Multifamily and Duplex Properties for Sale in Morgan Hill: Zoning and Rent Rules

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What multifamily in Morgan Hill looks like

Morgan Hill’s income property is mostly small: duplexes and duets, townhome-style attached housing, small apartment buildings near downtown, and a set of mobile home parks, with newer apartments and mixed-use buildings downtown. Because the city has controlled housing growth by voter measure since 1977, the supply of new units has been metered, and any plan to add units runs through the Residential Development Control System. For two to four units, read financing 2-4 unit properties; for larger buildings, see apartment building loans.

Where the zoning allows it

Chapter 18.18, adopted with the 2018 zoning rewrite and amended through Ordinance 2362 in February 2025, sets three attached residential districts. Density is expressed as minimum site area per unit.

District	Site area per unit	Approx. units/acre	Height	Housing types
RAL-3,500 / RAL-3,000 Low Density	3,500 or 3,000 sq ft	about 12 to 15	30 ft	Duplexes, duets, multifamily, attached single-family, ADUs
RAM Medium Density	2,000 sq ft	about 22	3 stories or 40 ft	Same
RAH High Density	1,100 sq ft	about 40	3 stories or 40 ft	Same; typically in and around downtown
MU-N Neighborhood Mixed Use	—	8 to 20	35 to 45 ft	Duplexes, multifamily and attached homes permitted
MU-D Downtown Mixed Use	—	No minimum or maximum	45 ft, 55 ft on 22,000+ sq ft sites	Uses set by the Downtown Specific Plan
MU-F Mixed Use Flex	—	7 to 24	35 to 45 ft	Conditional, and on hold until a Monterey Corridor master plan

The units-per-acre figures are our conversions of the code’s site-area numbers. In RAM and RAH, a new detached single-family home is allowed only on a lot of record that existed before July 7, 2018, so these districts are reserved for attached and multifamily housing.

ADUs and SB 9. Secondary dwelling units are exempt from RDCS allotments, which makes ADUs the simplest way to add a rental unit in Morgan Hill. SB 9 projects can apply on qualifying single-family lots under state law; ask the city how it treats SB 9 units under the RDCS. See our ADU investment guide and SB 9 lot split guide.

Rent rules: state law, plus a local mobile home ordinance

The Attorney General’s rent cap page, updated July 16, 2026, lists only San Jose and Mountain View among Santa Clara County cities with local rent ordinances, so Morgan Hill apartments and duplexes follow AB 1482. Santa Clara County is in the All Other Counties group, with covered units allowed up to 8.6% for increases from August 1, 2026 through July 31, 2027. Statewide just cause rules apply to covered tenancies. The County’s unincorporated tenant protections do not reach property inside city limits. See our AB 1482 guide and just cause eviction guide.

Mobile home parks. Morgan Hill does regulate space rents in mobile home parks. Chapter 5.36 includes a rental dispute hearing process and rent increase and fair return standards. We did not review its formula, so a park buyer should read the full chapter and any city resolutions.

Morgan Hill rental property rules: the RDCS

Chapter 18.156 is the rule that most shapes multifamily investing here.

Ceiling and pace. Measure S, adopted by voters in 2016, caps population at 58,200 on January 1, 2035 and allows up to 215 allotments a year, plus set-asides. New units generally need an allotment before development.
Exemptions. No allotment is needed for one home on a lot that existed on March 1, 2017, secondary dwelling units, converting a single-family home to a duplex without a new detached primary structure, assisted living and nursing homes, and annexed existing homes.
Competition. Projects must score at least 80% of available points, judged across objectives such as schools, location, affordable housing, parks, transportation and quality. The city may create categories such as small projects under 15 units, senior housing or multifamily rental.
Set-asides. Downtown projects can draw from 500 allotments through 2035, up to 100 a year, first-come, first-served, and 300 allotments go to projects that place permanent agricultural easements.
Phasing and expiration. Phased projects can get multi-year allotments, up to three years under 100 units and five years at 100 or more. Allotments expire if not exercised within 30 months, with a single extension of up to a year allowed only for city-caused delays or severe natural events.

State housing laws adopted since 2019 restrict how cities apply growth limits, so ask the city how the RDCS currently applies to your project.

Building, utility and inspection issues

Older downtown buildings and mobile home parks deserve a seismic retrofit and systems review. We did not find a mandatory soft-story ordinance for this page. Buildings of three or more units with elevated balconies or walkways need SB 721 balcony inspections. For development sites, residential transition standards in Section 18.92.130 add setbacks and stepbacks next to lower-density homes.

Underwriting a Morgan Hill multifamily purchase

Confirm the district and site area; RAM at 2,000 square feet per unit allows roughly twice the units of RAL-3,500.
For any added units, confirm the RDCS path: exemption, competition or set-aside, and the expiration clock.
Model rents at or below AB 1482’s 8.6% cap for covered units.
For mobile home parks, read Chapter 5.36 and the park’s rent history.
Collect leases and estoppel certificates.
Rebuild expenses with reassessed taxes in our rental property analysis; the city’s 27.5-cent documentary stamp tax under Chapter 3.16 shares the County’s $0.55 per $500 rate.

Questions people ask

Is there rent control in Morgan Hill?

Not for apartments. AB 1482 applies, at up to 8.6% from August 1, 2026. Mobile home park space rents have a local ordinance.

Do I need an RDCS allotment to build an ADU?

No. Secondary dwelling units are exempt from allotments.

Can I turn a house into a duplex?

Converting a single-family home to a duplex is exempt from RDCS allotments if no new detached primary structure is built. Zoning must still allow two units.

Where are apartments allowed in Morgan Hill?

In RAL, RAM and RAH, and in the MU-N and MU-D mixed-use districts. MU-F housing awaits a corridor master plan.

How many units can I build in RAH?

One unit per 1,100 square feet of site area, or about 40 an acre, up to three stories or 40 feet, subject to RDCS allotments.

What is the RDCS population limit?

58,200 by January 1, 2035, under Measure S of 2016.

Sources & notes

Morgan Hill Chapter 18.18, Residential Attached districts (GoCodebook)
Chapter 18.22, Mixed Use districts
Chapter 18.156, Residential Development Control System
Chapter 5.36, Mobile Home Park Rents
Chapter 3.16, Documentary Stamp Tax
California Attorney General, rent caps (updated July 16, 2026)

Note: We did not review the text of Chapter 5.36, the ADU chapter, or how state housing law affects the RDCS. Units-per-acre figures are our conversions.

General information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

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