Updated City Agency Operations and Procedures During Shelter in Place

| Thomas Tunny
City Agencies

San Francisco Boards, Commissions, and Departments have begun to adapt their operations and procedures in response to the Shelter in Place restrictions, and for land use practitioners, this means project processing activity is on the rise.

By contrast, on March 31 the Department of Public Health issued an Order that further restricted allowed construction to the following: healthcare projects directly related to addressing the COVID-19 pandemic; housing and mixed use projects that include at least 10% affordable housing (the City Attorney has interpreted this to mean on-site affordable housing); projects that provide services to vulnerable populations; projects required to maintain safety, sanitation, and habitability of residences and commercial buildings; and construction necessary to secure an existing construction site that must shut down.

The March 31 Order also extended the deadline of the Shelter in Place Order from April 6, 2020 to May 3, 2020.

Board and Commission Hearings

Board of Supervisors:  The Board of Supervisors and Board Committees continue to hold their regular meetings by videoconference.  Board and Committee agendas are being limited to urgent matters, matters subject to statutory deadlines, and matters related to essential services and COVID-19 policies.

Planning Commission:  The Planning Commission held its first hearing by videoconference yesterday, April 9.  Hearings are expected to continue on a regular weekly basis every Thursday.  Agendas for now generally are limited to projects concerning essential services and multi-unit residential projects.

Historic Preservation Commission:  The Historic Preservation Commission will begin to hold hearings by videoconference April 15.

Variance Hearings:  The Planning Department has indicated that the Zoning Administrator intends to hold the April 22 Variance hearing by videoconference, but this has not been confirmed yet.

Board of Appeals:  The Board of Appeals has canceled its April 8 and April 15 hearings.  All briefing deadlines still are in effect even if the hearing has been canceled.

Planning Department Noticing Procedures and Reinstatement of Enforcement Actions 

Planning Code Section 311 Notices Mailed Prior to the Shelter in Place Order

(‘Clock’ starts April 7, 2020) All building permit neighborhood notifications (known as “311s”) that had already been issued were placed on hold, and no new notifications were issued, as of March 17 when the Shelter in Place Order first took effect.  On April 7, the Department will resume the ‘clock’ for all neighborhood notifications that were previously issued.  If a project’s Section 311 notification period began prior to the Shelter in Place Order, the Project Sponsor must put a note on the 311 poster(s), or add an additional poster stating that the 311 notice period will be extended by the number of days such notice fell within the original Shelter in Place Order. For example, if a 311 notice started on March 1 and was set to expire on March 31, that notice would continue for another 15 days once the clock restarts on April 7. Project Sponsors should also communicate this extension to any parties that contact them regarding information about the project.

Planning Code Section 311 Notices Mailed After the Shelter in Place Order

On April 7, 2020, the Department will begin issuing new Building Permit neighborhood notifications (known as “311s”) for essential projects only.

Pre-Application Meetings Noticed Prior to the Shelter in Place Order

If a project’s Pre-Application meeting is scheduled to take place during the Shelter in Place Order, the project sponsor must post a notice at the site on the meeting date that says the meeting was canceled, but that anyone who wants to discuss the project can contact the project sponsor, along with accurate contact information during the Shelter in Place Order.  This will still allow interested parties to stay aware of a project and engage with the project sponsor going forward.

Pre-Application Meetings for Which Notice is Provided During the Shelter in Place Order

Project Sponsors should use the standard form, process, and 14-day notice period.  However, they must also include a copy of the project plans in the mailing. They must also e-mail applicable registered neighborhood organizations.  If there is no email address provided on the Department’s list, standard mail is acceptable.  No in-person meetings should be conducted during the Shelter in Place Order. The notice template should indicate a day and time period during which the Project Sponsor will be available to take phone calls from interested parties or host a video meeting.  The applicant should offer both options on the notice.

Planning Code Enforcement Notices Mailed Prior to the Shelter in Place Order

If a Notice of Violation or Notice of Penalty was issued prior to the Shelter in Place Order, any deadlines to respond to the Planning Department will be paused during the period of the Shelter in Place Order (i.e., March 17 through May 3). All such enforcement deadlines will be reinstated on May 4 and extended by the number of days that fell within the Order.

Planning Code Enforcement Notices Mailed During the Shelter in Place Order

A Notice of Violation issued during the Shelter in Place Order will not require action to abate the violation until 1) the Shelter in Place Order expires, and 2) all relevant City agencies are operating at a level necessary to abate the violation.

Department of Building Inspection (DBI) Permit Processing

For essential projects only, DBI began accepting addenda and revised plans for existing building permit applications electronically on April 1, and started working to convert some previously submitted projects from paper to digital files.  DBI is accepting and processing building permit applications where the construction addresses urgent habitability needs.

Starting April 9, applicants can submit online for the following expanded list:

  1. Completing the permit process for essential and nonessential previously submitted projects (e.g., send addenda, revisions, and requests to convert previously submitted paper plans to electronic plans)
  2. Submitting a new permit for the following:
    • Essential construction projects
    • Accessory Dwelling Units
    • Permits or scope that only need Fire plan/life safety review

DBI hopes to expand new project and permit intake to a larger universe of both essential and nonessential projects by the end of April.

 

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

Mayor Breed Takes Proposal to Streamline Affordable Housing to the Voters

| Tiffany Kats

Mayor London Breed recently introduced the “Affordable Homes Now Initiative,” which would streamline approvals for both 100% affordable housing projects and market-rate projects that exceed the City’s affordability requirements. The proposed ballot measure needs signatures equivalent to at least 10% of the total number of registered voters to be on the November 2020 ballot. Eligible projects would be ministerially approved if they meet the requirements summarized below. Because ministerially approved projects are not subject to environmental review, the ballot initiative would dramatically shorten approval timelines and mandate that both the Planning and Building Departments approve eligible projects within 180 days of submittal.

Eligibility Requirements

  1. Affordability

100% affordable housing projects include residential buildings, as well as mixed-use residential developments with ground floor nonresidential uses. For such projects, all of the residential units must be affordable with up to a maximum overall average of 120% area median income (“AMI”) across all units. However, the maximum rent or sales price for these affordable units cannot be higher than 20% below median market rents or sales prices for the neighborhood in which the project is located.

The ballot measure would also extend streamlined approvals to increased affordability housing projects (“IAHP”) as follows:

  • Projects with less than 25 units must exceed the on-site affordable housing requirement under the City’s Inclusionary Affordable Housing Program (“Inclusionary Program”).
  • Projects with 25 or more units must comply with the Inclusionary Program and provide additional on-site affordable units equal to 15% of the number of units required under the Inclusionary Program.

For example, a 100-unit project with a 24% on-site requirement would be required to provide 24 on-site units under the Inclusionary Program. In order to qualify as an IAHP, an additional 15% of the required 24 units, or 4 units, would need to be provided on-site for a total of 28 below market rate units.

For both 100% affordable projects and IAHPs, each on-site unit cannot exceed a maximum purchase price or rent of 140% AMI. For rental projects, the rent cannot exceed 30% of the applicable household income limit; For ownership projects, the annual housing cost cannot exceed 33% of the applicable income limit. Finally, the units must be restricted as affordable for the life of the project, or a minimum of 55 years, through a recorded regulatory agreement.

  1. Code Compliant

Any eligible housing project must also comply with objective standards of the Planning Code or state law, including height and bulk requirements. Conditional use requirements that might otherwise require Planning Commission approval for height or large lot developments, for example, are waived with the exception of conditional uses for non-residential use, parking, modification of dwelling unit mix requirements, and location of curb cuts. In addition, project sponsors of eligible projects may request certain exceptions as-of-right, and available density bonus programs can be used in conjunction with this streamlining measure.

  1. Additional Requirements

Finally, eligible affordable housing projects cannot involve the removal of existing residential units, demolition of certain designated historic buildings, or construction on lots under the jurisdiction of the Recreation and Parks Department, and must be in a zoning district that allows dwelling units. Projects with more than 30 units must also pay prevailing wages to construction workers.

Streamlined Ministerial Approval

Prior to submitting a development application for a streamlined affordable housing project, the project sponsor must place a poster at the property for 30 days, describing the project and stating that the project is expected to be subject to the streamlined review process. After a complete development application is submitted, the Planning Department would have a 60-day period to: (1) determine whether the project is eligible for streamlining and (2) complete design review.

Projects that meet these eligibility requirements would be ministerially approved and exempt from any discretionary approvals and review by the City, including by the Planning Commission, Historic Preservation Commission, Arts Commission, Board of Supervisors, and Board of Appeals. Any building permits must also be ministerially approved by the Planning Department and issued by the Department of Building Inspection within 180 days of submittal of a complete development application. The Board of Appeals would still have jurisdiction over appeals of building permits issued to eligible affordable housing projects, but would only narrowly consider whether the permits comply with objective standards in the Building Code.

Because these projects would be approved ministerially, environmental review under CEQA would not apply. Project opponents often appeal CEQA determinations to the Board of Supervisors, resulting in both subjective political decision-making and significant delays to entitlement schedules. As a result, the ballot initiative would allow eligible affordable housing projects to be approved much faster than they are currently.

We will continue track the progress of Mayor Breed’s proposed ballot measure.

Authored by Reuben, Junius & Rose, LLP Attorney Tiffany Kats

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.

Supervisor Ronen Proposes to Remove Most Office Uses in UMU Districts

| Tara Sullivan
Office Use

On Tuesday, February 11th, Supervisor Ronen introduced legislation that would greatly curtail the amount of office use that can go into buildings in Urban Mixed Use (“UMU”) Zoning Districts.  The legislation, available here, will prohibit all general office and allow “client-oriented” office uses at the ground floor with a Conditional Use Authorization.

UMU Districts were created through the Eastern Neighborhoods Area Plan, adopted by the Board of Supervisors in 2009.  The intent of the UMU Districts was to function as a buffer zone between the more restrictive residential and neighborhood commercial districts and the industrial PDR districts.  Uses such as light manufacturing, arts activities, laboratory, business service, and retail are encouraged. Housing is also permitted but is subject to higher affordability requirements.  UMU Districts are primarily located in Eastern Mission, Potrero Hill south of 16th Street, Showplace Square/West SoMa, and the Dogpatch neighborhoods. These areas have historically contained warehouse style buildings that contain a mix of uses interspersed with housing.

The intent in UMU Districts is to locate office use on the upper floors, keeping the ground floors available for more “public-facing” uses, such as traditional retail.  Only office uses that have a “client-oriented” business model, such as doctors offices, accountants, real estate brokers, and the like are permitted at the ground floor. General office use, such as an advertising agency and technology offices, are limited to the upper floors.

Currently, office uses are regulated in UMU Districts through “vertical controls” based on the height of a building.  A two-to-four story building can have 1 floor of office use; five-to-seven story building can have 2 floors of office use; and 8 or more story buildings can have 3 stories of office use.

Under Supervisor Ronen’s proposal office uses would be prohibited on the upper floors throughout UMU Districts.  Exceptions would still exist for qualifying landmark buildings.  The other notable change is that “client-oriented” office uses would be allowed at the ground floor but require a Conditional Use Authorization from the Planning Commission.  As proposed, there are no grandfathering provisions for projects currently under review.

Since the legislation was recently introduced, there are no Planning Department or Legislative Analyst reports or recommendations available.  The Planning Commission must review and make a recommendation on the proposed legislation within 90 days, after which it will return to the Board of Supervisors.  We will keep track of this legislation and provide updates when they become available.

 

 

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

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

 

A Carrot and a Stick for New Housing

| Mark Loper
New Housing

Last week, Mayor London Breed proposed an initiative that would exempt San Francisco housing projects that comply with zoning and volunteer additional on-site affordable units from the arduous and sometimes frustrating discretionary entitlement process. A few days later, Supervisor Hillary Ronen announced plans to further restrict office projects in the UMU zoning district, with the aim to encourage property owners into residential redevelopment instead of commercial. They show different approaches—a carrot and a stick, perhaps—to encourage the production of new housing.

According to a campaign website, Mayor Breed’s latest effort to provide more housing would amend the San Francisco Charter to provide a “streamlined” six-month approval process for all 100% affordable housing projects, and for any code-compliant mixed-income project that provided 15% more affordable housing units on-site than required by code.  In exchange, it would get approvals and start construction months if not years earlier.

The ballot measure is not yet publicly available, but a San Francisco Chronicle article suggested qualifying projects will not require any hearings at the Planning Commission. Other details to track in the initiative include AMI levels for the additional affordable units; the degree of design flexibility regarding certain Code requirements such as unit exposure and rear yard size; workforce and prevailing wage requirements; how the streamlined process will interface with the realities of each project’s CEQA processing; and the amount of design input afforded to City staff.

Supervisor Ronen’s proposed legislation—which is also not yet publicly available—would ban new upper-story office space in parts of the Mission District, Potrero Hill, and Dogpatch that are zoned UMU. Instead of upper floor office, the Supervisor hopes her legislation will spur property owners and project sponsors to consider residential developments instead.

UMU zoning is meant to encourage a mix of uses including but not limited to office, residential, light manufacturing, institutional, arts activities, and retail. Office use is already limited by building height in UMU. It generally cannot be located on the ground floor, promoting retail and other non-office uses in the pedestrian realm. Buildings with 2-4 stories are permitted one floor of above-ground office; 5-7 story buildings can have up to two; and buildings with 8 or more floors can have up to three. So under current zoning any property owner or project sponsor that builds to the height limit already cannot do a 100% office project.

Interestingly, Planning Department data shows that residential development in the Eastern Neighborhoods over the last 10 years outpaced what was anticipated, and less office and other commercial development occurred. If passed, Supervisor Ronen’s legislation could further that trend.

We will continue to track each piece of legislation. Check back for updates.

 

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

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

Updates to the Proposed Intermediate Length Rental Regulations

| Jody Knight
units and intermediate length rentals

Medium-term, furnished rentals have been a part of San Francisco’s housing stock for many years. According to the Corporate Housing Providers Association, roughly 3,000 dwelling units in San Francisco – less than one percent of the City’s total housing – are used as intermediate length rentals. These types of rentals serve workers in higher education, healthcare, theater, and other industries, who are in town too long to stay in a traditional hotel but don’t need a full one-year lease. They also provide housing for long-term family visitors – grandparents helping with a newborn or relatives caring for a sick family member.

However, many affordable housing advocates, who view these rentals as competing with long-term housing for San Francisco residents, lined up at the Planning Commission last fall to protest them. Shortly after, Supervisor Aaron Peskin introduced legislation targeted at  rental properties that require tenants to stay for at least 30 days in order to avoid short term rental regulations (See our prior coverage, New Legislation Aims to Limit “Intermediate Length” Rentals).

The legislation would amend the Planning Code to create a new Intermediate Length Occupancy (“ILO”) Residential Use Characteristic for dwelling units offered for occupancy of greater than 30 days but less than one year. It would also add a new Planning Code Section 202.10 to regulate those units. On January 14, 2020, substitute legislation was introduced which makes several changes to the original proposal. The substitute ordinance is available here.

While the original legislation allowed ILO units only in new construction of projects with at least 10 dwelling units, the substitute legislation would allow existing units to be eligible to be classified as ILO units unless the units are below market rate units built under the City’s Inclusionary Housing regulations or are subject to the Rent Control Ordinance. For buildings with nine or fewer units, requests to establish ILO use would be principally permitted so long as no more than 25% of the units in the building are classified as ILO. For buildings with 10 or more dwelling units, ILO units would require conditional use authorization, and no more than 20% of the units could be classified as ILO.

The substitute legislation further clarified that while ILO units could be offered for occupancy of one year or greater without losing the ILO use characteristic, ILO status would be considered abandoned if otherwise defined as abandoned under the Planning Code.

Finally, the revised legislation provides owners and operators of ILO units 24 months from the effective date of the ordinance to submit a complete application to establish the ILO use. The total number of ILO units Citywide would be capped at 1,000 – an increase above the 500-unit cap in the earlier legislation. While not labeled as interim controls, the intent of the legislation is to put in place a policy to regulate corporate housing while the data to be collected under the program is evaluated by the Controller’s Office. The legislation does not address grandfathering of existing ILO units, of which there are approximately 2,000 more than would be permitted by the 1,000 unit cap, but the 24 month compliance period established by the Ordinance indicates that existing units may not be grandfathered or exempt from the new ILO controls.”.

Residential hotels and student housing would still be exempt from Section 202.10 under the substitute legislation. Furthermore, the Rent Ordinance Amendments proposed in the original legislation would remain, except that the prohibition on non-tenant use, including use for a corporate entity’s own employees or licensees, and the requirement that online listings for units disclose that they are subject to the Rent Ordinance, would be effective April 1, 2020 instead of February 1, 2020.

The Planning Commission voted to recommend adoption of the substitute ordinance on January 30, 2020. We will continue to follow the evolution of these regulations as they move towards adoption by the Board of Supervisors and implementation by the Planning Department and Planning Commission.

 

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.

California Tells Cities to “Approve Housing and Don’t Delay”

| Jonathan Kathrein

The Housing Crisis Act will dramatically reduce the ability of cities and counties across California to obstruct or deny housing by removing the main tools used by housing opponents – unpredictability, subjectivity and delay. To deny a housing project application, cities and counties will now have to make an objective determination and make it more quickly.

The Housing Accountability Act already limits a jurisdiction’s ability to disapprove or conditionally approve a residential housing project for lower and moderate-income residents (up to 120% of the area’s median income level) if the project is consistent with the local zoning and general plan and it meets objective standards.

The Housing Crisis Act of 2019, also known as SB 330, continues to move State housing law toward objectivity and predictability. It applies to urbanized jurisdictions as will be determined by the Department of Housing and Community Development by July 2020 based on US Census data. We expect urbanized jurisdictions to include San Francisco and much of the Bay Area, Los Angeles area, San Diego area, and the Highway 99 corridor through the Central Valley. The new law went into effect on January 1, 2020 and will sunset on January 1, 2025.

An urbanized jurisdiction may not rezone or “downzone” properties where housing was allowed in 2018 in a way that would discourage residential development without “upzoning” elsewhere within the jurisdiction. This includes changes in height, density, FAR, minimum lot size, minimum frontage, and moratoriums or caps on housing approvals. Similarly, an urbanized jurisdiction no longer can adopt subjective design standards or apply those adopted after January 1, 2020 to proposed housing projects.

In an urbanized jurisdiction, residential units cannot be removed from the market. Any project that proposes to demolish protected residential units, including below market rate, rent controlled, or Section 8 units, must replace those units at similar affordability levels. A project applicant must also provide relocation assistance and an opportunity for those tenants to rent the new units.

An applicant can lock the then-current land use controls in an urbanized jurisdiction by filing a preliminary application. A full application must be made within 180 days of the preliminary application and the applicant has 30 months to begin construction. This does not limit existing fees with automatic annual adjustments.

Local planning departments are going to have to plan their hearing calendar carefully for these housing projects. Once a housing development project application is deemed complete (for an entirely residential project or a mixed-use project on land zoned to require at least 2/3 residential), a jurisdiction may only hold five hearings on the project. Workshops and continuances count toward the five-hearing limit. An appeal hearing also appears to count toward the five-hearing total. The number of hearings may not be extended by the applicant. Permit Streamlining Act timelines limit a jurisdiction’s ability to delay the five hearings.

A project applicant, a qualified potential resident, or a housing organization may bring an action to compel an urbanized jurisdiction to comply with these requirements. A court must take action within 60 days and the burden of proof is on the local jurisdiction to show that they complied.

Cities like San Francisco are already taking seriously these new changes. Other jurisdictions are likely waiting for HCD’s official determination later this year. The determination could be a pivotal moment for communities that are on the cusp of urbanization and use discretionary tools to slowly kill housing projects. We will be watching closely.

Please keep in mind that there are many subtleties to both new and existing law. Please contact Reuben, Junius & Rose, LLP for more information.

 

Authored by Reuben, Junius & Rose, LLP Attorney Jonathan Kathrein.

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 50 Revamp: The More HOMES Act Amended

| Justin A. Zucker
SB 50 Housing

SB 50, The More HOMES Act introduced by San Francisco State Senator Scott Wiener in December 2018 was reintroduced with amendments earlier this week. The reintroduction comes after SB 50 was held by the Appropriations Committee last spring by State Senator Anthony Portantino.

SB 50, which we have previously reported on, seeks to address California’s housing crisis by requiring cities to allow increased density for housing projects near “high-quality” transit stops or “jobs-rich areas.” In addition, SB 50 would streamline permitting for multifamily housing developments up to 4 residential dwelling units that are code complaint per the zoning requirements in place as they existed on July 1, 2019. For such projects, the bill would establish a streamlined ministerial approval process, thereby exempting them from the California Environmental Quality Act (“CEQA”) approval process. And SB 50 would prohibit a local agency from adopting any requirement that applies to a project solely or partially on the basis that the project receives ministerial or streamlined approval.  Not surprisingly, opponents of SB 50 continue to express concerns regarding its incentive program taking away local control and the likely displacement of locals through gentrification.

There is an estimated shortfall of 3.5 million units of housing in California that is the result of a decade of low housing production. SB 50 enables the production of more housing and requires larger projects to set aside 15% to 25% of homes to low-income residents. SB 50 aims to increase density in residential areas by making it legal to construct small apartments complexes, such as triplexes and fourplexes, in single-family neighborhoods and up to six-story buildings adjacent to “high-quality” transit.

In order to address the local push back, the following amendments have been added:

  • Gives local governments flexibility – local flexibility plans – for how they implement SB 50’s requirements;
  • A priority preference program for local low-income residents; and
  • Continues to provide a two-year implementation delay for “potentially sensitive communities” and five-year implementation delay for “sensitive communities.” These are generally defined as communities that are vulnerable to gentrification.

Local Flexibility Plans

In lieu of being subject to SB 50, local governments may submit a “local flexibility plan” that crafts their own housing plans. The local flexibility plan must create at least the same number of new units as would be allowed under SB 50.

By July 2, 2021, the Governor’s Office of Planning and Research shall publish rules, regulations, or guidelines for the submission and approval of a local flexibility plan. Local governments will have to submit their local flexibility plans to the Department of Housing and Community Development for review and approval. If the local flexibility plan is certified by the Department of Housing and Community Development, the local government would not be required to grant the incentives provided under SB 50.

To prevent a local government from concentrating new housing in certain areas, a local flexibility plan cannot result in increased vehicle miles traveled and must distribute new housing equally among both lower-income and more affluent areas. The goal being to add housing near jobs to reduce residents’ commutes, and in turn help the state reach its greenhouse gas reduction goals.

Priority Preference Program

In an effort to prevent displacement of low-income residents from their neighborhoods, individuals living within one-half mile of the housing development will receive priority for some of the project’s homes. Forty percent of a housing development’s affordable housing units are to be reserved for low income, very low income, and extremely low-income households living within one-half mile. Note, SB 50 does not include a provision for the creation of guidelines on implementation of the priority preference program.

Sensitive Communities

By July 1, 2023, “sensitive communities” in each county shall be identified by a working group comprised of residents of potentially sensitive communities within the county. The working group will develop a map of sensitive communities within the county to be adopted by the board of supervisors or council of governments, as applicable. And implementation of SB 50 would be delayed until January 1, 2026, for the identified “sensitive communities.” For “potentially sensitive communities,” implementation of SB 50 would be delayed until July 1, 2023.

Senator Wiener has indicated that housing is his top legislative priority this year. And he is likely to have a receptive ally from Governor Gavin Newsom who has pledged to have 3.5 million new homes built by 2025.

SB 50 has until January 31, 2020, to pass the State Senate otherwise the proposal officially dies in the legislature.

 

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.

Prop F – More Restrictions on Campaign Contributions and Advertisements

| Tiffany Kats
Prop F

In June 2019, District 4 Supervisor Gordon Mar introduced Proposition F, also known as the “sunlight on dark money” ballot initiative. The goal, according to Supervisor Mar, was to restrict “pay-to-play” donations and increase transparency in terms of who is contributing to candidates and their committees. However, what resulted was a ballot initiative—which was ultimately approved by approximately 77% of voters in the November election—that appears to only single out donations from the development community.

Campaign Contributions

Proposition F amended the San Francisco Campaign and Governmental Conduct Code by adding limited liability companies and limited liability partnerships, whether for-profit or nonprofit, to the business entities that are prohibited from directly contributing to candidate committees.

In addition, individuals, and any entities the individual controls or majority owns, are prohibited from contributing to the campaigns of candidates for mayor, Board of Supervisors, or city attorney if they have a pending land use matter before the City or a land use matter that was ruled on within the previous 12 months. The following would be prohibited from making these land use-related donations:

  • People who have an ownership interest of at least $5,000,000 in a land use project or property;
  • Individuals who hold a director or principal officer position in an entity with an ownership interest of at least $5,000,000 in a land use project or property; and
  • Developers of projects with an estimated construction cost of at least $5,000,000.

Note that the prohibition on land use contributions is not applicable to matters concerning an individual’s primary residence.

Finally, Proposition F prohibits current members, prospective candidates, or their election committees from accepting or soliciting prohibited contributions. However, the law interestingly includes a “safe harbor provision,” which states that if the political committee or candidate accepted a prohibited contribution after doing “due diligence,” they will not be penalized other than having to forfeit the contribution to the City’s General Fund.

One of the ways to satisfy the “due diligence” requirement of the safe harbor provision is if the person or entity making the contribution states under penalty of perjury that the contribution is not prohibited. In that case, even if the candidate or committee knows or has reason to know that the contribution is illegal, the donor’s statement that it is not prohibited will constitute a complete defense from enforcement against the candidate and/or their committee. The wording of this safe harbor provision is certainly strange – but this is what the current law says. And although provisions of the Campaign and Governmental Conduct Code can typically be amended or repealed by the Board of Supervisors, the section that prohibits land use-related contributions (including the safe harbor protection for candidates and committees) can only be amended or repealed by the voters.

Campaign Advertisements

Proposition F also made a number of changes to campaign advertising laws, including:

  • Lowering the threshold for qualifying as a top donor to political advertisements, which must be disclosed, from $10,000 to $5,000. If any of the top three major contributors is a committee, the disclaimer must also disclose both the name and the dollar amount contributed by each of the top two major contributors of $5,000 or more to that committee.
  • Increasing the minimum Political Reform Act disclaimer size from 12 point to 14 point bold font.
  • Requiring disclaimers in audio and video advertisements to be spoken at the beginning, rather than the end.
  • Requiring committees that file late independent expenditure reports and associated advertisements to also file  an itemized disclosure statement with the Ethics Commission for that advertisement(s)
  • Requiring committees making independent expenditures to pay for mass mailings to file a copy of the mailing and an itemized disclosure statement with the Ethics Commission within five days. However, if the mass mailing occurs within the final 16 days before an election, the copy of the mailing and itemized disclosure statement must be filed within 48 hours.

 

Authored by Reuben, Junius & Rose, LLP Attorney Tiffany Kats

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

 

 

New California ADU Laws Aim to Remove Barriers and Boost Development

| Tiffany Kats

While campaigning for Governor, Gavin Newsom pledged to build 3.5 million new units by 2025 to combat California’s housing crisis. One way to meet this ambitious goal is through the construction of accessory dwelling units (“ADUs”). Since 2017, California lawmakers have passed several bills to streamline the ADU approval process. However, exorbitant fees and strict local requirements in some cities have continued to hinder the development of new ADUs. In response, Governor Newsom recently signed into law five bills that aim to further remove local barriers to ADU development, as well as to incentivize owners of both single-family and multi-family homes to add much-needed additional units to their properties.

AB 68 & AB 881 – Streamlining ADU Approvals

AB 68 and AB 881, introduced by Assemblymembers Philip Ting and Richard Bloom, were consolidated and enacted as one bill because the fundamental goal of the two bills was essentially the same—to streamline and improve the ADU process in order to facilitate the development and construction of ADUs. Effective January 1, 2020 these bills will:

  • Require permits for ADUs and junior ADUs added to existing single-family and multi-family homes to be ministerially approved or denied within 60 days, rather than the 120 days allotted by existing law;
  • Allow the approval of ADUs in proposed housing to be delayed until the new construction is approved, but the ADU permit must still be issued ministerially;
  • Allow cities and counties to establish minimum and maximum ADU size requirements, provided that the maximum floor area is not less than 850 square feet or 1,000 square feet if the ADU has more than one bedroom;
  • Prohibit any lot coverage, floor area ratio, open space, and minimum lot size requirements that would impact or deny ADU production; and
  • Prohibit municipalities from requiring that existing nonconforming zoning conditions be corrected as a condition for ADU permit approval.

Perhaps most importantly, subject to certain requirements, the consolidated bill will require ministerial approval for projects in residential and mixed-use zoning districts that propose to create the following:

  • One ADU (attached or detached) and one junior ADU on a lot with either an existing or proposed single-family home;
  • Multiple ADUs within an existing multi-family building; or
  • Up to two detached ADUs on a lot with an existing multi-family building.

Note that if a garage is converted or demolished to construct a new ADU, the off-street parking spaces do not have to be replaced. Furthermore municipalities will be prohibited from enforcing parking standards for ADUs located within ½ mile of public transit.

SB 13 – Owner Occupancy and Fees

Similar to the consolidated bill made up of AB 68 and AB 881, SB 13 prohibits the enforcement of parking standards for ADUs within ½ mile of public transit, requires ministerial approval of ADU permits within 60 days, and allows the construction of ADUs in garages and detached accessory structures. However, SB 13, introduced by Senator Bob Wieckowski, goes a step further by tackling two key issues: (1) the owner-occupancy requirement and (2) expensive fees.

First, as a condition of approval, local agencies can currently require that an applicant for an ADU permit occupy either the primary residence or the proposed ADU. Until January 1, 2025, SB 13 will exempt all ADUs from such owner-occupancy requirements.

Second, one of the biggest barriers to constructing ADUs in California are the fees associated with getting them approved and developed. To further incentivize owners to construct ADUs, SB 13 will implement a tiered fee structure based on the ADU’s size and location. Specifically, no impact fees can be imposed on ADUs smaller than 750 square feet, and any impact fees assessed for larger ADUs must be proportional to the square footage of the primary residence.

AB 670 & AB 671 – HOA and General Plans

Finally, AB 670 prevents homeowners’ associations from banning or unreasonably restricting the construction of ADUs on single-family residential lots. Meanwhile, AB 671 will require local General Plan housing elements to incentivize and promote the construction of affordable ADUs that can be rented to very low, low, and moderate-income households. The California Department of Housing and Community Development must also draft a list of “existing state grants and financial incentives” for ADU owners and developers by December 31, 2020.

Together, this package of ADU laws hope to ease local restrictions in order to incentivize the development of “affordable by design” ADUs. In the midst of California’s housing shortage, it remains to be seen what impacts these bills will have on ADU construction when they take effect next year.

 

Authored by Reuben, Junius & Rose, LLP Attorney Tiffany Kats

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.

Citywide Jobs Housing Linkage Fee Increase on Office and Lab

| Melinda Sarjapur

On Tuesday, the San Francisco Board of Supervisors passed legislation increasing the Jobs Housing Linkage Fee (“JHLF”) for office and laboratory projects.   While some grandfathering applies to pipeline projects, as of January 2021 new large office projects will be assessed the JHLF at a rate of $69.60 per gross square foot (“gsf”); smaller office developments at a rate of $62.64; and laboratory projects at a rate of $38.37/gsf.

The JHLF was created in the 1980s and applies to projects citywide that increase by 25,000 gross square feet (“gsf”) or more any combination of office, retail, hotel, integrated PDR, laboratory or small enterprise workspaces uses.  The Fee is intended to account for the increased housing demand created by new commercial construction.

Until now, the JHLF program allowed developers to choose between paying an in lieu fee or dedicating land of equivalent value to a housing developer for construction of affordable housing (although the land dedication option was rarely used).  Projects within the Central SoMa Special Use District also have the alternative of dedicating land to the City for affordable housing production.  The JHLF is currently assessed at a rate of $28.57/gsf for office use, and $19.04/gsf for laboratory.

Last May, District 6 Supervisor Matt Haney introduced legislation to raise the JHLF on office to $38.00/gsf – about $10 over the current rate.   Then in September he introduced modified legislation with much steeper rates:  $69.60 /gsf for office and $46.43/gsf for laboratory, with no grandfathering for pipeline projects.  The legislation did not increase the JHLF for retail, hotel, or small enterprise workspace development.

On October 21st, amended legislation was introduced at the Board’s Land Use Committee, providing some grandfathering for pipeline projects by phasing-in rate increases between now and January 1, 2021.   On October 29th, additional amendments were introduced at the full Board, differentiating fee rates for large-cap (> 50,000 gsf) versus small-cap (49,999 gsf or less) office projects.   The final JHLF legislation fee rates are summarized below.

Large-Cap Office (50,000 gsf or more):

Small Cap Office (49,999 gsf or less):

Laboratory:

In addition, Tuesday’s legislation makes the following modifications to the JHLF:

  • Requiring the fee to be indexed annually according to the Annual Infrastructure Construction Cost Inflation Estimate, consistent with most other City development impact fees;
  • Eliminating application of JHLF to “Integrated PDR,” a defunct use category;
  • Allowing projects citywide to comply with the JHLF through land dedication to the City, but removing the formerly-available option of compliance through payment of a fee or land dedication to another housing developer;
  • Requiring sponsors of large-cap office projects approved by the Planning Commission before 9/10/19, which contain approval language stating that the project will be subject to JHLF increases adopted before the project received a Certificate of Occupancy [essentially “key sites” in the Central SoMa Plan area], to pay the difference in JHLF assessed at the time of site permit issuance and the rate due under the legislation ($52.20) prior to issuance of a Certificate of Occupancy; and.
  • Requiring the JHLF Nexus study to be updated every five years.

The JHLF legislation was approved by Board on Tuesday, and will become final unless disapproved by the Mayor within 10 days.  Pending Mayoral action, it is anticipated to take effect in December 2019.

 

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

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