Employee Cafeterias and New Construction ADUs – A Legislative Update


Tomorrow, the San Francisco Planning Commission will consider two interesting legislative proposals on hot-button land use topics in the city. One would restrict—but not prohibit—new employee cafeterias in office developments, modifying a proposal from last year to ban them outright. The other would authorize accessory dwelling units in new construction.

Conditional Use for New Employee Cafeterias

The employee cafeteria proposal, introduced at the Board of Supervisors last summer, initially prohibited all new cafeterias. Finding an outright prohibition a bridge too far, the Planning Commission passed a motion disapproving the ordinance. In December 2018, the legislation was amended at the Board of Supervisors’ Land Use Committee to require a conditional use approval instead. That retooled proposal is back in front of the Planning Commission tomorrow.

The updated legislation proposes a number of factors for the Planning Commission to weigh when deciding on a cafeteria project. Some factors include: the cafeteria’s size; if it would be open to the public; its “impact” on existing businesses in the neighborhood; if meals would be free or heavily subsidized; if employers will also subsidize or pay for meals outside the cafeteria; the ability of existing restaurants to “absorb” increased demand that the office project would bring; the impact of cafeteria employees on demand for housing, public health, and social services; and if the cafeteria is open to all employees and contractors, such as janitors, servers, and security guards.

It appears the Planning Department recommends only including some of these factors, specifically cafeteria size; if it will be open to the public; impact on neighboring business; and if any subsidies or vouchers will be offered. Staff also recommends adding a factor about promoting economic opportunities for local residents and businesses through OEWD’s workforce system and First Source Hiring program.

At least a few of these factors may prove hard for project sponsors to demonstrate, including impact on existing businesses and those businesses’ ability to absorb increased demand, as well as the  cafeteria employees’ demand for housing, public health, and other social services throughout the city. Additionally, many criteria are specific to employers themselves and not to project sponsors or developers, potentially causing uncertainty about when an employee cafeteria could or should be proposed.

Notably, the Planning Department also recommends cafeterias be exempt from the CU requirement if they are located on the ground floor, open to the public, and employers either only subsidize 50% of meals or provide vouchers for use outside the cafeteria.

ADUs in New Construction

Recognizing that accessory dwelling units—historically called in-law units and now more commonly referred to as ADUs—can provide much-needed affordable by design housing, California lawmakers in recent years passed a series of amendments to streamline ADU production. San Francisco policymakers and elected officials have in large part worked quickly to implement state law. In particular, the Planning Department and the Mayor’s Office have consistently proposed ways to cut through red tape, while still maintaining certain development requirements. This most recent ADU ordinance continues that trend by addressing a simple way to add more housing: permitting ADUs in new construction, consistent with a new state law, and further streamlining some of these units that are the least likely to raise neighborhood concerns.

The Planning Department proposed a few interesting features for new construction ADUs. First, Planning staff recommends a 1,200 square foot cap on ADUs that can be approved ministerially. Larger ADUs can still be approved, but they would receive more input from staff and likely take longer to get through the permitting process. Staff also suggests reducing the amount of open space required for ADUs in RH zoning districts, recognizing that larger open space requirements for ADUs could lower the appetite of a property owner in these districts to pursue an ADU. Because the RH zoning districts cover a significant portion of San Francisco’s west side, this change could incentivize new housing in parts of the city with fewer residential projects.

On a macro level, being able to add ADUs into new construction projects is a helpful and logical next step to streamline production and get people living in those units. Currently, property owners in San Francisco can only process ADU permits after projects are constructed. While the Planning Department has implemented a number of best practices to streamline ADU permitting, eliminating the need to go through the building permit process twice is a common-sense solution.

We will continue to track these proposals as they make their way through the legislative process.

 

Authored by Reuben, Junius & Rose, LLP  Attorney Mark Loper

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.