SB 1123: Unlocking Small-Lot Development Opportunities in California

At Inform Construction Inc., we help clients take full advantage of SB 1123. From acquisition and feasibility analysis to construction and leasing, our team offers end-to-end support to turn underutilized land into high-performing real estate assets

SB 1123 builds on the momentum of SB 684 by expanding its provisions to include vacant lots zoned for single-family use. It allows these lots—up to 1.5 acres in size—to be subdivided into smaller parcels for residential development, all through a ministerial (non-discretionary) process.

This means:

● No CEQA review

● No planning commission or city council hearings

● Significantly reduced timelines for project approvals

For small developers, landowners, and investors, SB 1123 is a rare opportunity to create housing in areas where it was previously restricted or impractical.

To be eligible for SB 1123, a property must meet the following criteria:

● Zoned for single-family residential

● Vacant (no existing structures)

● 1.5 acres or less in size

● Located in an area with urban surrounding uses

● Subdivided parcels must be at least 1,200 square feet each

Up to 10 parcels can be created, and Accessory Dwelling Units (ADUs) may be added per local allowances. ADUs and JADUs do not count toward the 10-unit limit.

The flexibility of SB 1123 supports a variety of residential models:

● For-sale townhomes or small-lot homes

● Build-to-rent micro-communities

● Properties with ADUs for added income

● Projects under Tenancy in Common (TIC) or community land trust ownership

The law allows local design standards to apply, but cities cannot reduce height or density below what existing zoning permits.

Inform Construction Inc. is equipped to manage every stage of an SB 1123 project. Our integrated approach ensures your development moves forward efficiently and profitably.

1. Site Acquisition & Feasibility

● Identify eligible properties

● Analyze zoning, density, and yield potential

● Provide acquisition and financial modeling support

2. Entitlements & Subdivision

● Prepare and manage ministerial lot split applications

● Coordinate surveys, infrastructure, and utility planning

● Oversee compliance with local planning regulations

3. Design & Construction

● Manage architectural, engineering, and permitting teams

● Provide turnkey general contracting services

● Deliver high-quality, code-compliant construction

4. Leasing, Sales & Stabilization

● Coordinate with brokerage teams for leasing or disposition

● Optimize unit layout and amenity strategies for market demand

● Ensure long-term asset value through quality control and oversight

SB 1123 is designed to unlock more housing in neighborhoods that are typically resistant to growth. It allows private owners, builders, and investors to participate in meeting California’s housing needs—without waiting years for entitlements or rezoning.

Whether you’re repositioning an underused asset or exploring your first development project, SB 1123 provides a path forward—and Inform Construction Inc. can help you get there.

If you own or are interested in a property that may qualify under SB 1123, now is the time to plan. Our team will evaluate your site and walk you through the potential—from lot split strategy to full project delivery.

Contact us at informcm.com to schedule a consultation.

Let’s build smarter, faster, and more efficiently—together.