An Overview of Senate Bill 1123 (SB-1123)

Senate Bill 1123 (SB-1123) expands the Starter Home Revitalization Act established by SB-684 to streamline for-sale housing development on a broader range of residential lot types. Most importantly, the bill extends the program to vacant single-family zoned land. The bill also lowers density thresholds and exempts ADUs and JADUs from previously established unit caps, making small-scale homeownership development faster and more viable across California.

What is SB-1123?

California Senate Bill 1123 (SB-1123) took effect in July of 2025. The bill amends two sections of the legislation originally established by SB-684, which created a ministerial-approval pathway for a housing development project with up to 10 housing units on multifamily-zoned lots. Housing policy refers to the laws and regulations that shape housing supply and safety, and SB-1123 fits within that broader state housing law framework. For a better understanding of SB-684, check out our overview of SB-684. Previously, vacant single-family parcels were only accessible for infill development through SB-9, SB-1123 changes that. Through the ministerial approval process, local agencies must process all applications that meet stated requirements without discretionary review of a public hearing. Existing law in this area also limits how much discretion can be applied to a qualifying housing project.

Senate Bill 1123 uses that same framework but extends who can use it. Under SB-1123, vacant single-family zoned lots are eligible; the density requirements have been reduced to 66% of the maximum allowable density from the previous 100%, and accessory dwelling units (ADUs) and junior accessory dwelling units (JADUs) are no longer counted toward the 10-unit cap established by SB-684. Effective housing policies pair housing production with protective rules under housing law. Notably, local agencies retain the choice of whether to permit ADUs and JADUs. These changes increase the pipeline of viable sites and bring more development opportunities within reach. That planning context also ties to the housing element law: California requires local government to plan for housing needs and update an adopted housing element every five or eight years.

Why does SB-1123 go further than SB-684?

While SB-684 opened the door to small-scale for-sale housing, the opportunities were limited to parcels in neighborhoods already zoned for multifamily residential development. There was still room for growth, and SB-1123 seeks to capitalize on those opportunities. It does so against the backdrop of the state's housing shortage, where a strained housing supply is pushing affordability pressure higher and increasing the need for pathways that can also support affordable housing projects. Much of California's developable land is in single-family zones that were untouched by the starter-home framework of SB-684. SB-1123 addresses this directly by extending ministerial approval to vacant single-family lots. By doing this, the law brings the missing-middle housing model into established neighborhoods where entry-level homeownership is needed most but has been the hardest to deliver. One in three Californians considers housing affordability a problem, and California's median home price was $758,990 as of March 2021, while 55% of renters were cost-burdened in 2017.

What parcels are eligible, and what are the requirements?

To qualify for ministerial approval under SB-1123, the proposed development must meet the following requirements:

• Lot type. The land proposed to be subdivided must either be a parcel zoned for single-family residential use or a parcel that allows multifamily residential dwelling use. The existing zoning designation for the site governs the applicable development standards. To qualify as vacant, there must be no permanent structure. If there is an existing structure, it must be abandoned and uninhabitable – but under AB-130, that structure may be set aside as a remainder parcel, which would allow the rest of the lot to proceed. Furthermore, lots with affordable housing covenants, rent-controlled units, or tenant occupancy within the past five years do not qualify as vacant.
• Lot size. Lots for a multifamily residential dwelling must be no larger than 5 acres. Lots for single-family residential development must be no larger than 1.5 acres. Also, both must be substantially surrounded by qualified urban uses, meaning the site must be surrounded by qualified urban development such as homes, apartment buildings, shops, offices, or transit facilities.
• Unit Count. Within the streamlined ministerial approval process, the proposed housing units must total 10 or fewer residential units and parcels. Local agencies may allow ADUs and JADUs, but they are not required to permit accessory dwelling units; in California, ADUs are exempt from local growth control ordinances.
• The average net habitable square footage across all proposed units on the lot must not exceed 1,750 square feet. This applies to the average across the project, not to each unit, which means some units can exceed that threshold as long as the overall average stays at or below 1,750 square feet. Net habitable square feet is defined as finished, heated floor area with at least 6.5 feet of headroom, including living, working, eating, sleeping, and storage areas, but excludes garages, carports, cellars, and unfinished spaces.
• Parcel Size. Newly created parcels must be at least 600 square feet in a multifamily zone. In single-family zones, this increases to 1,200 square feet. These newly created parcels are intended as fee simple ownership lots. Frontage requirements do not apply under SB-1123. However, local agencies may require a maintenance agreement for shared common space, which can include shared driveways or access easements.
• If the parcel is identified on housing element sites, the development must be consistent with the jurisdiction’s adopted housing element and planned capacity for its regional housing need. If the parcel is designated to accommodate low or very-low-income housing needs, those units must meet that income targeting and be subject to a recorded affordability restriction of at least 45 years. If the parcel is not identified as being subject to the jurisdiction's housing element, the development must be at least 66% of the maximum allowable residential density. This is a reduction from the previously established 100% and reflects the applicable residential density standard. Projects must also comply with local inclusionary housing ordinances, which often require 10–20% affordable units in new developments.
• Ownership Structure. In addition to all the ownership structures permitted by SB-684, SB-1123 provides that ownership may be held as part of a tenancy in common.
• Tenant and Affordability protections. The development cannot demolish or alter affordable housing, rent-controlled housing, or housing occupied by tenants within the past five years. This ensures that SB-1123 is helping the California housing shortage, not making it worse.
• Existing units. The subdivision cannot result in any existing dwelling units being separated from the title of another existing dwelling unit on the lot.
• Environmental Constraints. Lots located in high fire hazard zones, wetlands, protected habitat, or land under conservation easements are all disqualified. Flood plains, earthquake fault zones, and hazardous waste sites require additional review and documentation to qualify. Existing law and applicable Government Code provisions set these eligibility limits, and local agencies may still deny an application if they find a specific adverse impact.

What can you build?

SB-1123 allows the development of up to 10 for-sale residential units, excluding ADUs and JADUs. These can be townhomes, condos, small-lot single-family homes, or supportive housing, which combines affordable units with essential services, as long as the buildout meets local objective zoning and design standards. Those standards can also include universal design or accessibility requirements. Affordable developments may also depend on financial subsidies such as tax benefits or rental assistance support mechanisms. One notable restriction is that on single-family zoned lots, local agencies are permitted to impose a height limit consistent with the existing zoning designation

Like SB-684, qualifying approvals under state housing law can limit local discretion through the Housing Accountability Act and related planning and zoning rules for a housing project. Projects approved under SB-1123 are exempt from the California Environmental Quality Act (CEQA). Also, local agencies must approve or deny a completed application within 60 days. In some cases, building permits may be processed before a tentative and final map is fully completed for qualifying residential projects. If they fail to act, the application is deemed approved. If an application is rejected, the city must provide a written explanation of exactly what's missing and how to fix it, also within 60 days. Tenant protections, including eviction procedures and fair housing laws, still apply.

What are the limitations and opportunities?

Limitations:

• Local implementation: The law is new and extends to single-family zones for the first time; as a result, some jurisdictions may not have clear internal processes for reviewing SB-1123 applications. This can lead to early applications facing delays as cities adapt. 
• Design constraints on single-family lots. Single-family lots carry a 1,200 sq ft minimum parcel size and permit local height limits, which could significantly constrain density in practice depending on the jurisdiction.

Opportunities: 

• Massive land unlock. By extending ministerial approval to vacant single-family lots up to 1.5 acres, SB-1123 dramatically expands the supply of potential sites. 
• ADU bonus. Because ADUs and JADUs no longer count toward the 10-unit cap, there is potential for many more homes to be built on a single lot.

How is SB-1123 different from SB-684?

SB-1123 is a direct amendment of SB-684, with changes that also align with broader housing and community development goals. SB-1123 expanded what was possible under SB-684.

The most significant change is the addition of vacant single-family zoned lots as eligible sites. SB-684 was limited to multifamily zones. Other key differences include:

• ADUs and JADUs no longer count toward the 10-unit cap.
• The density threshold drops from 100% to 66% of the maximum allowable density.
• Tenancy in common is added as an eligible ownership structure.
• The minimum parcel size in single-family zones is 1,200 sq ft.

That for-sale structure can better support lower-income households when paired with affordable ownership programs, including down-payment assistance, especially given that 80.6% of low-income households are cost-burdened or severely cost-burdened. It can also advance community development by supporting inclusive housing policies that foster more integrated neighborhoods.
Where permitted, a community land trust or a common interest development can also help preserve affordability, expand shared ownership opportunities, and support wealth building.

One notable addition under SB-1123 is the explicit waiver of frontage requirements, something SB-684 did not directly address. Local agencies can still require maintenance agreements for shared driveways or access easements, but they cannot use frontage as a basis to deny a project. For a deeper dive, check out our full overview of SB-684.

How do I get started?

Type Five's new tool infillworks, lets you see what's possible on your property, evaluate feasibility, and costs. From there, Type Five can help customize the design and help build your home.