Local Governments Given Broad Power to Authorize ADU Sales

sale

As recently as last month, existing state law prohibited the sale of accessory dwelling units (“ADU”) from being sold or conveyed separately from the primary residence, except under specific circumstances where the ADU was built or developed by a qualified nonprofit corporation and held pursuant to a recorded tenancy-in-common agreement meeting certain requirements. Thanks to new state legislation – and depending on the city – the right of property owners to sell ADUs separate from primary residences has been considerably broadened. Drafted by Assemblyman Phil Ting (D-San Francisco) and signed into law on October 11, Assembly Bill 1033 provides a path forward for participating cities to adopt legislation authorizing the purchase and sale of ADUs as condominiums, regardless of whether the contractor was a qualified nonprofit or the manner in which the property is owned. The following summarizes the requirements of AB 1033 and provides guidance for homeowners in utilizing this change in law.

With respect to the construction of ADUs, Government Code § 65852.2 allows local agencies, by ordinance, to provide for the creation of ADUs in areas zoned for single-family or multifamily dwelling residential use. Among other requirements, any such ordinance must (i) designate areas within the jurisdiction of the local agency where accessory dwelling units may be permitted, (ii) impose certain objective standards on ADUs (such as parking, height, setback, landscape, architectural review, and maximum size), (iii) provide that ADUs do not exceed the allowable density for the lot upon which the ADU is located, and (iv) require ADUs be for residential use consistent with the existing general plan and zoning designation for its lot.

AB 1033 now allows cities to adopt ordinances that authorize the sale of ADUs – constructed in compliance with Gov. Code § 65852.2 – as condominiums, provided such ordinances meet the following requirements:

(1) The condominiums are created pursuant to the Davis-Stirling Common Interest Development Act, the state’s statutory scheme governing residential condominiums.

(2) The condominiums are created in conformance with all applicable objective requirements of the Subdivision Map Act, which governs subdivision mapping, and all objective requirements of applicable local subdivision ordinances.

(3) Before recordation of the condominium plan, a safety inspection of the ADU must be conducted, evidenced either through (i) a certificate of occupancy from the local agency or (ii) a housing quality standards report from a building inspector certified by the United States Department of Housing and Urban Development.

(4) Each lienholder of the applicable property must consent to the recording of a subdivision map and condominium plan before either of those documents may be recorded. With respect to lienholder consent, a lienholder may (i) refuse to give consent, or (ii) give consent provided that any terms and conditions required by the lienholder are satisfied.

(5) Prior to recordation of the condominium plan (or any amendments thereto), written evidence of the lienholder’s consent must be provided to the county recorder along with the following signed statement from each lienholder:

“(Name of lienholder) hereby consents to the recording of this condominium plan in their sole and absolute discretion and the borrower has or will satisfy any additional terms and conditions the lienholder may have.”

(6) The lienholder’s consent must be included on the condominium plan or a separate form attached to the condominium plan (and include certain information required by statute), and must be recorded in the office of the applicable county recorder.

(7) The local agency must also include a statutory notice to consumers on any ADU submittal checklist or public information issued describing requirements and permitting for accessory dwelling units.[1]

(8) If an accessory dwelling unit is established as a condominium, the local government must require the homeowner to notify utility providers of the condominium creation and separate conveyance.

(9) For owners of a property or a separate interest within an existing planned development with an existing association, as defined in Section 4080 of the Civil Code, such owners may not record a condominium plan without the written authorization by the association.

Under AB 1033, an ADU may be sold or otherwise conveyed separate from the primary residence where the above conditions are satisfied. While this is certainly an encouraging development in the fight to overcome the state housing crisis, many questions remain.

AB 1033 will only be as effective as the cities that choose to adopt the necessary legislation providing for the separate conveyance of ADUs as condominiums. As of this writing, the City of Santa Monica has passed a resolution directing staff to draft a conforming ordinance for consideration. No city has yet enacted an AB 1033-compliant ordinance.

Beyond the issue of city participation, the appetite of lienholders to consent to the mapping and sale of ADUs as condominiums is unclear. If the condominiumization of ADUs were to reduce the value of the principal residences acting as a secured asset, lenders may decline consent or grant consent while imposing onerous conditions on property owners.

Further, the market for the sale of ADUs as condominiums is an unknown quantity. It may prove difficult for property owners to sell ADUs as a condominium separate from a primary residence, and vice versa. Purchasing either interest would also subject owners to the rules and regulations applicable to homeowners’ associations, which can prove tricky for small, two-member associations, particularly when disputes arise.

Homeowners looking to sell ADUs should contact their local city officials and request information regarding the prospects for local adoption of an ordinance now authorized pursuant to California Government Code § 65852.2.

If you have any questions or would like to discuss the mechanics and implications of AB 1033, please contact Michael Corbett from Reuben, Junius & Rose, LLP, at 415.567.9000 or mcorbett@reubenlaw.com.

[1] See Gov. Code § 65852.2(a)(1)(10)(E) for the required notice.

 

Authored by Reuben, Junius & Rose, LLP Attorney Michael Corbett.

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.

San Francisco Entitlement Streamlining Legislation Faces Legislative Hurdles

planning

As previously reported in August, San Francisco is currently considering a major overhaul of its Planning Code that would revise, relax, and simplify many of the city’s complex zoning and development controls. The legislation, aptly named the Housing Production – Constraints Reduction Ordinance, would affect over 30 sections of the Planning Code, ranging from reducing required setbacks to relaxing demolition controls and notice requirements.

As part of the legislation process, the City’s Planning Commission reviewed the ordinance in late July and gave its approval 4-2-1 with a few minor modifications. It then came before the Board of Supervisors Land Use and Transportation Committee (LUTC) on September 18th to be reviewed, discussed, and amended, if necessary. This committee review is a necessary hurdle before the legislation can be presented to the full Board of Supervisors and voted on.

Although some were hopeful of the ordinance passing in its current form, it met strong opposition from both supervisors and members of the public. The hearing began with Planning Department staff recommending a number of corrective amendments, including some that re-added various conditional use requirements that the legislation originally proposed to remove. During the over four hours of public comment, members of the public expressed concerns about reduced notice requirements, loss of rent-controlled housing, and a loss of neighborhood character from simplified development controls.

The three supervisors on the committee echoed these sentiments, expressing great concern over many of the proposed changes. Notably, many members of the committee were not convinced that relaxing and making development standards more uniform, such as setbacks and height limits, would produce more housing, and felt that, instead, it would simply lead to a loss of neighborhood character. It was stated multiple times that zoning fixes should focus on large-scale projects, while many of the proposed changes were seen to mostly benefit one and two-unit developments. The supervisors were also critical of the changes to notice requirements and demolitions controls, citing worries over reduced public participation and the loss of rent-controlled housing, respectively.

The hearing ended with Supervisor and LUTC President Melgar stating that she had been planning to introduce numerous amendments based on community feedback. The LUTC also agreed that there was a need to formalize the amendments proposed by Planning and the Mayor, and to incorporate many of the changes discussed during the meeting. The legislation was continued for two weeks, although it remains to be seen if the amendment language will be ready by then. If said amendments are considered substantive, the legislation would need to go back to the Planning Commission, then return to the LUTC before finally going before the full Board of Supervisors. The ordinance is open to further amendment at each step of the way, and it seems that many of the provisions intended to simplify the development process are now at risk of being weakened or removed.

With Planning Commission’s blessing of the legislation and San Francisco’s looming RHNA requirement to build 82,000 new housing units over the next eights years, some were hopeful that the legislation would move quickly through the City’s legislative bodies; however, last week’s hearing proved there’s a long road ahead for the Housing Production – Constraints Reduction Ordinance.

 

Authored by Reuben, Junius & Rose, LLP Attorney Daniel J. Turner.

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.

Legislation Aimed at Impact Fee Reform Nears Final Approval

Development

Last month, the San Francisco Board of Supervisors passed on first reading Impact Fee Reform legislation aimed to make development more predictable, easier, and financially feasible. The legislation complements the proposed BMR and impact fee changes our office previously reported on and will:

  1. Reinstate the fee deferral program;
  2. Escalate development impact fees by 2% each January;
  3. Allow projects to lock in the type and rate of impact fees to be paid;
  4. Waive development fees for a narrow category of projects; and
  5. Adopt a nexus analysis that was completed in December 2021.

The Impact Fee Reform legislation is a part of the City’s efforts at recovery from the pandemic and is meant to supplement efforts to accomplish the policy goals outlined in the updated Housing Element that was adopted earlier this year. Inclusionary housing development impact fees are specifically excluded from the scope of the legislation, so would not be affected.

Below is a brief summary of the changes proposed by the legislation:

Fee Deferral Program

The legislation would reinstate and modify a Fee Deferral Program that expired in 2013 to allow project sponsors to defer 80%-85% of total development impact fees, except inclusionary affordable housing fees. For projects that opt to defer fees:

  • Generally, projects subject to a neighborhood infrastructure impact development fee would be required to pay 20% of the total amount of development fees owed prior to issuance of the first construction document;
  • For projects not subject to a neighborhood infrastructure impact development fee, project sponsors would be required to pay 15% of the total amount of development fees owed prior to issuance of the first construction document.

The remaining percentage of fees must be paid before issuance of the first certificate of occupancy. To obtain deferral, the project sponsor must submit a deferral request to DBI on a form provided by DBI before issuance of the first construction document. Fee deferral is not available to project sponsors that pay the fee before the effective date of the legislation. Projects subject to a development agreement would be eligible for fee deferral, unless otherwise agreed by the parties.

Development Fee Indexing

The legislation would replace and simplify the current method of annual fee escalation with a 2% escalation rate every January 1st.

Development Fee Assessment

The legislation proposes to freeze the rates of development impact fees as follows:

Additionally, the legislation institutes new procedures for assessing development impact fees when a development project requires a modification, renewal, or extension.

Development Impact Fee Waivers for Certain Projects

The legislation would also waive development impact fees for certain projects. Eligible projects that obtain a final approval before the effective date of the ordinance that have not already paid development impact fees are eligible for waiver. Waiver under the legislation is set to expire on December 31, 2026.

Projects in Production, Distribution, and Repair (“PDR”) Districts:

Within PDR Districts, projects that meet the following requirements are eligible for waiver from development impact fees related to establishing new PDR or retail use:

  • Located in a PDR District;
  • Contain a retail or PDR use and no residential uses;
  • Propose new construction of at least 20,000 square feet of Gross Floor Area (“GFA”) and a maximum of 200,000 square feet of GFA;
  • Located on a vacant site or site improved with buildings with less than a 0.25:1 Floor Area Ratio on the date a development application is submitted; and
  • Submit a complete development application on or before December 31, 2026.

Projects in C-2 and C-3 Districts

Within C-2 and C-3 Districts, projects that meet the following requirements are eligible for waiver from development impact fees related to establishing hotel, restaurant, bar, outdoor activity, or entertainment use:

  • Located in a C-2 or C-3 District;
  • Contain hotel, restaurant, bar, outdoor activity, or entertainment use; and
  • Submit a completed development application on or before December 31, 2026.

 

Authored by Reuben, Junius & Rose, LLP Attorney Kaitlin Sheber.

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.

Legislation to Overhaul Residential Building & Zoning Standards

Zoning
  • On June 29th, the San Francisco Planning Commission voted to recommend approval of Mayor Breed’s proposed legislation titled “Housing Production” (BOS File No. 23-0446).  The legislation amends the Planning Code to encourage housing production by focusing on the controls that mainly apply to Residential and Neighborhood-Commercial Districts.  This legislation is proposing significant and far-reaching changes that will greatly change how residential projects are developed, for the better.

First, the legislation proposes to reduce the number and type of projects that require Planning Commission hearings.  The major changes are below:

Eliminate Conditional Use Authorization (“CUA”) / Planning Commission Hearing / Neighbor Notice

The legislation also proposes to modify some of the more basic building standards that apply to most properties in the city: setbacks, open space, and lot area requirements.  If passed, these changes would be the most radical to residential projects in decades.  A summary of the significant changes are below.

Required Rear Yard (Section 134)

Lot Size (Section 121, 121.1)

Front Yard/Setback (Section 132)

Usable Open Space (Section 135)

There are several other changes proposed, but the above are the most far-reaching.  The legislation is currently awaiting a hearing at the Land Use & Transportation Committee, which may happen once the Board of Supervisors returns from their summer recess.  As with any legislation, changes may occur before it is finally passed, but it is expected to pass largely as-is.

Reuben, Junius, & Rose, LLP will continue to monitor this legislation and provide an update once passed.

 

Authored by Reuben, Junius & Rose, LLP Partner Tara Sullivan.

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 California Legislation – Summer Recess Update

bills

The California legislature reconvened yesterday, after taking a summer recess. As previously reported, this year’s legislative session is packed full of pending bills with far reaching changes to land use controls and local controls of such. In this update, I provide the status of bills introduced related to the California Environmental Quality Act (CEQA), the State Density Bonus Law, accessory dwelling units (ADUs), parking, and housing policies. Bills previously reported in 2023 Legislation at a Glance – Part 1 or Part 2 and not discussed below failed to leave their house of origin and advance to their second house.

CEQA:

Many of the previously reported CEQA bills have failed to advance out of their house of origin. There are, however, some CEQA bills advancing through their second house to note, including:

  • AB 1307 (Wicks and Luz Rivas) Residents’ Noise Not A Significant Effect. This bill, which appears to be in response to the University of Berkeley People’s Park project hang up, would amend CEQA to clarify that for residential projects, noise generated by the unamplified voices of residents is not a significant effect on the environment. A mirror bill, AB 1700(Hoover) failed to advance.
  • AB 1449 (Alvarez) 100% Affordable Housing Exemption. This bill would, until January 1, 2033, exempt 100% affordable housing projects from CEQA. While there are other tools available to make 100% affordable housing projects ministerial and not subject to CEQA, e.g., SB 35 (2017, Weiner), there are no workforce standards tethered to AB 1449.
  • AB 356 (Mathis) Aesthetics Not a Significant Effect. This bill would extend the current regulation, set to sunset January 1, 2024, that aesthetic impacts are not considered significant effects on the environment for housing projects involving the refurbishment, conversion, repurposing, or replacement of an existing building.
  • SB 393 (Glazer) CEQA Litigation Underwriting Disclosures. This bill would require, upon request, a petitioner of an action attacking a project’s CEQA compliance to identify every person or entity that contributes in excess of $10,000 to the costs of the action.

State Density Bonus Law:

AB 1287 (Alvarez) Additional Density Bonus. This bill would allow up to an additional 50% density bonus for projects that (1) maximize the very low income, low income, or moderate-income units permitted under the current State Density Bonus Law and (2) provide up to 15% additional moderate-income units. A bonus up to 38.75% can be obtained by providing 10% very low-income units. 100% affordable projects would be eligible to receive five incentives or concessions. Previously, this bill was to modify the State Density Bonus Law to supersede the California Coastal Act of 1976 and up to six incentives or concessions for certain projects, but those provisions were removed.

AB 323 (Holden) Restricting Use of For-Sale Units as Rentals. This bill has progressed intact; it would prohibit a developer from offering a for-sale unit constructed pursuant to a local inclusionary zoning ordinance to a purchaser that intends to rent the unit to families of extremely low, very low, low-, and moderate-income families, unless the developer can prove that none of the applicants for owner-occupancy can qualify for the unit. Any violation would be subject to a civil penalty of not more than $15,000.

ADUs:

All but one of the bills previously reported on pertaining to ADUs (AB 1661) have left their house of origin and are advancing through their respective second house. The bills that advanced include:

  • AB 1033 (Ting) ADU Condominiumization. This bill would allow a local jurisdiction to permit condominiumization and sale of ADUs separate from the primary residence.
  • AB 1332 (Carillo) Pre-Approved ADU Plan Sets. This bill would require jurisdictions, by January 1, 2025, to develop a program for the preapproval of ADUs plans. Initially six sets of preapproved plans were to be prepared, but as amended, no amount to be published is set.
  • AB 976 (Ting) No Owner-Occupancy Requirement. This bill 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) ADU Chapter. This bill would create a new Government Code chapter to house state ADU regulations. It has been amended to take effect immediately as an urgency statute.

Parking Controls:

All three bills relaxing parking controls previously reported on have advanced to their second house:

  • AB 1317 (Carrillo) Unbundled Parking for Residential Property. This bill would require landlords to “unbundle” parking costs from rent for leases or rental agreements for residential property in Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta, and Ventura counties, commencing or renewed on or after January 1, 2025.
  • AB 1308 (Quirk-Silva) Parking Requirements for Single-Family Homes. This bill 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) Shared Parking. This bill would provide a pathway to activate underutilized parking (as defined) as shared parking spaces with other users, which would count toward meeting any automobile parking requirement.

Housing Policies:

While several previously reported housing bills have failed to advance, several have made it on to their second house, including:

AB 1485 (Haney) State Intervention in Actions Involving Violations of 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 ActHousing Crisis Act of 2019, and the Density Bonus Law. This bill was amended to allow both the Attorney General and the Department of Housing and Community Development to intervene.

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. This bill was amended to include a sunset date of January 1, 2031.

SB 423 (Weiner) SB 35 Extension and Expansion. This bill would extend SB 35 (2017, Weiner), which is currently set to expire January 1, 2026, and expand its applicably as previously discussed. While the bill has remained intact, SB 423 has been amended with significant additions as follows:

  • Limited Duration. Initially, SB 423’s extension was to be permanent but has since been limited to sunset January 1, 2036.
  • Labor Standards. Skilled and trained workforce provisions are required for projects having habitable space above 85 feet in height.
  • Local Enforcement. The bill would allow localities to take administrative action or sue a construction contractor for failure to comply with the ordinance’s workforce standards.
  • Community Engagement. In areas designated as either a moderate resource area, low resource area, or an area of high segregation, a public meeting must be held before application submittal to provide an opportunity for the public and local government to comment on the project.

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, also 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.

We will continue to track these import pieces of legislation. September 14, 2023, is the last day for each house to pass bills. October 14, 2023, is the last day for Governor Newson to sign or veto bills timely passed by the legislature. Please stay tuned later this fall for a repeat of last year’s 2022 Housing Legislation Round-Up with a summary of relevant 2023 legislation signed into law. If you have any questions regarding any of the pieces of proposed legislation, please reach out to me.

 

Authored by Reuben, Junius & Rose, LLP Attorney Justin A. Zucker.

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.

Summer SF Legislation Roundup

summer

Below is a round-up of some items introduced before the Board of Supervisor’s summer recess, which will run from July 31st to September 4th.

Update to Ordinance That Would Expand Allowable Commercial, Restaurant, and Retail Uses

In early June, Mayor Breed and Supervisors Engardio, Dorsey, and Melgar introduced an ordinance aimed at reducing zoning restrictions to allow more types of commercial use on the ground floor of certain neighborhood commercial and residential districts.

For an in-depth overview of this legislation, see our June 22nd update.

On July 25th, the Mayor substituted an amended version of this legislation.  It has been assigned to the Land Use and Transportation Commission, where it will likely be heard in the early fall.

Changes in the updated version appear minor, and include:

  • allowing formula retail restaurants with conditional use authorization at the ground floor in the Mission Street Formula Retail Restaurant Subdistrict;
  • retaining the flat prohibition on formula retail pet supply stores or restaurants in the Geary Boulevard Formula Retail Pet Supply Store and Formula Retail Eating and Drinking Subdistrict;
  • correcting the summary description of maximum number of eating and drinking uses that would be allowed in the Mission Street NCTD to 197 (from 179); and
  • clarifying that formula retail and restaurant controls would be amended in certain residential districts, as well as commercial districts.

A Tweak to Prop X

Section 202.8 of the Planning Code, enacted by voters in 2016 as “Prop X”, limits projects that would convert Production, Distribution, and Repair (“PDR”) uses, Institutional Community uses and Arts Activities uses in certain Eastern Neighborhoods Plan areas and Central SoMa.

With limited exemptions, Prop X imposes specific replacement requirements for projects that would convert building space where the prior use was:

  • a PDR use of at least 5,000 square feet;
  • an Institutional Community use of at least 2,500 square feet; or
  • an Arts Activities use.

On July 25th, Supervisor Dorsey introduced an ordinance that would create an exemption from Prop X replacement requirements for projects proposing change of use from one of the listed uses above to another listed use, or to new Institutional Education uses, in areas zoned SALI, MUO, SLI, MUG or MUR as of July 1, 2016. This could allow for a more efficient change of use process, encouraging continued use of buildings.

This legislation would require a supermajority vote (i.e., 8 members) of the Board to pass, and has been assigned under the Board’s 30-day rule to the Land Use and Transportation Committee for review.

Vacant Storefront Fee Waivers

Currently, owners of vacant or abandoned commercial storefronts are required to register the storefront with the Department of Building Inspection (“DBI”) within 30 days of a vacancy or abandonment, pay an annual registration fee, and to renew the registration annually.

On July 25th, Mayor Breed introduced an ordinance that allows the Director of DBI to waive the annual registration fee for storefronts that comply with City and state law, do not contribute to blight as defined by the Administrative Code, and are ready for occupancy and being offered for sale, lease, or rent.

This ordinance has been referred to the Building Inspection Commission for comment and recommendation.

Reduction of Entertainment Permit Requirements

On July 25th, Mayor Breed introduced an ordinance that could reduce entertainment permit requirements citywide, encouraging a sector that will draw in locals and tourists alike.

The ordinance, which has been referred to the City’s Small Business Commission for review, would do the following:

  • waive the initial license and filing fees through June 30, 2025, for certain Entertainment Permits for current or former holders of Just Add Music Permits;
  • waive initial license and filing fees for Entertainment Permits for applicants who are newly eligible to apply for those permits due to recent Planning Code amendments;
  • eliminate masked ball permits;
  • require applicants for Arcade, Ancillary Use, billiard and pool table, Place of Entertainment, Limited Live Performance, Fixed Place Outdoor Amplified Sound, and Extended-Hours Premises Permits to submit a new Permit application and filing fee if their existing application has not been granted, conditionally granted, or denied within 12 months of its submission;
  • authorize the Entertainment Commission Director to issue billiard and pool table permits without a hearing, and allow them to be suspended or revoked under the standards that apply to other Entertainment Permits;
  • eliminate the requirement that applicants for Place of Entertainment Permits disclose criminal history information regarding certain individuals connected with the applicant business;
  • narrow the categories of new criminal charges, complaints, or indictments brought against a Place of Entertainment Permittee or its employees or agents that the Permittee must report, to only those charges, complaints or indictments that could be grounds for suspension of the Permit; and
  • allow the Entertainment Commission Director to require an applicant for a Limited Live Performance Permit to propose a Security Plan if necessary to protect the safety of persons and property or provide for the orderly dispersal of persons and traffic, to make compliance with the Security Plan a condition of the Permit, and to require revisions to the Security Plan as necessary.

Decline in Value Tax Appeals are Due Soon

Tax bills are in the mail for the 2023/2024 tax year.  Many commercial owners have experienced a decline in income and property value due to reduced occupancy and rental rates.  Some residential neighborhoods have also declined in value.  The good news is that there is the possibility for some temporary real estate tax relief.  Property owners have the right to file decline in value appeals (also referred to as Prop. 8 appeals) to account for such market conditions.  The deadline for properties located in San Francisco is September 15, 2023.  Alameda County’s deadline is also September 15, 2023.  Contra Costa County and San Mateo County give a bit more time – November 30, 2023 is their deadline.  (Deadlines are taken from each County’s website.)

If you would like more information about a real estate tax appeal, contact Kevin Rose at krose@reubenlaw.com.

 

Authored by Reuben, Junius & Rose, LLP Attorney Melinda Sarjapur.

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.

SF’s Proposed BMR and Impact Fee Changes

fee

Late last month, Supervisors Peskin and Safai introduced long-awaited legislation lowering San Francisco’s affordable housing requirements for certain approved and proposed projects, as well as reducing impact fees. This week’s alert summarizes the proposal as it currently stands.

Changes for pipeline projects

Sponsors of projects with 25 or more units that were or are approved before November 1, 2023 and have not received a first construction document (usually the architectural addendum)—so-called “pipeline projects”—are allowed to apply for a lower affordable housing obligation, additional time to obtain a site permit, and changes to density bonus law compliance.

The affordable rates are proposed to be reduced across the board as follows:

  • Affordable housing fee. 16.4%, for both ownership and rental projects. If the project is in an area with a specific affordable housing fee, the applicable percentage is 54.5% of the rate for rental projects in the area or 16.4%, whichever is higher.
  • On-site. 12% for both ownership and rental projects, with 8% for low-income, 2% moderate-income, and 2% middle-income. For projects in areas with specific on-site BMR requirements, the rate is 54% of the rate for rental housing projects in that area or 12%, whichever is higher.
  • Off-site. 16.4%, for both ownership and rental projects. If the project is in an area with specific off-site BMR requirements, the applicable percentage is 54.5% of the rate for rental projects in the area or 16.4%, whichever is higher.

Project sponsors can also request an extension of performance periods for their projects up to May 1, 2029. The legislation does not require the City to extend all performance periods to May 2029, though. The current practice is for three-year extensions starting on the date of City approval.

The legislation has two “use it or lose it” provisions. First, the City needs to grant the request for reduced affordable rates by November 1, 2026. Because the deadline is not the date that the request is submitted to the City but the date of City approval, sponsors should make sure to apply comfortably before the end of the deadline. Also, sponsors need to get a first construction document—as noted above, usually the architectural addendum—on or before May 1, 2029.

Finally, density bonus pipeline projects are allowed to request modifications to the number and type of concessions, incentives, and waivers, as well as the number of affordable units. This recognizes that density bonus projects may need to adjust their compliance with the density bonus law if the project’s on-site affordable unit count decreases.

As noted above, sponsors must ask for a reduction; the changes do not apply automatically. Most projects will be approved by City staff administratively, assuming the Planning Commission agrees to delegate its authority. The legislation also would allow staff to extend the time to get a site permit, instead of going to the Planning Commission. Projects proposing “significant modifications” need to go to the Planning Commission, though. This includes projects whose unit count would change by more than 20%, floor area would change by more than 10%, and whose unit typology would change from dwelling units to group housing.

Projects entitled between November 2023 and November 2026

The ordinance would also reduce the affordable housing requirements for non-pipeline projects entitled between November 1, 2023 and November 1, 2026. The rates are proposed as follows:

  • Affordable housing fee. 20.5%, for both ownership and rental projects. If the project is in an area with a specific affordable housing fee, the applicable percentage is 68% of the rate for rental projects in the area.
  • On-site. 15% for both ownership and rental projects, with 10% for low-income, 2.5% moderate-income, and 2.5% middle-income. For projects in areas with specific on-site BMR requirements, the rate is 68% of the rate for rental housing projects in that area.
  • Off-site. 20.5%, for both ownership and rental projects. If the project is in an area with a specific off-site requirement, the applicable percentage is 68% of the rate for rental projects in the area.

These projects also have a “use it or lose it” provision: their first construction document needs to be received within 30 months of entitlement approval or approval on appeal, whichever happens later, and building permit approval for projects that do not require discretionary entitlements.

Permanent affordable housing changes

The ordinance would make a third and permanent change to San Francisco’s affordable requirements:

  • Affordable housing fee. For projects with 25 or more units, 27% for condos and 24.5% for rental projects.
  • On-site. 15% for projects with 10-24 units. For projects with 25 or more units, 20% for condos and 18% for rentals. Condos need to be 10% low-income, 5% moderate income, and 5% middle income. Rentals need to be 10% low-income, 4% moderate-income, and 4% middle-income.
  • Off-site. For projects with 25 or more units, 27% for condos and 24.5% for rentals. Condos need to have 12% low-income, 7.5% moderate-income, and 7.5% middle-income. Rentals need to have 12.5% low-income, 6% moderate-income, and 6% middle-income.
  • UMU and Divisadero NCT. Different Affordable requirements would apply to UMU and the Divisadero NCT.

Starting in 2028, the on-site percentage would increase by 0.5% annually, up to a maximum of 26% for condo projects and 24% for rentals.

Impact fee reductions until November 2026

The ordinance also proposes to reduce most development impact fees by 33%, so long as the fees are assessed by November 1, 2026, and the project gets a first construction document within 30 months of entitlement approval or approval on appeal, whichever happens first, or building permit approval for projects that do not require discretionary entitlements. Pipeline projects need to receive a first construction document by May 1, 2029.

The schools fee—which is imposed by SFUSD and outside of the jurisdiction of the City itself—would not be reduced. And any Community Facilities Districts (aka Mello-Roos assessments) will continue to apply to qualifying projects in areas such as Central SOMA and the Transit Center District.

We will continue to track this important piece of legislation and its eventual implementation. In the meantime, please reach out to us with any questions about whether your project qualifies for a reduction and how to properly ask for and receive a reduction in a project’s affordable housing requirement.

 

Authored by Reuben, Junius & Rose, LLP Partner 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.

Proposed Legislation to Expand Allowed Commercial Uses

legislation

In the latest effort to ease longstanding zoning restrictions and encourage new business activity in San Francisco, Mayor Breed (along with Supervisors Engardio, Dorsey, and Melgar) have introduced legislation to expand the types of uses permitted in Neighborhood Commercial Districts (“NCDs”), streamline the change of use process in Eastern Neighborhood Mixed Use Districts, and incorporate numerous other Planning Code changes aimed at filling retail vacancies throughout the city.

Unlike a number of other recently proposed changes, this legislation would not limit the amendments to Downtown. Instead, it focuses on neighborhood commercial corridors and on expanding permissible uses and streamlining the change of use process for certain use types across the city. With retail vacancies in San Francisco as high as 14.8%,[1] any change that allows more categories of business to occupy empty commercial storefronts in more zoning districts would be a welcome policy change.

The 92-page ordinance has yet to be heard by the Planning Commission or the Land Use and Transportation Committee, so a lot could change between now and final passage, but here is a summary of some of the more meaningful changes proposed:

  • Professional Services Uses: Arguably the most substantive and exciting change is a proposal to eliminate the distinction between Retail Professional Services and Non-Retail Professional Services. Currently, Non-Retail Professional Services include businesses that provide services to other businesses, like accounting, legal, insurance, advertising, and consulting offices. Retail Professional Services cover uses primarily open to the general public—in other words, offices where a member of the public can walk in to talk to a lawyer, travel agent, or accountant. As drafted, the legislation would principally permit all types of Professional Services Use (both retail and non-retail types), within all NCDs and Chinatown mixed use districts. This opens up the possibility of office-type uses operating in ground and upper-level spaces in neighborhood commercial corridors throughout the city.
  • Section 311 Notice: The proposed ordinance would eliminate Section 311 notice for change of use projects in Eastern Neighborhoods Mixed Use Districts—doing away with the possibility of a discretionary review hearing for those projects. 311 notice would still apply to formula retail and substantial construction projects in those districts.
  • Legalization of Existing Outdoor Activity Areas: The proposed ordinance would allow business owners citywide to legalize an Outdoor Activity Area via a building permit, provided the Zoning Administrator or Planning Staff determines that the outdoor space has been operating (mostly continuously) for the last 10 years. No Conditional Use (“CU”) Authorization would be required for these legalizations, but a building permit would need to be filed within one year from when the proposed ordinance becomes effective.
  • Flexible Retail Uses: Previously limited to properties in Districts 1, 4, 5, 10 or 11 and zoned NCD, NCT or NCS, the legislation proposes to allow Flexible Retail Uses citywide. Flexible Retail Uses are defined as the combination of at least two of the following uses: Arts Activities, Limited Restaurant, General Retail Sales and Services, Professional Services, and Trade Shop.
  • Formula Retail in Residential Districts: The legislation would allow Formula Retail uses in RH and RM districts with approval of a CU.
  • Special Use District Controls: A number of proposed amendments ease controls on eating, drinking, and entertainment uses within Special Use Districts (“SUDs”). Here are a few highlights:
    • Allow new Restaurant, Limited Restaurant, and Bar uses on the first story in the Jackson Square SUD, with approval of a CU.
    • Allow a Music Entertainment Facility in the Mission Alcohol SUD to serve alcohol with an ABC Type 90 license.
    • Non-Formula Retail Restaurants and Limited Restaurants would be principally permitted within the Taraval Street Restaurant Subdistrict (i.e., no CU for these uses).
    • Permit Financial Service and Limited Financial Service uses with approval of a CU in the Chestnut Street Financial Service Subdistrict.
    • Allow new Liquor Establishments with approval of a CU in the Haight Street Alcohol Restricted Use Subdistrict.
  • Expedited CU Review: The legislation would allow Nighttime Entertainment and Non-Retail Sales and Services uses (including Professional Services) (that meet other eligibility criteria) to be eligible for the Community Business Priority Processing Program, which aims to schedule eligible projects for a consent calendar Planning Commission hearing within 90 days of the application being deemed complete. Many non-Formula Retail commercial uses are already eligible for this program.
  • Miscellaneous Changes: Other one-off exciting changes include the following:
    • Financial Services would be allowed on the ground floor with approval of a CU in many NCDs.
    • Professional Services and Design Professional uses would be allowed at the ground floor in the North Beach NCD.
    • The Sacramento Street NCD would permit Bars on the first story with a CU, and Gyms and Health Services would be principally permitted on the ground floor.
    • The Union Street NCD and Pacific Avenue NCD would allow Bars on the first story with a CU.
    • The West Portal NCD would permit Financial Services on the ground floor with a CU, and Health Services and Design Professional uses would be principally permitted on the first and second floor.
    • Allow new Restaurants, Limited Restaurants, and Bars within the Mission Street NCT, up to an increased maximum of 197 locations (up from 167). Full-service Restaurants and Bars allowed within the cap would still require a CU.
    • New Bars and Restaurants would be permitted in the 24th Street-Mission NCT with approval of a CU, subject to the limitation of the Calle 24 SUD.

In the current market, any kind of storefront activation is good for the health of commercial corridors, and it seems that the prevailing political opinion finally agrees. This piece of legislation is just at square one of the process, and you can track its progress here.

[1] See Cushman & Wakefield San Francisco North Bay Metro Retail Q1 2023 Report; available at https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/san-francisco-north-bay-marketbeats (accessed June 21, 2023.)

 

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.

New State Laws Affecting Condo Homeowners Associations

HOAs

There are relatively fewer new state laws affecting condominium homeowners associations (“HOAs”) in 2023 than in recent years. However, one particular bill was passed by the California State legislature that includes important changes condominium owners and HOAs should be aware of.  Assembly Bill 1410 made a few significant changes to the Davis-Stirling Common Interest Development Act, which is the primary state law affecting condos and HOAs.  These new laws became effective January 1, 2023.

As we have previously reported over the past few years, the state legislature has been making an effort to increase affordable housing in the state.  To that end, the ability of HOAs to restrict rentals of condo units has been curtailed.  Assembly Bill 3182, passed in 2020, amended Civil Code Section 4740 to limit the power of HOAs to enforce restrictions on a homeowner’s ability to rent his or her unit.  AB 3182 also added new Civil Code Section 4741, which provides that HOAs cannot require a minimum rental term of greater than thirty (30) days.  Section 4741 also states that HOAs cannot enforce a cap on the number of units that may be rented at greater than 25%.  Units that are owner-occupied where only a portion of the unit is rented, or an accessory dwelling unit (ADU) that is part of the unit is rented, do not count towards any such rental cap.  The effect of this is to limit restrictions on rental of ADUs and a unit owner’s ability to rent rooms in his or her unit.

AB 1410 furthers the state legislature’s objective of increasing affordable housing by adding a new section 4739 to the Civil Code.  Section 4739 provides that an HOA’s governing documents cannot prohibit an owner from renting out a portion of his or her unit so long as the owner occupies the unit and the rental term is for more than 30 days.  This has the effect of allowing more short term rentals so long as the rental period is for more than 30 days.

AB 1410 also amends Civil Code Section 4515 to provide that an HOA’s governing documents cannot prohibit a member or resident from exercising free speech by using social media or other online resources to discuss certain matters, even if the content is critical of the HOA or its governance. Such matters include development living, HOA elections, proposed legislation, government elections, and other issues of concern to members and residents of the community.  This does not mean an HOA has to provide any social media or other online resources to its members, and an HOA does not have to allow members to post content on the HOA’s website.  This new law seems to be fixing a problem that is not widespread, but has become an issue in some HOA communities.

Finally, AB 1410 prohibits an HOA from pursuing any enforcement actions for a violation of its governing documents during a declared state or local emergency if the nature of the emergency makes it unsafe or impossible for the owner to either prevent or fix the violation.  The only exception is an enforcement action relating to an owner’s nonpayment of assessments to the HOA.  This rule is clearly intended to give homeowners some leeway to comply with an HOA’s governing documents during government imposed emergency declarations.

 

Authored by Reuben, Junius & Rose, LLP Attorney Jay Drake.

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.