What it's like to do an SB 9 lot split in Atherton | January 20, 2023 | Almanac | Almanac Online |

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News - January 20, 2023

What it's like to do an SB 9 lot split in Atherton

The owners behind the first town-approved project share insights on the process

by Angela Swartz

Historically, Atherton has been known as a single-family home town. In the 1920s, town officials coined the term the "Atherton acre" for its roomy minimum lot size of slightly less than an acre — 0.92, to be exact.

But with Senate Bill 9, the new state duplex law enacted in 2022, Atherton began to see applications trickle in for property owners wanting to split their lots and build up to four homes.

The first property approved by the town for such a split is 2 Lowery Drive. The final map for the property is expected to be recorded by San Mateo County this week. On site currently is a one-story, five-bedroom, three-bathroom home, built in 1960 on a 1.22-acre lot adjacent to an elementary school. It last sold for $5.6 million on Dec 13, 2021, according to Zillow.

Two of the partners who own the site, Mircea Voskerician and Melanie Griswold, spoke with The Almanac about the process of splitting a lot in Atherton.

Voskerician, a Palo Alto-based real estate developer, joined the project in June 2022 after meeting Griswold, a developer based in San Jose, at an open house in Los Altos. His portion of the property, now 77 Edge Road, is about 22,000 square feet.

"SB 9 opens up to more opportunities to use land in California in different ways," Voskerician said. "I don't agree with the concept that you're going to change how Atherton looks or how Palo Alto looks or how Mountain View looks (with SB 9)," Voskerician said, adding that the lot split will still generate expensive homes. "It's not going to be an affordable house. It's going to be $3 million to $4 million, $5 million or more."

Property owners must complete an application, create a map of what the split will look like and pay a $1,519 fee.

This particular development also had an upside for neighbors, according to Voskerician.

"Neighbors were very interested to see a house developed there," he said. "It was an unmaintained house for a long time. They'd like to see something new and a family there. Nobody said anything like, 'Oh my God there are going to be two homes.'"

Griswold, who purchased the property in 2021, said she and her partners were able to help remove a lot of overgrown trees on site as well. Much of the site was undeveloped, she said.

"It's a great example of how SB 9 could work," she said. "Otherwise you could have a 10,000-square-foot home. Now you can have two good-sized homes that are going to look really nice with all the setbacks. It will give two families the opportunity to live in a really beautiful property."

What SB 9 does

SB 9 took effect in January 2022 and requires local agencies to grant so-called ministerial approval to certain lot splits and up to two primary housing units on each resulting lot, with 4-foot minimum side and rear setbacks. Ministerial approval means 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 are already allowed to 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 two new parcels of approximately equal size. The newly split lots 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, according to the town.

An owner could also split a lot and sell the second one.

Plans for the site

For now, 2 Lowery's brick-and-wood-slat home with a shake roof is boarded up. It will be demolished to make way for new ones.

Voskerician plans to meet with architects and finalize his plans for his lot, which is about 0.51 acres, in the first half of this year. He said he plans to start designing the home in the next month and build throughout 2024. He can build up to a 4,500-square-foot home above ground, plus an ADU of up to 1,200 square feet.

Voskerician and his wife are still considering whether they'll build a house for themselves at 77 Edge or just build it and sell it.

Griswold will start designing the home for her about 0.69-acre lot this year and hopes to start construction this year. She can also build up to a 4,500-square-foot home and said she also plans to build an ADU. She noted that SB 9 doesn't increase the overall square footage allowed on the site, so you're basically taking the original square footage allowed and splitting in half between the lots.

Because of SB 9 rules, one of the owners is required to live in one of the homes for three years. Their third partner, Stephanie Yi, has agreed to do so.

YIMBY critique of SB 9 adoption in Atherton

Rafa Sonnenfeld, a policy director at YIMBY Action, a housing advocacy group, said that Atherton's SB 9 ordinance is fairly restrictive.

"Atherton should be a poster child for SB 9 projects because they have so much land and such high land values," he said. "They've been completely resistant to the law and done the bare minimum. ... It's clear from reading the ordinance they're not willingly going along with state law."

The town noted that it was adopting the law "under protest, as it is the council's position that in enacting these laws, the legislature has improperly usurped local land use authority."

There are some required setbacks, limitations on size of new units built (just up to 800 square feet in some cases) and the same impact and development fees as a standard single-home building project are required. Those fees could be waived to encourage development, Sonnenfeld said.

"Atherton is the kind of place SB 9 was designed to be useful," he said. "Residents have the financial ability that a lot of other communities do not have to fund a project out of pocket. ... I'm sure you'd see a lot more interest if the restrictions were eased. But even with those restrictions, it speaks to the demand and interest people have to live in Atherton."

People can also use SB 9 for tear-downs because it may be an easier path to get approval in the city, thanks to its ministerial approval process.

Town Manager George Rodericks said that while he agrees with the premise that there would be more SB 9 lot splits if the town relieved setbacks, limits on the size of units and other restrictions, the council felt that it was in the best interest of the community to try and retain the community's character of large lots and large setbacks.

School district's interest in lot

This past fall, the Menlo Park City School District considered purchasing 2 Lowery Drive to help accommodate enrollment growth, but ultimately decided the property was too expensive to justify buying. At the time, the district wasn't yet sure if its enrollment was expected to decline or increase over the next five years. Its demographer reported in December that enrollment is forecast to decline by about 7.4% in 2027.

Its location was ideal for expansion given that it is next to the Lower Laurel School campus, former Superintendent Erik Burmeister said.

Complexity of SB 9 lot splits

Yi and Griswold turned in a tentative map in February, which was approved by the town in July. The town approved the final map in December.

"It shouldn't take 10 months," Voskerician said. "I understand it's a new process."

Griswold, who has other SB 9 projects in cities like Los Altos, Campbell and Monte Sereno, said learning the SB 9 process has been an education for her. Griswold, who is working on SB 9 projects in other cities, said Atherton did a good job of adapting a very specific ordinance.

"When you know what you need to do it makes it easier," she said. "It's become more clarified in months since it's been adopted. ... It's been a bit of starts and stops and trying to figure out the process. I'm really pleased with the outcome."

Voskerician said the partners worked with a civil engineering firm on the map because doing it is complicated.

Most planning in California is pretty complicated, she noted.

"There's a lot of things that can trip up people," she said. "There's a lot of things you don't anticipate with utility connections. It's hard to know whether a property is a good candidate for SB 9."

Rodericks said that the town has begun to streamline the SB 9 process for owners through the basic application, standardized forms, review checklists and required affidavit process.

Other lot splits under consideration

Town staff is reviewing final maps for two other lot splits in Atherton, at 78 Cebalo Lane and 125 Glenwood Ave.

The 78 Cebalo Lane site is located near the intersection of Selby Lane and El Camino Real, bordering Redwood City. The site has a four-bedroom, 2.5-bath home built in 1964 on a 0.84-acre lot and was last sold for $4.5 million in November 2021, according to Zillow.

Tentative maps for two other lot splits in Atherton have been approved by staff. These sites are 94 Palmer Lane, a 0.28-acre lot, and 1 Gresham Lane, a 0.32-acre lot.

The 1 Gresham site is included in a town sites inventory of lots to rezone to become multi-family housing as part of its 2023-31 housing element. It's unclear how this potential rezoning could impact the owner's plans.

Rodericks said that if the lot is split by the time the town completes the upcoming element draft, he'd add both lots into the upzoned area.

"One never knows what a developer might choose to do," he said.

The town is also reviewing an SB 9 split for 197 Glenwood Ave., but no tentative map for the site has been approved yet. The home is on a 1.29-acre lot last sold for $4.95 million in December 2020, according to Redfin.

Once a final map is approved by the town, it goes to San Mateo County for final recording.

Email Staff Writer Angela Swartz at [email protected]

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