Legislative Analysis Archives

To Fourplex or Not to Fourplex

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

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

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

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

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

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

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

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

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

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

Density Bonus Law & CEQA Tiering Upheld

April 7, 2022April 6, 2022 | Mark Loper

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

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

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

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

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

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

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

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

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

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

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

Planning Commission Considering EV Charging Regulations

March 23, 2022 | Chloe Angelis

This Thursday, the San Francisco Planning Commission will consider an ordinance that would amend the Planning Code to address electric vehicle (“EV”) charging uses. The Planning Code does not contemplate EV charging currently—leaving operators to work with the Planning Department on a case-by-case basis to determine the permissibility and approval path for any new EV charging site.

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

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

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

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

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

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

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

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

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

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

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

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

Planning Commission Considers Changes to Group Housing

February 23, 2022 | Melinda Sarjapur

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

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

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

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

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

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

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

To the Group Housing Definition Legislation:

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

To the Group Housing SUD Legislation:

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

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

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

San Francisco’s New Large Residence Legislation Unveiled

February 17, 2022February 17, 2022 | Kaitlin Sheber

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

Central Neighborhood SUD:

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

Prohibited Dwelling Units:

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

Dwelling Units that require Conditional Use Authorization:

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

Exceptions:

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

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

Authored by Reuben, Junius & Rose, LLP Attorney Kaitlin Sheber.

San Francisco Façade Safety Requirements

February 3, 2022February 3, 2022 | Jody Knight

In 2016, the San Francisco Building Code (“Code”) was amended to require that the façades of certain buildings of five or more stories be inspected periodically by a licensed architect or engineer and that a Façade Inspection and Maintenance Report (“Report”) be submitted to the owner and the Department of Building Inspection (“DBI”). The Code requires the maintenance of façades in accordance with an Administrative Bulletin based on a national standard. The intent of the program is to identify current unsafe conditions that could jeopardize public safety if façade elements fall onto streets and sidewalks below. It is also intended to identify conditions that could deteriorate into unsafe conditions before the next inspection.

The requirements apply to Type I, II, III, and IV buildings. Buildings of other construction types and fewer than five stories may voluntarily comply. For inspection of buildings considered to be historic resources, the qualified professional must have expertise in structural inspection and maintenance of historic resources. Reports are to be submitted based on the schedule below, and then at least every 10 years thereafter. Reports for inspections and maintenance work conducted within 10 years of the deadline satisfy the reporting requirement. Buildings constructed under a permit submitted after January 1, 1998 are exempt from having to conduct an initial inspection, but are required to begin periodic inspections 30 years from the issuance of the Certificate of Final Completion for the building.

Where a building experiences significant damage due to earthquake, weather, or the passage of time, an inspection must be done within 60 days of discovery of the damage, in addition to immediate action to address the damage. Significant damage includes items that have fallen from a building or items that have cracked or dislodged to become potential falling hazards.

It is important to note that buildings built before 1910 were required to submit Reports by December 31, 2021. DBI has alerted the public that in order to avoid penalties, property owners should get started with Reports right away. The next deadlines are as follows:

Buildings built between 1910 and 1925: December 31, 2023
Buildings built between 1926 and 1970: December 31, 2025
Buildings built after 1970: December 31, 2027

Reports may be submitted by email to dbi.facade@sfgov.org, or to DBI in person or by mail at 49 South Van Ness Avenue, Suite 500, San Francisco, CA 94103. DBI is to respond to the Reports within 60 days to confirm whether additional information is required and to confirm dates for additional inspections and reports. Once a Report is approved, the owner/owner’s representative will be contacted to pick up the acceptance letter and pay the associated fees. Reports are not deemed complete until all associated fees have been paid.

For more about this program, property owners can visit DBI’s Façade inspection and maintenance program page.

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

HOA Liens Effective Even In Member Bankruptcy

January 20, 2022 | Michael Corbett

This month, the California Second District Court of Appeal (“Court”) stopped short of prohibiting a common interest development owners association (“Association”) from recovering a portion of surplus proceeds following a nonjudicial foreclosure sale of an Association member’s townhome (“Unit”) where the Association had a recorded financial interest in the Unit.

In Cruz v. Valerio Townhomes Homeowners Association (an appeal from Los Angeles County Super. Ct. No. LS030053)[1], appellant and former Unit owner Cruz defaulted on her mortgage and the property was sold in a nonjudicial foreclosure sale. The sales proceeds exceeded the balance due on the loan, prompting the trustee to give notice of the surplus to all persons with a recorded interest in the Unit. Respondent Association filed a claim with the trustee for a portion of the surplus proceeds. Because Cruz disputed the Association’s claim, the trial court conducted a bench trial on the issue. The trial court entered judgment in favor of the Association and ordered the distribution of $94,873.97 to the Association and the remaining surplus of $20,639.98 to Cruz.

At the heart of this dispute was the validity and enforceability of a lien recorded against the Unit for unpaid assessments in late 2014. Cruz contended the Association’s claim was “full of over-billed dues and unearned and bogus fees” and not in compliance with the requirements of the Davis-Stirling Act (“Act”), the body of law governing residential common interest developments in California.

In 2015, the Association attempted to foreclose on the lien. However, a few days prior to the noticed foreclosure sale, Cruz filed a Chapter 13 bankruptcy petition, preventing the sale.

In the trial court’s tentative statement of decision, it ruled the Association had failed to establish a legally valid lien. Specifically, the Association failed to establish compliance with three (3) parts of the Act: (i) the pre-lien notice; (ii) the notice of recordation of the lien; and (iii) a legally binding vote by the Association board to record the lien. Accordingly, the trial court’s preliminary ruling held that the Association was not entitled to any surplus proceeds from the sale of the Unit.

The Association objected, requesting the trial court to recognize and consider relevant documents from Cruz’s bankruptcy case: the Association’s proof of claim for the lien and the Case Summary and Claims Register, which evidenced that Cruz failed to file an objection to the Association’s proof of claim.

The Association argued that Cruz’s failure to challenge the validity of the lien by objecting to the proof of claim in her bankruptcy case resulted in the claim being deemed allowed. The Association further contended that an allowed claim is in the nature of a final judgment and thus the principle of res judicata[2] precluded the trial court from considering the lien’s validity.

After further consideration of the Association’s argument, the trial court changed course, ruling that under res judicata, the Association’s unchallenged claim was tantamount to a final judgement. Consequently, the trial court determined it did not have the ability to reconsider the validity of the lien.

On appeal, Cruz attacked the Association’s arguments on dueling fronts: (i) the Association had waived any res judicata argument as to the validity of the lien because the Association presented independent evidence in support of the lien’s validity apart from its res judicata defense; and (ii) that collateral estoppel or issue preclusion (i.e., res judicata) did not apply in the subject case.

Both arguments put forth by Cruz were rejected by the Court, which affirmed the trial court ruling.

Waiver of Res Judicata

The Court disagreed with Cruz’s waiver position, pointing out, “waiver is the intentional relinquishment of a known right after knowledge of the facts. The burden … is on the party claiming a waiver of a right to prove it by clear and convincing evidence … and doubtful cases will be decided against a waiver. The waiver may be either express, based on the words of the waiving party, or implied, based on conduct indicating an intent to relinquish the right.” Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 31.

The Court continued, “California courts will find waiver when a party intentionally relinquishes a right or when that party’s acts are so inconsistent with an intent to enforce the right as to induce a reasonable belief that such right has been relinquished.” Waller, supra, at pp. 33–34. “The pivotal issue in a claim of waiver is the intention of the party who allegedly relinquished the known legal right.” DRG/Beverly Hills, Ltd. v. Chopstix Dim Sum Cafe & Takeout III, Ltd. (1994) 30 Cal.App.4th 54, 60.

Inapplicability of Res Judicata

The Court – correctly – began its analysis by recognizing that even where all three (3) required elements of res judicata (as described in footnote 2) have been satisfied, the Court has repeatedly looked to the public policies underlying the doctrine before concluding whether res judicata should be applied in a particular setting. Lucido v. Superior Court (1990) 51 Cal.3d 335, 342–343.

Homing in on the relevant federal bankruptcy statute, the Court cited title 11 of United States Code section 502, subdivision (a), which states a “claim or interest, proof of which is filed under section 501 of this title …, is deemed allowed, unless a party in interest … objects.” (Emphasis added) Further, the allowance or disallowance of “a claim in bankruptcy is binding and conclusive on all parties or their privies, and being in the nature of a final judgment, furnishes a basis for a plea of res judicata.” Siegel v. Fed. Home Loan Mortg. Corp. (1998) 143 F.3d 525, 529. Put simply, California courts must give full faith and credit to a final order or judgment of a federal court. Levy v. Cohen (1977) 19 Cal.3d 165, 172.

Conclusion

Because Cruz did not object in bankruptcy court to the Association’s proof of claim concerning the subject lien, the claim was deemed allowed. 11 U.S.C. § 502(a). Even if a bankruptcy case were later dismissed – as was the case in Cruz – the result would be the same. As the Court noted, the validity of the subject lien was established when the Association filed a proof of claim in Cruz’s bankruptcy case and Cruz failed to object. 11 U.S.C. § 502(a); Siegel, supra, at p. 529.

Owners’ associations throughout California should therefore not be deterred from enforcing lien rights against a delinquent member who has declared bankruptcy, and would be wise to promptly lodge a proof of claim at the outset of such proceedings to protect its financial interests against delinquent members.

[1] While Cruz is an unpublished opinion, it gives valuable insight on how future courts might deal with similar issues.

[2] The doctrine of res judicata gives certain conclusive effect to a former judgment in subsequent litigation involving the same controversy. The required elements for applying this doctrine to either an entire cause of action or one or more issues are the same: (i) a claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (ii) the prior proceeding resulted in a final judgment on the merits; and (iii) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding. People v. Barragan (2004) 32 Cal.4th 236, 252–253; Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797.

Authored by Reuben, Junius & Rose, LLP Attorney Michael Corbett.

Oakland ADU Updates: Legalization Amnesty Program

January 12, 2022January 13, 2022 | Justin A. Zucker

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

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

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

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

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

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

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

Supervisor Safai Introduces Competing Fourplex Legislation

December 8, 2021December 8, 2021 | Sabrina Eshaghi

On November 30, 2021, Supervisor Ahsha Safai introduced legislation that would allow up to four units on lots zoned RH-1(D), RH-1, and RH-2 with the addition of affordable housing for moderate-income families. This competes with Supervisor Rafael Mandelman’s fourplex legislation, which would allow up to four units in all RH zones without any affordability requirement. Supervisor Safai’s legislation takes a different approach that would require at least one deed-restricted middle-income housing unit in order to build a fourplex. Safai’s legislation would also allow exceptions to certain Planning Code requirements, provide priority processing, and eliminate 311 notice and discretionary review.

Specifically, the legislation would create what it calls the Affordable Housing Incentive Program, which would apply to lots that are (1) located in the RH-1(D), RH-1, or RH-2 districts, (2) within one mile of a major transit stop, and (3) no smaller than 2,500 square feet. In addition, the project cannot be subject to any other density bonus programs and any existing “protected” units, which includes rent controlled or affordable housing units, must be replaced.

Under the Program, one affordable housing unit is required to allow up to three units per lot and two affordable units are required to allow up to four units per lot. The affordable housing units must be provided at 110% of the area median income (“AMI”) for rental units, or 140% AMI for owned units. Currently, these income levels for a single person household translate to $102,600 and $130,550, respectively. At the 110% AMI level, base rent for a one-bedroom unit would be limited to $2,713 and $3,010 for a two-bedroom unit. The affordable units are also subject to certain size requirements.

In exchange for the affordable housing, the Program allows a variety of Code modifications and shorter processing times. For example, lots in the RH-1(D) and RH-1 zoning districts are currently limited to a height of 35 feet, but the Program would generally allow up to 40 feet. In addition, projects under the Program would be entitled to reduced rear yard, dwelling unit exposure, and open space requirements. The Planning Director may also grant minor exceptions from Code requirements to allow building mass to appropriately shift to respond to surrounding context when the proposed modification would not substantially reduce or increase the overall building envelope. Likewise, the provisions of the Residential Design Guidelines related to “building scale and form” and “building scale at the mid-block open space” would not apply.

To provide more certainty in the approval process, the Program requires projects to be approved within 180 days of submittal of a complete project application, unless an environmental impact report is required. It also eliminates 311 neighborhood notification and discretionary review. Instead, the only opportunity to appeal would be through the associated building permit.

The legislation is currently in a mandatory 30-day holding period before any Planning Commission or Board Committee hearings can take place. Meanwhile Supervisor Mandelman’s legislation has already advanced from the Planning Commission and is awaiting a Land Use Committee hearing date. It remains to be seen what version of the fourplex legislation will make it to the full Board.

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

State Warns San Francisco Concerning Rejected Housing Projects

December 2, 2021December 2, 2021 | Thomas P. Tunny

The Board of Supervisors (“Board”) recently issued two unusual denials of large housing projects – the projects would have provided over 800 dwelling units, over 130 of which were affordable. In an even more unusual move, last week the California Department of Housing and Community Development (“HCD”) informed San Francisco officials that the City may have violated state housing laws by rejecting the projects. Without getting into the Board politics behind the project denials, the State’s actions are notable. The State rarely takes such a public stance concerning local planning and zoning decisions, indicating the high priority the State is placing on the provision of housing and the concern with these decisions.

The Two Rejected Housing Projects

The two housing projects at issue are located at 469 Stevenson Street and 450-474 O’Farrell Street. The 469 Stevenson Street project is a mixed-use, 27-story high rise with 495 dwelling units, including 89 affordable units. The Board of Supervisors denied the project on CEQA grounds, overturning the Planning Commission’s certification of the project’s Final Environmental Impact Report (“FEIR”). In HCD’s own words, the Board cited “various vague concerns about FEIR deficiencies, including seismic concerns, effects (e.g., shadowing) on historic resources, and gentrification.”

The project at 450-474 O’Farrell Street is a modification of an earlier project. The new project proposes more, smaller units (316 vs. 174) that are “affordable by design”, and included 43 affordable/below market rate units. The Board overturned the Planning Commission’s approval of a Conditional Use Authorization for the project without yet issuing written findings.

HCD Letter

HCD made its concerns known to City officials in a letter last week. The message was pointed. HCD expressed concern that the Board’s decisions “represent[] a larger trend in the City/County,” noting that “California’s housing production does not meet housing need. In the past ten years, housing production has averaged fewer than 80,000 new homes each year, far fewer than the 180,000 new homes needed…. As a result, the cost of housing has skyrocketed, and San Francisco stands amongst the top two most expensive housing markets in the United States.”

HCD raised significant concerns with the City’s compliance with the Housing Accountability Act (“HAA”). Under the HAA, a local government cannot disapprove or reduce the density of a housing development project that complies with applicable, objective general plan, zoning, and subdivision standards and criteria, including design review standards, in effect at the time that the application was deemed complete, unless it makes written findings supported by a preponderance of the evidence on the record that the project would have a specific, adverse impact upon the public health or safety and there is no feasible way to mitigate that impact. The Board did not make such findings for either project.

HCD also expressed “concern[] about the significant delays in the approval of housing generally and in the City/County in particular.” As to the O’Farrell project, HCD expressed concern that the City violated the “5 Hearing Rule” set forth in the Housing Crisis Act of 2019 (SB 330). The Planning Commission had six hearings on the project and the Board appeal was the seventh hearing.

Lastly, HCD warned the City about its implementation of and compliance with its existing Housing Element and its upcoming Housing Element update. The Housing Element update “must … demonstrate local efforts to remove governmental constraints that hinder the locality from meeting its share of the regional housing need and include program actions with metrics and milestones to remove or mitigate identified constraints…. Academic research continues to show that San Francisco’s processing and entitlement timeframes and procedures exceed the norms for other jurisdictions of similar size and complexity and act as a constraint on the development of housing.”

HCD concluded by reminding the City that HCD “has both the authority and duty to review any action or failure to act by a city, county, or city and county that it determines is inconsistent with an adopted housing element… or in violation of the HAA.” HCD’s investigation remains open and they are continuing their review of the City’s practices with respect to housing review and approval generally.