant ministerial approval to certain lot splits and up to two primary units on each resulting lot, with 4-foot minimum side and rear setbacks. Projects don't need to be approved by the Planning Commission or City Council and are handled by town staff without discretionary review or a hearing.
Owners can already add accessory dwelling units (ADUs) or junior ADUs to their properties, but SB 9 allows an owner to create a new lot. The owner can subdivide an existing parcel to create no more than two new parcels of approximately equal lot area. The new parcel must be at least 40% of the original parcel's size.
Owners must sign an affidavit that states they will live in one of the units as their primary residence for at least three consecutive years, a requirement added to the law to reduce investor speculation. The law also prohibits the development of small subdivisions and prohibits SB 9 lot splits on adjacent parcels by the same person.
If the lot splits are approved, then the applicants can then apply for building permits, said Assistant Town Planner Ralph Robinson.
There have been two other initial inquiries about SB 9 lot splits, he said.
How much new housing could Atherton see?
SB 9 could result in about five new housing units per year in town, according to a February staff presentation. This would result in about 40 new units that would go toward the town's 2023-31 Regional Housing Needs Allocation (RHNA) numbers. Atherton is required by the state to plan for the development of 348 new housing units compared to just 93 during the prior eight-year cycle.
SB 9 projects are more likely to take place on properties with an older residence, staff noted. There are about 606 parcels in town greater than one acre with a main residence built before 1970, and 687 parcels greater than one acre with a primary home built before 1980, according to the town. The survey didn't include "Atherton acre" lots, lots slightly smaller than an acre, or about .92 acres, which predate the town's one-acre-minimum lot sizes, town officials noted.
The most financially viable option for most property owners will be to split the lot and built one single family home on each lot, the presentation states.
Neighboring towns and SB 9
So far, the neighboring towns of Woodside and Portola Valley have not received any SB 9 applications, according to their town managers Portola Valley has received two inquiries about projects, said Town Manager Jeremy Dennis in a Friday email.
Both towns have stricter limits on building SB 9 projects. For example, in Woodside, just west of Atherton, officials passed an ordinance to limit SB 9 unit sizes to 800 square feet, and prohibited basements. Portola Valley also limits SB 9 buildings to 800 square feet.
Woodside made news earlier this year when the Town Council froze all SB 9 applications, citing an exemption for mountain lion habitats. Woodside reversed the decision when State Attorney General Rob Bonta told town officials they could not evade state law.