Oakland: Housing Approved & Zoning Updates

| Justin A. Zucker
Zoning

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 10th and 20th Streets and from 14th Street between Castro Street to Lake Merritt Boulevard; and
  • Koreatown/Northgate – area surrounding Telegraph Avenue along 23rd, 24th, 25th, 26th, 27th and 28th

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.

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 Expands CUA Appeal Rights to Tenants

| Reuben, Junius & Rose, LLP
Appeal

On Tuesday June 14th, 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 14th 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.

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 Carlos Enacts Northeast Area Development Moratorium

| Matthew Visick
moratorium

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

On April 25th, 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., 4/5ths) 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 25th 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 11th to gather stakeholder input and that input will be shared with the Council.

Planning Department staff emphasized at the April 25th 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.

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.

To Fourplex or Not to Fourplex

| Thomas P. Tunny
fourplex

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.

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.

Density Bonus Law & CEQA Tiering Upheld

| Mark Loper
DBL

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 6th 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.

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

Planning Commission Considering EV Charging Regulations

| Chloe Angelis
EV

This Thursday, the San Francisco Planning Commission will consider an ordinance that would amend the Planning Code to address electric vehicle (“EV”) charging uses. The Planning Code does not contemplate EV charging currently—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.

As summarized in the Planning Commission Staff Report, 2022-000549PCA (“Staff Report”), for the legislation, the City’s climate action targets include the following transportation goals:

  • By 2030, 80% of trips taken by low-carbon modes such as walking, biking, transit, and shared EVs.
  • By 2030, increase vehicle electrification to at least 25% of all registered private vehicles, and, by 2040, to 100% of all such vehicles.

The International Council on Clean Transportation (ICCT) predicts that in order to serve the 170,000 light duty EVs predicted to be registered in San Francisco by 2030, “the number of publicly accessible charging stations in San Francisco needs to increase from about 800 in 2019 to 2,000 by 2025, and over 5,000 by 2030.” (See Staff Report.) The proposed ordinance aims to create a regulatory framework to guide the slew of EV charging projects that the City expects to see over the next several years in response to that demand.

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

For reference, the proposed amended definition of an Automotive Use would read as follows:

A Commercial Use category that includes Automotive Repair, Ambulance Services, Automobile Sale or Rental, Automotive Service Station, Automotive Wash, Electric Vehicle Charging Location, Fleet Charging, Gas Station, Parcel Delivery Service, Private Parking Garage, Private Parking Lot, Public Parking Garage, Public Parking Lot, Vehicle Storage Garage, Vehicle Storage Lot, and Motor Vehicle Tow Service. All Automotive Uses that have Vehicular Use Areas defined in this Section of the Code shall meet the screening requirements for vehicular use areas in Section 142.

If the legislation is enacted as drafted, Fleet Charging uses would require Conditional Use Authorization in most zoning districts except for in PDR-1-D, PDR-1-G, and PDR-2 districts. Fleet Charging would be prohibited in the Neighborhood Commercial Districts. Electric Vehicle Charging Locations would be more widely permitted, and would be principally permitted in most districts where the existing use is already some type of Automotive Use. Such conversions from an existing Automotive Use to an Electric Vehicle Charging Location would also be exempt from the Section 311 building permit review and noticing requirements—meaning those projects would not be subject to the City’s often costly and time-consuming discretionary review process.

While most Fleet Charging projects will require Conditional Use approval under the new rules, the legislation does allow some limited Fleet Charging as an accessory use to public charging, with Fleet Charging limited to a maximum of 1/3 of the total charging stations.

Planning Staff has recommended the following two changes to the legislation:

  1. Require Conditional Use Authorization in all C-3 Districts for Electric Vehicle Charging Locations and change the code to make Gas Stations a Conditional Use in the two C-3 districts where they are currently principally permitted.
  2. Exempt the conversion of existing automotive uses to EV Charging from Section 142 Screening requirements.

After the Planning Commission hears the legislation on Thursday, it will then go to the Land Use and Transportation Committee before being heard by the full Board of Supervisors. You can track the ordinance’s progress here.

 

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

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

Planning Commission Considers Changes to Group Housing

| Melinda Sarjapur
Group Housing

On February 10th, the San Francisco Planning Commission voted unanimously to recommend its approval (with modifications) of two proposed ordinances that could bring big changes for Group Housing citywide.

In mid-December 2021, Supervisor Peskin introduced two ordinances at the Board of Supervisors.  The first (Board File No. 211299, “Planning Code – Group Housing Definition”), which is co-sponsored by Supervisors Walton and Mandelman, proposes to amend the definition of Group Housing under the San Francisco Planning Code (the “Planning Code”).

Under the current Zoning provision of the Planning Code (and pursuant to a previous Zoning Administrator interpretation), Group Housing rooms can include a limited cooking facility, which is defined as having a small counter space, a small under-counter refrigerator, a small sink, a microwave, and a two-ring burner.  Further, Group Housing rooms must be rented out for a minimum of seven days, and Group Housing developments do not have minimum square footage requirements for building common spaces and amenities.  On-site below-market-rate/inclusionary Group Housing rooms can be offered as either rental or ownership tenure.

However, Supervisor Peskin’s legislation proposes the following changes to the Group Housing definition:

  • Individual and limited cooking facilities would no longer be allowed in Group Housing rooms.
  • Group Housing rooms would need to be rented out for at least 30 days, rather than 7.
  • Group Housing would require at least 0.25 square feet of common space for every square foot of private space (including bedrooms and individual bathrooms). At least half of the required common space would need to be devoted to a communal kitchen, with one kitchen for every 20 Group Housing rooms. Student housing and 100% affordable housing would have an exception to this requirement.
  • On-site inclusionary Group Housing rooms would no longer be permitted as ownership units.

The second ordinance (Board File No. 211300, “Planning Code, Zoning Map – Group Housing Special Use District”), proposes to create a new Group Housing Special Use District, generally covering the Chinatown and Tenderloin neighborhoods, within which new Group Housing rooms would be prohibited.

After three hours of hearing and deliberations, the Planning Commission voted unanimously to recommend approval of both ordinances to the Board of Supervisors, with the following proposed modifications:

To the Group Housing Definition Legislation:

  • Increase the common space requirement for Group Housing to 0.5 square feet of common space for every square foot of private space (instead of the proposed 0.25 sf);
  • Require at least 1 kitchen within 15% of the common space (instead of the proposed 50%);
  • Revise the minimum number of kitchens to be at least 1 communal kitchen for every 15 Group Housing rooms (instead of the proposed 20);
  • In addition to Student Housing and 100% Affordable Housing, also exempt units protected under Section 41.3 of the Hotel Conversion Ordinance from common space requirements;
  • Exempt organizations such as Family House from the common space requirements;
  • Allow academic institutions to provide limited cooking facilities in Group Housing rooms;
  • Define the metrics for communal kitchen requirements;
  • Exclude the single-room occupancy (“SRO”) aspect from this specific legislation with the intent to continue discussions on SRO controls in the future; and
  • For the Planning Department to consider establishing a Working Group to further discuss Group Housing intent, best practices, and future legislation.

To the Group Housing SUD Legislation:

  • Revise the proposed SUD to exempt Student Housing and 100% Affordable Housing projects; and
  • Exclude the SRO aspect from this specific legislation with the intent to continue discussions in the future.

It remains to be seen which, if any, of the Commission’s proposed modifications will be incorporated into these ordinances, which will come before the Board’s Land Use and Transportation Committee at an unknown future date.

 

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.

San Francisco’s New Large Residence Legislation Unveiled

| Kaitlin Sheber
Large Residence

This past Monday, the Land Use and Transportation Committee unanimously voted to recommend a new scaled-back version of Supervisor Mandelman’s proposed Large Residence Legislation (the “Legislation”) that could greatly affect a large number of homeowners in central San Francisco neighborhoods. As we reported in prior updates on October 4th, July 29th, and March 31st of last year, the original form of the controversial legislation was introduced to discourage a growing trend of large homes. However, after the Planning Commission disapproved the original form of the legislation, a new version has been introduced with significant changes:

Central Neighborhood SUD:

  • The proposed new Legislation creates a Central Neighborhoods Special Use District (“Central Neighborhoods SUD”) which includes the Duboce Park, Castro, Noe Valley, and Diamond Heights neighborhoods. The Legislation only affects dwelling units on lots zoned RH and within the Central Neighborhoods. The Legislation does not affect units within the Corona Heights Large Residence Special Use District.

Prohibited Dwelling Units:

  • The Legislation would prohibit residential development or expansion that would result in a dwelling unit with over 4,000 square feet of Gross Floor Area (“GFA”). Under the Legislation, accessory parking counts towards the GFA of a dwelling unit. Construction of a home over 4,000 square feet where the Legislation applies would require a variance.

Dwelling Units that require Conditional Use Authorization:

  • The Legislation would require Conditional Use Authorization where residential development or expansion of residential buildings would result in a dwelling unit with either a GFA with over a 1:1.2 Floor Area Ratio or over 3,000 square feet of GFA.
  • In granting Conditional Use Authorization, the Planning Commission must consider the following new criteria:
    • The proposed project in context with its neighborhood
    • Whether rental units are removed
    • Whether the number of dwelling units are increased
    • The size of a dwelling unit compared with the largest dwelling unit in a building
    • The property’s historic preservation status

Exceptions:

  • The new Legislation does not apply to expansions that result in less than a 15% increase in GFA.
  • The Legislation would apply to development applications submitted on or after January 1, 2022, and does not affect expansions where building permits were issued before January 1, 2022

As noted above, the Legislation was unanimously recommended to the full board on February 14, 2022. Notably, during the hearing, Supervisor Mandelman discussed the potential for expansion of the Central Neighborhoods SUD in the future. Public comment was generally supportive of the Legislation, and the Planning Commission waived its option to hear the Legislation again. The Legislation will next be heard at a Board of Supervisors Full Board meeting, but no date has been set yet.

 

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.

Oakland ADU Updates: Legalization Amnesty Program

| Justin A. Zucker
Amnesty

As I previously reported, Oakland is in the process of updating its Planning Code regulations pertaining to accessory dwelling units (“ADUs”). On December 21, 2021, the Oakland City Council heard and passed on first reading legislation amending Oakland’s ADU controls (the, “Legislation”). The proposed amendments encourage ADU production by reducing barriers through the adoption of streamlined approval processes consistent with State law. One of the proposed programs by the Legislation is an amnesty program to legalize unpermitted ADUs established and occupied in Oakland prior to January 1, 2021.

The amnesty program consists of two elements that encourage the legalization of existing eligible unpermitted ADUs. First, a property owner may request a waiver from provisions of zoning or development standards, e.g., setbacks, that would preclude the preservation of an eligible unpermitted ADU.

Second, a property owner may request a five year delay in enforcement of Building Code requirements if the unpermitted ADU was built prior to the effective date of the Legislation. The ability to request a five year enforcement delay is available until January 1, 2030. Property owners would be allowed to bring their existing, eligible, unpermitted ADU into compliance with current Building Code standards without incurring any enforcement penalties or fines. This amnesty would last up to five years from the date the enforcement delay is granted, meaning the latest the five-year enforcement delay can be in effect for a specific ADU is December 31, 2034. Amnesty  does not apply to structures that pose an immediate risk to public health and safety.

In addition to creating an amnesty program for legalizing existing unpermitted ADUs, the Legislation makes several changes to the existing ADU development controls, including:

  • Category Three ADU. The Legislation establishes a new attached ADU category that may combine both converted space within an existing envelope of a multifamily building and a newly built addition to a building footprint.
  • Height Increase. Exceeding State law, the Legislation allows two-story ADUs up to a maximum height of 20 feet, as compared to 16 feet, if an ADU complies with the minimum four-foot side and rear setbacks required for detached ADUs.
  • Envelope Expansion. The Legislation permits additional envelope expansion as part of the conversion or replacement of an existing accessory structure on a small lot to allow construction of one internal conversion ADU. The ADU must have a total structural footprint no greater than 800 square feet, with the height of the addition no more than 16 feet. A “small lot” is defined as those no greater than 3,000 square feet or no greater than 35 feet in lot width mean.
  • Trees. The Legislation calls for project sponsors to plant one new tree on the subject lot or within the public right of way fronting the subject lot per every 500 square feet of detached ADU floor area.
  • ADUs in Front Setback. Consistent with State law, the Legislation permits one ADU of a minimum size of 800 square feet, up to 16 feet in height, in the front setback if the lot’s configuration precludes creation of the ADU anywhere else on the lot.
  • Multifamily Internal Conversion ADUs. The Legislation clarifies that multifamily properties are permitted one internal conversion ADU or up to a number equal to 25% of the existing units per multifamily building (not per lot). This clarification addresses situations where more than one multifamily building is located on a single lot. In which case, each multifamily building on the lot would be allowed to add internal conversion ADUs up to a number equal to 25% of existing units.

The Legislation is scheduled to return to the Oakland City Council for the second and final hearing for passage. Having been unanimously passed at the December 2021 Council meeting, it is anticipated that the Legislation will be finally passed by the Council next week. We will continue to monitor the Legislation and keep readers updated.

 

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.

Building Department and ADU Update

| Gillian Allen
ADU

The Code Advisory Committee of the San Francisco Department of Building Inspection (“Building Department”) held a discussion with the public and with Building Department officials on December 8, 2021 to discuss concerns about the impact of suspending Information Sheet EG-02, which allowed a local equivalency for Emergency Escape and Rescue Openings (EEROs), opening into a yard with a minimum 25-foot depth. While the conversation did not result in an immediate solution, and the Building Department is unable to reinstate the equivalency because it is in direct violation of the building and fire codes, the Building Department stated their priority is to keep working with projects to try and find an alternate design. A recommendation was made that the Building Department work to create a task force to address this issue.

Ordinance 208-21: Additional Required Noticing for ADUs Now In Effect

On December 12, 2021, Ordinance No. 208-21, amending the Planning Code to clarify the requirements for applications to construct Accessory Dwelling Units (“ADU”) under the City’s local Accessory Dwelling Unit approval process, went into effect.

This Ordinance is intended, in part, to clarify the existing rules in the Rent Ordinance as to housing services. The term housing services refers to services provided by the landlord connected with the use or occupancy of a rental unit, including, but not limited to, access to areas such as garages, driveways, storage spaces, laundry rooms, decks, patios, gardens on the same lot, and kitchen facilities or lobbies in single room occupancy (SRO) hotels. This Ordinance clarifies that landlords may not sever, remove, or reduce housing services without just Notification.

Prior to submitting an ADU application, an owner must file a declaration with the Rent Board demonstrating the project will comply with the requirements of the Rent Control & Eviction Ordinance.

The declaration is to include: (1) a description of housing services supplied in connection with the use or occupancy of any units on the property that are located in the area of the property or building where the ADU would be constructed; (2) whether construction of the ADU would result in the severance, substantial reduction, or removal of any such housing services; and (3) whether any just causes for eviction would apply.

An owner must also mail or deliver notice to each unit (including unauthorized units) at the subject property at least 15 calendar days prior to submitting the application. The property owner shall submit proof of these notices to the Planning Department as part of the application to construct an ADU. These notices shall have a format and content determined by the Zoning Administrator, and shall generally describe the project, including the number and location of the proposed ADU(s), and shall include a copy of the written declaration required.

Tenants may contest the information in the declaration by petition to the Rent Board within 30 days after notice. The Rent Board will make determination and send to Planning within 90 days of receipt of petition.

 

Authored by Reuben, Junius & Rose, LLP Manager, Post Entitlement Division Gillian Allen.

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.