SB9 in Sacramento

Sacramento earns a B grade, indicating a moderately favorable environment for SB9 development. The city complies with state SB9 requirements and has demonstrated a steady, if declining, level of activity. Investors can expect reasonable approval rates and a growing program, but should be aware that momentum has slowed in recent years. Sacramento presents a viable market for SB9 projects with some caution due to the downward trend in applications and approvals.

Sacramento’s SB9 ordinance is a standard implementation of state law. It does not impose unusual restrictions beyond the state’s baseline requirements. The ordinance allows for lot splits and duplex developments on qualifying parcels with typical setbacks, parking, and design standards consistent with state guidelines. There are no additional local hurdles such as minimum lot sizes beyond state limits or excessive design review processes. The city’s approach facilitates moderate SB9 activity without imposing barriers that would significantly restrict development.

SB9 activity in Sacramento began with moderate momentum in 2022 and 2023, with 10 and 14 applications respectively, and a combined approval rate above 70 percent. This suggests the city was responsive to SB9 requests and processed applications efficiently. However, in 2024, applications dropped sharply to 5, with 4 approvals, signaling a slowdown in new filings. By 2025, there were no applications or approvals recorded, indicating a near halt in SB9 activity. This decline may reflect market dynamics, developer interest, or local administrative factors rather than regulatory barriers, as Sacramento is not a charter city and has no litigation affecting SB9 compliance. The city’s status as the state capital may contribute to stable but cautious development patterns. The absence of enforcement actions or legal challenges suggests the decline is not due to policy changes or compliance issues but rather external factors such as market conditions or developer priorities.

There is no record of enforcement action by the California Department of Housing and Community Development (HCD) against Sacramento related to SB9 compliance. The city remains in good standing with state requirements and has not faced penalties or corrective mandates.

Investors should view Sacramento as a market with established SB9 compliance and a history of approvals but with a clear recent decline in activity. The city’s moderate approval rate and standard ordinance provide a stable foundation for SB9 projects. However, the sharp drop in applications and approvals through 2024 and 2025 signals caution. Investors should adopt a wait-and-see approach, monitoring whether the city’s SB9 program regains momentum or if the decline continues. Sacramento is not a high-growth SB9 market at this time but remains a viable option for patient investors willing to navigate a slower development pace. For the grading methodology, see the SB9 City Guide post.