An effective way to add value to real property is to increase its development potential, and a good way to do that is to subdivide it so that a greater number of units can be constructed on it.
Legal Overview
Any division of a single legal parcel into two or more parcels is a “division of land” subject to the state Subdivision Map Act (“SMA”, Gov’t Code sections 66410 et seq.) and local regulation.
All subdivisions must be approved by the local government entity (incorporated city or county) in which the subject property resides, and the specific approval processes and application requirements vary depending on the number of parcels being created, whether specific development is being planned along with the subdivision, and numerous other factors.
The general rule under the SMA (which is applicable in all local jurisdictions through principles of state preemption), is that any subdivision that results in five or more parcels requires a “tentative map” and a “final map.” Any subdivision that results in four or fewer parcels (often referred to in local ordinances as a “minor subdivision”) requires a “parcel map.” The tentative map/final map approval process is much more rigorous, time consuming, and expensive than the parcel map approval process. Tentative map approval requires much more information about the subdivision project, it is often subject to environmental review under the California Environmental Quality Act (CEQA), it requires a public hearing and it often results in the imposition of numerous conditions of approval. On the other hand, parcel map approval requires less information to be provided by the applicant, it usually does not require a public hearing, and it is usually exempt from CEQA.
If certain property was legitimately divided in the past (for example, before state and local subdivision requirements even existed), but the division is not recognized on any current county property tax assessment, subdivision, or other local entity maps, then the owner can try to exempt the property from the tentative map or parcel map approval process by applying to the local agency for a “certificate of compliance” that all required subdivision laws have been satisfied. (See Gov’t Code section 66499.35.)
Note that subdivision approval or certificate of compliance approval does not constitute a right to develop, but only confirms that the lots created or certified are separate, legal lots.
Subdivision and Development
As stated above, the specific informational and procedural requirements for the approval of tentative maps and parcel maps vary by local jurisdiction. Local subdivision ordinances, and the planning department staff members that apply and enforce them, are concerned with potential development impacts on health, safety, public welfare and the environment. So while a minor subdivision in a flat, urbanized area may be an easy process, local ordinances may have special requirements for new development in special areas (such as hilly areas, coastal areas, riparian areas, heavy traffic areas, public transit hubs, et cetera), even if the project is only to subdivide, but not develop, the property.
Thus, applicants should carefully analyze local subdivision requirements (particularly, what “findings” the approving entity must make), and whether the proposed project is consistent with the local legislative body’s most recent plan for the property (that is, according to the land use element of the applicable general plan, applicable specific plan and “overlays” (if any). All applicable zoning requirements must also be complied with, and for subdivision purposes the most important zoning requirement is the minimum acreage per legal parcel. In some rural areas in unincorporated Santa Cruz County, the zoning ordinance does not even list a specific minimum acreage, but rather, minimum residential density (i.e., minimum # of acres per house per parcel), is determined through an analysis of numerous factors about the actual condition and environment of the specific property in question (“rural residential density determination”).
Applicants should also investigate the actual and foreseeable physical conditions at and near the subject property. For subdivision projects that include new development, and for subdivisions in sensitive areas, planning department staffers will scrutinize numerous issues in addition to general plan and zoning compliance, including but not limited to the following:
- adequate and safe access from the public street to all new lots (e.g., a flag lot may need an easement);
- access to utilities and impacts on utilities infrastructure;
- traffic impacts;
- water availability and project requirements for domestic and landscaping water use;
- impacts on natural resources, including trees;
- septic issues; and
- potential flooding issues.
The applicant may need one or more development plans that address these issues as part of the subdivision application.
For all but the most straight-forward minor subdivisions (e.g., on flat, urban property, in an existing R-1 neighborhood), the local ordinance and/or local agency practice may require the applicant to apply for all necessary development entitlements (e.g. development permit, single-family house permit, special use permit), concurrently with the subdivision application. If so, all of those permit requirements, procedures, and fees must be analyzed and complied with as well.
How to Start?
One strategy to follow in deciding whether a subject property is a good investment opportunity for subdivision and development would be to find one that can satisfy local “minor subdivision” requirements. Initial investigation should include an analysis of the following: the local subdivision ordinance section addressing parcel maps and approvals (e.g., what are the criteria and what “findings” must be made); the land use element of the general plan, applicable specific plans and overlays (if any), and the zoning ordinance (basic building requirements – minimum lot size, FAR, setbacks, height, off-street parking, et cetera); physical property access conditions; traffic conditions; and natural resources on or near the property.
Once you have an understanding of all of these conditions and constraints, then have a preliminary or pre-application meeting with a planner at the local planning department, who will give you his/her interpretation of the subdivision and development potential of the property, application requirements, process and fees, and other issues that you probably did not think of. As a practical matter, the decision-maker (usually the Planning Director for a minor subdivision), will usually follow the recommendations of the planning staffer assigned to your project, so it is wise to cooperate with the staffer in planning your project and producing the materials needed to complete your application.
However, applicants are advised to have an experienced land use consultant or land use attorney provide an analysis of relevant subdivision and zoning requirements prior to the applicant’s first meeting with the planning department in order to anticipate and explain potential “issues” that the planning department staff may raise, and so that you do not concede anything unnecessarily. It is also useful to have an attorney or land use consultant prepare your application and act as your advocate throughout the process, as many of these issues are fairly technical, and some projects require a degree of debate and negotiation about what approval conditions and development fees are legal and reasonable and/or how certain provisions in the local ordinance should be applied to your particular project.
Finally, if the applicant expects the project to be opposed and challenged, then he or she should definitely retain an attorney to prepare the application, draft suggested “findings” for the agency, and respond to all public comments opposing the project.
©2015 Miles J. Dolinger. This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship.
Miles Dolinger
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