California SB9 Explained: How Investors Can Build 4 Homes on One Lot

Petra Buchanan (00:00)
SB9 is the big one that everybody’s really excited about. So it basically means you can take an urban lot, split it in two, and put two residences per lot. So you end up with four residences, whereas before you could only have two one residence on woo per lot. ⁓ so that’s huge. And then we have SB9 because a lot of cities and counties.

We’re creating roadblocks to SB9. And so now we have SB450 to make it harder for cities and counties to make get pushing through SB9 difficult or yeah, difficult. We also have SB130 that makes CEQA a lot easier.

Cody Crabb (02:15)
Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb, and today I’ve got Petra Buchanan with me.

Petra is the owner of Buchanan Land Use Consulting in California, where she helps developers, builders, and property owners navigate the permitting and land use process. Today we’re talking about how California’s recent housing law changes.

are creating new opportunities for investors. Petra, thanks so much for coming on the show today.

Petra Buchanan (02:39)
Happy to be here.

Cody Crabb (02:40)
how does someone go from running a cannabis farm to where you are now? I mean, it seems like two paths that are very much not in interconnected, are they?

Petra Buchanan (02:50)
No, not at all. ⁓ but but I mean somewhat. I what can I say? I had a cannabis farm and I am a very cheap person and I was shocked at how much the consultants were charging, like, you know, $260 an hour. And I also just like to figure out things on my own. And so I learned how to draw buildings and I learned how to draw maps and I did all my own consulting work. And that led to a lot of because also

It was this thing like I was in the industry, I was on all these Facebook groups already, and I was really excited about it. So I would talk about like the regulations, the permitting, all of it. And so then people just started hiring me. And next thing I know, I was drowning in work and learning a lot. Like it was basically like I felt like I went back to graduate school. It was really intense.

Cody Crabb (03:38)
Yeah, and and with those kinds of ⁓ experiences, I feel like you you kind of get thrown in in the deep end in a lot of ways. you know, you’ve you ha you kind of are teaching yourself you don’t know what you don’t know, so you’re kind of filling in some gaps. for someone that’s never worked with a land use consultant before, like where do you fit into the development process? What types of problems are you helping to solve exactly?

Petra Buchanan (03:59)
I help with anything you need to develop your property from A to Z. Like I help people with bare land. Say, like I have had a client recently who was near Bakersfield, raw land, raw parcel, they needed septic, they needed a well, they need electricity. Well, they needed solar. ⁓ and so I worked with all of the professionals, ⁓ engineers, septic installers, solar installers.

everybody to make the project happen. I worked with the county. I did not draw the building plans for that project. I did draw grading plans for that project. because I was working with the builder so I just used his plans. and so from from beginning to end we worked through how to get this parcel permitted. ⁓ it was in this flood zone so we had to do a grading plan and and do a raised pad to put the house on. And it’s

Yeah, it’s like through completion. Once they’re done building, I’m still there meeting with the inspector to get it signed off to make sure everything’s okay and approved.

Cody Crabb (05:03)
you’ve been doing this for about ten years now. And during that time, California has changed quite a bit. ⁓ what are some of the biggest housing law changes investors should be paying attention to today?

Petra Buchanan (05:13)
There are so many of them. So SB9 is the big one that everybody’s really excited about. So it basically means you can take an urban lot, split it in two, and put two residences per lot. So you end up with four residences, whereas before you could only have two one residence on woo per lot. ⁓ so that’s huge. And then we have SB9 because a lot of cities and counties.

We’re creating roadblocks to SB9. And so now we have SB450 to make it harder for cities and counties to make get pushing through SB9 difficult or yeah, difficult. We also have SB130 that makes CEQA a lot easier. Do you know what CEQA is?

Cody Crabb (06:00)
I would love it if you would explain it. Okay.

Petra Buchanan (06:03)
So it’s the California environmental regulations laws, and it just slows down a lot of projects. And so basically they’ve made it so that like ADUs don’t need to go through the sequel review. Certain, a lot of projects no longer need to go through the sequel review. They’re streamlined through it. But now there’s also AB 131, which is for it’s for properties like they have one issue.

And instead of forcing them to go through the whole entire Sequa review, they can just focus on getting through that one issue because Sequa is insane. Like it’s basically like an environment an environmental review of your entire property. Like they could require biologists to come and find rare flowers on your property to stop your project. I mean, it can get really intense. So having it less onerous is amazing. yeah, and then also especially like

Needing only to focus on one part of the review instead of having to do a full CEQA EIR is also amazing. And then the next law that was passed is 79, which makes it a lot easier to build near transit. So even if the zoning isn’t supportive of building residential homes, it it basically bypasses a a lot of things like zoning to allow for

more building higher built like taller buildings, bigger buildings, and more occupancy near transportation. ⁓

Cody Crabb (07:32)
So if I’m an investor, ⁓ let’s say I’m I’m an investor listening to this, what is the practical takeaway? So give me some headaches or impossibilities from just a few years ago that are now something that you may want to pay attention to if you’re an investor.

Petra Buchanan (08:35)
It’s it’s all of it, it’s I’m not no I’m not sure about headaches, but like it just makes everything easier. There’s less roadblocks, there’s statewide standards is a big thing because like I don’t know if you’re aware you deal with this, but like I find it in schools and all these building departments. Like every county and city is completely different. So you have to like adhere to all these different rules. It’s ridiculous. Like it is so money wasting for all of us. It’s like

Money wasting for individuals, it’s money wasting for taxpayers, it’s just money wasting. And so now they’re really pushing through more and more statewide standards that the counties and the cities have to adhere to whether they want to or not.

Cody Crabb (09:15)
Yeah, I suppose that makes sense ’cause if unless a city is substantially different, I mean, why what is the reason to change it, honestly?

Petra Buchanan (09:21)
Well

and even if the cities are different, ’cause you know, they have these really affluent cities that, you know, are trying to block stuff or just like, I don’t know, cities that think they’re different and then they have these like, you know, silly reasons to block more housing. And the state’s basically saying no.

Cody Crabb (09:38)
Yeah. So it sounds like you know, the the z the zoning and the all these all there’s so many things to take into account. it’s kind of the bureaucratic stuff that really ends up tripping up some people ⁓ along the way. so what are

Petra Buchanan (09:53)
fun like figuring it out all out and like, you know what I mean? You have a project and you’re just like, okay, how can we fit everything together to basically make it work for us, essentially? Like to me, it’s really fun.

Cody Crabb (10:05)
To me, that does not sound fun. To me, that sounds like the worst part of every project. So that so that’s amazing that there is someone that can that can help with that. No, that’s that’s great. That’s cool. Well, that’s that I find that interesting because I do like you mentioned this before we started recording. I feel like there are ⁓ you know, with with any with any kind of consultant or person you would hire or something, there’s gonna be this kind of subset of people that just don’t want to do that thing and the it’s some expertise that you bring to

that that you’ll just you can do a better job. So I’d love to hear, you know, what are give me some examples of things that you would be able to do that maybe someone kind of trying to handle this on their own would miss.

Petra Buchanan (10:44)
That’s that I mean, first of all, I can draw your house and your map. I highly doubt people can do that on their own. a lot of it is just this annoying, headache, you need to like again, every planning and building permit is different. They’re gonna have different standards, ⁓ and knowing how to navigate them and and be able to creatively problem solve.

It it’s just like it’s such a headache to to deal with the permitting prop process. Like you div you put everything together, you submit it all, and then you get these corrections. And I’m guessing most homeowners just wouldn’t know where even start.

Like they’re not even gonna know what they need to to do. It just it would yeah, I’m just gonna be a lot faster and more efficient than a homeowner.

Cody Crabb (11:31)
you see the same patterns and you see the same issues. I mean and like you said, especially somewhere like California, there are lots of not only are there lots of regulations and and stuff, there’s also tons of different

counties and cities and things that kind of go under this umbrella of you you mentioned the statewide the statewide regulations are starting to kind of come in. ⁓ is there anything that’s kind of in the pipeline right now that is potentially going to be a thing ⁓ in the future that you’ve seen?

Petra Buchanan (12:32)
Is a really good question. And I can’t say there’s anything specific that I’m aware of at the moment. Yeah. Now I’m gonna look into it and make sure I know about it. Yeah, totally.

Cody Crabb (12:39)
Yeah. Well see, and I had to ask now now I give Exactly

a ⁓ lot of times it’s when it comes to this part, this is the part that that well when I say nobody wants to do, I guess I’m not including you. this is the part where the investors this is not the exciting part to them. This is a lot of for a lot of investors, this is like the

Yeah, we gotta get through the busy work so we can do the cool part, the the renovation part, the the get in the actual money part. And so I I find it cool that there’s actually a way you there may be a way to to kind of do that. Is it is this is your role something that has that exists elsewhere too, or is this kind of something that you’ve stumbled upon that is just you?

Petra Buchanan (13:18)
of us out there. There’s yeah, there’s a lot of people out there. ⁓ it is interesting. Like I have started I’ve gotten hired to fix some issues that other permit companies have created. And it’s a little like impressive how half-assed some of them are. Like you know what I mean? They have the nice website. They just seem really like they have it together. And then they just literally didn’t submit any like they didn’t do a single thing.

And the client was like, why aren’t and they’re like, no, you have to do that. Like it was just weird, like what this one permit company didn’t do. And then like another builder, I helped them out a bit. and yeah, it just makes me feel like I really know what I’m doing. Like I’m just really good at what I’m doing and have a lot of experience.

Cody Crabb (14:02)
What would you say is the most common mistake that you that ends up delaying things or making things not work because they tried to do something like this themselves? That they made they wouldn’t

Petra Buchanan (14:12)
It’s all about planning. Like you need to know the order, like what order things need to start in. And so if you start with the wrong thing, you can just end up so far behind. Like you’re focusing on, like you really want to focus on like make you know, if you need electricity, you want that PG and E drop. Like that’s the first person you call. You call PG and E, you call septic, you call water.

Because those are the things that are gonna hold up the project if they’re not in place by the time you get your building permit and all that other stuff submitted because they take so long. So that’s it’s really it’s like timing. Like I was a chef and it’s the same thing, like you really

Cody Crabb (14:50)
That came out of nowhere. Wow.

Petra Buchanan (14:52)
I’ve

done I’ve done a lot of stuff, but whatever. It’s just it’s all about timing. Like you really need to do things in the right order for your project to roll out in a you know, in a really nice way.

Cody Crabb (15:06)
Yeah. So the ⁓ we we did talk about a couple of the specific laws. we talked about some of the the ways that ⁓ you know, i if if someone is gonna look to hire somebody like you, maybe not maybe not you specifically, but someone like you, what qualities should they look for in in ⁓ in someone who does what you do?

Petra Buchanan (15:25)
Say completed projects, attention to detail, knowledge of counties and cities, like they’ve worked in a wide variety of counties and cities, so they are able to be flexible because again, all these counties and cities are so different. I would say an ability to be able to read plans, like not all permit facilitators can read plans or know much about Title 24.

What else? I feel like me being able to draw maps helps a lot. Like I feel like I’m a bit more well-rounded than a lot of permit facilitators because I also draw buildings and maps. And so like also, if you need a grading plan, I can do that. I don’t need to hire out. and then also you want to make sure that they have a good network of people they work with.

Because that really can make or break a project. Yeah. If you don’t have the right professionals.

Cody Crabb (16:18)
So w I guess to to kind of wrap us up, we’re almost out of time here, but I’d love to hear your answer to this. What is something that the state law now allows that you specifically couldn’t do before? Like like is there is there like a finally we can blank kind of thing?

Petra Buchanan (17:16)
No, well, it I mean, one thing was just hilarious. A couple of years ago, someone angrily one night posted about being pissed off that you couldn’t build or have tiny homes legally in California. Or and specifically my county. And like my county had just passed the tiny home ordinance like a week earlier. And so I decided me and my friends hadn’t like we did this whole series of tiny home talks.

And ADU talks just to like really educate people and let people know, like, yeah, you can now have ADUs in your backyard. You can now have tiny homes. Tiny homes can now be primary residences, which is pretty awesome.

Cody Crabb (17:55)
Yes.

Petra Buchanan (17:56)
Right.

So you can buy like I have this girlfriend who’s looking for property right now and there’s a property that’s near me that I think she might like, but it doesn’t have a house. Like now all she needs is electric, septic and water. She can bring the tiny home on and just start living her best life.

Cody Crabb (18:13)
Yeah, that’s cool. Yeah. Yeah. I think I think a lot of a lot of investors are starting to get really creative with with some of these laws. like you said that you’re able to have four was it four ⁓ yes doors on one lot one lot now? Is that how it works? Yeah yeah stuff like that. Like I mean if there if you kind of thought you you couldn’t really make another huge investment, maybe you can kind of modify what you’ve got and change

Petra Buchanan (18:35)
Also like there’s laws too allowing like clusters of tiny homes and clusters of ADUs and like not every county allows that, but there definitely are more and more counties that are allowing that sort of thing.

Cody Crabb (18:48)
And it certainly sounds like if you are paying attention, there’s maybe some opportunity there that you may not be that others may not be aware of just because of where you are. so where is the best place for people to if people want to like research it where they where they where they are exactly? Like I’m I know that I I would Google it, but like I I would probably click some something that wouldn’t be the best information. What is this the very best information source?

Petra Buchanan (19:13)
Well, so what I would do is go to your county website to find all your zoning and everything, like a pro find a property profile so you know exactly like what kind of construction your house is, what zoning, all of that. that I would say would just be the first step. And then I’d probably work with Chat GPT or some other AI, I hate to say it, and you know, go through it and and

Do basically a differential of like what can I do, what can I do, what applies, what doesn’t apply, and come up with a plan.

Cody Crabb (19:43)
Yeah. I frankly, I I know what you mean about like I know I hate to say that about the AI thing, but I think that that kind of thing is exactly what AI is great at. It

Petra Buchanan (19:53)
Exactly. It’s it’s it’s amazing for that kind of stuff.

Cody Crabb (19:56)
Yeah,

and I think yeah, yeah, maybe maybe I don’t need it to write me a movie and and make me pictures of and art and stuff, but maybe stuff like that, I mean that’s that’s a perfect use case for it. Exactly. so if people if people are in California, if people are kind of near you and they are thinking, man, I really need somebody like Petra, wha how where can they go to to find out more about how to

Petra Buchanan (20:17)
They can check out my website, Buchanan Land Use Consulting. They can find me on Facebook, Petra Buchanan. They can find me on Instagram, Buchanan Land Use Consulting, or I also have a Redwood Spa Haven Instagram account for my AD or my Airbnb. and I would say those are good places for them to find me. Yeah.

Cody Crabb (20:37)
Awesome. Well, thank you so much for all the all these little nuggets that you’ve given us today. This has been really informative. and we appreciate your time today. So and and listeners, thanks for joining us as well, and we’ll catch you on the next one. Take care.

Petra Buchanan (20:48)
Bye. Thank you.