The Basics: Easements and Their Relocation

relocation

When an easement is granted, a property owner gives another person an interest in and right to use the land which is burdened by the easement.  Easements are often conveyed, for example, to give an adjacent property owner a right to cross over the land, install utilities below the surface of the land, or otherwise use the land in a way that does not prevent the landowner from continuing to use its land.  In most cases, an easement runs to the benefit of an adjacent property, rather than benefitting a particular person.  Accordingly, easements are generally recorded in the official records of the county where the land is located, and are valid for an extended or unlimited period of time.

A well-drafted easement agreement typically includes terms that identify the land which is burdened by and benefits from the easement, describes the location of the easement, outlines how the easement may be used (and any limitations on its use), states how long the easement will remain in place, and explains how and under what circumstances it may be terminated.  The agreement may also include terms about how the easement will be maintained and at whose cost, establish indemnity and insurance obligations, and provide for dispute resolution.  But the property owner who grants the easement should also consider how its property may be used going forward, and whether it may wish to relocate the easement in the future.  Unless relocation rights are reserved, the owner of the burdened property may be unable to relocate the easement in the future, unless it obtains consent from the owner of the easement.  That gives the easement owner considerable power to, for example, prevent development or otherwise interfere with the burdened property owner’s ability to use its land.

In an effort to address this inequity, in July of 2020, the Uniform Easement Relocation Act (“Act”) was adopted by the Uniform Law Commission, also known as the National Conference of Commissions on Uniform State Laws.  Generally speaking, in jurisdictions where the Act is enacted, the owner of land burdened by an easement is allowed to relocate the easement without the consent of the easement owner.  The Act applies to easements conveyed before, on, or after the date when the Act is adopted.  And the Act does not allow the owner of the burdened property to waive or otherwise restrict by agreement its right to relocate the easement.

The relocation rights established by the Act are not unlimited.  For example, the Act does not apply to public utility, conservation, or negative easements (i.e., an easement that restricts the use of property).  If an easement is of a type which may be relocated, the proposed relocation may not hinder the utility of the easement, increase the burden on the owner of the easement, impair the purpose for which the easement was created, or impair the physical condition of value of the easement owner’s property, among other requirements.  The owner of the land burdened by the easement is not permitted to disrupt the use of the easement during relocation, unless the nature and disruption of the disruption is “substantially” mitigated.

A property owner who wishes to relocate an easement using the Act is required to file a lawsuit to obtain a court order to allow the proposed relocation.  The lawsuit must be filed against the owner of the easement, any lender that holds a security interest in the property, and any lessee of the easement owner’s property, at a minimum.  Assuming that the court makes the factual determinations required by the Act – i.e., that the easement is of a type that may be relocated and that the Act’s conditions on relocation are satisfied – it may issue an order approving the relocation.  A certified copy of the order must be recorded in the official records of the county in which the burdened land is located.

When an easement is relocated pursuant to a court order issued under the Act, the owner of the burdened property is obligated to pay all reasonable expenses associated with the relocation.  The easement owner has a duty to cooperate with the relocation in good faith.  When the relocation is complete, the burdened property owner must record and serve a certification that the easement has been relocated.  But, if no improvements must be constructed in connection with the relocation, the recorded court order – alone – is sufficient to constitute the completed relocation.

Thus far, only Nebraska, Utah, Washington and Arkansas have enacted the Act.  It is not clear whether the Act will be adopted in California or when.  But until such adoption, property owners who elect to convey easements to others should consider expressly reserving the ability to relocate the easement if circumstances warrant.

 

Authored by Reuben, Junius & Rose, LLP Attorney Corie A. Edwards.

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.

2023 Legislation at a Glance – Part 2

policies

As reported last week, this legislative session is packed full of pending bills with far reaching changes to land use controls and local control of such. In Part 1, we discussed some of the most significant bills introduced impacting the California Environmental Quality Act (CEQA), the State Density Bonus Law, and removal of an only in San Francisco allowance to appeal a building permit after a qualifying residential project receives entitlement. Here, in Part 2, we discuss significant bills introduced related to housing, parking, accessory dwelling units (ADUs), and other land use-related policies.

Accessory Dwelling Units

Since their introduction into housing nomenclature by former Bay Area lawmaker Senator Bob Wieckowski (D-Fremont) in 2016 with SB 1069 along with companion AB 2299 (Bloom), ADUs have become somewhat of a darling child in the housing production world. Over the years, several bills have passed intended to increase the production of ADUs. A few include a package – AB 68 (Ting), AB 587 (Friedman), AB 670 (Friedman), AB 671 (Friedman), AB 881 (Bloom), and SB 13 (Wieckowski) – enacted in 2019 and another pair of bills from 2022 – AB 2221 (Quirk-Silva) and SB 897 (Wieckowski). This year, we see proposals for further relaxation of controls on ADUs, including:

  • AB 1033 (Ting) would allow a local jurisdiction to permit condominiumization and sale of ADUs separate from the primary residence.
  • AB 1332 (Carillo) would require jurisdictions, by April 2025, to publish six sets of permit ready floor plans (studio, 1-bedroom, and 2-bedroom, in both standard and reverse formats) for detached ADUs.
  • AB 1661 (Bonta) would remove the requirement that an ADU be individually metered for electrical and gas service and allow for an ADU to use existing or upgraded meters on the property.
  • AB 976 (Ting) would make permanent an existing prohibition to imposing an owner-occupancy requirement on an ADU that sunsets January 1, 2025.
  • SB 477 (Committee on Housing) would create a new Government Code chapter to house state ADU regulations.

Constitutional Amendments

There are two noteworthy Constitutional Amendments being proposed this legislative session.

ACA 1 (Aguilar-Curry) Affordable Housing Bond Approval Threshold. Would lower the necessary voter threshold for approving affordable housing bonds from a two-thirds supermajority to 55%. This appears to be a set up for a forthcoming affordable housing bond (AB 1657, Wicks), slated to go before the voters in fall of 2024.

ACA 10 (Haney) Housing a Fundamental Right. Would amend the Constitution to declare that the state recognizes the fundamental human right to adequate housing for everyone in California. The amendment would impose a shared obligation on the state and local jurisdictions to respect, protect, and fulfill this right, by all appropriate means, including legislative action.

Relaxing of Parking Controls

In recent years, there has been an effort to reduce minimum parking controls. Last year, AB 2097 (Friedman) removed a local jurisdiction’s ability to impose any minimum parking requirements on residential or commercial development located within one-half mile of public transit (as defined). This year there is a trio of bills that will further relax parking controls local jurisdictions may impose:

  • AB 1317 (Carrillo) would require landlords to “unbundle” parking costs from rent from leases or rental agreements for residential property commencing or renewed on or after January 1, 2024.
  • AB 1308 (Quirk-Silva) would prohibit a local jurisdiction’s ability to increase the applicable minimum parking requirements of a single-family residence as a condition of approval to remodel, renovate, or add to a single-family residence.
  • AB 894 (Friedman) would allow properties with underutilized parking (as defined) to share spaces with other users, which would count toward meeting any automobile parking requirement.

Housing Policies

AB 1485 (Haney) Attorney General Right To Intervene in Actions Involving Violations of State Housing Laws. This bill would grant the Attorney General an unconditional right to intervene in any lawsuit filed over a potential violation of an enumerated list of state housing laws, including, among others, the Housing Accountability Act, Housing Crisis Act of 2019, and the Density Bonus Law.

AB 1532 (Haney) Streamlined Office to Residential Conversions. This bill would allow by-right, ministerial office to residential conversion projects statewide and limit fees and design requirements that local governments can impose on conversions. It would also allow an applicant to pay applicable impact fees over a ten-year period. It includes a skilled and trained workforce requirement. This bill has been converted to a two-year bill and we will likely not see any movement on it until next year.

AB 1633 (Ting) Housing Accountability Act Protection Extended to CEQA Review. This bill would expand the Housing Accountability Act’s definition of “disapprove the housing development project” to include any instance when a local agency fails to issue an exemption, fails to adopt a negative declaration or addendum for the project, or certify an environmental impact report or another comparable environmental document.

AB 281 (Grayson) Streamlining Post-Entitlement Permits. This bill would extend the post-entitlement permit timelines created by AB 2234 (2022, Rivas) to special districts. AB 2234 imposes the following timelines for review of post-entitlement applications for housing projects: (1) for projects with 25 units or fewer, a local agency shall complete first review and comment within 30 days of an application completion; and (2) for projects with 26 or more units, a local agency shall complete first review and comment within 60 days of an application completion.

AB 821 (Grayson) General Plan Consistency. This bill would provide that, in the event a local jurisdiction fails to amend a zoning ordinance to be consistent with the general plan within 90 days of receiving written notice of the inconsistency, a proposed development project cannot be deemed inconsistent with that zoning ordinance and cannot be required to be rezoned, if there is substantial evidence that (1) the proposed project is consistent with objective general plan standards and (2) the zoning for the project site is inconsistent with the general plan.

AB 919 (Karla) Stable Homes Act – Tenant Opportunity to Purchase. This bill would require a residential property owner, including owners of single-family homes, to (1) provide notice of their intent to sell the residential real property to each tenant and qualified entities and (2) allow each qualified entity ten days to give notice of interest and either 60 or 40 days to submit an offer to purchase to the owner. For a single-family residential property, the qualified entity must provide existing tenants eighteen months to purchase the entire residential property or to purchase improvements if the underlying land is to be retained by a community land trust.

SB 294 (Weiner) Minimum Floor Area Ratio Limits. This bill would expand the minimum floor area ratio (FAR) standards under state law that currently only apply to projects providing up to 10 units, to apply to all housing projects. The bill would prohibit municipalities from imposing an FAR limit less than 2.5 on housing projects providing 11-20 units. For housing projects over 20 units, it would prohibit an FAR limit less than 1.25 for every ten units.

SB 423 (Weiner) SB 35 Extension and Expansion. This bill would permanently extend SB 35 (2017, Weiner), which is currently set to expire January 1, 2026, and expand its applicably as discussed below:

  • Eligibility. This bill would allow SB 35 projects (1) in the coastal zone and (2) on wetlands or protected habitat if authorized by any other state or federal law. It would also apply in cities that have failed to adopt complaint housing elements as determined by HCD.
  • Labor Standards. This bill would remove the skilled and trained workforce requirement. Instead, the requirement to pay prevailing wages will remain, and on projects over 50 units, contractors would be required to offer apprentices employment and cover health care expenditures.
  • Clarifications. This bill clarifies that the planning director or other equivalent local government staff is required to make determinations about compliance with the objective planning standards, all departments required to weigh in on a project before granting entitlement must do such within SB 35’s time parameters (60 or 90 days depending on project size), prohibits the local government from requiring consultant studies to evaluate consistency with objective planning standards, removes references to public oversight from the design review process, and prohibits requiring compliance with any standards necessary to receive a postentitlement permit for purposes of the SB 35 approval.

SB 450 (Atkins) SB 9 Amendments. This bill would amend SB 9 (2021, Atkins), the fourplex/urban lot split legislation that took effect last year, by:

  • Removing the limitation on demolition of more than 25% of the existing exterior structural walls to be eligible for ministerial approval;
  • Prohibiting a local agency from imposing objective standards that do not apply uniformly to development within the underlying zoning or do not relate to the design or improvements of a parcel;
  • Removing the ability of a local jurisdiction to deny a SB 9 project if the building official makes a written finding that the proposed housing development project would have a specific, adverse impact on the physical environment;
  • Requiring the local agency to approve or deny a SB 9 application within 60 days from receiving a completed application; and
  • Requiring the local agency to provide a full set of comments to the applicant with a list of items that are defective or deficient and a description of how the application can be remedied by the applicant if it denies an application.

AB 1218 (Lowenthal) SB 330 Amendments. This bill would tweak SB 330 (2019, Skinner) by extending the protected unit demolition and replacement controls, which currently only apply to housing development projects, to projects that are not considered housing developments. This bill would also place the restrictions on demolition of protected units and replacement requirements into a separate provision that will apply permanently, which otherwise would become inoperative on January 1, 2030.

Land Use-Related Policies

SB 466 (Wahab) Rent Control Reform – 15-Year Look Back. This bill would amend Costa Hawkins to allow municipalities to apply rent control to properties that were issued a certificate of occupancy more than 15 years before the date the owner seeks to establish the rental rate. It would also remove the exemptions for properties that are alienable and separate from title to any other dwelling units, meaning rent control could be applied to single family homes and condos.

SB 745 (Cortese) Water Demand Reduction. This bill would require the California Building Standards Commission to propose mandatory building standards to reduce the potable water demand of new buildings by 25% from current mandatory design requirements and to minimize the use of potable water for nonpotable uses. The bill would require the Commission to adopt mandatory building standards for new buildings to be designed to capture graywater and use alternative water sources for nonpotable building and landscaping water uses.

SB 83 (Weiner) Electrical Grid Connection. This bill would require electrical utilities to connect, aka energize, a development project to the electrical grid within 8 weeks of the project being ready for interconnection (previously known as receiving a “green tag”). An alternative time period may be set and applies if an issue specific to the project or project site arises that would prevent the utility from safely completing the interconnection. This bill would further require a utility to compensate a development project applicant for failing to meet either the 8-week or the alternatively-set time period.

 

Authored by Reuben, Junius & Rose, LLP Attorneys Justin A. Zucker and Sabrina Eshaghi.

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.

Cars to Casas Nearing Adoption

housing

Approximately a year ago we reported on Mayor London Breed’s introduction of the “Cars to Casas” legislation which proposed to make it easier to build housing on existing parking lots, gas stations and properties improved with certain other automotive uses.  The legislation has now been rebranded as “Automotive Uses to Housing Uses” and made significant progress in the last two weeks with a positive recommendation from the Land Use and Transportation Committee on Monday, December 5th, and unanimous votes at the full Board of Supervisors on first reading on Tuesday, December 6th and on second and final reading on Tuesday, December 13th.  The legislation will be forwarded next to the Mayor for her signature, and if signed, will become effective 30 days thereafter.

The legislation has been pending since October 2021, in part due to the Land Use and Transportation Committee’s request for an economic analysis.  If adopted, the legislation will eliminate a conditional use authorization requirement that currently applies to conversion of existing gas station uses, and would create an exception to the permitted residential density at eligible sites.  Sites that are eligible under the legislation are those that are currently used for auto-oriented uses, allow residential uses as a principally permitted use but do not currently contain any residential uses, and have not had a Legacy Business on the site within four years prior to the application submittal date.

As proposed, including amendments by the Land Use and Transportation Committee, the legislation will not apply to any properties that are zoned for the RM (Residential-Mixed) or RC (Residential-Commercial) district, or to properties that are located in a historic district.

The permitted residential density for RH (Residential-House) districts is up to four units per lot, and for all other eligible sites density is unlimited provided the project complies with applicable height, bulk, setback and other Planning Code requirements.  That said, eligible sites can also utilize the state density bonus program, which can allow waivers and concessions from otherwise applicable Planning Code requirements.

The legislation is one example of efforts by Mayor Breed and the City to make it easier to build more housing and to get entitlements and permits for development proposals, and as such, a welcome proposal.  If the legislation is signed by the Mayor in the next 10 days, it will become effective in approximately mid-January 2023.

 

Authored by Reuben, Junius & Rose, LLP Attorney Tuija Catalano.

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.

Mayor Proposes Increased Density on Auto-Focused Lots

Auto

Mayor London Breed’s “Cars to Casas” ordinance, introduced on October 19, 2021, would eliminate the Conditional Use requirement for the conversion of an Automotive Service Station and would create a new residential density exception for housing projects on sites previously used for auto-oriented uses.

The ordinance cites a wide-reaching set of policy goals: “missing middle” housing production, cutting auto emissions, and traffic safety consistent with the City’s Vision Zero policy. By encouraging the elimination of auto-oriented uses and reducing the amount of property in the city dedicated to cars, the ordinance seeks to decrease auto travel. And in increasing density and streamlining the approval process for eligible residential projects, the legislation hopes to chip away at the housing crisis and incentivize the construction of new apartment buildings—with a focus on small and medium sized projects with at least four units.

For starters, the legislation eliminates the Conditional Use Authorization requirement to convert an existing Automotive Service Station to some other use. This change applies regardless of whether the Auto Service Station would be converted to residential use or to some other non-residential use.

The ordinance zeros in on properties currently used for “Auto-Oriented Uses,” defined as those parcels with an accessory parking lot or garage, or any use defined as an Automotive Use. Planning Code Section 102 defines Automotive Use as follows:

“A Commercial Use category that includes Automotive Repair, Ambulance Services, Automobile Sale or Rental, Automotive Service Station, Automotive Wash, Gas Station, Parcel Delivery Service, Private Parking Garage, Private Parking Lot, Public Parking Garage, Public Parking Lot, Vehicle Storage Garage, Vehicle Storage Lot, and Motor Vehicle Tow Service.”

The legislation would not change this definition.

The Mayor’s proposed density exceptions would apply to all sites with an Auto-Oriented Use where residential use is permitted, except that sites with an existing residential use and those that have had a Legacy Business at any point during the 10 years prior to application submittal would not be eligible. As of today, the Legacy Business Registry lists seven automotive/motorcycle businesses as Legacy Businesses.

On eligible sites, the legislation would principally permit up to four dwelling units per lot within RH zoning districts. In other zoning districts, the legislation would eliminate dwelling unit maximums and would instead regulate the size of residential projects based on the applicable form-based controls (i.e., height, bulk, setbacks, exposure, and open space).

The legislation also proposes to limit the parking maximums that would apply to residential projects approved under the new density exception. Up to 0.25 spaces per unit would be principally permitted and up to 0.5 spaces per unit would be allowed with Conditional Use Authorization. Parking in excess of 0.5 spaces per unit and parking for non-residential components of projects utilizing the new density exception would be prohibited. Permitted parking varies by zoning district, but in most cases, the parking maximums proposed by the legislation represent a decrease from what is currently allowed.

So as to balance the current demand for new housing against the need to retain some of the city’s existing Auto-Oriented Uses—and likely in an effort to temper potential opposition—the legislation includes a sunset provision: once the Planning Department has approved a total of 5,000 units pursuant to the proposed density exception, the exception will expire.

 

Authored by Reuben, Junius & Rose, LLP Attorney Chloe Angelis.

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.

Planning Commission Considers Two New Pieces of Legislation

SUD

The Planning Commission considered two pieces of proposed legislation at its regular meeting last week.  One was the elimination of the Life Science and Medical Special Use District (to which staff added a proposal to eliminate the Industrial Protection Zone (IPZ) Special Use District), and the second was Supervisor Mandelman’s so-called “Large Residence” legislation (which we have discussed in a previous update).

Life Science and Medical and IPZ Special Use Districts

The Life Science and Medical Special Use District (SUD) is generally bounded by Mariposa Street to the north, 3rd Street to the east, 23rd Street to the south, and Iowa Street to the west. The SUD was adopted as part of the Central Waterfront Plan in 2009, and was established in the northern part of the Plan Area to support the creation and expansion of life science and medical uses, given the proximity to the UCSF campus at Mission Bay. The Dogpatch Historic District and Neighborhood Commercial District are generally excluded from the boundaries of the SUD. Almost all parcels in the SUD are classified as Urban Mixed Use (UMU) zoning.

The SUD principally permits medical services, life science offices, and life science laboratories. Among other controls facilitating the development of these uses in the SUD, the uses are exempt from PDR replacement requirements. The Planning Department’s broader concern with the loss of PDR uses was one of the reasons driving the elimination of the SUD.

The other reasons behind the legislation are the Planning Department’s view that the City has enough supply of life science and laboratory space (including projects at Pier 70, Potrero Power Station, Mission Rock, and in SoMa, Central SoMa, and Mission Bay), and concerns with some of the ambiguities in the Planning Code concerning life science and laboratory uses. These ambiguities have contributed to uncertainty for project sponsors, an increased need for letters of determination, and the departure of businesses. The Department is studying a more comprehensive code update to clarify controls related to laboratory uses.

The IPZ SUD consists of a large area in the Bayshore and Bayview neighborhoods now classified as PDR-2. Staff recommended eliminating the IPZ SUD to close what it considered a loophole allowing self-storage, big box retail, and heavy industrial uses in PDR neighborhoods.

The Commission voted unanimously to recommend to the Board of Supervisors that both SUD’s be eliminated, with a grandfathering clause for the Life Science and Medical SUD that exempted any projects with submitted applications as of July 22, 2021.

Large Residence Legislation

As we have reported previously, Supervisor Mandelman’s proposed large residence legislation would discourage residential units over 2,500 square feet by requiring, with some limited exceptions, a conditional use for them in RH zoning districts. Last week, the Planning Commission had a lengthy discussion of the merits of the legislation, before voting to continue the matter until September 23, 2021.

Ranging from some support to some pointed concerns, here are the highlights of the discussion:

  • There was some consensus that the legislation, while perhaps identifying a problem for Supervisor Mandelman’s District 8, was not appropriate as a City-wide control where other areas might not have the same issues.
  • More than one Commissioner questioned the 2,500 square-foot number, calling it arbitrary. The Commissioners discussed FAR as a more accurate measure, but identified concerns with that approach as well.
  • At least one Commissioner questioned the lack of data concerning how many projects this was designed to address, and the lack of research supporting the legislation generally.
  • One Commissioner questioned the wisdom of telling homeowners how big their bedrooms and other rooms should be, and how many bedrooms they should have.
  • Commissioners also expressed some support for the intent of the legislation, due to ongoing concerns with the lack of affordable and moderately-priced housing. One Commissioner suggested that the proposed controls should not be enforced as a conditional use authorization, but rather as legislated Planning Code controls, from which property owners could seek variances.

Following the discussion, the Commissioners agreed there were too many unresolved issues and voted to continue the matter until September 23, 2021.  They wanted to consider it at the same time as Supervisor’s Mandelman’s proposed “fourplex” legislation for corner lots in RH districts (which we have discussed in a previous update). The Commission also discussed possibly delaying the legislation so it could be considered with the planned Housing Element update.

 

Authored by Reuben, Junius & Rose, LLP Attorney Thomas P. Tunny.

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.

Two Legislators Take Aim at Statewide Planning Laws

Laws

In an apparent backlash against recent housing bills, two California state legislators have introduced a constitutional amendment that would essentially revoke the state’s ability to regulate land use. If approved, this amendment would allow cities to avoid compliance with state laws aimed at increasing housing production, making it more difficult to meet the housing needs of the growing California population.

The measure was introduced by Assemblymember Muratsuchi (D-Torrance) on March 16, 2021 and co-authored by Senator Glazer (D-Contra Costa). This comes after an attempt to get a similar citizen-initiated measure on the ballot, which has not reported any required signatures to the state as of this writing. In order to qualify for the ballot, two-thirds of each legislative chamber will need to approve the constitutional amendment. That amounts to a minimum of 54 votes in the Assembly and 27 in the Senate, assuming no vacancies. The governor’s approval is not required.

The constitutional amendment itself is fairly simple. It states that city or county regulations regarding “zoning or the use of land” prevail over conflicting state laws. Limited exceptions include conflicts with state statutes involving (1) the California Coastal Act, (2) the siting of certain power generating facilities, and (3) water or transportation infrastructure projects. Transportation infrastructure projects do not include transit-oriented development projects. This amendment would apply to both charter cities and general law cities. However, in charter cities, courts would determine whether a local ordinance that conflicts with one of the subject areas listed above addresses a matter of statewide concern or a municipal affair.

The measure states that the amendment will provide local control over land use decisions in order to balance development with the economic, environmental, and social needs of the community. The measure notes that the impacts of land use decisions vary depending on the municipality and specifically points to impacts on the infrastructure needed to maintain adequate public services.

While these are valid concerns, they need to be evaluated in light of the current housing crisis, which has been decades in the making. The state sets housing production goals, also known as the Regional Housing Needs Assessment (RHNA), that cities and counties are required to plan for in their Housing Elements. However, planning for housing does not always translate into actual housing production. According to the HCD’s latest data, only about 6% of California’s cities and counties are on track to meet the state’s current RHNA goals in all income categories. And, as we noted in a prior e-update, many cities and counties are looking at significant increases in RHNA goals next cycle. In order to incentivize housing production, the legislature has stepped in to streamline approvals, allow density bonuses, and limit municipalities’ ability to deny certain housing projects.

The amendment’s broad applicability to regulations regarding “zoning or the use of land” leaves significant room for interpretation and will result in far-reaching consequences that will ultimately exacerbate the state’s worsening housing crisis. For example, the amendment would allow cities to disregard the following state laws:

  • Density Bonus Law. Under the Density Bonus Law, developers are entitled to up to a 50% density bonus if certain on-site affordability requirements are met. The law also allows waivers and concessions from development standards that would physically preclude the density permitted or result in identifiable and actual cost reductions.
  • SB 35. This legislation requires ministerial approval of housing projects that meet certain affordability requirements in cities and counties that are not meeting their RHNA goals.
  • Permit Streamlining Act. This Act allows certain development projects to be deemed approved if the local agency does not approve the project within specified time limits.
  • SB 330. Among other things, SB 330 (1) provides a mechanism to vest the ordinances, policies, and standards in effect at the date a complete Preliminary Housing Development Application is submitted, (2) limits the ability of municipalities to downzone certain properties, impose moratoria, or apply new subjective design standards to housing developments, (3) further streamlines approvals, and (4) limits the number of hearings that can be conducted prior to approval of a housing project.
  • Housing Accountability Act. This Act limits a local government’s ability to deny, make infeasible, or reduce the density of housing development projects that are consistent with objective local development standards.
  • ADU Law. In recent years, there has been a significant amount of legislation making ADUs easier to build by streamlining the approval process, limiting applicability of impact fees, and relaxing zoning requirements.

The broad language of the amendment may also have the effect of reversing state rent control regulations and General Plan requirements, including the need to update the Housing Element to accommodate RHNA goals. In addition, a number of land-use related bills have been introduced this session that could be impacted by this constitutional amendment.

It remains to be seen whether two-thirds of the legislature, which recently passed landmark housing bills, would vote to put this constitutional amendment on the ballot. We will continue to monitor this measure and keep you updated.

 

Authored by Reuben, Junius & Rose, LLP Attorney Sabrina Eshaghi.

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.

Updates to the Proposed Intermediate Length Rental Regulations

units and intermediate length rentals

Medium-term, furnished rentals have been a part of San Francisco’s housing stock for many years. According to the Corporate Housing Providers Association, roughly 3,000 dwelling units in San Francisco – less than one percent of the City’s total housing – are used as intermediate length rentals. These types of rentals serve workers in higher education, healthcare, theater, and other industries, who are in town too long to stay in a traditional hotel but don’t need a full one-year lease. They also provide housing for long-term family visitors – grandparents helping with a newborn or relatives caring for a sick family member.

However, many affordable housing advocates, who view these rentals as competing with long-term housing for San Francisco residents, lined up at the Planning Commission last fall to protest them. Shortly after, Supervisor Aaron Peskin introduced legislation targeted at  rental properties that require tenants to stay for at least 30 days in order to avoid short term rental regulations (See our prior coverage, New Legislation Aims to Limit “Intermediate Length” Rentals).

The legislation would amend the Planning Code to create a new Intermediate Length Occupancy (“ILO”) Residential Use Characteristic for dwelling units offered for occupancy of greater than 30 days but less than one year. It would also add a new Planning Code Section 202.10 to regulate those units. On January 14, 2020, substitute legislation was introduced which makes several changes to the original proposal. The substitute ordinance is available here.

While the original legislation allowed ILO units only in new construction of projects with at least 10 dwelling units, the substitute legislation would allow existing units to be eligible to be classified as ILO units unless the units are below market rate units built under the City’s Inclusionary Housing regulations or are subject to the Rent Control Ordinance. For buildings with nine or fewer units, requests to establish ILO use would be principally permitted so long as no more than 25% of the units in the building are classified as ILO. For buildings with 10 or more dwelling units, ILO units would require conditional use authorization, and no more than 20% of the units could be classified as ILO.

The substitute legislation further clarified that while ILO units could be offered for occupancy of one year or greater without losing the ILO use characteristic, ILO status would be considered abandoned if otherwise defined as abandoned under the Planning Code.

Finally, the revised legislation provides owners and operators of ILO units 24 months from the effective date of the ordinance to submit a complete application to establish the ILO use. The total number of ILO units Citywide would be capped at 1,000 – an increase above the 500-unit cap in the earlier legislation. While not labeled as interim controls, the intent of the legislation is to put in place a policy to regulate corporate housing while the data to be collected under the program is evaluated by the Controller’s Office. The legislation does not address grandfathering of existing ILO units, of which there are approximately 2,000 more than would be permitted by the 1,000 unit cap, but the 24 month compliance period established by the Ordinance indicates that existing units may not be grandfathered or exempt from the new ILO controls.”.

Residential hotels and student housing would still be exempt from Section 202.10 under the substitute legislation. Furthermore, the Rent Ordinance Amendments proposed in the original legislation would remain, except that the prohibition on non-tenant use, including use for a corporate entity’s own employees or licensees, and the requirement that online listings for units disclose that they are subject to the Rent Ordinance, would be effective April 1, 2020 instead of February 1, 2020.

The Planning Commission voted to recommend adoption of the substitute ordinance on January 30, 2020. We will continue to follow the evolution of these regulations as they move towards adoption by the Board of Supervisors and implementation by the Planning Department and Planning Commission.

 

Authored by Reuben, Junius & Rose, LLP Attorney Jody Knight.

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.