How to Subdivide Land in San Diego
Property owners often subdivide (or split) their land to significantly increase the financial value of the property. By subdividing land, you can enhance your property's worth, either through selling portions of the property or by building additional homes & structures. The true value of land extends beyond just its square footage but its potential for development. For example, splitting a single one-acre lot into two half-acre lots has the potential to double its value. This guide will explore land subdivisions in San Diego and how the result can deliver a massive return on investment.
What is a Parcel of Land?
A parcel of land (also called a lot) refers to a specific, defined area or piece of real estate. It can vary widely in size, ranging from a small city lot of a thousand square feet to a ranch with hundreds of acres. Parcels of land are typically used for various purposes, including residential, commercial, agricultural, industrial, or recreational uses.
In legal and real estate terms, a parcel of land is often described by its boundaries, which are defined by measurements, landmarks, or natural features like rivers or roads. Each parcel of land is identified by a unique identifier such as an Assessor’s Parcel Number (APN) or legal description.
Reasons a Property Owner Would Subdivide Their Lot or Parcel
The following are common reasons a property owner may choose to split their lot:
Financial Gain: Subdividing a larger parcel into smaller lots can potentially increase the overall value of the property. This can result in higher total revenue compared to selling the entire parcel as a single unit.
Diversification of Assets: A subdivision allows a property owner to create multiple smaller properties, which can be sold individually. This diversifies the landowner's portfolio and spreads the risk associated with a single, large parcel.
Meeting Market Demand: Smaller, more affordable lots may be in higher demand, especially in areas with a strong market. Subdivision can help cater to a broader range of potential buyers.
Maximizing Land Use: Large parcels may have constraints, such as irregular shape, topography, or zoning restrictions that make them less suitable for development. Subdividing can create smaller, more manageable lots that are better suited for specific purposes.
Estate Planning: Subdividing can be a strategic way to allocate specific portions of the property to different heirs. This can facilitate smoother inheritance and estate planning, minimizing potential disputes or complications.
Multigenerational Properties: A landowner may have a specific vision for the property that requires creating smaller, distinct parcels. This could be to accommodate multiple residences for a family compound, create a mix of residential and commercial spaces, or allocate space for different types of amenities or structures.
The Subdivision Process in San Diego
Subdividing land in San Diego involves several steps, which can be complex and may vary depending on local regulations. Here's a general outline of the process:
Research and Due Diligence
Develop Required Documentation
Submit Subdivision Application
Review and Processing
Planning Commission or City Council Approval
Finalize Maps and Legal Documents
Record Documents
Infrastructure and Improvement Installation
Final Inspections and Sign-offs
Completion and Sale
Let us take the confusion out of the lot division process. If you or someone you know is seeking guidance on lot division for a custom home build, schedule a free consultation with us today!
Research and Due Diligence
Review Zoning Regulations: Determine the zoning regulations that apply to your property. This information is typically available from the local planning/zoning department. People often look at “minimum lot size” as the key factor for a subdivision, but this is only one of many items to review.
Meet with All Agencies: You will need to meet with every agency that has authority over your lot to ensure all requirements can be accommodated in a cost-effective manner for a subdivision.
Land Suitability: Evaluate the land's suitability for subdivision, considering factors like topography, access to utilities, and any environmental considerations. Any of these aspects can make the project cost-prohibitive and should be reviewed upfront.
Understand Improvements: Many lots can be subdivided, but it may be cost-prohibitive to do so. You should be working with a builder who is well-versed in this process to ensure that the results of the subdivision make the entire project worth it.
Determine required documentation: The reports required to split a lot can easily cost tens of thousands of dollars or more, so it’s important to understand what will be required of you upfront before you proceed.
Consult Professionals: Engage with professionals such as land planners, surveyors, civil engineers, builders, and attorneys who are experienced in Sand Diego & California land development to help guide you through the process.
Develop Required Documentation
Bidding Subcontractors: Essential documents such as surveys, grading plans, parcel maps, improvement plans, and various tests are likely to be required for a subdivision. It's important to engage with multiple potential partners during the bidding phase to find the best partners.
Develop Documentation: Once you’ve found your partners, you must begin the process and oversee the creation of the subdivision plans. If you are not an expert, it could be challenging to provide feedback to guide the process to the most efficient result. It’s important to engage your experts and consultants during this process.
Value Engineer Documentation: Thoroughly reviewing and evaluating documentation is essential, rather than just superficial approval. While plans are typically prepared to meet specific requirements, they often lack value engineering by the preparer. Having an expert on your team during this process is crucial to assess the provided materials and guarantee maximum efficiency in practical development.
Submit Subdivision Application
Complete Application: Prepare and submit the subdivision application along with all required documents and fees to the local planning / zoning department.
Provide Required Documentation: This may include maps, surveys, environmental studies, engineering reports, and any other documents specified by the local authorities.
Review and Processing
Initial Review: The planning department will conduct an initial review of your application to ensure it is complete and meets basic requirements.
Public Notice and Comment: Depending on the jurisdiction, there may be a period for public notice and comment on the proposed subdivision.
Environmental Review: If required, an environmental review may be conducted to assess potential impacts and identify necessary mitigation requirements.
Agency Coordination: The application may be circulated to various agencies for their input and approvals (e.g., public works, Fire).
Planning Commission or City Council Approval
Public Hearing: The subdivision may be subject to a public hearing before the planning commission or city council, where stakeholders and the public can provide input.
Decision: The planning commission or city council will make a decision on the subdivision application. If approved, the project may be subject to conditions of approval.
Finalize Maps and Legal Documents
Survey and Engineering: Prepare final maps, plats, and any required engineering documents in accordance with local standards and requirements.
Legal Documents: Draft and finalize legal documents, including deeds, covenants, conditions, and restrictions (CC&Rs), if applicable.
Record Documents
Submit for Recording: Record the final maps and legal documents with the county recorder's office.
Infrastructure and Improvement Installation
Develop Infrastructure: Construct any required infrastructure improvements, such as roads, utilities, and drainage systems as required in the conditions of approval.
Final Inspections and Sign-offs
Inspections: Obtain final inspections and sign-offs from relevant agencies to ensure compliance with all requirements.
Completion and Sale
Lot Sales or Development: Once all requirements are met, you can proceed with the sale of individual lots or commence development.
How Much Does it Cost to Subdivide Land in San Diego, CA?
The cost of subdividing land in San Diego, CA can vary widely depending on various factors, including the size of the parcel, its location, local zoning regulations, and specific requirements set by the county or municipality. You should expect that the all-in cost of a subdivision will cost 10’s of thousands to well over 100 thousand dollars to complete when factoring in required documents, consultants, subcontractors, fees, and improvements. However, given that most lots in San Diego can cost from $300,000 to well over $1,000,000, this endeavor can produce a massive return on investment.
Here are some of the key expenses associated with subdividing land in San Diego, CA:
Application Fees: These fees are paid to the local planning or zoning department when submitting the subdivision application. They can range from a few hundred dollars to several thousand dollars, depending on the complexity of the subdivision and the specific jurisdiction.
Consulting and Professional Fees: Hiring professionals like Buildable, land planners, surveyors, civil engineers, and attorneys may be necessary to navigate the legal and technical aspects of the subdivision process. Their fees can vary based on their expertise and the complexity of the project.
Environmental and Site Studies: Depending on the location and characteristics of the land, you may need to conduct studies like environmental impact assessments, geotechnical reports, or biological surveys. These studies can be costly, particularly if specialized expertise is required. However, depending on the lot, you may not need to produce these documents.
Land Improvements: This may not be necessary but can include the costs associated with installing or upgrading infrastructure such as roads, utilities (water, sewer, electricity), and drainage systems to meet local requirements.
Legal and Recording Costs: These include expenses related to preparing legal documents, recording subdivision maps, and any required legal representation or advice.
Public Utility Fees: This may not be necessary, but some jurisdictions may require contributions to public utilities or services, especially if the subdivision places additional demands on local infrastructure.
Infrastructure Bonds or Fees: In some cases, a developer may be required to post bonds or pay fees to cover the cost of future infrastructure improvements that benefit the subdivision.
Environmental Mitigation Fees: If the subdivision impacts sensitive environmental areas, you may be required to pay fees or implement mitigation measures to offset any ecological impacts.
Compliance with Conditions: If the local planning department imposes specific conditions as part of the subdivision approval, you may incur costs associated with meeting those requirements.
Laws & Rules Concerning Subdividing Land in San Diego, CA for Home Builds
The Subdivision Map Act is a state law in California that governs the division of land into smaller parcels for sale, lease, or financing. Enacted in 1972, the Subdivision Map Act (SMA) provides a legal framework for the process of creating and recording subdivision maps. Its primary purpose is to ensure orderly and responsible land development, protect the public interest, and promote the health, safety, and welfare of the community.
The 2021 California Senate Bill 9 (SB9), also known as the California Housing Opportunity and More Efficiency (HOME) Act is a bill to promote the creation of housing units in single-family residential zones in the State of California. Owners of certain single-family homes can now build either two 800 square foot minimum homes or one duplex on their property with a maximum of four housing units on a previously designated single-family lot or lot split. That means property owners can have a total of 4 units across 2 lots. The bill aims to streamline the approval process for certain housing developments and urban lot splits, while also addressing concerns related to housing affordability, historic preservation, and transportation access. We’ve written more about this, and you can find links at the end of this article.
What Are County Requirements for Subdividing Property?
When planning a subdivision in California, it's essential to ensure that your project aligns with the county or municipality’s general plan. Additionally, each lot you propose must meet specific county requirements, including:
Minimum Lot Size: Each lot should adhere to the county's minimum size standards, encompassing both width and depth.
Buildable Site Verification: You need to demonstrate that each lot is suitable for construction. For instance, lots that are in certain types of flood zones or don’t have access to water will not be viable for building.
Building Setback Compliance: Each lot must conform to the minimum setback requirements, maintaining a specified distance from property boundaries for building structures.
How Many Lots Can Be Created From A Parcel?
In California, the number of lots that can be created from subdividing land depends on various factors, including the local zoning regulations, the size of the original parcel, the minimum lot size requirements of the local jurisdiction, environmental constraints, access to infrastructure (like roads and utilities), and other development standards.
Generally, local zoning ordinances will dictate the minimum lot size and the maximum density allowed in a particular area. For example, if a zone allows one unit per 4,000 square feet and you have an acre of land (43,560 square feet), theoretically, you could divide this into 10 lots (43,560 divided by 4,000), assuming no space is needed for roads, utilities, and other infrastructure or open space requirements. However, in practice, the actual number of lots will often be fewer due to these additional considerations.
California's Senate Bill 9 (SB 9), effective from January 1, 2022, has also impacted the subdivision of residential lots. SB 9 allows for the splitting of a single-family residential lot into two separate lots, provided certain criteria are met. Additionally, it allows for the development of up to two residential units on each of these newly created lots, potentially increasing the housing density in single-family residential zones.
Minor vs. Major Subdivisions in San Diego, CA
In California, land subdivision is generally categorized into two types: minor subdivisions and major subdivisions. The distinction between these two types is based on the number of lots being created and the complexity of the development. Here's a breakdown:
What is A Minor Subdivision?
A minor subdivision typically involves the division of land into fewer lots. Although the specific number can vary by jurisdiction, it's commonly defined as creating four or fewer new parcels. The process for a minor subdivision is usually simpler and requires fewer steps compared to a major subdivision. This might involve a less rigorous review process, fewer public hearings, and simplified reporting requirements. Minor subdivisions are often used for smaller development projects, like dividing a single large property into a few smaller ones for individual sale or development.
What is A Major Subdivision?
A major subdivision refers to the division of land into five or more lots. This is the threshold in many California jurisdictions, but local regulations can vary. Major subdivisions are subject to more stringent and comprehensive planning, review, and approval processes. This includes detailed environmental impact assessments, more extensive public hearings, and adherence to more complex local and state regulations. These subdivisions are typically for larger-scale developments, such as residential communities, commercial complexes, or industrial parks. Larger subdivisions can take years or even decades to complete.
Why work with experts at Buildable?
Subdividing land takes an immense amount of time and effort, but with the right team, the end result can be well worth it. The process can appear overwhelming to those who start the journey alone; however, you vision can be simple to execute when you approach the process with experts by your side who can guide you through every step. Buildable specializes in land development and custom home construction, and we have the experts on our team that you need to have a stress-free experience from start to finish. We have over 40 years of home-building experience within our team, and over 1,000 homes built. Read about our team, talk to us, and get the answers to questions you may have about starting the custom home-building process in San Diego.
It will never be more cost-effective to subdivide your lot than today. Requirements are always changing, and in the future, new regulations could prevent you from subdividing a lot. If you plan to do it, do it as soon as possible. Schedule a free consultation with us today!
