SB-9 vs traditional ADU - which is better in Oakland?

Hello and thank you for reaching out with your question regarding expanding your property in Oakland! Navigating the decision between utilizing SB-9 for a lot split and constructing a traditional Accessory Dwelling Unit (ADU) can indeed be complex, but I'm here to help guide you through the process. Let’s break down your inquiries step-by-step:

### 1. Approval Processes and Timelines

**SB-9 Lot Split:**
- **Approval Process:** SB-9, also known as the California Housing Opportunity and More Efficiency (HOME) Act, allows homeowners to split their lots and build up to two units on each lot. In Oakland, this means you could potentially transform your 6,000 sq. ft. lot into two separate lots, each with the possibility of having a duplex.
- **Timelines:** The process can be lengthy. It involves a subdivision map approval, which can take 4-6 months, depending on how quickly you can meet the city's requirements and respond to requests for additional information.
- **Considerations:** You'll need to ensure that any new lot created is at least 1,200 sq. ft., and that you comply with local zoning laws. Additionally, owner occupancy is required for at least one unit for a minimum of three years.

**Traditional ADU:**
- **Approval Process:** Building an ADU is generally simpler. Under California's AB-68, permits for ADUs should be approved within 60 days if the application is complete.
- **Timelines:** From design to construction, you might expect a total time of 6-12 months, depending on contractor availability and the complexity of your project.
- **Considerations:** Local Oakland ordinances are generally supportive of ADUs, allowing for units up to 800 sq. ft. without additional parking requirements if within proximity to public transit.

### 2. Rental Income and Property Value Increase

- **SB-9 Option:** By splitting your lot and potentially building a duplex, you could significantly increase your rental income potential. A duplex in the Lake Merritt area could rent for approximately $2,500 to $3,500 per unit per month, depending on size and finish.
- **Traditional ADU:** A well-designed ADU can also command a good rental price, typically between $1,800 and $2,500 a month. ADUs can increase your property value by about 20-30%, but less than the potential of a full duplex.

### 3. Tax Implications

- **SB-9 Lot Split:** Expect an increase in property taxes due to the creation of new parcels and the construction of additional units. You may also face capital gains tax if you sell the new lot or units.
- **Traditional ADU:** Adding an ADU will increase your property taxes, but typically only the assessed value of the new construction is added to your current assessed value, which is generally more manageable.

### 4. Local Regulations and Pitfalls

- **SB-9 Considerations:** Ensure you adhere to setback requirements, which can be stricter for new lots. Be aware of potential neighborhood opposition, which can slow down the process.
- **ADU Considerations:** Make sure your plans comply with local fire safety regulations and that your contractor is familiar with Oakland's specific building codes.

### Additional Tips and Warnings

- **Budget Wisely:** With a budget of $250,000, an ADU is more feasible given construction costs in Oakland, which can range from $200 to $300 per square foot for a high-quality ADU. A duplex or multiple units under SB-9 could exceed this budget.
- **Engage Professionals Early:** Work with an architect or a design-build firm familiar with Oakland's zoning laws. They can offer valuable insights and streamline the permit process.
- **Community Impact:** Consider how each option affects your neighborhood's character and your personal lifestyle. ADUs often integrate more seamlessly, while lot splits might face more resistance from neighbors.

### Next Steps

1. **Consult with Local Experts:** Engage a local real estate attorney or planner to discuss the specifics of SB-9 and ADU regulations in Oakland.
2. **Visit the Oakland Planning and Building Department:** They can provide specific guidance and resources for both SB-9 and ADU projects.
3. **Network with Other Homeowners:** Reach out to homeowners who have undertaken similar projects for firsthand insights and recommendations.

In conclusion, both SB-9 and traditional ADU projects have their merits, but considering your budget and the complexity involved, an ADU might be the more practical option for a smoother and quicker expansion. Regardless of your choice, careful planning and professional guidance will be key to maximizing your investment. Good luck with your project!