California SB 684: The Starter Home Revitalization Act (Small-Lot Subdivisions up to 10 Homes)

- Dax Nollenberger

California SB 684: The Starter Home Revitalization Act (Small-Lot Subdivisions up to 10 Homes)

February 18, 2026

SB 684, enacted in 2023 and operative as of July 1, 2024, creates a streamlined, ministerial path to subdivide certain multifamily-zoned parcels into up to 10 small lots and build up to 10 homes. The intent is to enable smaller, for-sale housing by reducing entitlement risk and avoiding condo structures in appropriate infill locations.

The Core Idea

SB 684 is designed to make small, fee-simple homes easier to produce. Instead of building a multifamily project on one parcel or navigating a condominium map, the law allows qualifying sites to be subdivided into individual parcels that can be sold separately, provided strict eligibility standards are met.

Zoning and Location Requirements

To qualify, a property must meet all of the following baseline conditions:

• Multifamily zoning
  The parcel must be zoned for multifamily residential use.
• Urban infill context
  The site must be no larger than five acres and substantially surrounded by qualified urban uses. Qualified urban uses include residential, commercial, retail, public institutional, transit, or transportation passenger facilities.
• Seventy-five percent perimeter test
  At least 75 percent of the parcel’s perimeter must adjoin parcels developed with qualified urban uses or be separated only by an improved public right of way. The remaining perimeter must adjoin parcels designated for urban uses in an adopted plan.
• Urbanized area requirement
  The parcel must be located either within an incorporated city that includes an urbanized area, or within an urbanized area or urban cluster in a county with a population exceeding 600,000 based on the most recent census.
• No prior SB 684 split
  Parcels previously created under SB 684 or the related Government Code section are ineligible.

Parcel Count, Unit Count, and Minimum Lot Size

SB 684 allows the creation of up to 10 new parcels and 10 residential units total on the original site.

Each new parcel must be at least 600 square feet, unless the local agency has adopted an ordinance allowing smaller lots.

Average Home Size Cap

A critical limitation that is often overlooked is the size restriction. The average net habitable floor area across all homes in the project may not exceed 1,750 square feet. This cap is intentional and reinforces the law’s focus on smaller, entry-level housing rather than luxury development.

Housing Element and Affordability Rules

SB 684 is closely tied to a jurisdiction’s housing element:

• If the parcel is identified in a substantially compliant housing element, the project must deliver at least the number of units assumed for that site.
• If the site was identified to accommodate low or very-low income RHNA, the project must include at least that number of affordable units, with affordability restrictions recorded for a minimum of 45 years.
• If the parcel is not identified in the housing element, the project must produce at least as many units as the maximum allowable residential density.

Tenant Protections and Demolition Limits

Projects are ineligible if they involve demolition or alteration of:

• Deed-restricted affordable housing
• Rent-controlled housing
• Housing occupied by tenants within the last five years
• Housing withdrawn from the rental market under the Ellis Act within the prior 15 years

These protections apply even if units were vacated prior to the SB 684 application.

Environmental and Hazard Constraints

SB 684 excludes sites located on or within several sensitive or hazardous areas, including:

• Prime farmland
• Wetlands
• Very high fire hazard severity zones
• Certain hazardous waste sites unless cleared for residential use
• Earthquake fault zones unless properly mitigated
• FEMA special flood hazard areas and floodways, with limited exceptions
• Lands subject to conservation or habitat protection plans

Ministerial Approval and Timelines

Qualifying projects are approved ministerially. No discretionary hearings are allowed.

Once an application is deemed complete, the city or county must approve or deny it within 60 days. Failure to act results in automatic approval. If denied, the agency must issue a complete written explanation identifying all deficiencies and how they can be corrected.

Only objective standards may be applied. Local agencies may not impose standards that physically preclude allowed density, require special conditions because SB 684 is used, or apply floor area ratio limits below statutory minimums.

Building Permits Before Final Map Recordation

SB 684 allows building permits to be issued after tentative or parcel map approval, prior to final map recordation. Jurisdictions may require a recorded covenant tying certificates of occupancy to final map recordation. This provision can materially improve project financing and timing.

Ownership Structures

SB 684 allows multiple ownership models, including fee-simple lots, common interest developments, housing cooperatives, and community land trusts. For many projects, the ability to sell homes on individual parcels is the primary economic driver.

SB 684 vs SB 9

SB 684 is often confused with SB 9, but they serve different purposes. SB 9 applies to certain single-family zoned parcels and allows limited unit additions and splits. SB 684 applies only to multifamily zoning, allows up to 10 homes, and includes stricter eligibility requirements and a size cap.

SB 684 in Santa Cruz County

In Santa Cruz County, the number of parcels that realistically qualify for SB 684 is limited. Multifamily zoning is relatively scarce, and many parcels are constrained by coastal regulations, fire hazard severity zones, flood risk, or tenant history that disqualifies them under the statute.

However, when a parcel does qualify, SB 684 can be unusually impactful locally. The law removes discretionary review and imposes firm timelines, which significantly reduces entitlement risk in a county known for long and unpredictable approval processes. That certainty alone can materially change feasibility and return calculations.

There is also a notable pricing inefficiency. Many sellers and buyers are not yet underwriting SB 684 correctly, particularly the ability to create fee-simple parcels rather than condominium units. In a market with limited supply and strong demand for smaller for-sale homes, this structure can unlock stronger exit options and improved returns.

SB 684 is not a broad solution in Santa Cruz County. It is a precision tool. When zoning, tenant history, surrounding uses, and environmental constraints align, it can offer a rare combination of streamlined approvals and strong economic potential.

Is SB 684 Worth Exploring for Your Property?

SB 684 eligibility is highly specific and requires careful, parcel-by-parcel analysis. Zoning, housing element status, tenant history, environmental constraints, and surrounding development all matter.

If you own, are considering purchasing, or are evaluating a multifamily-zoned property and want to understand whether SB 684 applies, a feasibility review is essential.

For a parcel-specific SB 684 analysis or to discuss how this law could factor into a sale, acquisition, or development strategy, feel free to reach out.

Dax Nollenberger
📩 dax@sereno.com
📞 831-227-5847