How SB 9 Properties Get Valued in Los Angeles County
If you own a property with an SB 9 unit — or you're considering buying one — the appraisal is the part that surprises most people. The income it generates doesn't drive the number the way you might expect. What drives the number is comps.
The Short Answer: It Appraises Like a Duplex
SB 9 allows a single-family lot to be converted into a duplex or split into two parcels, each with its own unit. From an appraiser's standpoint, once that second unit exists as a permitted primary unit — not an ADU — the property is functionally a two-unit residential property.
For residential properties with four units or fewer, appraisers don't use the income capitalization approach to set value. That's a commercial tool. Instead, they use the sales comparison approach: find comparable two-unit sales nearby, make adjustments, and reconcile a value based on what similar properties have sold for.
That means your SB 9 property isn't being valued on what it rents for. It's being valued based on what a comparable duplex sold for.
If you want to understand how this differs from how a standard ADU gets treated at underwriting, how a home with an ADU gets valued when you sell in Orange County walks through the distinction — the comp methodology is similar, but the legal status of the unit changes how much weight an appraiser can give to rental income.
The Comp Problem
Here's where it gets complicated. Duplex comps in Los Angeles County can be thin depending on the submarket, and SB 9 comps — sales of properties that specifically went through the SB 9 conversion process — are even thinner. The law has only been on the books since 2022, and the pipeline of completed, permitted, sold SB 9 conversions is still building.
Appraisers working SB 9 assignments will typically search in this order:
SB 9 unit sales — properties that have already gone through the same conversion process in the same neighborhood or nearby
Two-unit / duplex sales — standard duplex comps in the subject neighborhood or expanded geographic area
Income-producing single-family sales with a permitted ADU — where no duplex comps exist, some appraisers will pull homes with a permitted ADU and treat them as a paired comp with adjustments
The fewer comps available, the wider the appraiser has to cast the net — which can introduce geographic adjustments, time adjustments, or both. Fannie Mae's guidelines on adjustments to comparable sales give appraisers flexibility here, but wider comp sets also mean more room for variance in the final number.
What This Means If You're a Buyer
If you're financing an SB 9 property with a conventional loan, your lender will order a standard residential appraisal. The appraiser is going to look for duplex comps. In a market where those comps are plentiful and the sales data is clean — areas like Long Beach, Anaheim, or Garden Grove where two-unit sales are regular — the appraisal tends to come in predictably. In a thin comp market, you can get an appraisal that comes in low not because the property isn't worth it, but because comparable data is scarce.
Before you write an offer on an SB 9 property, ask your agent to pull recent duplex sales in the immediate area. If supply is thin, you need to go in with your eyes open about appraisal risk — especially if you're paying at the top of the range or over list. Here's what I check on every investment property in OC and LA before going into contract — comp depth is on that list for exactly this reason.
DSCR lenders will approach this differently. They're often more comfortable using an income-based lens alongside the comp approach, which can produce a more favorable valuation on a strong cash-flowing SB 9 property — particularly when conventional appraisals are running light due to thin comps.
What This Means If You're a Seller
If you're listing an SB 9 property, your pricing strategy should start with duplex comps — not ADU comps, not single-family comps. Pull the two-unit sales in your submarket from the last 6–12 months, look at what closed per square foot, and price from that data set. What your home with an ADU is actually worth and how to price it right covers the broader pricing framework — the same logic applies here, just anchored to duplex comps instead of SFR-with-ADU comps.
If there are no recent duplex comps close by, your agent needs to build the comparable set manually and be prepared to support the list price with a written value narrative — the kind of documentation that helps a buyer's appraiser justify a number that might otherwise feel like a stretch.
Also worth knowing: if you did an SB 9 lot split and sold one parcel separately, that transaction is its own comp now. Any subsequent sale of the remaining parcel will be appraised against whatever the lot split created. That's a reason to be thoughtful about how you sequence those transactions — something the full breakdown of SB 9 in Los Angeles City gets into in detail.
The Bottom Line
SB 9 properties don't get a special valuation formula. They get treated as duplexes, and they get valued off duplex comps. In markets with strong comp supply, that's a straightforward process. In thinner markets, it takes more work — and the outcome is less predictable.
Knowing this going in changes how you write offers, how you structure your exit, and how you think about the asset. If you're trying to figure out what an SB 9 property on a specific street is actually worth — or whether the list price holds water — reach out and I'll pull the comps with you.
Ready to Start?
Call or text Dylan Serna, ADU Realtor at (714) 860-2868 to schedule a ADU/SB9 Consult Call
