[lazide]

Uh, not really? They have to stay there anyway for SB9 - this gives them a tractable (aka actually) doable way to get more wealth now without having to leave, and still retaining their home as-is in many cases. And it means SB9 like densification and additional housing is more likely to actually happen.

99% of homeowners could not actually do what you need to do for this densification - the planning, paperwork, and execution to get everything done is very difficult. 20% of net profit in exchange is pretty good actually. You’d need some truly crazy levels (several million+) of pure gain before it would make sense to try it yourself IMO.

I’ve done a decent amount of permitted work and far smaller projects can easily burn a year of nights and weekends.

[halpert]

But you wouldn't actually have to do the work. The value of the land should increase because the work could be done. It really comes down to whether or not the 3-year provision of SB9 can be enforced, because then there is some value in the homeowner staying in their home while the work is done. Apparently, this is enforced by making the home owner sign an affidavit and then charging them with perjury if they lie. It will be interesting to see if that holds up in court.

[lazide]

That value increase is theoretical, not cash in the bank.

People sometimes need cash in the bank.

Sometimes theoretical is fine.

And since it takes awhile for a buyer to turn the theoretical value into cash (and risk, and work), the theoretical value is also going to be lower than you might think.

[linuxdude314]

If the value increases the owner should be able to tap into that equity by doing a cash-out refinance.

[lazide]

Not if they don't have income.

They could do a reverse mortgage, but a lot of people are adverse to those for their own reasons.

[halpert]

Or just selling their home.