Multifamily and Duplex Properties for Sale in Hillsborough: Zoning and Rent Rules

What multifamily in Hillsborough looks like

Hillsborough has essentially no apartment buildings or duplexes for sale. It is an estate town zoned for single-family homes on half-acre-plus lots, and multifamily housing is allowed only on certain town-owned land. For an investor, "income property" in Hillsborough means an estate with a permitted ADU or JADU, a property with a legal guest house or staff quarters, or an SB 9 two-unit project on a qualifying lot. The town’s rules on these are detailed and recently rewritten. For small-property financing, see financing 2-4 unit properties; for apartment buildings in nearby San Mateo or Burlingame, see apartment building loans.

Where the zoning allows it

Hillsborough’s use table, last amended by Ordinance 792 on January 8, 2024, has three districts.

Private investors will rarely own RD-2 or RD-3 land, so for most buyers the question is how many units an RD-1 lot can hold.

ADUs and JADUs. Hillsborough repealed and replaced its ADU chapter through Ordinance 800 on April 13, 2026.

• How many. A single-family lot may have one ADU plus one JADU in converted space, and one new detached ADU.
• Size. JADUs are limited to 500 square feet inside the home. Converted-class detached ADUs are limited to 800 square feet. Other ADUs may reach 850 square feet for a studio or one-bedroom and 1,000 square feet for two or more bedrooms, with attached ADUs capped at half the main home’s floor area.
• Height. Detached ADUs generally top out at 16 feet. They can reach 22 feet if set back at least 20 feet from side and rear lines and 25 feet from the street.
• Setbacks. 4 feet side and rear, and 20 feet front for larger ADUs.
• Owner occupancy. ADUs need no owner occupancy. A JADU without its own sanitation requires the owner to live on the property.
• Review. Review is ministerial: completeness within 15 business days and a decision within 60 days, or the application is deemed approved.
• Fees. No impact fees for a JADU or an ADU under 750 square feet.

See our ADU investment guide.

SB 9 two-unit projects. Hillsborough’s Chapter 17.54, from Ordinances 779 and 781 (2021–2022), is restrictive. Urban lot splits are in Chapter 16.44.

• Who may apply. Only natural persons and certain trusts and nonprofits; corporate entities may not.
• Excluded lots. Lots with protected housing, including units occupied by a tenant in the past three years, and lots in very high fire hazard zones unless mitigated.
• Size and height. New units must be 500 to 800 square feet, and on typical lots they are limited to one story or 16 feet.
• Placement and design. Units must sit at least 30 feet from the front line and match the main house’s materials and roof pitch. Rooftop decks are barred, and windows near neighbors must be clerestory or frosted.
• Ownership. The units cannot be sold separately or condominiumized. Unless the lot came from a lot split, the owner must live on site.
• Notice. Neighbors get 30 business days’ notice before construction.

See our SB 9 lot split guide.

Rent rules: state law only

Hillsborough has no local rent ordinance; the Attorney General’s rent cap page, updated July 16, 2026, lists East Palo Alto as the only San Mateo County city with one. For San Mateo County, covered units may rise up to 6.3% for increases from August 1, 2025 and 8.8% from August 1, 2026 through July 31, 2027. A home with an ADU, where the owner lives in one of the units, can be exempt, as can single-family homes owned by individuals that give the required lease notice. Confirm each case. See our AB 1482 guide and just cause eviction guide.

Hillsborough rental property rules

• 30-day minimum. No ADU or JADU may be rented for less than 30 days, and SB 9 units carry a recorded deed restriction against rentals under 30 days.
• ADU rent reporting. ADU owners report projected rent at permit application and actual rent each year.
• Not a business. Renting an ADU is not treated as a business under the town’s business license chapter.
• Home businesses. Any business run from a rental needs the tenant’s own annual home business permit.
• Transfer tax. The County’s documentary transfer tax is $1.10 per $1,000. We found no Hillsborough tax; confirm on the escrow estimate.

Hillsides, fire zones and estate buildings

Much of Hillsborough is wooded hillside, and both the ADU and SB 9 chapters add rules for very high fire hazard zones, so check the parcel’s fire hazard designation before planning a unit. Older estates often have staff quarters or guest houses built decades ago; confirm they are legal units before counting rent, and review older wood-frame structures for seismic retrofit needs. SB 721 balcony inspections apply to buildings of three or more units, which will be rare here.

Underwriting a Hillsborough income property

1. Pull town permits for every secondary unit; count only legal ADUs, JADUs and permitted guest quarters.
2. Map what more the lot can hold: one converted ADU plus one JADU, and one detached ADU.
3. Check fire hazard zone, protected-tenant history and ownership type before counting on an SB 9 unit.
4. Classify units under AB 1482 and model covered increases at or below 8.8%.
5. Collect leases, ADU rent reports and estoppel certificates.
6. Rebuild expenses with reassessed taxes, wildfire insurance and estate maintenance in our rental property analysis.

Questions people ask

Sources & notes

1. Hillsborough Chapter 17.16, Uses Permitted (GoCodebook)
2. Chapter 17.52, ADUs and JADUs
3. Chapter 17.54, Two-Unit Projects
4. Section 17.16.015, Home Business
5. Hillsborough Title 17, Zoning
6. San Mateo County Assessor-County Clerk-Recorder, documentary transfer tax
7. California Attorney General, rent caps

Note: We did not review the urban lot split chapter (16.44), the zoning map, the fire hazard maps or the structure size chapter (17.32).

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

Related: Hillsborough real estate guide · Commercial real estate in Hillsborough · Multifamily investing guide · Investor services