A corner lot at Elm Avenue and 27th Street. A large palm in the front yard that city code protects. Sepulveda Boulevard one block to the east. That last block is in a different zone.
Each of those is a question about value, and each one takes an experienced local expert to answer when you are considering a sale or a purchase in the South Bay. This is not a cookie-cutter market. 2700 Elm Avenue and 2701 Oak Avenue back onto each other on lots of the same size, about 4,480 square feet each. They sold about three weeks apart in the spring of 2026, one for $2,612,000 and the other for $2,250,000. That is a $362,000 difference between two houses on matching lots.
It is also why automated estimates such as Zillow’s Zestimate and the Redfin Estimate have a hard time keeping up with values here. Zillow says its model works from standardized data such as bedroom and bathroom counts, square footage, lot size, tax assessments and prior sales, and that “unreported additions, updates and remodels aren’t reflected in the Zestimate.” Redfin reports a median error of 7.38 percent for homes that are not on the market. On a $2.6 million house, 7.38 percent is about $192,000 in either direction, and half of all estimates miss by more than the median.
There are nuanced levers on property value all over the area: a zoning line, a protected tree, a permit file. The smallest of them can move a price. Knowing which ones apply before a house goes on the market clears the road for the sale. In Neil’s experience it also supplies the most important element of all, which is buyer confidence.
The Residential Overlay District is a prime example. The district, called the ROD for short, is a zoning layer the City of Manhattan Beach placed over 34 commercial sites in March 2023, including lots along Sepulveda Boulevard. On those sites, an apartment or mixed-use project that meets the written standards is approved by city staff without a public hearing. The base standards are 20 to 60 homes per acre, a 36-foot height limit on Sepulveda, and at least 20 percent of the homes reserved for lower-income households. State law lets a qualifying project build taller, and the three Sepulveda projects in the City notices cited below are seven to ten stories. The first of them, at 2301 N. Sepulveda, is headed into construction: MB News reported from the City’s pre-construction meeting on June 25, 2026 that demolition and excavation could begin as soon as July, with about 22 months of building to follow.
We sold 2700 Elm Avenue in May 2026 and 2701 Oak Avenue, the abutting lot behind it, in April 2026. Both are in the Tree Section and sit on the edge of the district. Before 2700 Elm went on the market we hired Srour & Associates, a trusted real estate development services firm in Hermosa Beach, for a written study of both lots, with a section on the overlay district next to them. The sections below draw on that study and on the City’s own documents, all rechecked after the sale, on October 5, 2026.
What is the Residential Overlay District in Manhattan Beach?
The Residential Overlay District is Chapter 10.50 of the Manhattan Beach Municipal Code, adopted by Ordinance 23-0006 in March 2023. It covers 34 sites made up of 75 parcels, about 43 acres in all, in the General Commercial, Local Commercial and Planned Development zones. On those parcels, qualifying housing is permitted “by-right,” which means staff review against written standards and no public hearing.
The City’s Residential Overlay District page gives the reason it exists. California requires every city to adopt a Housing Element, a state-reviewed plan showing where its share of the region’s new housing could be built. Manhattan Beach’s current plan, called the 6th Cycle Housing Element, named these commercial sites, and the overlay is the zoning that carries the plan out.
An overlay is added over the zoning a lot already has. A lot on Sepulveda zoned CG, for General Commercial, stays commercial. If it is also in the district, the zoning map shows it as CG-ROD, and its owner may build shops and offices as before, or a qualifying residential or mixed-use project.
The density range is easier to picture as land per home. An acre is 43,560 square feet, so 60 homes per acre works out to one home for every 726 square feet of lot, and 20 per acre to one home for every 2,178 square feet. At least 20 percent of the homes in a project must be reserved for lower-income households, as the state defines that term.
Where is the overlay district near the Tree Section?
Commercial lots line both sides of Sepulveda Boulevard through this part of Manhattan Beach, and some of them, though not all, are in the Residential Overlay District. 2700 Elm Avenue and 2701 Oak Avenue are one block from that corridor. Both are zoned RS, for single-family residential, and neither is in the district.
The study includes the City zoning map for the surrounding blocks, with the commercial lots in red and the overlay lots hatched. It gives one example by address: the lot at 2700 N. Sepulveda Boulevard, which the study says could have up to six homes for a qualifying project.
For an owner on Oak or Elm near Sepulveda, the zoning of the house did not change in 2023. What changed is what can be approved on certain commercial lots nearby, and how: by staff review, with no hearing to attend. For a buyer looking at a house near the corridor, the zoning map shows which of the nearby commercial lots carry the ROD suffix, and the City’s ROD page lists the projects in review.
How tall can a building in the overlay district be?
City code limits a Residential Overlay District project on Sepulveda Boulevard to 36 feet. California’s State Density Bonus Law allows a project that includes affordable homes to request more height and more density than local code permits. Each of the three Sepulveda projects in the City notices below asked for added height.
| Address | Homes | Stories and height | Status in City documents |
|---|---|---|---|
| 2301 N. Sepulveda Blvd. | 40 rental homes: 29 market rate, 3 moderate income, 8 low income | 7 stories; 73 feet 4 inches to the parapet | Notice dated January 10, 2025, updated December 4, 2025. A Notice of Exemption posted May 19, 2026 says the plans were approved. MB News reported a pre-construction meeting on June 25, 2026. |
| 201 to 207 N. Sepulveda Blvd. | 60 rental homes: 48 market rate, 12 low income | 7 stories; 68 feet 9 inches | Notice dated January 16, 2026, updated May 5, 2026. Building permit applied for and not yet issued as of that notice. |
| 3600 N. Sepulveda Blvd., the former Fry’s site | 273 rental homes: 218 market rate, 46 low income, 9 very low income | A 10-story building at 134 feet 1 inch and a 7-story building at 81 feet 7 inches | Notice dated October 9, 2025. Building permit not yet issued as of that notice. |
Take 2301 N. Sepulveda, the nearest of the three to 27th Street. Forty homes on a 13,440 square foot site is one home for every 336 square feet of land, a little more than twice the 60 per acre in city code. Its 73 feet 4 inches is about twice the 36-foot limit and nearly three times the 26 feet allowed for a new house on Elm Avenue. At the June 2026 pre-construction meeting the contractor put the building at about 50 feet above grade on a sloping lot, according to MB News. The City’s notice gives 73 feet 4 inches to the parapet, and this page uses the City’s figure.
The City mails a notice to owners and residents within 500 feet of a proposed ROD project. The notice says state law requires the City to review these projects against “strictly objective development standards, without public hearings or discretionary review.” The notice tells neighbors about a project that is in plan check, the City’s review of the building plans, and no hearing follows it.
What else is being built near the north Tree Section and Manhattan Village?
The Los Angeles Sparks are building a headquarters and training facility at 2021 Rosecrans Avenue in El Segundo, just east of Sepulveda Boulevard. It is around the corner from the north end of the Tree Section and from the homes behind the gate in Manhattan Village. The building is due to open in 2027.
Construction is well along. A joint release from the City of El Segundo and the team, dated August 31, 2026, says the structure topped out the week of August 26, which means its highest piece is in place. The release puts the project at about 64,000 square feet and $150 million, designed by Gensler and built by Clark Construction.
Rosecrans Avenue is the city line here, so this project was approved in El Segundo and the Residential Overlay District has no part in it. A South Bay buyer looking near Sepulveda and Rosecrans will still ask about it, for the same reason they ask about the 273 homes noticed for the former Fry’s site at 3600 N. Sepulveda. Both are changes within a few blocks, and both have dates and documents a buyer can read before making an offer.
What did the lot study find for 2700 Elm and 2701 Oak?
The study, written by Brandon Straus of Srour & Associates and dated March 20, 2026, covers two abutting lots of about 4,480 square feet each in the RS zone, Area District 2. It sets out five paths for each lot, from keeping the house to an urban lot split under Senate Bill 9, and it flags the palm at 2700 Elm as a protected tree.
| Path | What the study says |
|---|---|
| One new house on each lot | Up to 3,136 square feet of buildable floor area, 26 feet and two stories, a 20-foot front setback and two enclosed parking spaces. The house may add one or two Accessory Dwelling Units (ADUs), or an ADU and a Junior ADU. An ADU is a second, smaller home on the same lot, limited to 1,200 square feet. A Junior ADU is limited to 500. Either may be rented. Neither may be sold apart from the house. |
| A duplex on each lot under SB 9 | Senate Bill 9 is the California law, in effect since 2022, that allows two homes on a lot zoned for one. The City cannot apply a standard that would physically prevent two homes of at least 800 square feet each. One enclosed parking space per home. Rentals must run longer than 30 days. |
| An SB 9 urban lot split | Each lot may be divided in two, with each new lot at least 40 percent of the original and at least 1,200 square feet. The applicant must be a person, not a company, and must sign an affidavit of intent to live in one of the homes for three years. A lot is not eligible if a tenant has lived in the house in the last three years. Across both lots the study counts up to eight homes. |
| Add on to or remodel the existing house | Up to the same 3,136 square feet. If a survey shows the house does not conform to current standards, the cost of the work may be capped at 50 percent of the cost of rebuilding the whole structure, unless the work removes the nonconformity. |
| Convert the garage to an ADU | Permitted, and the lost parking does not have to be replaced. |
The 3,136 square foot figure is 70 percent of the lot. It is about 2.4 times the 1,288 square foot house at 2700 Elm and about 3.4 times the 912 square foot house at 2701 Oak. Manhattan Beach wrote its own SB 9 rules into Municipal Code Chapters 10.78 and 11.40, in effect since January 18, 2024, and the City’s SB 9 page has the application steps.
The study also names the palm. The City’s tree preservation rules protect certain trees in the 20-foot front setback and the 5-foot corner side setback of a residential lot, and removing one takes a Tree Permit supported by an arborist’s report. A buyer sketching a new house for that corner had the palm in writing before hiring an architect.
Why order a lot study before listing a house?
A house one block from a commercial corridor raises two questions the house cannot answer: what can be done with this lot later, and what can be built on the lots nearby. Both answers sit in city code and state law. We asked for them in writing before the listing went live, and attached the full study to the MLS listing so every buyer’s agent could read it.
The MLS, or Multiple Listing Service, is the shared database where agents post listings and the documents that go with them. Our brochure for the property summarized the study, told agents where the full text was, and asked buyers to confirm every item with the City of Manhattan Beach. A buyer’s agent can only advise a client on the facts in front of them, and this put the same four pages in front of all of them on the first day.
2700 Elm was listed at $2,599,000 and closed at $2,612,000 on May 8, 2026, after 13 days on the market. 2701 Oak sold privately to a builder at $2,250,000 on April 15, 2026. Plans for a new luxury home on that lot are now in plan check with the City, and in Neil’s estimate the finished house is likely to list in the high $5 million to $6 million range. The study did not set either price. It answered the zoning questions for both lots, under a named professional’s signature, before a buyer had to ask. The permit file for the 2011 rebuild at 2700 Elm did the same job for the house itself, and our report on what fixer, remodel and tear-down mean explains how a builder prices the same lot compared with an owner-user, a buyer who plans to live in the house.
How can you check whether a lot is in the overlay district?
The City of Manhattan Beach publishes the answer in three places. The zoning map shows the ROD suffix on every lot in the district. The GIS parcel report gives the zoning for a single address. The Residential Overlay District page lists the projects in preliminary review and in building permit review. All three are reached from the City’s zoning and development regulations page.
For a study of your own lot, Srour & Associates and Salt & Timber Group are two highly reputed local businesses that provide these services to the public. Srour lists entitlements, pre-purchase due diligence and permit expediting. Salt & Timber lists architectural design, permitting, entitlements and ADUs. You do not have to be a REALTOR® or a builder to reach out to either one directly about your own property and your plans for it.
The Planning Division answers questions about a specific lot at (310) 802-5520 or [email protected]. Each project notice also names the planner assigned to it.
We recheck the City’s project list for this page each quarter, and the next check is in January 2027. If the City issues a building permit for any of the three Sepulveda projects before then, the table above gets the date.
Own near Sepulveda, buying in Manhattan Beach, or working out what a lot in the Beach Cities could become? Send Neil the address and we will tell you what the public record shows for it. Our Sellers resources page explains how we thoroughly prepare a listing for a successful sale in an ever-competitive local market.
Sources
- City of Manhattan Beach, Residential Overlay District (ROD): adoption, Ordinance 23-0006, site count, density range, affordability requirement and review process. Checked October 5, 2026.
- City of Manhattan Beach Planning Commission staff report, February 22, 2023: Chapter 10.50, base zones and the Government Code sections the overlay carries out.
- City of Manhattan Beach project notices: 2301 N. Sepulveda Blvd., 201 to 207 N. Sepulveda Blvd. and 3600 N. Sepulveda Blvd.. Checked October 5, 2026.
- California Governor’s Office of Land Use and Climate Innovation, CEQAnet, Notice of Exemption 2026050715, posted May 19, 2026.
- California Government Code section 65915, the State Density Bonus Law.
- City of Manhattan Beach, SB 9 and Tree Preservation and Restoration, Private Property. Checked October 5, 2026.
- City of El Segundo and Los Angeles Sparks, LA Sparks Reach Topping-Out Milestone on $150M El Segundo Headquarters and Training Facility, August 31, 2026.
- MB News, Manhattan Beach’s First 7-Story Apartment Building Set to Break Ground, by Dave Fratello, June 25, 2026.
- Zillow, What is a Zestimate? and Redfin, About the Redfin Estimate, which Redfin dates September 2025. Checked October 5, 2026.
- Srour & Associates, Real Estate Development Services Group, Inc., zoning analysis of 2700 Elm Avenue and 2701 Oak Avenue, Manhattan Beach, by Brandon Straus, March 20, 2026. Prepared at our request and included in the MLS listing supplements.
- California Regional MLS listing records SB26065251 and SB26101262; closing figures as reported to the MLS. See 2700 Elm Avenue and 2701 Oak Avenue.
We do our very best to supply facts drawn from official sources so that the information you find here is reliable and accurate. If we find conflicting information, we report on all of it. This article is general real estate information about zoning near one sale. It is not legal, tax, lending, financial or investment advice, and it is not a recommendation to buy, sell, hold, list or price any property. Zoning rules and project details change, so confirm anything that affects a decision with the City of Manhattan Beach Planning Division and your own land use professional. The lot study summarized here was prepared for 2700 Elm Avenue and 2701 Oak Avenue only and does not apply to any other property. Chhabria Real Estate Company receives no referral fee or other compensation from any firm named here. Chhabria Real Estate Company, DRE 01821437.
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