Land Use Archives

Two Legislators Take Aim at Statewide Planning Laws

April 7, 2021April 7, 2021 | Sabrina Eshaghi

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

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

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

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

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

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

Density Bonus Law. Under the Density Bonus Law, developers are entitled to up to a 50% density bonus if certain on-site affordability requirements are met. The law also allows waivers and concessions from development standards that would physically preclude the density permitted or result in identifiable and actual cost reductions.

SB 35. This legislation requires ministerial approval of housing projects that meet certain affordability requirements in cities and counties that are not meeting their RHNA goals.

Permit Streamlining Act. This Act allows certain development projects to be deemed approved if the local agency does not approve the project within specified time limits.

SB 330. Among other things, SB 330 (1) provides a mechanism to vest the ordinances, policies, and standards in effect at the date a complete Preliminary Housing Development Application is submitted, (2) limits the ability of municipalities to downzone certain properties, impose moratoria, or apply new subjective design standards to housing developments, (3) further streamlines approvals, and (4) limits the number of hearings that can be conducted prior to approval of a housing project.

Housing Accountability Act. This Act limits a local government’s ability to deny, make infeasible, or reduce the density of housing development projects that are consistent with objective local development standards.

ADU Law. In recent years, there has been a significant amount of legislation making ADUs easier to build by streamlining the approval process, limiting applicability of impact fees, and relaxing zoning requirements.

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

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

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

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

Size Restrictions Proposed on San Francisco Homes

March 31, 2021 | Thomas P. Tunny

San Francisco policy-makers continue to scrutinize the size of dwellings in an attempt to manage affordability and housing stock. Merits aside, policy-makers have expressed a consistent concern about demolitions, expansions, and new large-home construction. The latest measure is an ordinance introduced last month by Supervisor Rafael Mandelman (District 8), whose district includes the Castro, Noe Valley, Glen Park, and Bernal Heights.

Planning Code Section 317 already requires a conditional use authorization for residential demolitions, mergers, and removals. Supervisor Mandelman’s proposal would discourage residential units over 2,500 square feet by requiring, with some limited exceptions, a conditional use for them in RH (residential, house) zoning districts:

Expansions

On a developed lot where no existing dwelling unit exceeds 2,500 square feet of gross floor area, expansion of the residential use that would result in an increase of more than 50% of gross floor area to any dwelling unit or would result in a dwelling unit exceeding 2,500 square feet of gross floor area, except where the total increase of gross floor area of any existing dwelling unit is not more than 10%.
On a developed lot where any existing dwelling unit exceeds 2,500 square feet of gross floor area, expansion of the residential use that would result in an increase of more than 10% of gross floor area of any dwelling unit.

New Construction

Residential development on a vacant lot, or demolition and new construction, where the development would result in only one dwelling unit on the lot or would result in any dwelling unit with a gross floor area exceeding 2,500 square feet.

New Conditional Use Criteria

In addition to the standard conditional use criteria, the Planning Commission must consider the following new criteria:

the property’s historic preservation status;
whether additional dwelling units are added;
whether the proposed development preserves or enhances the existing neighborhood character by retaining existing design elements;
whether the development proposes to remove more than 50% of the existing front façade; and
whether the project removes rent control units.

Exceptions

The legislation would except developments from the new conditional use authorization requirement where a complete development application was submitted before February 2, 2021. The legislation would also except developments that increase the number of dwelling units on the lot provided that no dwelling unit exceeds 2,500 square feet of gross floor area as a result of the development, no proposed dwelling unit is less than one third the gross floor area of the largest dwelling unit resulting on the lot, and that neither the property or any existing structure on the property: (i) is listed on or formally eligible for listing in the California Register of Historic Resources; (ii) has been adopted as a local landmark or a contributor to a local historic district under Articles 10 or 11 of the Planning Code; or (iii) has been determined to appear eligible for listing in the California Register of Historic Resources.

The legislation has been referred to the Planning Department for review and consideration by the Planning Commission. To date, there is no estimate of how many projects would be affected by this requirement in a typical year, how many hours of staff time it would take to process them, or how the volume of new conditional uses would affect backlogs for all projects. No hearing date has been set for the Commission to consider the legislation, but we will continue to monitor and keep readers informed.

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

Hostile Use of Another’s Property & Prescriptive Easements

March 24, 2021March 24, 2021 | Lindsay Petrone

A recent case provides further insight into what is considered “hostile” or “adverse” with respect to obtaining a prescriptive easement right. A prescriptive easement is where one acquires a right to use another’s property, not by express agreement, but through the use of another’s property without permission. More specifically, to establish a prescriptive easement, the party claiming it must show use of another’s property that has been open, notorious, continuous and adverse for an uninterrupted period of five years. Whether the use is “hostile” or is merely a matter of neighborly accommodation is a question of fact to be determined in light of the surrounding circumstances and the relationship between the parties.

In Husain v California Pacific Bank, the Court of Appeal analyzed whether a use can be considered “adverse” through hostile acts alone (rather than actual notice), particularly in the context where permission was impliedly granted to the user by the prior owner of the burdened property. 21 Cal. Daily Op. Serve. 2198 (Filed March 9, 2021). In Husain, the tenants from one property (“Property A”) were allowed to use the parking spaces, garden, driveway and garbage area of another property (“Property B”) when Property A and Property B were owned by the same party. In 2011, the properties were sold to two different owners and common ownership was severed. After such sale, the tenants of Property A continued to use the above-referenced areas of Property B, without formally advising the new owner of Property B of such use or seeking its permission. Property A’s use was consistent and frequent and included maintaining and improving the portions of Property B used by Property A. Husain purchased Property B in 2017 and eventually sued to quiet title of the affected areas of Property B. Property A counter-sued for, amongst other things, a prescriptive easement as to its use of the parking spaces, garden, driveway and garbage area of Property B.

Husain argued that because the use was permissive when the properties were under common ownership, such permission did not terminate simply because the property changed hands. In other words, because permission was granted by the original owner and never repudiated by the subsequent owner of Property B, there was never any “hostile” use by Property A triggering the five-year clock to establish the prescriptive easement. While express repudiation is required to make a formerly permissive use “hostile”, the Court in Husain distinguished this argument because the properties were previously under common ownership. There can be no adverse use during the time of common ownership because one cannot obtain an easement in one’s own land. Permission would have to have been given or withheld after the properties were transferred to two separate owners in 2011. Here, the Court found that Property A’s continued use of the affected areas of Property B after the sale without seeking permission put Property B on notice that Property A’s use was adverse to Property B. As such, once the five-year time period elapsed without any change in status, Property A acquired a prescriptive easement to use such portions of Property B.

The Husain case shows that open and continuous use can be considered “adverse and hostile”, even if it was once pursuant to a neighborly accommodation. One should look at the history of the affected properties and review the set of facts at issue to determine whether a use was hostile or with permission.

Authored by Reuben, Junius & Rose, LLP Attorney Lindsay Petrone.

Cities’ Upcoming Need to Identify Housing Opportunity Sites

March 18, 2021 | Tuija Catalano

The next RHNA (Regional Housing Needs Assessment) cycle is quickly approaching, which means that all Bay Area cities will be taking a closer look at their Housing Elements and determining whether they have enough land zoned to accommodate more housing.

In June 2020, the California Housing and Community Development (“HCD”) provided the Bay Area its Regional Housing Needs Determination for the next RHNA cycle (2023-2031), identifying a need for 441,176 new housing units. The overall figure is further categorized into very low (26%), low (15%), moderate (16%), and above moderate (43%) housing and income levels. This figure represents a significant increase when compared to the prior RHNA cycle (2015-2023) when the Bay Area was allocated 187,990 units. In the Bay Area, the Association of Bay Area Governments (“ABAG”) is responsible for allocating the overall figure among cities and counties, and its Housing Methodology Committee spent much of 2020 in meetings to discuss and decide on different methodology options. Regardless of which allocation methodology was going to be chosen, most Bay Area cities and counties are seeing a significant increase in their RHNA allocations.

ABAG’s Executive Board approved the Draft RHNA Methodology and Final RHNA Subregional Shares (“Draft Allocation”) for the Bay Area on January 21, 2021. The Draft Allocation is subject to HCD approval on or before April 11, 2021, and thereafter an appeal opportunity by individual cities and counties during Summer/Fall 2021. Historically, very few appeals by individual cities or counties have been successful, and thus most of the Draft Allocation figures are anticipated to be adopted as final allocations by late 2021.

Once the allocations have been finalized, individual cities and counties will need to amend their Housing Elements and identify sufficient number of vacant or underdeveloped sites that can accommodate the RHNA figure allocated to each city. Many cities are currently starting the process by engaging consultants to work on their next Housing Element update. The updated housing elements must be submitted to the State by each city and county no later than January 2023, and if applicable, cities and counties will thereafter need to rezone properties consistent with the updated Housing Elements and site identifications.

To understand the magnitude of the increases cities and counties are facing for the next RHNA cycle, it is helpful to look at some of the Draft Allocation figures. The following represents a sampling of Bay Area cities, comparing their final 2015-2023 RHNA figure to those proposed in the Draft Allocation for the next, 2023-2031 cycle. For a complete list of cities/counties, see the Draft Allocation.

City	2015-2023 cycle	2023-2031 cycle
San Francisco	28,869	82,069
Oakland	14,765	26,251
San Jose	35,080	62,200
Berkeley	2,959	8,934
Fremont	5,455	12,897
Concord	3,478	5,073
Lafayette	400	2,114
Walnut Creek	2,235	5,805
Novato	415	2,090
Tiburon	78	639
Daly City	1,350	4,838
Menlo Park	655	2,946
San Bruno	1,155	3,165
Cupertino	1,064	4,588
Los Gatos	619	1,993
Sunnyvale	5,452	11,966

Cities and counties are not required to build new housing, but they are required to plan for it and specifically plan for enough housing that satisfies their assigned RHNA figure. Since most Bay Area cities and counties are subject to significant increases, local city councils and board of supervisors, along with their Planning Departments, will be taking a comprehensive look at zoning and development in their jurisdictions over the next year and a half. This may also represent opportunities in the near-term for property owners of currently vacant or underutilized properties and/or those that lack the zoning necessary for residential development.

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

Plan Updates in Oakland and SF

March 4, 2021March 5, 2021 | Mark Loper

This week, we discuss Oakland’s most recent status report on its proposed Downtown Specific Plan and San Francisco’s kickoff of its own General Plan update.

Oakland’s Downtown Plan Progresses, with Changes

Oakland’s sixth area plan—and the first to focus exclusively on the downtown area—is moving forward again, but with modifications based on feedback provided on the draft Environmental Impact Report (“Draft EIR”) and in response to Covid’s impacts on urban life, including efforts to address the City’s acute housing shortage and homelessness and affordability crisis. The City now anticipates City Council review of the Plan by the end of the calendar year.

The Downtown Oakland Specific Plan (“DSOP” or “Plan”) has been in the works since the mid-2010s. The Plan and accompanying Draft EIR were published in August 2019; they envisioned and evaluated 29,100 new residential units, approximately 17 million square feet of office, nearly 2.5 million square feet of retail, and over 1 million square feet of “flex” commercial and industrial space. It covers many different neighborhoods and districts in downtown, including Kono, Uptown, San Pablo, the “central core” of Downtown, Lakeside, Old Oakland, Jack London and the surrounding area south of I-880, and Laney College.

The City’s brief summary update a few weeks ago explains that changes to the Plan’s proposed zoning controls will “address the changing nature of retail” presumably brought on (or exacerbated, depending on your perspective) by the pandemic, identify and regulate priority areas for arts and institutional cultural uses, and encourage increased development in exchange for enhanced community benefits. This voluntary “Zoning Incentive Program” as proposed will set clear metrics for public benefits necessary to achieve enhanced density, such as affordable housing, reduced rent for non-profits and arts organizations, and homelessness services.

Oakland is also undertaking a study on options to fund more housing. These include potential new or increased impact fees, an inclusionary housing requirement that could be more robust than the City’s current policies, and infrastructure financing.

The City anticipates three more phases of planning before the Project and accompanying environmental review are considered by Council: first, revising the DSOP, responding to comments on the Draft EIR, drafting new zoning regulations, and analyzing housing funding options in the Winter and Spring of 2021; next, completing the revised DSOP, responding to EIR comments, completing the housing funding analysis and updated zoning regulations in the Spring and Summer of 2021; and finally, holding adoption hearings on the final DSOP, EIR, zoning amendments, and housing funding program in the Fall and Winter of 2021.

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.

San Francisco Kicks Off General Plan Update

Later this month, the San Francisco Planning Department will hold a series of virtual public meetings kicking off an update to San Francisco’s General Plan. 12 meetings are scheduled to run from March 15-26. City staff will discuss topics such as housing, transportation, climate resilience, environmental justice, and racial and social equity. The introductory session is set for Monday, March 15, and one or two events per day focusing on a specific aspect of the General Plan will follow. We are monitoring the update closely and will keep you up to speed as the City releases more information.

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

New Interim Density Controls for Residential-Commercial Districts

February 24, 2021February 24, 2021 | Tara Sullivan

In January the Board of Supervisors passed interim zoning controls for parcels in RC, RM, and RTO (excluding RTO-M) zoning districts. The controls require Conditional Use Authorization (“CU”) for most new construction or alterations that do not maximize residential density. Sponsored by Supervisor Peskin, the interim zoning controls became effective on January 21^st and are in place for 18 months, until July 2022. They apply to all projects—even ones currently under review by the Planning Commission—where a final site or building permit has not been issued (i.e., any project currently on file with the City).

The controls aim to disincentivize low-density projects, restrict the construction of large residences, and prevent the loss or conversion of rent-stabilized housing units. The zoning districts cited allow for a higher density (i.e., more units at a smaller size), but often are developed with larger units that are more suitable to higher-income families (i.e., less units at larger sizes).

The controls apply to any (i) new construction of a residential building or (ii) a proposed alteration that would result in the expansion of the building. A CU from the Planning Commission will be required if the residential building does not maximize the principally permitted residential density while meeting minimum unit size requirements. The following minimum unit sizes must be used in density studies under the interim controls: 450 sf for 1-bedrooms, 700 sf for 2-bedrooms, 900 sf for 3-bedrooms, and 1,100 sf for 4-bedroom units.

There are exceptions to the Conditional Use requirement where site constraints prevent a project from maximizing density or for certain minor expansions. To fall under the site constraints exception, a project must meet the following criteria:

Existing lot conditions or form-based restrictions on development (e.g., height, bulk, rear yard requirements) prevent a project from maximizing density without seeking a variance or subdividing units (while adhering to the minimum unit sizes in the Planning Code);
The proposed project increases density on a subject lot; and
No unit is greater than 2,000 square feet in size.

Expansions of existing residential buildings are permitted without a CU if the proposed expansion is 25% or less of the existing residential building and:

Does not increase the size of any units that is already larger than 2,000 square feet in size;
Does not create a new unit larger than 2,000 square feet, or
Cause an existing unit less than 2,000 square feet in size to exceed 2,000 square feet.

It is unclear how many projects the interim zoning controls will impact, or whether it will result in changes to proposed development. Until the Planning Department or Planning Commission adopt clear guidelines for implementing the controls, including standards for density studies, the impact of the interim zoning controls remains uncertain. Reuben, Junius & Rose LLP will continue to monitor the implementation of the interim controls.

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

Impact Fee Update

January 28, 2021January 28, 2021 | Jody Knight

San Francisco School Fees Expanded

On January 11, 2021, San Francisco issued the 2021 Impact Fee Schedule. One change of note is the calculation of the San Francisco Unified School District Fee (“School Fee”) as applied to multi-unit residential developments. The change would increase the fee on such developments by increasing the space in the building subject to the fee.

The School Fee applies to new residential developments and additions to existing residential properties of greater than 500 square feet. Although the School Fee is collected upon issuance of the first construction document along with the fees paid to the City and County of San Francisco, the School Fee is subject to its own calculation rules under California Government Code Section 65995(b)(1).

Currently, San Francisco applies the School Fee to “total habitable space,” defined as space in a structure used for living, sleeping, eating or cooking. The calculation excludes bathrooms, toilet compartments, closets, halls, storage or utility space, and similar areas.

Effective February 1, 2021, the assessable space for calculation of the School Fee for any new residential development will include all of the square footage within the perimeter of the structure. Space still excluded from the Fee calculation includes any carport, covered or uncovered walkway, garage, overhang, patio, enclosed patio, detached accessory structure, or similar area.

The change is based on a 2018 appeals court decision that settled the long-contested question of whether school district fees should be assessed on interior common areas. 901 First Street Owner, LLC v. Tustin Unified School District held that interior space outside of individual units, such as interior hallways, storage rooms, mechanical rooms, fitness centers, lounges, and other interior common areas should be included in the fee calculation under the language of Government Code Section 65995(b)(1). Based on this, the School Fee was expanded, which could lead to a significant increase in fees for projects anticipating paying the fee on the square-footage of the units only.

Oakland Eyes Increased Affordable Housing Fees

Oakland is currently undertaking a mandatory five-year review of its impact fee program. The focus of the review for many is impact fees for affordable housing. Currently, affordable housing fees are tiered depending on the type of housing proposed and the location of the property in one of three regions of the city based on the level of demand for development in that region. There is debate about whether the tiered system should be eliminated, as well as whether fees should be increased over the tiers.

Affordable housing advocates believe that fees should already have been increased to fund construction of affordable housing during the last several years of strong development. Developers have expressed concern that higher impact fees could stifle further development.

Officials and advocates are also looking at other aspects of the implementation of affordable housing requirements. Discussion is underway about how affordable housing is best produced, whether through construction of on-site affordable units or through funding construction of affordable units with impact fees. Also under review is the policy of collecting 50% of the affordable housing fee at permit issuance and 50% only after a certificate of occupancy is issued.

We will continue to watch the Oakland impact fee review process as it unfolds in 2021. We will also watch for earlier changes to fees spurred by the current debate.

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

Housing Production Legislation to Watch

December 16, 2020December 18, 2020 | Justin A. Zucker

The start of another legislative session is upon us. Last week at the outset of the 2021-2022 legislative session, several bills impacting housing production were introduced. Some are similar to bills that weren’t passed last year. Below are four bills to watch as they wind through the Legislature.

SB9 (Atkins, Caballero, Rubio, Wiener)

SB9 is a refresh of SB1120 from last session that would allow duplexes on most lots. SB9 requires cities to ministerially permit, i.e., without CEQA review or other discretionary reviews or hearings, two-unit development projects in single-family zoning districts. It would also allow single-family parcels to be subdivided into two lots if the parcel is located within an urbanized area or urbanized cluster and is: (i) not located within a historic district, (ii) not included in the State Historic Resources Inventory, or (iii) not within a site that is designated or listed as a city or county landmark/historic property/district.

SB1120 cleared the Assembly with only minutes left in the session, leaving too little time for it to return to the Senate for passage, which makes this year’s SB9 a bill to closely watch.

SB10 (Wiener)

Senator Wiener’s SB10 is a refresh of SB902 from last session that would allow—but not require—local governments to upzone qualified parcels for up to ten-unit apartment buildings. The allowance for streamlined upzoning would only apply in urbanized locations close to job-rich areas, which are defined as areas rich with jobs or would enable shorter commute distances, and/or transit rich areas, which are defined as areas within half a mile of a major transit stop. While SB10 creates a shortcut for upzoning, it does not provide for streamlined project approvals, i.e., projects within upzoned areas would remain subject to CEQA and other local approval processes. SB10 requires the Department of Housing and Community Development, in consultation with the Office of Planning and Research, to determine jobs-rich areas and publish a map of those areas by January 1, 2022.

SB30 (Cortese)

Senator Cortese’s SB30 would prohibit after January 1, 2022, the construction of a state building connected to the natural gas grid and prohibit state funding or other support for construction of residential and nonresidential buildings that are connected to the natural gas grid.

SB6 (Caballero, Eggman, Rubio)

SB6 is a second attempt to pass the Neighborhoods Homes Act that would override local prohibitions on residential uses on properties (no size limit) within any commercial zone, except where office uses and retail uses are not permitted or only permitted as an accessory use, that is not adjacent to an industrial use. Densities allowed fall into the range from 15 dwelling units/acre in rural areas to 30 dwelling units/acre in highly urbanized areas, with suburban areas allowing at least 20 dwelling units/acre. Housing development projects would still be subject to local zoning and parking controls, objective design review and permitting processes, and CEQA would be applicable. Projects taking advantage of the Neighborhoods Homes Act would be required to pay prevailing wages or use skilled and trained labor.

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

Reduce Exposure to Mechanics’ Liens

December 11, 2020 | Kaitlin Sheber

While contractors typically enjoy a 90-day period to file a Mechanic’s Lien once a project is completed, project owners in California can take steps to significantly shorten this deadline by recording a Notice of Completion (“Notice”). The Notice gives written notice that an entire project is completed. A Notice that is properly recorded and served benefits project owners in two main ways:

Reduced project risk because contractors and subcontractors have less time to record a Mechanic’s Lien – which can result in filing of a mechanic’s lien foreclosure action; and
Project owners can clear title more quickly, smoothing the way for post-construction loans and sales.

Mechanic’s Liens Can be Recorded as late as 90 Days After Project Completion:

Unless an owner records a Notice, contractors and subcontractors have 90 days to record a Mechanic’s Lien. But, if a Notice is properly recorded, that 90-day period is shortened to 60 or 30 days. The time period depends on whether a direct contractor performed the work:

A direct contractor has 60 days to file a Mechanic’s Lien after a project owner records a Notice of Completion.
Persons that are not direct contractors have 30 days to file a Mechanic’s Lien after a project owner records a Notice of Completion.

It is critical that a recorded Notice be served on each direct contractor, subcontractor, and material supplier who may have the right to record a mechanic’s lien against the project. The Notice will only be effective if timely and validly served, so we recommend service via certified mail with a proof of notice declaration to establish service in the event of any dispute.

When is a Project Completed?

The date a project is completed is the moment the clock begins to run to record a Mechanic’s Lien or Notice. Under the California Civil Code, a project is considered complete when any of the following occur:

Actual completion;
Labor stops and occupation or use by the owner occurs;
Labor stops for a continuous period of 60 days; or
Labor stops for a continuous period of 30 days, after which a notice of cessation is recorded.

Additionally, a project is considered completed at the time a public entity accepts the project.

In practice, the definition of actual completion has proved difficult to nail down. Ordinarily, “completion” means that the entire project has been completed. But this meaning does not give clear direction for the date a court would find a project legally completed.

Courts may also determine completion by looking at the substantiality of work performed after a project is presumed completed. Where a contractor performs additional work under the construction contract, courts will tend to find the project was not previously completed. Conversely, the project may be actually completed even if the contractor later corrects defects. Factors like an issuance of a Final Certificate of Occupancy can serve as evidence of completion, but are not definitive proof. Unfortunately, as the California Civil Code currently stands, the important definition of completion remains ambiguous.

Notice of Completion Timing

A Notice must be recorded and served within 15 days from the date a project is completed. Though the definition of completion is nebulous (as discussed above), a Notice is considered valid if recorded and served within 15 days of the true project completion, even if it includes an erroneous completion date.

Authored by Reuben, Junius & Rose, LLP Law Clerk Kaitlin Sheber.

Proposition H and New Processing for ADUs

December 3, 2020 | Thomas P. Tunny

Proposition H Adopted by Voters

Proposition H was adopted by the voters at this November’s election. Titled, “Save Our Small Businesses Initiative”, the initiative ordinance gives existing businesses more flexibility in their operations and speeds approvals for new businesses in the City’s Neighborhood Commercial (“NC”) Zoning Districts. The initiative reduces the approval requirement for many uses from a conditional use authorization from the Planning Commission to an over-the-counter administrative approval. Restrictions on office uses are relaxed. The initiative eliminates neighborhood notification for changes to a principally permitted use and provides existing businesses with greater flexibility to adapt their operations in response to the COVID-19 pandemic and shifting retail landscape. The initiative calls upon the City to streamline the approval for small businesses to 30 days.

In particular, the initiative provides as follows:

Neighborhood Notification

Eliminates neighborhood notification for new principally permitted uses in Neighborhood Commercial Districts, for Limited Commercial Uses, and for Limited Corner Commercial Uses. These change of use permits can now be approved over-the-counter.

Permitted Uses

In all NC Districts except for the Mission Street NC, 24th Street-Mission NC, and SOMA NC, more principally permitted and conditionally permitted uses are now allowed:
- Non-Retail Sales and Services (e.g., office uses) are principally permitted on upper floors and permitted with a conditional use authorization on the ground floor.
- General Entertainment, Movie Theaters, Community Facilities, Restaurants, Limited Restaurants, Animal Hospitals, and Retail Professional Services (e.g., realtors, accountants, insurance agents) are now principally permitted where currently permitted with a conditional use authorization, and conditionally permitted where currently not permitted. Restaurant controls were not changed in the North Beach Special Use District, where a conditional use authorization is required and any new restaurant may only occupy a space where the last use was a restaurant.
- Arts Activities and Social Service or Philanthropic Facilities are now principally permitted on all floors.
- Formula retail controls (conditional use authorization required) were not changed by the initiative.

Approval Process

Requires the creation of a streamlined review and inspection process for principally permitted storefront uses in NC Districts with a target approval in 30 days or less. The City is in the process of implementing these new procedures;
Requires that in cases of City error, permits to remedy that error be prioritized and have fees waived;
Establishes policy to allow restaurant table service within parklets in addition to the existing use of parklets by any member of the public; and
Locks-in the initiative’s provisions for 3 years from passage, except to further relax restrictions.

Processing ADU Applications Moves to Planning

In an effort to ease the administrative burden on DBI and hasten the approval of ADUs, the City has shifted the intake and processing of ADU applications from DBI to the Planning Department. This includes new applications for ADUs and work related to ADU construction, such as expansions required for an ADU, excavations required for an ADU, new construction for a detached ADU, and interior remodel work to create independent access to the ADU.

Applications consist of the standard Planning Department Project Application, the ADU checklist form, the ADU screening form, a fixture count form for the PUC, and a pdf of the project plans. Applications are submitted online at a new, easy-to-use website just for ADUs. The application can be a full building permit or a site permit with addenda.

Once the application is submitted, Planning will send the applicant a confirmation email with the planning application number. Planning’s Property Information Map (PIM) will provide updates about the application. It will take one day for the record to appear in the PIM. A planner will email the applicant about next steps within 14 business days. The application still will be routed as before to other City agencies having jurisdiction over the proposed work for review, including DBI.

Once the permit is approved, Planning will coordinate with the applicant to verify their licensed contractor information and pay the fees. Planning will email the job card to start construction.

For questions or assistance, email the Planning Department.