Eliminating Single Family Zoning is OK, but Don’t Eliminate Parking

| Matthew Visick
Bill

SB 9 Makes it Through the Assembly but AB 1401 Dies in the Senate

Two bills that would limit local control over housing issues met very different fates this past Thursday in the California Legislature.  Both were vehemently opposed by cities and groups that favor local control over land use decision making.  One was opposed by housing equity groups.

Senate Bill 9

Senate Bill 9 (“SB 9”) would, among other things, require a city or county to ministerially approve (1) a two-unit housing project in a single-family zone, (2) the subdivision of a parcel zoned for residential use into two parcels, or (3) both.

SB 9 could unlock substantial housing production in single-family neighborhoods, where opposition to multi-family housing projects is typically greatest.  Many of the lots in these districts include only a single-family home and maybe an Accessory Dwelling Unit (which cannot be separately sold).  SB 9 would allow each existing single-family lot to be ministerially subdivided into two lots, and require ministerial approval of a duplex on each of the lots.

According to the Terner Center for Housing Innovation at UC Berkeley, SB 9 has the potential to allow for the development of nearly 6 million new housing units statewide.

Assembly Bill 1401

Assembly Bill 1401 (“AB 1401”) would limit minimum off-street parking requirements for projects located near a “major transit stop” (generally a train station or bus station with high frequency headways).

AB 1401 is hardly radical legislation.  When first introduced by Assembly Member Friedman in February 2021, the bill prohibited public entities (cities and counties) from imposing or enforcing minimum parking requirements on residential, commercial, or other development that is located within one-half mile walking distance of a “major transit stop” (generally a rail stop or a bus stop with frequent headways).  As last amended on July 5, 2021, the bill eased the prohibition for smaller cities.  A city with a population of 75,000 or more that is located in a county with a population of less than 600,000 was only prohibited from imposing the parking minimums on projects located within one-quarter mile of a major transit stop, and a city with a population of less than 75,000 was not subject to any prohibition.

Studies show that eliminating minimum parking requirements for projects located near transit routes supports the state’s housing goals by reducing the cost to deliver housing and allowing more dwelling units on a development site.  Eliminating parking requirements near transit also advances the state’s environmental goals by reducing emissions from cars.

Wait, the Parking Bill is the One That Died?

Both SB 9 and AB 1401 sailed through their respective policy committees in both the Assembly and the Senate with large vote margins in support.  Both were vehemently opposed throughout by local governments and groups that advocate for “local control” over land use decision making.  Yet AB 1401 was referred to the “suspense file” in the Appropriations Committee, where ambitious legislation often goes to die, while SB 9 was not.

It is hard to know exactly why bills are referred to the “suspense file.”  The “suspense file” is intended to be a place to evaluate whether to advance a bill that could have a significant fiscal impact.  But committee analyses of both SB 9 and AB 1401 show that both bills were anticipated to have the same annual impact on the budget (SB 9: $89,000 and AB 1401: $97,000).

A more plausible explanation emerges when one considers the groups opposed to the changes the bills would bring.  It is not surprising that numerous suburban cities and local government groups opposed both bills (SB 9 faced even greater opposition from these groups than AB 1401).  However, the opposition to AB 1401 was more diverse.  Affordable housing advocates argued that eliminating parking minimums for market rate development would reduce incentives for developers to create the affordable dwelling units required to reduce parking requirements using the Density Bonus Law.  In addition, environmental groups objected to the reduction of parking near transit as inconsistent with equity goals.

Decline in Value Real Estate Tax Appeals Due September 15

The deadline to appeal the valuation of property for real estate tax purposes is September 15 for both San Francisco and Alameda Counties.  Such an appeal would be appropriate due to a decline in property value because of the impact of Covid-19 and the related business shutdowns.  If you need more information, please contact Kevin Rose at krose@reubenlaw.com (415.567.9000).  Other counties may have different deadlines, so you should check with your local County appeals board to confirm the deadlines.

 

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.

Legislation Seeks Water Conservation in New Buildings

| Justin A. Zucker
non-potable

To conserve water in the midst of another extreme drought, Supervisors Rafael Mandelman (District 8), Gordon Mar (District 4), and Myrna Melgar (District 7) proposed legislation (“Legislation”) to strengthen the 2012 Non-potable Water Ordinance (Article 12C of the San Francisco Health Code). The Legislation’s goal is to preserve the City’s water supply by requiring the use of non-potable water, which is water not suitable for drinking, for other productive uses such as toilet flushing, irrigation, decorative fountains, dust control and cooling applications. Across the nation, non-potable water is used to reduce pressure on natural water resources, and the use of onsite non-potable water may also reduce flows into the sewer, reducing strain on the City’s sewer system.

Effective since 2015, most new projects of 40,000 square feet or more are required to utilize the San Francisco Public Utilities Commission’s (“SFPUC”) Water Budget Calculator to assess the available supply of onsite alternate water sources and determine the demand for toilet and urinal flushing and irrigation. Large new projects of 250,000 square feet or more of gross floor area are required to construct, operate, and maintain an onsite non-potable water system to treat and reuse the identified available sources of rainwater, graywater, and foundation drainage to meet the planned demand for non-potable water uses.

In the Legislation introduced on June 29, 2021, the threshold for new projects that must construct, operate, and maintain an onsite non-potable system to treat and reuse available sources of water is reduced to 100,000 gross square feet for projects receiving a site permit after January 1, 2022. The systems required and sources of water to be used are also expanded and will be determined based on building type. For commercial buildings, most available sources, such as rainwater, graywater, blackwater, and foundation drainage, must be used if needed to satisfy as much toilet and urinal flushing and irrigation as possible. For systems providing water to residential and mixed-use projects, available sources of rainwater, greywater, and foundation drainage must be used for toilets, irrigation, and other end uses like clothes washing.

In analyzing the Legislation’s impact on pipeline projects, SFPUC staff determined that the lower threshold would result in a 20,000 gallons per day of potable water savings. This represents just 2% of the total savings anticipated by the Legislation. However, the cost burdens are not linear. For example, the SFPUC’s analysis found that the cost of a graywater system would only be 15% less for a 100,000 square foot building than a 250,000 square foot building. The SFPUC found that there is not sufficient data at this time to say conclusively whether the Legislation would be a net benefit or cost to smaller buildings. Additional cost-benefit analysis by SFPUC staff is expect before the next hearing.

Appreciating the costs for installation of onsite water reuse systems, the SFPUC has in place an Onsite Water Reuse Grant Program to encourage water users to voluntarily reduce SFPUC water supply usage through use of alternate water sources for non-potable application. To incentivize building owners to install alternate water source systems, SFPUC recently lowered the threshold of eligibility for the grant program.

The Legislation has been continued to the call of the Board of Supervisors’ chair and no hearing date has been set for consideration by the Board of Supervisors Public Safety and Neighborhood Services Committee. We will continue to monitor 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.

San Francisco Shared Spaces Program Permanent

| Sabrina Eshaghi
shared spaces

Mayor London Breed recently signed legislation that will make the Shared Spaces Program a permanent feature in San Francisco. The temporary Shared Spaces Program allowed more flexible use of sidewalks, streets, and other public spaces for neighborhood businesses and was implemented through a mayoral proclamation tied to the declaration of a state of emergency due to COVID-19. According to the Mayor’s Office, more than 2,100 curbside and sidewalk Shared Spaces permits have been issued by the City since June 2020. Given the success of the program, the Mayor proposed legislation to make the program permanent in March of this year. Due to the number of City agencies involved and the complex issues this legislation raises, it took months of debate and countless amendments to ultimately gain unanimous approval by the Board of Supervisors and the Mayor’s signature.

The permanent legislation will continue to allow the same types of shared spaces that have been permitted under the temporary program, including on sidewalks, curbside lanes, and roadways, but with an updated approval process and a new set of operating requirements that are meant to address some concerns with the existing program. The permits will be available for commercial and noncommercial activities, including retail uses, cultural events, arts activities, general recreation, and entertainment uses. Generally, the permits will allow the temporary and reversible installation of physical improvements.

Approval Process

All permits will be routed through the Planning Department to the appropriate agency with authority to approve the permit. Depending on the type of permit and the specific uses proposed, the agencies with jurisdiction over the permit will include the Department of Public Works, Interdepartmental Staff Committee on Traffic and Transportation (ISCOTT), Municipal Transportation Agency Board of Directors (SFMTA Board of Directors), Entertainment Commission, and/or Real Estate Division. Additional coordination or approval by other agencies may also be required. According to the Mayor’s Office, the City will require streamlined approval of the permits within 30 days of submittal of the application, in alignment with the requirements of Proposition H, which was passed by the voters in November 2020 (discussed in a previous update). The curbside and sidewalk permits will be effective for up to one year and can be renewed annually. Roadway permits will have a maximum initial term of two years and can be renewed for up to two years at a time. Any person can appeal the decision to approve or deny a Shared Spaces permit.

The permits will generally be subject to fees, except small businesses may be eligible for reduced fees in certain circumstances.

Conversion of Existing Permits

Given the significant number of existing Shared Spaces permits, the legislation allows existing Shared Spaces to continue operating based on the terms of the specific permit. Prior to the expiration of the existing permit, the permittee can apply to convert to a new Shared Spaces permit based on the requirements of the legislation.

Existing permitholders that apply for new curbside permits will be eligible for fee waivers and deferrals. However, the fee waiver and deferral will not apply to formula retail uses.

Enforcement

The 311 system will be utilized to receive complaints, route them to the appropriate agency, and provide complainants updates on the status of the complaint including how the issue was abated or why the complaint was closed. In addition, at least every other month, the City will be required to conduct rolling audits of Shared Spaces in commercial corridors to confirm compliance and take any necessary enforcement actions.

Accessibility

Accessibility was a major topic of discussion during the legislative process. Ultimately, the legislation requires each agency to provide regulations that account for disability and access needs. In addition, sidewalk permits will generally be required to provide an 8-foot wide unimpeded path of travel.

In terms of public accessibility, the legislation limits the number of restricted access events to eight single-day events per year. Parklets in curbside lanes or any other permit that exclusively allows private dining will be required to provide one public bench or another type of seating arrangement that will be accessible to non-patrons for every 20 feet of Shared Space. Although there was some discussion about leaving the parklets open after business hours, the final legislation allows permittees to secure curbside Shared Spaces from midnight to 7am.

Outreach and Notice Requirements

As part of the initial application, the legislation requires documentation of community outreach and support as well as documentation showing that all property owners of any building fronting a proposed sidewalk or curbside Shared Space have been notified of the application. The legislation also mandates a public notice and comment period following submittal of applications for sidewalk and curbside permits.

Annual Reporting

The Board of Supervisors included requirements for a number of annual reports regarding various issues related to the Shared Spaces Program, including:

  • Revocations of permits in order to comply with the City’s Vision Zero, Better Streets, and Transit First Policies, including for purposes of restoring transit lines, to maintain safe access to public rights of way for seniors and people with disabilities, and to facilitate pedestrian safety;
  • Opportunity sites for sidewalk extensions on blocks with many sidewalk or curbside Shared Spaces and commercial or mixed-use corridors with narrow sidewalks;
  • Impacts on small businesses without Shared Spaces permits, including businesses that rely on consumer vehicle loading and unloading, and recommendations for how to mitigate any negative impact of the Shared Spaces Program on those businesses; and
  • Impacts on street cleaning operations and recommendations for how to accommodate any decrease in such services.

We may continue to see the Shared Spaces Program evolve based on the recommendations and findings of these reports.

 

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

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

Planning Commission Considers Two New Pieces of Legislation

| Thomas P. Tunny
SUD

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

Life Science and Medical and IPZ Special Use Districts

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

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

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

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

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

Large Residence Legislation

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

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

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

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

 

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

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

SB 7 Renews Expedited CEQA Review for Leadership Projects

| Kaitlin Sheber
SB 7

Titled the “Jobs and Economic Improvement Through Environmental Leadership Act of 2021,” SB 7 reenacts and revises expedited CEQA administrative and judicial review procedures for certain Environmental Leadership Development Projects (“Leadership Projects”) established by AB 900. The bill was introduced by Senator Atkins as an urgency measure and went into effect on May 20, 2021. Since enactment, large projects are again eligible to be certified as Leadership Projects, and a new category of smaller housing projects may now be certified. Requirements for each type of project are discussed below.

Examples of projects certified by the Governor as Leadership Projects in the past include the Apple Campus 2 project in Cupertino, the Golden State Warriors Event Center and Mixed-Use Development project in San Francisco, the Downtown West Mixed-Use Plan in San Jose, the Potrero Power Station project in San Francisco, and the Hollywood Center project in Los Angeles. Once the Governor certifies a project, it must be approved by its lead agency within a certain period of time.

By requiring CEQA challenges to Leadership Projects to be resolved in under a year, SB 7 aims to expedite construction for housing projects and boost high-wage employment with the prevailing wage requirements that are a prerequisite for receiving the benefits of SB 7. However, given the increased costs prevailing wage requirements add to projects, developers of smaller housing projects that are unlikely to be challenged in court may not find Leadership Project certification economical. How many smaller residential projects choose to opt in to the program is yet to be seen.

Environmental Leadership Development Projects:

Only certain development projects qualify to be certified as Leadership Projects. These projects include:

  • Large residential, commercial, retail, sports, entertainment, cultural, or recreational use projects that:
    • Result in at least $100,000,000 in investment
    • Create high-wage and highly skilled jobs that pay prevailing and living wages, provide construction jobs and permanent jobs for Californians, help reduce unemployment, and promote apprenticeship training
    • Are 15% more transportation efficient than comparable projects, i.e. that generate fewer vehicle trips per employee, visitor, or customer
    • Are located on an infill site
    • Are consistent with any local sustainable communities strategy or alternative planning strategy and applicable policies where the California Air Resources Board has accepted the strategy achieves Greenhouse Gas reduction targets
    • Meet other environmental standards, including no net new greenhouse gas emissions with an emphasis on on-site emission reductions
    • Provide unbundled parking for multifamily residential projects
  • Housing development projects that:
    • Would result in an investment between $15,000,000 and $100,000,000
    • Create high-wage and highly skilled jobs that pay prevailing and living wages, provide construction jobs and permanent jobs for Californians, help reduce unemployment, and promote apprenticeship training
    • Are located on an infill site
    • Are consistent with any local sustainable communities strategy or alternative planning strategy and applicable policies where the California Air Resources Board has accepted the strategy achieves greenhouse gas reduction targets
    • Meet other environmental standards, including no net increase in greenhouse gas emissions
    • Dedicate at least 15% of the project to lower income households or dedicate the percentage required by local government, whichever is higher
    • Do not provide short term rentals
    • Do not include industrial or manufacturing uses
    • Dedicate at least 2/3 of the square footage to residential use
    • Provide unbundled parking for multifamily residential projects
  • Renewable clean energy projects that generate electricity through wind or solar only

Qualifying projects must go through a certification process to become Leadership Projects. First, the Governor must determine the project meets each condition as required above. Second, the Governor must submit that determination to the Joint Legislative Budget Committee, along with any supporting information, for review and concurrence or nonconcurrence within 30 days. If there is no concurrence or nonconcurrence from the Joint Legislative Budget Committee within those 30 days, the project will be deemed certified. Typically, the entire process takes 3 to 6 months.

Extension of time and new requirements:

The following timelines are in effect under SB 7:

  • Leadership Projects must be certified by the Governor before January 1, 2024.
  • Leadership Projects must be approved by the lead agency before January 1, 2025.
  • The provisions of the bill will expire January 1, 2026.

Projects certified by the Governor before January 1, 2020 and approved by a lead agency before January 1, 2022 are subject to the former AB 900 requirements in place on January 1, 2020.

SB 7 has added requirements that eligible projects use a “skilled and trained” workforce for all construction work and project applicants pay all trial court costs in addition to court of appeal costs associated with hearing and deciding any case. The bill has also authorized the Governor’s Office of Planning and Research (“OPR”) to charge a fee to applicants. Given the additional requirements SB 7 has introduced for Leadership Project certification, it is unclear how feasible or desirable it will be for development projects, especially smaller housing development projects, to obtain Leadership Project certification going forward.

 

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.

San Francisco Housing Element Update

| Jody Knight
Housing Element

While the Bay Area works to recover from the impacts of COVID-19 on retail and hospitality, and digital nomads slowly return to the office, the pandemic has done nothing to slow escalating home prices. The California Association of Realtors reported this week that the Bay Area’s median single-family home price exceeded $1.3 million in April, with a median price of $1.8 million in San Francisco. The City saw an increase of 5.9% from last year and 2.6% from March.

As single-family homes become increasingly out of reach for many families, the City also continues to experience a shortfall in all housing types, resulting in ongoing debate about uneven development throughout the City and the introduction of legislation at the State and local level that takes aim at single-family zoning.

On March 18, 2021, Reuben, Junius and Rose’s Tuija Catalano updated you about the upcoming RHNA (Regional Housing Needs Assessment) cycle. The update explained how the draft allocation would significantly increase the identified need for housing units in the Bay Area compared with the last RHNA cycle. Under the draft, San Francisco would see an increase from 28,869 to 82,069 units.

San Francisco has begun the process of planning for those housing units. The City’s Housing Element 2022 Update began in May 2020. The Housing Element is a component of the General Plan that is updated every eight years.

The current update focuses on social and racial equity, while it looks at how to accommodate the creation of 82,000 housing units by 2031. The plan focuses on building in State identified High Opportunity Areas, which are mainly in the western part of the City. The Planning Department has a page dedicated to the process which provides information and allows for public input.

The first draft of the Goals, Policies and Actions of the Housing Element have been identified as follows:

  • recognize the right to housing as a foundation for health and social and economic stability;
  • repair the harms of historic racial, ethnic, and social discrimination for American Indian, Black, and other People of Color;
  • foster racially and socially inclusive neighborhoods through distinct community strategies;
  • increase housing production to improve affordability for the City’s current and future residents;
  • increase housing choices for the City’s diverse cultural lifestyles, abilities, family structures, and income; and
  • promote neighborhoods that are well-connected, healthy, and rich with community culture.

On April 22, 2021, the Planning Commission conducted an informational hearing on the Draft Housing Element. Planning Staff will be engaging in outreach to further refine the policies in the plan, with a second draft anticipated by Fall 2021. The Draft Environment Impact Report is anticipated in early 2022.

At the April 22, 2021 hearing, the Planning Commission also heard the 2020 Housing Inventory and Housing Balance Reports. The City saw a 1% increase in housing stock in 2020, with most new development in SoMa, the Mission and Downtown. While 2020 was a difficult year for development because of the pandemic, the Reports illustrate how far the City has to go to meet its RHNA target, particularly on housing affordable to lower income residents.

Given the already contentious environment surrounding housing equity and the geographic distribution of new units in the City, we expect this Housing Element update to generate significant debate. However, the Plan does not change allowable land uses, heights, or density, so meeting the City’s housing needs will depend on legislative changes. We will follow and report on both as the housing debate continues.

 

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

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

Legislative Updates: San Francisco

| Daniel Turner
Use

With the end of the Covid-19 Health Emergency on the horizon, San Francisco is seeing an influx of land use legislation as City leaders set their sights on post-pandemic recovery. Below are two recent proposals to watch as they make their way through the approval process.

Small Business Recovery Act: Simplifying and Streamlining Small Business Approval

On March 16, 2021, Mayor London Breed introduced the Small Business Recovery Act (the “SBRA”), an ordinance proposing sweeping amendments to the Planning, Business and Tax Regulations, and Police Codes that are designed to stimulate and retain commercial and entertainment uses in the City.

After receiving a 4-3 approval at the April 22, 2021 Planning Commission hearing, Mayor Breed introduced a third version of the SBRA on May 11, 2021. The SBRA will need to go through further review before the Board of Supervisors ultimately votes on the ordinance.

The current version of the SBRA (as of May 13, 2021) would make the following changes:

  • Conditional Use Authorizations would no longer expire from abandonment as long as there is no intervening use. Currently, a Conditional Use Authorization expires after three years of disuse.
  • ADUs would be allowed in commercial spaces in Neighborhood Commercial Districts as long as the first 25 feet of lot depth is reserved for commercial use.
  • Neighborhood Notification would no longer be required for changes of use in the Eastern Neighborhoods, potentially removing the 30-day notification hold.
  • The eligibility for expedited 90-day processing for Conditional Use applications would be expanded to include Formula Retail uses with fewer than 20 locations, Bars, Nighttime Entertainment, Cannabis Dispensaries, non-retail sales and service uses, and any eligible use seeking to operate outside of principally permitted operating hours.
  • The Planning Department would be mandated to develop and use an abbreviated case report format to ensure the efficient processing of expedited Conditional Use applications.
  • Catering would be permitted as an accessory use in most Restaurants, subject to certain accessory use restrictions.
  • Additional code modifications would be implemented to give Entertainment Uses greater flexibility.

Elimination of Historic Preservation Commission Review and Appeals for Certain Alteration Permits

The SBRA would also eliminate the review and appeals period for Administrative Certificates of Appropriateness and Minor Alteration permits, which are required for certain projects involving landmarks or historic structures. Under current law, the Planning Department reviews and makes an administrative determination on these permits. After the Department makes a determination, anyone can appeal the decision to the Historic Preservation Commission (“HPC”) within 15 days. The HPC can also review any determination of its own volition within 20 days.

The SBRA would remove both the appeal and review periods, meaning the determination of the Department would be virtually final. This could significantly speed up certain projects by eliminating the ability of project opponents to contest approvals. However, it also means that project sponsors would lose a guaranteed avenue to quickly appeal a denial.

Removal of Life Science and Medical Special Use District

On May 4, 2021, District 10 Supervisor Shamann Walton introduced legislation to remove the Life Science and Medical Special Use District (“SUD”) in the Dogpatch Neighborhood.

The SUD was created 12 years ago to encourage Life Science and Medical uses that would benefit from the close proximity to UCSF Mission Bay, which opened directly to the north in 2003. The SUD covers about a third of the Dogpatch, and is concentrated on the blocks immediately south of UCSF Mission Bay, a thin corridor adjacent to I-280, and along 23rd Street. The SUD overlays the existing Urban Mixed-Use zoning and principally permits Life Science Office, Life Science Lab, and Medical Service uses and exempts them from certain size and PDR replacement controls.

In his proposal to remove the SUD, Supervisor Walton expressed dissatisfaction with the SUD and claimed it was operating contrary to Eastern Neighborhoods Plan by failing to provide a buffer around the Dogpatch and allowing encroachment of large office uses. The proposal claims that the SUD does not contribute to the neighborhood, and that placement of Life Science start-ups in the Dogpatch increases rents and pushes out vibrant and varied community-serving uses.

Under San Francisco’s 30-day rule, consideration of the proposed ordinance cannot take place until after June 3, 2021.

 

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

Berkeley SB 35 Project Wins Appeal

| Matthew Visick
SB 35

Court of Appeal Rejects City’s Bases for Denying the Project

After more than two years of legal wrangling in the courts, a 260-unit mixed-use project at 1900 Fourth Street in Berkeley (the Spenger’s parking lot) will soon be able to move forward under the streamlined approval process set forth in Senate Bill 35 (“SB 35”).  This week, the Court of Appeal determined—in a published decision that will have precedential value in other cases throughout the state—that the City’s rationale for denying the project had no merit.  The Court’s opinion reversed the decision of the trial court, which had upheld the City’s denial of the project.

Background

The project was originally proposed to include 135 apartments over 33,000 square feet of retail.  The project site is within a three-block area that the Berkeley Landmarks Preservation Commission (“Commission”) designated as a City landmark based on its proximity to the West Berkeley Shellmound.  The Shellmound is considered to have been a significant cultural resource and is listed on the California Register of Historical Resources.  However, as the Court noted in its opinion, nothing remains of the Shellmound above ground and decades of development had “systematically demolished” most of the Shellmound.

The draft Environmental Impact Report (“EIR”) for the original project exhaustively reviewed the potential impacts of the project on the Shellmound and concluded that there was very little chance, if any, that part of the Shellmound had been located on the project site.  The draft EIR nonetheless recommended mitigation measures to ensure that, if any of the Shellmound was discovered during construction, the project would not disturb it.  However, despite the robust analysis and mitigation measures in the draft EIR, the Commission took the position that the draft EIR was “seriously deficient” in its analysis of cultural resources.

In response to the Commission’s position, the project sponsor reformulated the project to take advantage of SB 35, which would allow the project to move forward without CEQA review.  The SB 35 project would include 260 apartments (nearly double the original number) over 27,500 square feet of retail space and parking.  To take advantage of SB 35, the project would make 50% of the units affordable to low-income households (we note that in some cases, only 10% of the units need to be affordable to low-income households).

The City Denies the Project

The City denied the revised application on several bases: (1) SB 35 does not apply to projects that require demolition of an “historic structure”; (2) SB 35 does not apply to the City because it is a Charter City; and (3) the project conflicts with the City’s affordable housing fee and traffic impact requirements.  After denying the revised application, the City offered that the project sponsor could restart the processing of the earlier application or revise it to conform to the SB 35 project.  The project sponsor sued.

Trial Court Upholds the City’s Denial of the Project

As described in a prior update, the trial court upheld the City’s denial of the revised application on two bases.  First, the trial court concluded that it was bound to uphold the City’s determination that the project might require demolition of an “historic structure” (i.e., the Shellmound) if there was any evidence to support it, however thin the evidence might be.  Second, the trial court concluded, after parsing the language of SB 35, that SB 35 did not apply to mixed use projects except in the very limited circumstance when the zoning specifically required at least 2/3 of the square footage to be residential.

Court of Appeal Rejects City’s Arguments and Reverses the Trial Court Decision

The Court of Appeal took a less deferential approach to its review of the City’s decision, concluding that the Legislature had intended to restrict cities’ discretion when it enacted SB 35.  The Court saw no evidence that the Legislature intended the term “historic structure” to include an historic site (like the Shellmound) and no evidence of a structure that could be demolished by the project.  The Court also rejected the City’s arguments that the revised project would conflict with its affordable housing fee and traffic impact requirements.

Significantly, the Court confirmed that the housing crisis is a matter of statewide concern and that the Legislature can therefore impinge upon a Charter City’s normally broad authority over its municipal affairs so long as the restriction of local authority is not overly broad.  In this case, the Court found that the extent to which SB 35 limited the City’s authority over historic preservation was not overly broad, and thus allowable.  This aspect of the Court’s opinion augurs well for the raft of recent state housing legislation, much of which restricts local discretion.

Finally, the Court rejected the notion that SB 35 does not apply to mixed-use projects except where the zoning requires at least 2/3 of the square footage to be residential.  The Court saw this interpretation of SB 35 as “strained and unreasonable” and concluded it “makes no sense in light of the statute’s purpose” to facilitate housing.  The Court affirmed that SB 35 is available so long as the project itself designates at least 2/3 of its square footage for residential use.

We expect the project sponsor will recover its attorney fees associated with the litigation given that the lawsuit ensured that the City would follow state housing law.  The Court’s opinion already provides for the sponsor to recover its costs (exclusive of attorney fees) related to the appeal.

 

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.

Accessory Dwelling Units – Oakland Update

| Justin A. Zucker
ADUs

As previously reported, a slate of new California State laws became effective on January 1, 2020, that encourage the construction of Accessory Dwelling Units (“ADUs”). State law holds that until a city adopts an ordinance that complies with State law, a city’s existing ADU regulations are null and void and only State standards may be applied. Currently, the City of Oakland’s ADU regulations are not in line with State law. In response to this inconsistency, Planning Department staff is proposing amendments to its ADU regulations to bring them in line with State law.

Below are some of the key changes to Oakland’s ADU regulations:

  • ADU permit approval within 60 days of application submittal.
  • Ministerial approval for one interior, attached, or detached ADU and one Junior ADU (“JADU”), which are a type of ADU no more than 500 sf with an efficiency kitchen, but do not require a private bathroom, per single-family lot.
  • Ministerial approval of a detached ADU, provided it is up to 800 sf, 16 feet in height, and maintains 4-feet rear and side setbacks.
  • Ministerial approval of at least one interior ADU on multifamily lots, up to a number equal to 25% of the existing units, that involves conversion of non-habitable space, and no more than two detached ADUs.
  • Conversion of existing accessory structures, such as carports and garages, into ADUs without requiring off-street parking replacement if the parcel is within half a mile walking distance of public transit.
  • Continued prohibition on all new ADUs and JADUs within the S-9 Fire Safety Protection Combining Zone Overlay (basically, the Oakland Hills) and now on streets with a width less than 20 feet or cul-de-sacs greater than 600 feet in length, due to the limited space for cars to escape in an emergency, such as a fire, natural disaster, or a health crisis.
  • Consultation with Historic Preservation Staff is required for ADUs proposed on a Local or California Register property visible from the public right-of-way. Placement of an ADU in front of a main building on a Local or California Register property is only allowed if the lot conditions or requirements preclude an ADU of minimum allowed size anywhere else on the lot.

In addition, the proposed Planning Code amendments introduce objective development standards consistent with State law:

  • Same roof pitch, visually similar exterior wall material, and predominant door and window trim, sill, recess and style as the primary dwelling structure for ADUs located in front of a primary structure, attached to it, or visible from the public right-of-way. Applicants may pursue approval of different finishes or styles through the Small Project Design Review process.
  • Regulation of balconies, decks, or rooftop terraces per established standards of the underlying zone.
  • Requiring at least one tree per every 500 sf of new ADU floor area, with tree(s) allowed anywhere on the lot or within the public right-of-way in front of the site.
  • ADUs that do not comply with the objective standards may go through the Small Project Design Review process.

These proposed Planning Code amendments are anticipated to be reviewed and considered by the Planning Commission later this spring with adoption by the City Council this summer. We will continue to monitor this proposed legislation and keep you 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.

Monument Referencing Before Construction

| Gillian Allen
Monument

New construction and alteration projects that require a permit for public right of way work often spend a year or more working with San Francisco Public Works (“DPW”) towards an issued permit. It is only upon approval that a parallel group within DPW, the Preservation Monument Team, notifies permit applicants that they must reference all monuments within 20 feet of construction prior to starting work within the public right of way.

In 2018, under DPW Order 187,592, the City and County of San Francisco (“CCSF”) Bureau of Street Use and Mapping (“BSM”) established clear guidelines for this process, however it is not identified on the DPW applications as being a step required for issuance. Because of the delayed notice of the monument referencing requirement some projects and contractors incur significant postponement to their schedules because they cannot activate a street improvement permit until this process is completed.

Monuments are essential to establishing and maintaining horizontal and vertical survey control for subdivisions, tracts, boundaries, roads, streets or highways and are further protected under California state law under Penal Code § 605, Streets and Highways Code §§ 732, 732.5, 1492.5, 1810.5, as well as Business and Professions Code §§ 8725, 8771 and 8773.3.

Due to the potential for movement or disturbance of survey monument during construction, all monuments within 20 feet of any proposed construction must be located and referenced through a field survey and the filing of a Corner Record, or Record of Survey, prior to any construction taking place. This is to allow for positional verification or replacement should a monument be disturbed or removed by the construction. Referencing can be conducted by a licensed Land Surveyor or CCSF BSM.

Currently, when a street improvement, minor sidewalk encroachment, or excavation permit is approved, the known monuments are referenced on the permit, however there are monuments that are not of record. Not of record means the monument does not appear on any maps or documentation that has been duly noticed by recordation with the City and County of San Francisco. DPW Order 187,592 requires that an onsite field review is performed to determine if such non-record monuments exist.

As described in CCSF BSM’s guidelines, non-record monuments are “old original subdivision marks that typically do not appear on any record maps. Within the City and County of San Francisco, not of record monuments typically are “L”, “T” and “+” cuts and lead plugs with brass tacks. ““L”, “T”, “+” cuts, lead plugs with brass tacks and or 1-inch disks are typically located in curbs and additionally can reside anywhere along property lines extending from street curb to the back of sidewalk.” Projects will need to submit a letter from a licensed surveyor indicating that they performed a field survey and no monuments were found. The CCSF BSM guidelines have detailed pictures and examples of what to survey for in the field.

While it is the responsibility CCSF BSM to preserve these survey monuments and to maintain their exact positions, it is the project sponsor’s responsibility to survey for the monuments both through the monumental map and in the field. Performing this survey when you file street improvement applications rather than waiting until they are issued will save your project time.

Extended Referencing is required where construction proceeded prior to standard monument referencing having been performed. This can happen when due to the backlog and delays in DPW permits being issued, a project decides to proceed with work “at risk” and/or was unfamiliar with the DPW order. In these situations, a comprehensive field survey and office analysis shall be required to determine if the construction activity caused any potential movement of the monument or to reestablish the monument position if a monument was destroyed. To perform this Extended Referencing, additional fees shall be assessed and are estimated to be $10,000 or more. If any monuments are covered, disturbed, destroyed, or removed, any costs incurred to re-establish the monument will be in addition to the initial application fee and may vary due to time and methods required. If you elect to have CCSF DPW BSM conduct research, please contact monument.preservation@sfdpw.org to request a proposal of these services.

Project teams who wish for BSM to perform the field survey and referencing should apply six to eight weeks ahead of construction to allow for payment to clear and crews to be scheduled. CCSF BSM Standard Referencing Fee is $3,876 and CCSF BSM Monument Referencing Fee for 2020-2021 is $3,876 per monument and covers the field and office-related costs for the standard monument referencing process. The Monument Referencing Fee is adjusted each year to reflect changes in the relevant Consumer Price Index. Before contacting BSM to do the monument referencing, please fill out and submit an application.

 

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.