Land Use Archives

2022 Housing Legislation Round-Up

October 6, 2022October 6, 2022 | Justin A. Zucker and Daniel J. Turner

This year was a blockbuster year for housing legislation coming from Sacramento. Last week, Governor Gavin Newsom signed into law more than three dozen bills related to housing and housing production. Below please find a brief overview of twelve housing bills signed by the Governor that become effective next year.

AB 682. Density Bonus for “Shared Housing” Buildings

AB 682 amends the State Density Bonus Law to create a density bonus for “Shared Housing” developments. Shared housing, or group housing as it is commonly known, is characterized by single-room units with shared access to common kitchen and dining facilities. Each unit is typically intended for one or two occupants and features a small kitchenette. This new density bonus will allow shared housing developments to build at greater densities in exchange for dedicating a percentage of units to affordable housing, with the same affordability requirements and bonus amounts as is currently available to standard-unit developments. Notably, shared housing developments can provide up to 25% of their floor area as standard-unit housing and still qualify for a density bonus.

AB 916. No Public Hearing to Increase Bedroom Count

AB 916 prohibits cities from requiring a public hearing for a permit to add up to two bedrooms by reconfiguring existing space within an existing dwelling unit.

AB 1551. Commercial Development Bonuses for Providing Affordable Housing

AB 1551 creates a density bonus for commercial developers who partner with housing developers and support the provision of affordable housing through land donation, cash payment, or by directly building units. A commercial developer is eligible for up to a 20% density bonus. To qualify, the housing development supported by the commercial developer must provide either 30% of units as affordable for low income (<80% AMI) or 15% of units as affordable for very-low income (<50% AMI).

AB 2011. Affordable Housing and High Road Jobs Act

AB 2011 provides streamlined, ministerial approval of multifamily housing developments that contain affordable housing units located in commercial zones. Two tiers of development are available, depending on the amount of affordable housing provided. A project dedicating 100% of units as affordable for lower income households can be developed by right on most parcels zoned for retail, office, or parking uses. A project with market-rate units that provides a specific percentage of rental or ownership units as affordable for either lower income or very-low income households can be developed by right on parcels zoned for retail, office, or parking if the site has at least 50 feet of frontage on a commercial corridor (a street between 70 and 150 feet wide). AB 2011 projects are also subject to certain prevailing wage and skilled workforce requirements. We have discussed AB 2011 in greater detail in previous updates on August 24, 2022, and September 1, 2022.

SB 6. Middle Class Housing Act

SB 6 is intended to increase the development potential for middle-income housing by principally permitting housing developments that meet specific criteria in areas zoned for office, retail, or parking uses. Eligible developments are required to meet or exceed certain density thresholds established in the state’s Housing Element law, such as 30 units per acre in metropolitan settings or 20 units per acre in suburban settings. SB 6 projects must also meet certain prevailing wage and skilled and trained workforce requirements, although a development can be exempted from these in certain circumstances.

AB 2334. Density Bonus in Very Low Vehicle Travel Area

AB 2334 expands the available density bonus for 100% affordable housing developments in very low vehicle travel areas. A “very low vehicle travel area” is a transit analysis zone where existing residential development generates 85% or fewer vehicle miles traveled per capita than the regional area in which it is located. Qualifying density bonus projects are not subject to maximum density controls, are entitled to up to 4 development incentives, and may receive an additional three-stories of height. This additional density bonus is only available in the counties of the Bay Area, Sacramento, the Southern Coast, and Inland Empire. AB 2334 also clears up the grey area for application of the state density bonus in a form-based zoning district, requiring calculation of an “average unit size” multiplied by the density bonus amount to determine increase in floor area allowed.

AB 2653. Housing Element Reporting

AB 2653 alters some of the requirements for annual housing element reports cities must submit to the state. Cities must include greater detail, including the numbers of all new and demolished housing units in the jurisdiction, as well as data on all approved density bonus projects. AB 2653 also provides a mechanism for the state to request corrections and make referrals for enforcement.

AB 2668. SB 35 Streamlining Updates

AB 2668 amends SB 35 clarifying streamlined SB 35 projects are not subject to any non-legislative discretionary approval and that density bonus units are not considered when calculating whether a project satisfies SB 35’s affordability requirements. Further, the bill prohibits cities from denying an application for missing materials if there is enough information to allow a reasonable person to conclude the development is consistent with the applicable objective standards. AB 2668 also brings important change to how the Cortese List affects SB 35 eligibility. Placement on the Cortese List, which is the aggregate of the state’s decentralized hazardous waste sites databases, disqualifies a site from SB 35, until it is cleared for residential use by the authority having jurisdiction. However, longstanding confusion over the mechanism of clearing a site meant that once a site was listed, it was effectively barred from SB 35 permanently, even if it had undergone extensive remediation. AB 2668 establishes specific criteria, documentation, and agency determinations that allow a “listed” site to qualify for SB 35.

AB 2221 & SB 897. ADU Law Updates

AB 2221 and SB 897 make a number of changes to existing ADU law to provide for greater development flexibility and ensure consistent and efficient project review. Under these bills, a city that denies an ADU application will be required to provide a full set of written comments that includes a list of all deficient items and details how the application can be remedied. These comments must be provided within the existing 60-day review period. Additionally, a city will be prohibited from denying an ADU application based on nonconforming zoning conditions, building code violations, or unpermitted structures that are not affected by the ADU construction and do not pose a threat to safety.

The bills also increase ADU development potential by restricting setbacks that prevent ADUs below a minimum floor area, increasing the minimum height limit for ADUs located near transit stops or attached to primary dwellings, and prohibiting owner-occupancy requirements until January 1, 2025. Importantly, the addition of an ADU will no longer constitute a change of R occupancy under the building code such as from an R3 (single-family or duplex) to an R2 (multi-family), and will not trigger a requirement for fire sprinklers if not previously required.

AB 2234. Post-Entitlement Permit Processing

AB 2234 focuses on post-entitlement non-discretionary building permit processes after the planning process has concluded and environmental review is complete. AB 2234 requires local agencies to compile a list of information need to approve or deny a post-entitlement permit, a checklist and post an example of a completed, approved application. AB 2234 also sets timelines for review of post-entitlement applications for housing projects: (a) for projects with 25 units or fewer, a local agency shall complete first review and comment within 30 days of an application completion; and (b) for projects with 26 or more units, a local agency shall complete first review and comment within 60 days of an application completion. These time limits are tolled if a local agency requires review of an application by an outside third-party reviewer. Failure to meet these timelines is a violation of the Housing Accountability Act.

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

Downtown Oakland Specific Plan: ZIP Update

September 21, 2022September 22, 2022 | Justin A. Zucker

As previously reported, the Downtown Oakland Specific Plan (“DOSP”) is working its way to the City Council for adoption, currently anticipated in late 2022. The DOSP includes Zoning Amendments (which we’ve previously reported on) and a Zoning Incentive Program (“ZIP”). Initial details for the ZIP were released earlier this summer (which we’ve previously reported on). Below are additional details regarding the ZIP based on the economic analysis reports prepared by Hausrath Economics Group, dated August 2022 and September 16, 2022, in addition to recent community meetings on September 13 (presentation slides) and on September 19 (presentation slides).

The ZIP was developed in response to community concerns to allowing development downtown without obtaining community benefits. The ZIP allows developers to voluntarily elect to provide community benefits, in one of four forms, to increase allowed development capacity, either additional market-rate dwelling units or commercial space. The four on-site community benefits options include providing (1) affordable housing, (2) below market-rate ground floor commercial space, (3) public restrooms, or (4) streetscape, open space and flood control improvements exceeding basic city requirements. Alternatively, the ZIP includes the option to provide community benefits through payment of an in-lieu fee instead of providing on-site benefits, or some combination of on-site benefits and an in-lieu fee.

The ZIP is a voluntary program that creates additional value for a development project with the City capturing a portion of the value increase. The increase in value from the additional, higher-intensity development is calculated as the difference in value of development under the maximum intensity zoning compared to the base zoning. The value is expressed in dollars per building square foot of added development for commercial and dollars per dwelling unit added for residential.

As currently analyzed, the ZIP is structured so that a third of the additional value from the more intense development is captured in the form of a community benefit. The remaining two-thirds is split with one-third to the developer to incentivize development at increased intensity and a third to the owner to account for increased resulting land value, which in turn results in increased property taxes. During recent community meetings, there has been discussion of adjusting this formula to increase the City’s value capture share.

In creating the incentive, the ZIP considers the costs and economic variables specific to development types, i.e., change from Type III or V (mid-rise/low-rise) to the more costly Type I (high-rise) construction. Properties with large increases in density supporting high-rise development over mid-rise/low-rise projects can have lower value capture per additional dwelling unit or per additional building square foot due to higher costs involved. To account for this, the ZIP establishes three Zoning Incentive Areas that reflect similar market contexts, development patterns and potentials, parcel sizes, and existing land uses. There are three areas each for residential development (map) and commercial development (map), with R-A, R-B, and R-C zones for residential and C-A, C-B, and C-C for commercial development.

The ZIP incentive areas allow additional density ranging from 11% to 800% more density with 65% of cases more than doubling density. The large density bonus accounts for increased costs associated with change in construction typology to Type I for high-rise development.

Based on location, a commercial development could obtain an additional 100,000 sf of office space with the provision of below market ground floor commercial space totaling 6,828 sf (Zone C-A), 4,655 sf (Zone C-B), or 3,724 sf (Zone C-C).

The ZIP is available to a developer in lieu of or in addition to the State Density Bonus set forth in Government Code Section 65915, et. seq. Meaning, a project could layer the State Density Bonus on top of the ZIP to increase development intensity. In instances when the ZIP and State Density Bonus are used in tandem, the project’s ZIP development intensity is the base density not the underlying base zoning density.

The DOSP and ZIP are slated to return to the Zoning Update Committee (“ZUC”) before advancing to the Planning Commission and City Council. While previously schedule to return to the ZUC on September 29, that hearing has been cancelled to allow additional public meetings. The ZUC hearing has not yet been rescheduled. We will continue to track this significant rezoning and community planning effort as it moves forward.

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

AB 2011 & SB 6: Pro-Growth or Slow Growth for Construction Workforce

September 1, 2022September 1, 2022 | Daniel Frattin and Daniel J. Turner

AB 2011, along with SB 6 (Cabellero, Eggman and Rubio), were passed by the California Legislature this week with large majorities in both houses. The two bills will create 10-year housing programs with similar aims: increasing housing production and increasing the skill level, wages, and number of residential construction workers. However, the bills differ in important ways—their approach to density, allowances for ministerial approvals, and the degree of deference to local zoning rules. They also take markedly different approaches to growing, training, and better compensating the residential construction workforce. The bills were the product of a political compromise between the State Building & Construction Trades Council and the Carpenters Union. They effectively set up an experiment to test the relative efficacy of the SB 6 labor rules favored by the State Building & Construction Trades Council—basically requiring union labor on any SB 6 project and the rules preferred by the Carpenters Union – requiring payment of prevailing wages and benefits to all workers on an AB 2011 project.

A good deal of attention has been given to improving the regulatory conditions for getting new housing approved, expanding access to sites, and requiring cities to upzone. However, less attention has been paid to the fact that—even if there were shovel-ready projects for the Governor’s declared goal of 3.5 million new homes over ten years—the current residential construction workforce could only build about a third of that number without significant increases in the number and productivity of workers, who currently build housing at a rate of one home per worker per year. By comparison, average productivity per worker was 1.4 units per year from 1990-2005. Put simply, the state cannot meet its housing targets without an increase in the number of workers and productivity.

However, attracting new workers has proven difficult. Median residential construction worker pay in California ranks 46^th in the country when adjusted for the high cost of living. On average, residential construction workers income is 2/3 of their commercial counterparts and they get about 1/3 the amount of fringe benefits. Less than half have insurance through employers. This is a dramatic shift since the 1970s and 1980s, when average pay in both sectors was roughly equal.

AB 2011, which we discussed in greater detail last week, provides for time-limited ministerial approvals for properties on commercial corridors that meet certain criteria for affordable housing and overrides local zoning rules that conflict with its minimum standards for density and height. It also mandates payment of prevailing wage to all construction workers, or at least the prevailing apprentice wages for apprentices enrolled in state-approved apprentice programs. Family healthcare benefits are required for projects with qualified construction craft workers on projects with more than 50 units, while those without such workers can credit qualifying expenditures toward the prevailing wage requirements. Essentially, AB 2011 bets that rapid approvals under more liberal standards will entice employers to pay higher wages and create a strong, near-term incentive for developers to invest in apprenticeship programs to elevate worker productivity.

A final version of SB 6 has yet to be published, but takes a less aggressive approach than AB 2011 with lower minimum density requirements, greater deference to local zoning, and no mandatory ministerial approval process unless a project otherwise qualifies under SB 35. Thus, many SB 6 projects would be subject to lengthy CEQA reviews and modified discretionary approvals. It would require lower amounts of affordable housing subsidies by than AB 2011, but would effectively require the use of union labor if two qualified bids are received from union contractors. While SB 6 expands potential building sites, most projects would not realize the cost savings associated with quick ministerial approvals or the elimination of most entitlement/CEQA risk. Without these incentives in place, it may be years before the state sees its first SB 6 project, or additional demand for workers.

AB 2011 passed the Assembly 67-4 with 9 abstentions and the Senate 33-0 with 7 abstentions. While the 4 Noes in the Assembly were from rural and suburban districts leaning more conservative (3 Rs & 1 D), notably 7 of the 9 abstentions were from urban and suburban districts along the coast between Ventura and San Diego with a high number of Democratic representatives (6 Ds & 3 Rs). Conversely, SB 6 passed the Assembly 67-0 with 13 abstentions and the Senate 34-0 with 6 abstentions. Of the 4 Noes for AB 2011, 3 abstained in SB 6 and 1 voted yes (a democrat representative from District 29, encompassing Santa Cruz and the surrounding area). The Assembly abstentions followed a similar pattern as AB 2011, with those abstaining coming from both parties and primarily representing rural districts or coastal urban and suburban districts in Southern California. For both AB 2011 and SB 6, the Senate abstentions followed a similar geographic pattern as in the Assembly.

While union support was split between the two bills, with both construction and other unions on either side, pro-housing and business organizations tended to support both. Most affordable housing developers supported AB 2011 and opposed SB 6, presumably because the latter would tend to increase cost and time for approval without offsetting benefits. San Francisco’s Council of Community Housing Organizations, which frequently opposes market-rate development, was a notable outlier, supporting SB 6 and opposing AB 2011 in spite of its clear benefits to affordable housing developers.

Both bills still need to be signed by the governor and will not take effect until July 2023. Annual reports of projects approved under both bills are required from cities and the Department of Housing & Community Development is to provide two reports on the use of each during the ten year period prior to their sunset date.

Authored by Reuben, Junius & Rose, LLP Attorneys Daniel Frattin and Daniel J. Turner.

AB 2011 Could Unlock Mixed-Income Housing

August 24, 2022August 25, 2022 | Mark Loper, Daniel J. Turner and Alex Klein

East Bay state representative Buffy Wicks, along with other co-sponsors including Senator Scott Wiener, proposed a compelling bill that aims to bridge a long-sought gap between pro-housing advocates’ desire for streamlining code-compliant multi-family residential projects with on-site affordability (both mixed-income and 100% affordable), and construction labor unions’ desire to ensure fair wages and future training for its members.

Known as the High Road Jobs Act of 2022, AB 2011 would allow ministerial, by-right approval for certain multi-family affordable housing. A development project in a zoning district where office, retail, and parking are principally permitted would be subject to streamlined, ministerial review if it meets many of the requirements for SB 35 eligibility, as well as additional locational and affordability requirements. AB 2011 projects would not need to obtain discretionary entitlements and would not be subject to CEQA.

To qualify for AB 2011 streamlining, housing development projects must either provide 100% affordability, or provide on-site affordable units, aka BMRs, in a primarily market rate project. As amended in the Senate on August 11, the on-site BMR requirement is somewhat complicated for rental units, but essentially requires between 12-15% BMRs unless a local requirement is higher, in which case the local program applies and additional AMI restrictions could be required. For condos, 30% could be offered at moderate income or 15% at lower income, and the same caveat about higher local requirements applies.

These projects would be subject to objective development standards, and additional qualifying criteria. As of August 11, the criteria for mixed-income projects include, but are not limited to:

proposing a multi-family housing development project;
abutting a commercial corridor and having a frontage at least 50 feet in width, on a site 20 acres or less in size;
not demolishing rent controlled or deed-restricted affordable units, or listed historic resources;
replacing no more than four existing units;
located no closer than 500 feet from a freeway;
providing relocation assistance to certain commercial tenants; and
vacant properties that are not zoned for multifamily residential use cannot qualify for streamlined ministerial processing.

Once an AB 2011 development application is submitted, several streamlining provisions apply. The local government must determine whether the project complies with objective planning standards within 60-90 days depending on unit count. If a local government determines that a project does not comply with objective planning standards, it must provide a written explanation to the proponent within this timeframe. Further, any design review must be completed within 90-180 days. Projects using the streamlined approval process would also be eligible for density bonuses, incentives, concessions, waivers, reductions in development standards, and potentially reduced parking ratios, under California’s density bonus law.

AB 2011 projects would also be required to pay construction workers at least the prevailing rate of wages and certify their compliance with this provision with the local government. As part of the developer’s obligation to pay prevailing wages, developers building 50 or more units of housing must submit monthly compliance reports to the local government.

Importantly, projects utilizing AB 2011 would not be a project for the purposes of CEQA (i.e. no environmental review) and the approval procedures the municipality would be permitted to use would solely be ministerial in nature.

In May of 2022, AB 2011 passed out of the California State Assembly, and is currently with the Senate, where it was voted out of committee on August 11. The bill has received several key union endorsements, including from the California Conference of Carpenters and SEIU. However, other unions, such as the State Building and Construction Trades Council of California, the San Francisco Building and Construction Trades Council, and the California Labor Federation have opposed the bill claiming it would “eliminate[] the mandate that a skilled-and-trained workforce be a part of… [project] construction crews.” Unions such as the Building Trades Council oppose the bill because the bill would not require developers to use a “skilled and trained workforce,” which has the effect of eliminating the requirement that a certain percentage of workers on a project are unionized. The bill provides instead that for developments streamlined under AB 2011 that workers be paid a “prevailing wage” with some additional benefits such as healthcare coverage.

We will continue to track this potential game-changer of a bill as it makes its way through Sacramento.

Authored by Reuben, Junius & Rose, LLP Attorneys Mark Loper and Daniel J. Turner, and Law Clerk Alex Klein.

Supervisors Pass New EV Charging Rules

July 28, 2022July 28, 2022 | Chloe Angelis

Back in March, we wrote about pending legislation that would amend the Planning Code to specifically address electric vehicle (“EV”) charging uses. At the time, the legislation was headed to the Planning Commission for initial consideration. On Tuesday, the Board of Supervisors unanimously passed an amended version of that legislation on the first reading.

As we explained in our March update, the Planning Code does not currently contemplate EV charging at all—leaving operators to work with the Planning Department on a case-by-case basis to determine the permissibility and approval path for any new EV charging site.

In order to meet the City’s climate action targets (which include a goal of 100% registered private vehicle electrification by 2040), the legislation aims to create a Planning framework to streamline the approval of publicly accessible EV charging stations and to regulate (though not necessarily streamline) the approval of new fleet vehicle charging sites.

The legislation creates two new Planning Code use categories, both under the umbrella of “Automotive Use.” The new “Electric Vehicle Charging Location” (“EV Charging Location”) use covers public-facing charging locations and “Fleet Charging” covers EV charging facilities that are dedicated to a private entity and not available to the general public.

The initial draft of the legislation would have required Conditional Use (“CU”) Authorization for Fleet Charging in most zoning districts, except in PDR-1-D, PDR-1-G, and PDR-2 districts, where Fleet Charging would have been principally permitted. That draft also would have prohibited Fleet Charging in the Neighborhood Commercial Districts. The earlier version of the ordinance called for more permissibility related to EV Charging Locations, which would be permitted in most districts, and would be principally permitted wherever the existing use is already some type of Automotive Use. This provision remains in the version passed on Tuesday.

The legislation was heard by the Land Use and Transportation Committee three times after it came out of the Planning Commission on April 14 with a handful of recommended changes. Several more amendments were made at those three Committee hearings—mostly to further restrict the permissibility of Fleet Charging uses—as outlined here:

While the initial version of ordinance would have allowed EV Charging Locations to dedicate up to 1/3 of spaces as accessory Fleet Charging, the final version of the ordinance prohibits Fleet Charging as an accessory use to EV Charging Locations or to any other use. I.e., no accessory Fleet Charging, period.
Consistent with the Planning Commission’s recommendation, the final legislation permits Fleet Charging in most of the Neighborhood Commercial Districts with approval of a CU.
The Land Use and Transportation Committee opted to require a CU for Fleet Charging in all of the PDR districts, primarily based on a concern that Fleet Charging uses could displace businesses that provide blue collar jobs. However, existing Private Parking Lots and Vehicle Storage Lots in the PDR-1-D, PDR-1-G, and PDR-2 districts will be able to convert to Fleet Charging without a CU. Supervisor Peskin explained that this minor exception would cover a limited number of properties located in District 10.

In addition to the above changes incorporated into the version of the legislation approved by the Board this week, the Land Use and Transportation Committee also created a duplicated version of the file in order to add a set of new CU findings that would apply to Fleet Charging projects. As drafted, a proposed Fleet Charging use would require consideration of the following criteria:

The proposed Fleet Charging use will not induce demand for low occupancy vehicles in highly congested areas or in transit-rich areas.
Vehicle movement on or around the Fleet Charging use will not unduly impact pedestrian spaces or movement, transit service, bicycle movement, or the overall traffic movement.
If the vehicles accessing the proposed Fleet Charging use are owned by one ownership entity, that the ownership entity establishes that it has secured sufficient parking spaces for vehicles when not in operation within San Francisco or adjacent counties.

The second finding essentially codifies a question that a Fleet Charging project’s environmental review would already address—i.e., would a new vehicle-oriented use significantly impact traffic in the vicinity of the project? The Planning Department is experienced with traffic circulation issues and how they should be addressed as part of the land-use process. So, we don’t anticipate a significant amount of uncertainty related to this second finding.

The first and third findings, however, leave open some critical questions of interpretation.

The first finding speaks to low occupancy vehicles. The Planning Code doesn’t define that term, but it is generally understood to mean a vehicle with one or two people in it. It’s not clear what this finding would mean as applied to a Fleet Charging use serving EV rideshare vehicles—which may sometimes carry only one passenger at a time. Other types of fleets, including delivery vehicles and service vehicles, will often have a driver and no passengers. Depending on how it’s applied, this finding could actually discourage the electrification of rideshare fleets—contrary to a 2021 California Air Resources Board mandate that rideshare companies reach zero GHG emissions and ensure that 90% of their vehicle miles are fully electric by 2030.[1]

It’s also unclear what exactly the third proposed finding aims to accomplish. EV chargers are likely to be installed at parking facilities, such that vehicles can be parked and charged in one place. Discouraging a dual charging/parking use would seem to run contrary to vehicle miles traveled (“VMT”) reduction goals.

Hopefully, these questions will get answered as the duplicated version of the ordinance makes its way through the legislative process. The duplicated legislation has been referred back to the Planning Commission, but as the Commission and Board of Supervisors head into August recess, we’ll have to wait until the fall to see how this shakes out.

[1] California Air Resources Board, Resolution No. 21-10 (May 20, 2021); see also California Air Resources Board Bulletin, California requires zero-emissions vehicle use for ridesharing services, another step toward achieving the state’s climate goals (May 20, 2021), available at: https://content.govdelivery.com/accounts/CARB/bulletins/2da5a7a.

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

Oakland: Housing Approved & Zoning Updates

July 20, 2022 | Justin A. Zucker

Golden West Project CEQA Appeal Denied

Yesterday, the Oakland City Council unanimously denied the appeal of a 222-unit State Density Bonus project, including 16 units for very low income households, on a vacant lot next to the West Oakland BART Station, aka the Golden West project (the “Project”). The City Council upheld the Planning Commission’s March 3, 2021, unanimous approval of the Project.

Appellant appealed the Planning Commission’s decision approving the Project and the environmental review performed for the Project. Appellant argued the Project’s environmental review did not comply with the California Environmental Quality Act (“CEQA”), demanding that a focused or infill EIR be prepared alleging hazardous materials impacts.

An EIR was prepared, however, which the Project tiered off of. The Project site is within the West Oakland Specific Plan area and was evaluated by the West Oakland Specific Plan Environmental Impact Report (“EIR”). The City’s independent environmental consultant analyzed and determined there was nothing peculiar about the Project than what was programmatically analyzed in the West Oakland Specific Plan EIR. Upon review, City staff determined that “all hazardous materials concerns were previously addressed in the [West Oakland Specific Plan] EIR” and “conclude[d] that the requirement for any supplemental and/or infill EIR would be inappropriate and not justified.” No further CEQA review was required. Tiering off the West Oakland Specific Plan EIR was found to be proper.

Reuben, Junius & Rose, LLP, led by Justin A. Zucker, is happy to have successfully assisted Project sponsor in navigating this Project from concept and entitlement through appeal.

Downtown Oakland Specific Plan Zoning Incentive Program Released

As previously reported, the Downtown Oakland Specific Plan is working its way to the City Council for adoption. One of the main purposes of the new specific plan is to address issues with existing zoning controls. A key element of the Downtown Oakland Specific Plan is establishment of a Zoning Incentive Program (“ZIP”).

On July 7, 2022, Oakland released the details of the Downtown Oakland Specific Plan ZIP. The ZIP allows developers to elect to provide one or more community benefits or pay an in-lieu fee to the City to fund such benefits, in exchange of increases in allowable building height and/or density. Projects may only participate in the ZIP if they are within one of the three ZIP areas designated in the Zoning Map. The three areas are generally located in:

Jack London Square – area along the Embarcadero, including the Victory Court area;
Central Downtown Oakland – area extending one to three blocks out from Broadway between 10^th and 20^th Streets and from 14^th Street between Castro Street to Lake Merritt Boulevard; and
Koreatown/Northgate – area surrounding Telegraph Avenue along 23^rd, 24^th, 25^th, 26^th, 27^th and 28^th

Under the ZIP, a project providing one of the following will result in allowance for additional density or non-residential floor area:

On-site, below market rate ground-floor commercial space – ground floor space provided at fifty percent (50%) of market rate rent for qualified retail, commercial, arts, and non-profit tenants;
On-site affordable dwelling units – providing on-site affordable dwelling units allows for increases over base density but not non-residential floor area;
Public restroom facility(ies) – provision of ground-floor, gender-neutral restroom facilities open to the public during work hours;
Streetscape, open space, and flood control improvements – provision of public streetscape and/or open space improvements includes landscaping, tree planting, and public art installation with flood control improvements including raising public lands, construction of drainage facilities, retaining walls, and other similar improvements;
In-Lieu Fees – provision of an in-lieu fee to be used by the City for the above-listed community benefits or for job training programs. The in-lieu fee per square foot of commercial development (non-residential floor area) ranges from $10 to $20 with the residential development in-lieu fee ranging from $12,000 to $22,000.

On July 13, 2022, the Zoning Update Committee held a hearing on the proposed ZIP. At that hearing, no action was taken by the Zoning Update Committee. An economic analysis of the ZIP is being prepared and will be reviewed and analyzed at the next scheduled Zoning Update Committee hearing on August 24, 2022.

Reuben, Junius, & Rose LLP has experience with entitlement projects and land use diligence throughout Oakland, and we are pleased to have worked on some of the largest housing projects approved in the city over the last several years. We will continue to track this significant rezoning and community planning effort as it moves forward.

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

Legislation Expands CUA Appeal Rights to Tenants

July 11, 2022July 11, 2022 | Reuben, Junius & Rose, LLP

On Tuesday June 14^th, Supervisor Melgar introduced a new version of legislation (“Appeal Legislation”) that will change, and effectively lower the threshold, for appeals of Conditional Use Authorizations (or denial) by the Planning Commission.

A Conditional Use Authorization (“CUA”) refers to the use or development of a parcel that is not permitted as-of-right but requires additional scrutiny by the Planning Commission. These land uses have special characteristics or a unique nature that may be suitable only in certain locations or operated and arranged in a particular manner. As such, they have a higher threshold for approval. The San Francisco Planning Code states that a CUA can be approved if they are “necessary or desirable for, and compatible with, the neighborhood or the community” (Section 303(c)(1)), along with other specific findings. CUA appeals are acted upon by the Board of Supervisors.

Because the standard for granting CUA’s are highly subjective, public opinion and political pressures often come into play in determining the “necessity or desirability, and compatibility” of a project. While land use justifications are given for classifying certain uses as conditional, other motives are often in play: to protect existing, local businesses from competition by formula retail or an overconcentration of similar businesses; to preserve the amenity and value of existing buildings by making height above 40 or 50 feet a conditional use, even in high-density districts where height limits allow for taller buildings and tall buildings are prevalent. With subjective standards for both approvals and appeals at the Board of Supervisors, some decisions may effectively become a popularity contest and create a great deal of uncertainty for applicants, property owners, and tenants. This is particularly true for businesses requiring a conditional use. Prior to new state laws setting stricter standards for disapproving or reducing the density of housing developments, new residential construction was downsized more frequently for compatibility with adjacent buildings.

Currently, a decision by the Planning Commission on a CUA may only be appealed within 30 days by either 1) five members of the Board of Supervisors; or 2) the owners of at least 20% of the property within 300 feet of the exterior boundaries of the subject property. Where a property has joint ownership, the signature of each owner is calculated as representing the affected property in “direct proportion to the amount of total ownership of that property attributable to the owners subscribing to the notice of appeal” (Section 308.1(b)(4)). A CUA may only be overturned or modified by a 2/3 vote of the Board.

The primary substantive change in the Appeal Legislation would count the signature of “Verified Tenants” as well as those of property owners toward meeting the 20% threshold for filing an appeal (currently, only owners are eligible). After receiving the signatures, the Department of Public Works (“DPW”) would have five days to verify whether the 20% requirement had been fulfilled.

In a city where the vast majority of owners and businesses rent or lease, and many owners do not live or operate businesses on their property, the policy motivations of the Appeal Legislation are self-evident: to give the people living or running a business in a building who may be most affected by a CUA decision standing to file an appeal regardless of whether they own the affected property.

With some narrow exceptions (e.g., property owners voting to tax themselves for community benefit districts that provide additional services), conditioning public participation or voting on property ownership is an anachronism. (North Carolina, the last state to make property ownership a prerequisite to voting in presidential elections, abolished its requirement in 1856.) With that said, the Appeal Legislation does raise several questions about the relative weight given to verification of tenant signatures, tenant votes, and the potential for double-counting votes in some instances:

Verified Tenants or Honor System? Only a “Verified Tenant” may subscribe to an appeal. A Verified Tenant is a commercial or residential tenant who declares under penalty of perjury that they lease an entire property or a unit on the property with a lease term exceeding 32 days. A Verified Tenant must maintain proof of tenancy (lease or other government document showing residency/occupancy) and have occupancy longer than 32 days as of the date of signing the appeal.

However, the Department of Public Works is not required to verify tenant documentation; it “may” request documentation at its discretion. It also does not specify that the signature from a business must be an authorized signatory for the business. For example, during the installation of street seating under COVID emergency orders, there were instances of unauthorized employees granting permission for structures with seating for adjacent restaurants to encroach on another store’s frontage without the business owner’s knowledge or consent. Given that DPW only has five days to determine the validity of an appeal, the verification process seems more like an honor system with a bare minimum of time for DPW to calculate the percentages based on self-reporting by signatories.

Five days does not provide a reasonable amount of time for requesting and verifying even a random sample of documentation from Verified Tenants. Further, defining a Verified Tenant as one occupying a unit pursuant to a lease should require a tenant to provide a copy of the lease. Other documents (DMV records, federal income tax records, and utility bills) may demonstrate that a tenant lives somewhere, but not that they are an authorized occupant with a lease. Verifying property ownership, the current requirement for CUA appeals, is an easier process since ownership is a matter of public record. Under the Appeal Legislation, the relevant documents to prove up occupancy for Verified Tenants are not a matter of public record and an applicant has no right to demand an audit by DPW. At minimum, a random audit of a percentage of tenant signatories should be included and the overall total counted toward the appeal discounted accordingly. This could be accomplished without extending overall timelines for a 5-day preliminary acceptance of the appeal, subject to an additional period for DPW to conduct a random audit to determine the percentage of invalid signatures. If the rate of valid signatures in the sample would cause the overall number of signatures to fall below the 20% threshold, the appeal would be rejected. (This is similar to the approach used for a preliminary evaluation and rejection of signatures in support of ballot measures.)

One Tenant Speaks for All Tenants in a Unit & All Units Are Equal. Where a rental unit is occupied by more than one tenant, the signature of one tenant in a unit effectively speaks for all tenants in the space. Similarly, all rental units are counted equally toward the 20% threshold. For example, in a multi-unit property, a 10,000 square foot commercial rental unit would be given equal weight as a 500 square foot studio unit. Compare this to the treatment of jointly owned property, where only the portion of the property attributable to a single signatory is counted.

Potential for Double-Counting. Where a joint owner and a tenant sign on to an appeal, each signatory is counted according to the method laid out for each. As an example, if an owner of one unit in a 2-unit condo building has a 50% interest in the property and rents that unit out, their two signatures would be added together such that they would effectively represent 100% of the property for appeal purposes. If the other owner or tenant joined, the percentage counted toward the appeal would not increase beyond 100%. On the other hand, if the other owner also rented and both that owner and tenant opposed the appeal, they would effectively be disenfranchised in determining the appeal threshold.

Depending on the number of rental units and ownership structure of buildings near the project, the Appeal Legislation could significantly reduce the 20% threshold, effectively negate the voice of supportive property owners and tenants, and, without any mandatory verification mechanisms for tenants, undermine transparency and trust in the validity of an appeal.

With that said, the Appeal Legislation does include other terms that reduce confusion and promotes administrative efficiency. For example, it requires the Planning Commission’s final, signed approval to be transmitted to the Clerk of the Board within 10 days of the Planning Commission’s action. No such reporting is currently required, and final decisions are not always issued within 10 days. Thus, the 10-day limit should broadly benefit all recipients of CUA approvals and reduce the burden on the Clerk of verifying the Planning Commission’s action. Appeals may not be filed “earlier than ten business days” or later than 30 days from the date of action by the Planning Commission. Although this technically shortens the appeal window to 20 days, the overall 30-day time period remains unchanged and there is no tolling of the appeal period if the final Planning Commission decision is not transmitted to the Clerk within 10 days.

Since most CUA appeals are filed towards the end of the 30-day appeal period, the change should have minimal, if any, effect on the length of the CUA appeal process. It does, however, lower the bar for appeals and increases the risk of delay and cost overruns, particularly for small businesses.

Given San Francisco’s slower-than-average recovery from COVID-19 job losses, the broader question the Appeal Legislation raises is one of priorities and goals for the city’s future. Is this the time to introduce more uncertainty and procedural hurdles into the business and housing environment?

Or should policymakers be focused on bigger questions facing our city: the revival of downtown and Union Square, restoring the tourism sector, and creating space for more flexible models for living, working, and doing business in a post-pandemic (or COVID endemic) world. Is a CUA really necessary for banks, architect’s offices, or small-scale hotels in Neighborhood Commercial Districts? Or for enlarging a successful business into an adjacent storefront? Are minor changes like these worth the time and attention of San Francisco’s elected officials? On balance, does the extent of regulatory oversight strike the right balance between public participation, public policy goals, and the costs, both in time and money, to applicants.

Public participation in the Planning process should be—and is—a given. But right now, shouldn’t that participation be focused on how to fill vacant spaces and addressing a persistent housing shortage and widespread homelessness, rather than adding time, cost, and risk for businesses and projects that fulfill those goals? By making big moves to provide flexibility and fast, by right-approvals for new housing and new/expanding businesses, San Francisco can send a strong signal that it is still the adaptable, dynamic, creative city that will continue to be an economic and cultural powerhouse—and not the dystopia the national press has portrayed it as of late. Tenants—both residential and commercial—should of course have a place at the table when major changes are proposed. But that participation should be focused on major changes in zoning rules and large-scale projects that need exceptions from standard regulations. At a bare minimum, an expansion of the right to bring a CUA appeal should be accompanied with the elimination of CUA requirements that stand in the way of important public policy goals.

Regardless of where one stands on these amendments, if approved, they will change the CUA Appeal landscape. The legislation was introduced at the June 14^th Board of Supervisors hearing and requires review and comment by the Planning Commission before it is taken up by the Supervisors. Stay tuned for updates on this legislation.

Authored by Reuben, Junius & Rose, LLP.

San Carlos Enacts Northeast Area Development Moratorium

May 5, 2022May 5, 2022 | Matthew Visick

Pending Specific Plan Will Streamline CEQA Review of Future Life Science Projects

On April 25^th, the City of San Carlos enacted a development moratorium covering approximately 120 acres of land in the north side of the City, and east of Old County Road (see map below). San Carlos has seen significant life science and R&D development in recent years, and the northeast area is anticipated to see an expansion of those uses. The moratorium is broad, applying to virtually all development applications other than tenant improvements and projects with complete, filed applications. It is expected to be in effect for two years while the City prepares a Specific Plan that will guide future development, articulate the public benefits future projects will provide, and streamline CEQA review of projects consistent with the Specific Plan.

State law allows a City Council or County Board of Supervisors to enact a development moratorium of up to two years after it makes findings that approving projects would create an immediate threat to the public health, safety, or welfare. The moratorium is initially limited to 45 days but can be extended with another vote of the City Council or Board of Supervisors to a maximum of up to two years. Both the vote to enact the moratorium and the vote to extend must be approved by a supermajority (i.e., 4/5^ths) vote.

The San Carlos City Council found development in the northeast area would have health, safety, and welfare impacts unless the Specific Plan considered how it would affect the “supply of land and adequate sites suitable, feasible, and available for the development of housing.” The findings anticipate that the Specific Plan will “develop policies and strategies to incorporate housing as a part of this new development.”

While not expected, it is possible the City Council will carve out additional projects when it considers whether to extend the moratorium. Several project sponsors opposed the enactment of the moratorium at the meeting on April 25, urging the Council to exempt projects with applications pending even if those applications were not yet complete. At least one Council member appeared sympathetic to those arguments during the May 25^th meeting (as noted above, at least four of the five Council members would need to vote to extend the moratorium). Planning Department staff will hold a public meeting with stakeholders on May 11^th to gather stakeholder input and that input will be shared with the Council.

Planning Department staff emphasized at the April 25^th hearing that the Environmental Impact Report (EIR) the City is preparing for the Specific Plan will help streamline the approval of future projects that are consistent with the Plan. State law provides several CEQA streamlining tools for projects consistent with a specific plan analyzed with an EIR. Development under Redwood City’s Downtown Precise Plan (DTPP) provides a good example of the advantages of this approach for both the City and the applicable project sponsors. Projects consistent with the DTPP required little to no additional project-specific CEQA review, allowing them to move through the approval process in a fraction of the time normally required. In an ideal world, this strategy allows over-stretched Planning Department staff to redirect their time from project-level CEQA review to other priorities, and project sponsors to significantly reduce the often inordinate time and cost associated with CEQA review of individual projects.

Authored by Reuben, Junius & Rose, LLP Attorney Matthew Visick.

To Fourplex or Not to Fourplex

April 18, 2022April 15, 2022 | Thomas P. Tunny

Senate Bill 9 (SB 9), which took effect January 1, 2022, enables property owners to split their single-family residential lot into two separate lots and build up to two new housing units on each lot. A key component of SB 9 is that it requires ministerial approval of such projects. In San Francisco (the “City”), that means no discretionary review process and other opportunities for project opposition. The City’s policymakers and housing advocates were influential in the adoption of SB 9. And yet, now that it’s here, the City’s lawmakers can’t seem to decide if they like SB 9.

Housing advocates hailed SB 9 for facilitating the construction of new, smaller dwelling units throughout the City. Everyone can agree that the City needs housing. However, the City’s new housing production in recent years has been heavily concentrated in the eastern and southeastern parts of the City, with 90% of all new housing produced in just ten eastside and central neighborhoods. Development in these neighborhoods has at times been subject to significant conflicts and prevented from moving forward. At the same time, roughly 60% of the City’s developable land area is in residential zoning districts, concentrated primarily on the City’s west side, with 38% of the City’s developable land area zoned exclusively for single-family homes. Just 3% of housing built since 2005 was added in areas that allow one to two units (only 6% of affordable housing when ADUs are counted). SB 9 presents a fresh approach.

When Supervisor Rafael Mandelman proposed his “fourplex” legislation last summer, allowing any single-family home to be turned into a fourplex, and corner lots to have six units, it seemed SB 9 would be embraced, and that some of the City’s more vexing housing challenges would be addressed. It wasn’t that easy.

Last Monday (April 11), the Board of Supervisors’ Land Use Committee considered Supervisor Mandelman’s fourplex legislation. Supervisor Mandelman, facing significant political push-back, had amended his legislation to upzone all single-family residential districts (RH-1 and RH-1(D)) in the City to two-family density (RH-2 and RH-2(D)). The elimination of single-family zoning is a means of ensuring the approval of new fourplexes and six-unit projects would not be ministerial, and that discretionary review of these projects would continue. This is because the ministerial provisions of SB 9 apply only to single-family residential districts.

Advocates of preserving the discretionary review process cite the need for the City to maintain design review control over new housing. But discretionary review is not about design review. Discretionary review has become a process that project opponents manipulate to stop new development. It adds significant time, cost, and risk to the production of housing, thereby discouraging new units. If design review is the concern, there are better ways to accomplish that without leaving it to discretionary review.

Other related issues addressed by Supervisor Mandelman’s legislation include residency and tenancy controls, measures to prevent demolition, condominium conversion and subdivision controls, and rent protections.

In the end, at the Land Use Committee on Monday, the Committee approved certain amendments proposed by Supervisor Melgar that sought to encourage larger units, incentivize marginalized homeowners to create more units, and waive the application fees for Historic Resource Assessments, and then voted to continue its consideration of the legislation to the April 25 meeting.

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

Density Bonus Law & CEQA Tiering Upheld

April 7, 2022April 6, 2022 | Mark Loper

This winter, two California Courts of Appeal issued decisions that reaffirm some of the positive aspects of state laws related to housing production, from both a CEQA perspective and via the State Density Bonus Law (“DBL”). In the first case, out of East Bay city Newark, the First District Court of Appeal upheld a tiered CEQA review for a 469-lot subdivision based on a program-level EIR prepared for a Specific Plan. About a week later, the Fourth Appellate District upheld San Diego’s approval of a 20-story residential tower, relying heavily on the protections afforded to mixed-income residential projects under the DBL. We discuss each below.

In Newark, the City approved a specific plan in 2010 for up to 1,260 units, as well as a golf course and related facilities, relying on an EIR. The EIR specifically noted that Newark would proceed under CEQA Guidelines Section 15168 for specific development proposals and “tier” off of the EIR to the extent applicable. In 2019, the applicants submitted a subdivision map proposing 469 residential lots, but no golf course. Other changes from the development analyzed in the EIR included filling and elevating only certain areas on the site (the project site is located next to the San Francisco Bay) and locating the filled and elevated areas directly next to wetlands, with riprap along the western banks. The City prepared an exemption checklist comparing the EIR to the subdivision’s impacts and conducted background technical studies, including an updated sea level rise analysis. The checklist found that the subdivision would be consistent with the specific plan, and that there were no changed circumstances or new information that might trigger the need for more CEQA review than what was done for the EIR. It was a classic example of CEQA “tiering.”

The Court of Appeal upheld the City’s use of the checklist. First, it rejected an argument that the project changes made tiering inappropriate. The Court helpfully pointed out that changes in and of themselves do not eliminate the ability to tier off an EIR; instead, the environmental consequences resulting from those changes must be new, greater, or substantially different than what was analyzed in the EIR. Here, they were not. The Court also rejected the appellant’s claim that the amount and rate of sea level rise was different enough to require a new EIR, finding that the EIR’s unambiguous finding of a significant impact due to sea level rise was adequate, as was some language in the EIR noting that the rate of sea level rise was uncertain and might be accelerating.

Finally, the Court determined that adaptive management plans for sea level rise do not improperly defer consideration of mitigation measures. Taking a refreshingly common-sense approach to climate change and CEQA, the Court would not fault Newark for acknowledging in the EIR that adaptive management would be required. “The City’s potential responses to environmental conditions between 50 and 80 years from now cannot be considered part of the project,” it concluded. “Because the City currently can only dimly guess what measures will be needed to respond to conditions several generations from now, the City was not required to analyze the impacts of the adaptive pathways” as part of the project.

The Court of Appeal’s opinion in San Diego generated more buzz, particularly among the pro-housing groups that have done yeoman’s work in recent years to strengthen California’s housing protections. The case was originally not certified for publication, in part because San Diego’s City Attorney was reluctant to have a published case that so clearly spelled out the limits of the City’s discretion to deny or downsize density bonus projects. Nevertheless, after receiving petitions to publish it, the Court did. It is helpful in several ways, reaffirming the City’s evidentiary burden to deny waivers or concessions; harmonizing General Plan consistency findings with the DBL; and applying the conclusion the First District Court of Appeal reached in Wollmer v. City of Berkeley that a density bonus project can be approved with residential amenities such as a courtyard.

The Project—a 20-story, 204-unit mixed use tower at 6^th Avenue and Olive Street across from Balboa Park—faced pushback from neighbors, at least some of whom the Court implied would lose their view of the park. Somewhat surprisingly, instead of arguing that the project would have an unmitigable health and safety impact on the adjacent park, the neighbors argued administratively, at the trial court, and at the Court of Appeal that the project should be denied because it did not comply with several General Plan and Community Plan guidelines that call for contextual development and massing moderation of tall towers. They also argued that the City should not approve waivers that contradicted the guidelines, and that the City should have approved a shorter and squatter development that had the same number of units but a smaller courtyard.

The Court began its analysis by noting that the neighbors had “sidestepped” the implications of the DBL, not discussing it at all in its opening brief and then dismissively claiming the DBL is not a “free pass.” The Court identified the narrow grounds by which a City can shrink or deny a DBL project and pointed out that the neighbors simply failed to make any arguments about that point.

It then went on to explain that the developer specifically requested concessions under the DBL that were germane to each of the General Plan and Community Plan guidelines the neighbors claimed the project did not comply with. The City Council expressly made a finding that there was no evidence to support the denial of the requested incentive, which the Court found to be determinative—acknowledging that the burden on this issue has now shifted to cities if they attempt to deny a project, not the developer proposing an incentive. It also concluded that the project’s waivers were correctly layered on top of the project with requested concessions, meaning a project qualifies for waivers based on its form with both the density bonus and the concessions.

The Court finally rejected the neighbors’ claim that the project’s design was not dictated by the density bonus and concessions, but by a large courtyard. It pointed out that this precise argument was raised and rejected in the Wollmer v. City of Berkeley case from 2011, one of the first cases analyzing the modern DBL. The San Diego City Council could not demand the developer remove the courtyard or redesign its building to satisfy the neighbors’ subjective concerns. The Court stated: “a city cannot apply a development standard that would physically preclude construction of the project as designed, even if the building includes ‘amenities’ beyond the bare minimum of building components.” It remains to be seen what qualifies as an “amenity” that can be baked into a project other than a courtyard, as both Wollmer and the San Diego case related to open space and courtyard amenities. And the evidentiary burden and procedural posture here were also the same as Wollmer: a city defending a project approval with amenities instead of making a project shorter or smaller by eliminating them. This issue may be ripe for further litigation.

The Newark case—Citizens Committee to Complete the Refuge v. City of Newark et al. (2022) ___ Cal.App. ___ (A162045, Alameda County Superior Court No. RG19046938)—and the San Diego case—Bankers Hill 150 et al v. City of San Diego et al (2022) ___ Cal.App. ___ (D077963, Super. Ct. No. 37-2019- 00020725-CU-WM-CTL)—are reminders that well-crafted CEQA documents, entitlement applications, and approval motions can help ensure new state laws meant to protect and streamline housing projects are accurately applied to a project.

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