Palo Alto is the clearest example of a city using SB 9's flexibility to hold the line at two units per split lot. That makes a split a two-homes play, not a four-plus-ADUs play. On rentals, the city's renter protections start sooner and cap deposits lower than the state does, so a landlord coming from another city needs to reset expectations.
Adding an ADU
In Palo Alto
In October 2024, HCD reviewed Palo Alto's ADU ordinance (Ordinance No. 5585, adopted June 5, 2023) and found parts of it didn't comply with state law.[1]
State law, everywhere in California
A city has 60 days to approve or deny a complete ADU or junior ADU (JADU) permit application.[2]
Lot coverage, floor area ratio, and front setback rules can't be used to block an ADU of at least 800 square feet with four-foot side and rear setbacks.[2]
A city can't set a height limit below 16 feet for a detached ADU, or below 18 feet within a half mile of a major transit stop or high-quality transit corridor. Attached ADUs can go to 25 feet or the main home's zoning height, whichever is lower.[2]
A JADU is up to 500 square feet of interior space inside the main home. Owner occupancy can't be required for an ADU, but it is required for a JADU that shares a bathroom with the main home.[2]
No impact fees on an ADU of 750 square feet or less. Above that, fees have to be proportional to the main home.[2]
On a lot with an existing apartment building, state law allows up to eight detached ADUs (never more than the number of existing units), plus conversions of non-living space.[2]
Lot splits and second homes
In Palo Alto
State law (SB 9)
SB 9 applies to lots zoned single-family. It allows two primary homes on one lot, a split into two lots, or both, with staff-level approval and no public hearing.[4]
Local rules can't stop two homes of at least 800 square feet each, or a split into two lots of at least 1,200 square feet. Side and rear setbacks are capped at four feet.[4]
Parking is capped at one space per unit, and none can be required within a half mile walk of a high-quality transit corridor or major transit stop, or within a block of a car-share vehicle.[4]
To split a lot, you sign an affidavit that you intend to live in one of the units as your main home for at least three years. Any rental has to be for more than 30 days.[4]
SB 9 doesn't apply if the project would demolish or alter rent-restricted housing, rent-controlled housing, or housing a tenant has lived in during the last three years. It also excludes historic properties, lots with an Ellis Act withdrawal in the last 15 years, lots already created by an SB 9 split, and lots next to one the same owner split.[4]
The ceiling is four units total. After a split, the city has to allow two units on each new lot. The city must decide on a complete application within 60 days.[4]
Rent control and AB 1482
In Palo Alto
Palo Alto lowered the maximum security deposit for unfurnished units to 1.5 times monthly rent, effective July 20, 2023.[5]
Renters qualify for the city's protections after 6 months in a unit instead of one year, effective September 21, 2023. The city made its protections permanent; the state protections end in 2030.[5]
Landlords must offer one-year leases, and properties with 10 or more units owe relocation assistance on no-fault evictions.[5]
We did not find a city rent cap. For units AB 1482 covers, the state cap applies.[6]
State law (AB 1482)
Under the Tenant Protection Act (AB 1482), rent can't go up more than 5% plus the change in the cost of living, or 10%, whichever is lower, in a 12-month period.[6]
After a tenant has lived in a unit for 12 months, the landlord needs a listed reason to end the tenancy, either at-fault (like nonpayment) or no-fault (like owner move-in or a substantial remodel).[6]
Exempt: units with a certificate of occupancy issued in the last 15 years (a rolling date), single-family homes not owned by a corporation or REIT, a duplex where the owner lives in the other unit, and units already under a stricter local rent control law.[6]
What is your Palo Alto home worth, and what could it become?
I spent my career on the investment side, helping operate more than 7,000 units. I'll give you a valuation built from recent sales, and a straight read on what your lot allows: an ADU, a split, or neither.
Palo Alto questions, answered
Can I add an ADU after an SB 9 lot split in Palo Alto?+
Not once the new parcel has two units. Ordinance No. 5645 caps split parcels at two units and doesn't permit ADUs or JADUs on a split parcel that already has two.[3]
What is the security deposit limit in Palo Alto?+
1.5 times monthly rent for unfurnished units, effective July 20, 2023.[5]
- [1]HCD, “Review of Palo Alto's ADU Ordinance, October 29, 2024”
- [2]California Department of Housing and Community Development (HCD), “ADU Handbook (March 2026 update)”
- [3]City of Palo Alto, “Ordinance No. 5645 (SB 9 and ADU amendments), passed January 13, 2025”
- [4]California Department of Housing and Community Development (HCD), “Housing Law Fact Sheet: Duplexes and Lot Splits (SB 9), April 2026”
- [5]City of Palo Alto, “Existing & Expanded Palo Alto Renter Protections”
- [6]California Attorney General, “Landlord-Tenant Issues: Tenant Protection Act”
Official Palo Alto pages
This page is general information, not legal or tax advice. Rules change, and cities amend their codes after state reviews. Confirm current requirements with the city and a qualified professional before you buy, build, or change a tenancy. Erica Walters, REALTOR®, CalDRE# 02239622, Compass.