Permit Process Improvements

| Gillian Allen
public works dbi

In recent months, City agencies have been working hard to improve review and issuance timelines for permits. This update focuses on the way that San Francisco Public Works (“Public Works”) will review releases for building permit applications (“BPAs”) filed after September 1, 2023 and upcoming changes from the San Francisco Department of Building Inspection (“DBI”) to improve process.

Public Works

Public Works has formally created a series of information sheets that help applicants include the necessary information to have the most streamlined review possible as well as obtain releases for building permits with scopes of work that qualify. We have summarized the changes below, but for the complete process, check out their “What’s New” page.

Currently, when a BPA is routed by DBI to Public Works, the Public Works plan checker will determine which Public Works permits are required for construction or occupancy of the public right-of-way. The applicant for the BPA is notified of the corresponding Public Works permit(s) required as a result of the proposed construction or occupancy. At that time, the BPA is placed on hold by Public Works and a note detailing the permit requirements are added to the DBI’s Permit Tracking System (PTS) by the Public Works plan checker. The hold on the BPA will remain in place until the applicant submits the appropriate Public Works permit applications and the Public Works plan checker has performed a detailed engineering review of the application(s), which, due to current staffing, can often delay the issuance of the building permit.

“Recognizing the importance of timely issuance of building permits, Public Works has evaluated and identified procedural reforms to allow for construction on private property, associated with BPAs, to commence while associated public right-of-way infrastructure, other construction and/or occupancy permit applications under the purview of Public Works are under review. It is vital that Public Works safeguard the public right-of-way, while at the same time establishing design review standards to allow for the timely release of BPAs that meet established minimum criteria. To accomplish this important goal, Public Works has created minimum submittal requirement tiers based on the BPA scope of work.”

Projects that fall under Tiers I and II will be eligible for early BPA release. Tier II requires BPA plans show minimum information as required by Public Works, detailed in their “MINIMUM STANDARDS FOR DESIGN REVIEW FOR BPA RELEASE” and in “PLAN CHECKER VERIFICATION LIST FOR BPA RELEASE” which starts at page 11 of the Minimum Standards for design review for BPA release memo.

A plan checker may request additional information to clarify specific items shown on BPA plans. If plans do not meet the minimum standards for review, the applicant shall resubmit revised plans to meet those standards prior to receiving a BPA release from Public Works.

Public Works has worked hard to create clear guidelines to improve the release process for building permits and we have found it to be working well over the last few weeks that it has been in process. Sincere thanks to all the public servants who collaborated to make this happen.

DBI

DBI has been doing an excellent job of catching up on their intake project backlog and recently announced that starting January 1, 2024, all intake review permits will be electronically reviewed. Electronic Plan Review has proven to save time on project review and it also saves customers money. Learn more about how to submit plans using Bluebeam Electronic Plan Review here. Additional Electronic Plan Review information is located here, and specific information for how to use Bluebeam on a Mac is here.

DBI is also developing a concierge plan review service for over-the-counter paper review that will focus on projects needing more than an hour of review but less than four hours of review. They are hoping to implement this service in early 2024 and we will update you on this exciting option as soon as it is available.

 

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

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

Update on Site Permit Reform

| Gillian Allen
permit

On May 11, 2023, the San Francisco Planning Department gave a presentation on Permit Streamlining at a joint Building Inspection Commission and Planning Commission hearing.  The focus of the presentation was on ways that San Francisco agencies can improve on the existing permitting timelines which are known to be some of the longest in the State, due to lack of coordination, unclear steps for the applicants and use of outdated tools for tracking of workflows.  This is part of a key initiative to streamline and improve the project development and construction permitting process.

The Planning Department and the Department of Building Inspecation are partnering to create a process which will improve upon the current “Site Permit” process by creating a Development Review Permit.  If this process is adopted, it will allow applicants to apply online with the Planning Department through the Accela portal with an early set of plans, get a plan check letter within a short amount of time that has review comments from all City agencies including Planning, Building, Fire, DPW, SFPUC and BUF, as well as one cohesive list of all agency applications needed for the process.  The applicant will then be able to respond with a revised set of plans and responsive comments and, upon approval of the responses as well as filing of any additional applications identified in the plan check letter, will receive an issued Development Review Permit once entitlements are complete.  This permit will be appealable to the Board of Appeals.

After the Development Review Permit has been issued, construction level plans can be submitted through the Department of Building Inspection for review and issuance of construction permits through the addenda process.  Any construction documents submitted through the Addenda process will be protected from appeal as they are today.

Leading up to this presentation, both the Planning Department and Department of Building Inspection held meetings with the public to seek information and suggestions on process improvement.  Several of the suggestions were echoed at the joint hearing and the agencies will continue to work together to integrate and create the best process possible.  Many applicants are interested in what level of design documents will need to be submitted.  The Department of Building Inspection and the Planning Department are proposing that, at minimum, plans should provide enough information for agencies to perform a preliminary review of accessibility compliance, construction type, size and height of the building, fire protection to evaluate setbacks from property line and firewall or other fire protective design needs, as well as egress.  The Planning Department is also incorporating a list of review criteria proposed by the American Institute of Architects while the Department of Building Inspection is working on further defining what criteria they need for early review.  Both agencies are working towards finalizing these efforts on July 20, 2023 and will be holding workshops with the public thereafter to receive further feedback.  For more information and updates, please go to the information page.

 

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

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

Bigger Code Violation Fines In SF’s Future?

| Mark Loper
code

We kick off Reuben, Junius and Rose’s 2023 client updates by discussing a proposed San Francisco ordinance that would significantly enhance penalties for unpermitted work eliminating or adding residential units and significantly altering historic resources, and increase administrative and civil penalties for violations of the Building and Planning Codes.

The legislation, co-sponsored by Supervisors Ronen, Peskin and Chan, was introduced in July 2022 (Board File No. 220878). In October 2022, the Building Inspection Commission voted unanimously to recommend approval. A Planning Commission hearing is scheduled for next Thursday, January 19th. After the Planning Commission, hearings would take place at the Board of Supervisors’ Land Use and Transportation Committee, followed by the full Board.

The ordinance would increase the Zoning Administrator’s authority to impose significant monetary fines on property owners who carry out unpermitted work associated with a residential demo, merger, or change of use, and significant alterations to historic buildings. For unpermitted alterations, mergers, or demolition that eliminate one or more residential units, and also for unpermitted additions of more than two unauthorized units, the property owner would be liable for an administrative penalty of up to $250,000 for each unit. The owner also would be required to file a permit and request retroactive permission from the Planning Commission to eliminate the dwelling unit with a Planning Code Section 317 Conditional Use permit. The Planning Department’s Zoning Administrator would ultimately determine the amount of the fee; the ordinance directs the Planning Commission to adopt factors and criteria for the Zoning Administrator to consider.

The ordinance would also punish property owners who carry out alterations that are tantamount to demolition without securing a Section 317 Conditional Use permit. For five years, no permits authorizing construction or alteration are allowed. There would be one exception: the permit would need to have the same or more residential units, with the same or higher proportion of residential to non-residential units as the building as it existed before the unpermitted work occurred. Also, the replacement units need to be at least 40% of the size of the largest unit in the project. They also could be subject to rent control; as written, this provision of the draft ordinance is unclear.

The ordinance would also enhance the potential penalties for unpermitted damage to historic properties. For historic properties that are designated locally or on the California or National registers, a penalty of up to $500,000 is available for each structure that is “significantly altered or damaged,” or “demolished.” Similar to the unpermitted residential work, the Historic Preservation Commission would be tasked with adopting factors and criteria for the Zoning Administrator, and would also need to define the terms “significantly altered or damaged” and “demolished.”

Also, for all Notices of Violation (“NOVs”)—not just NOVs relating to unpermitted work on residential or historic buildings—the ordinance would add the following additional factors when considering whether to uphold the NOV and whether to assess administrative penalties:

  • if a violation was willful or intentional;
  • the extent to which it resulted in financial gain;
  • if tenants were displaced; if the violation is reversible; and
  • if it created a nuisance, health hazard, or dangerous condition.

Also, the daily administrative penalty would be increased from $100 to $200.

On appeal to the Board of Appeals, if the Board upholds in whole or in part the Zoning Administrator’s decision on the amount of the penalty, it can reduce the penalty, but not below $50,000 for each residential unit or $100,000 for each historic property.

The ordinance would also allow a court to assess a daily civil penalty of between $200 and $1,000 and adds criteria for a court to consider when assessing the amount of any civil penalty for any Planning or Building Code violation. They include: the nature and seriousness of the misconduct, number of violations, the persistence of the misconduct, length of time, willfulness of the defendant, if any tenants were displaced, if the violation is reversable, if the violation impacted an historic resource, the financial gain because of the violation, and the defendant’s net worth.

Finally, the ordinance adds some procedural teeth. Any time after issuing an NOV, the Zoning Administrator can issue a “Notice of Additional Compliance Actions and Accrued Penalties” that requires a responsible party to perform additional abatement actions, and/or sets out the total penalties accrued to-date. Final NOVs or Notices of Violation and Penalty Decisions (“NOVPD”) may be recorded as an Order of Abatement on title, which also would spell out the steps necessary to abate the violation. The Ordinance would also make transferees responsible for daily penalties that accrue after the transfer if an NOV or NOVPD has been recorded on title; if not, the Zoning Administrator can only start assessing daily penalties if a notice and an opportunity to cure the violation are provided.

We will continue to track this interesting piece of legislation as it moves forward.

 

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.

Building Department Update

| Gillian Allen
DBI

The San Francisco Department of Building Inspection (“DBI”) is working hard to improve on permit review and processing times. They launched a program called “Enhanced In-House Review Permit Application Process” on July 1, 2022, which should streamline the review and issuance of small and medium sized projects, and there are many new faces at the over-the-counter shifts which inevitably gives more seasoned staff time to work through their backlog.

The Enhanced In-House Review program incorporates suggestions from stakeholders and internal staff and creates new plan check categories. Until recently, DBI had only two options for plan review—Over-the-Counter and In-House review. For a project to qualify for Over-the-Counter review, the plan review needed to be an hour or less at each plan review station. Under their new Pre-Plan Check system launched on July 1, they added two new plan check categories for small to medium-sized projects that don’t qualify for Over-the-Counter review, but could be reviewed in one day after their assignment to a reviewer. Projects are now pre-screened per the criteria below:

Plan Check Category OTC Level 1 In-House Level 2 In-House Level 3 In-House Level 4
Time for plan review <1 hour 1-4 hours 4-8 hours >8 hours

New Central Queue

The new system also changes the way DBI assigns projects to plan reviewers. Previously, they assigned projects to plan reviewers as they came in—so if a plan reviewer had a large workload or went on vacation, customers waited longer for plan review. Under the new system, projects now go into a central queue and will be assigned to plan reviewers on a weekly basis. For customers, it means that once your project is assigned to a plan reviewer, you can expect DBI to begin review on your project in the next few business days. Over the past three weeks, the new process has effectively increased the quality of plan submissions and is helping DBI manage its workload better.

DBI’s next step is to remove projects from individual plan checker’s queues and to move all the existing in-house review project submissions into one queue and then begin assigning them to plan reviewers on a weekly basis.

The program has been in action for about two months, and according to the August update, DBI is pleased with the progress on the transition to the new process. About 68% of new applications have been accepted as complete and all of the older priority projects, such as affordable housing and Accessible Dwelling Units, have been assigned to a plan reviewer.

The new system also establishes a minimum 20 business days and maximum 40 business days target for DBI to respond to the application with comments for the applicant to clarify or address. Other agencies will attempt to match these turnaround thresholds but may have exceptions.

To ensure clear communication and to keep projects moving, DBI staff comments that cannot be or are not addressed with two resubmittals (ie: resubmitting revised plans), will be automatically escalated to a DBI plan check supervisor. Should a project have unresolved comments after four resubmittals, the project will automatically be escalated to the Deputy Director of Permit Services.

DBI plans to start posting updates to their website in September to let you know the date range of projects being assigned to DBI staff every week and appreciates your support as they move from the old system to a new system that will serve you better. Learn more here.

 

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

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

Appellate Court Clarifies Permit Streamlining Act’s Noticing Requirements

| Mark Loper
PSA's

On the heels of the Berkeley Shellmound SB 35 decision in favor of streamlined housing, another recent Court of Appeal decision rejected a public agency’s attempts to delay a housing project under the Permit Streamlining Act (“PSA”), and clarified that a jurisdiction with permitting authority must take action within the PSA’s time limits even if the project’s public hearing notice did not specifically discuss the PSA’s “deemed approved” provision.

Overturning a 2006 decision about the level of detail necessary to trigger the PSA’s “deemed approved” requirement when a City fails to render a decision on a project within a specified time period, the Court of Appeal in late June determined that a public agency’s hearing notice did not need to specifically include a reference to the deemed approved outcome (Linovitz Capo Shores LLC et al v. California Coastal Commission, No. G058331 (Cal. Ct. App. June 25, 2021)). Instead, the Court found that the California Coastal Commission (“Coastal Commission”) failed to properly make a decision on the merits of a mobilehome housing project within the PSA’s time limits, and under the PSA the project was approved. While the fact pattern for the case is somewhat unique, it provides a lesson for local and state permitting agencies, and project sponsors dealing with jurisdictions hostile to new housing.

Owners of beachfront mobilehomes in San Clemente, Orange County, filed permits with the Coastal Commission and other permitting agencies to renovate their mobilehome park. After several years, the Coastal Commission issued individual public hearing notices for each application. The notice included a project description, the date, time, and location of the hearing, hearing procedures, and ways the public could participate. Notably, the hearing notice did not specify the deadline for the Coastal Commission to render a decision on the permits under the PSA. However, the staff report provided in bold lettering that the Coastal Commission was required to make a decision at the hearing in order to comply with the PSA, and the Commission’s legal counsel discussed the “deemed approved” deadline at the hearing itself.

At the project hearing, the sponsors agreed in principle to withdraw and re-file their applications with an amended scope, but asked the Coastal Commission to waive resubmittal fees and a resubmittal waiting period. The Commission waived the waiting period, but not the resubmittal fees, and the meeting recessed without any further comment from the project sponsors. The Commission did not take any formal action on the pending applications. The sponsors then sued the Commission, claiming in part that the projects had been deemed approved under the PSA.

Unsurprisingly, the Coastal Commission claimed that the projects were not approved for several reasons. Relevant to the PSA, according to the Commission, the requisite public notice under the PSA was never given. It claimed the hearing notice needed to include a statement that the projects would be “deemed approved” if the Commission did not act within 60 days. The Court of Appeal disagreed, interpreting the PSA to require such a statement only when an applicant itself is providing notice of a hearing under the PSA. When the permitting agency provides notice, the PSA’s time limitations can apply even if the notice does not discuss the PSA.

The Court of Appeal’s decision overturns a 2006 decision reaching the opposite conclusion. The Court did not promulgate a list of information that must be included in a public notice to trigger the PSA’s deemed approved deadlines, instead reaching a narrower conclusion that the notice provided in this case—as discussed above—complied with statutory law and constitutional due process principles.

Interestingly, the Court noted that even though the Coastal Commission did not have a legal obligation to notify the public of the upcoming PSA deadline, it did just that, both through the project’s staff report and its legal counsel’s advice to the Commission that the PSA deadline was approaching. The Court also went out of its way to note near-unanimous public support for the project, which arguably made its decision easier. Implied in the Court’s opinion is that the Commission made a simple mistake of parliamentary procedure by not taking an official action on the pending applications in front of it.

The Court did not opine on whether the Commission could legally keep the hearing open and continue it to a future date past the PSA deadline date, or adopt a motion of intent to disapprove and continue it. Both are common actions taken by permitting authorities that pro-housing activists have long claimed circumvent the intent of the PSA and cause delay to housing projects.

Increasingly, California courts are being asked to enforce the pro-housing laws passed in Sacramento in recent years, such as SB 330, the PSA, and SB 35. For example, two trial courts recently rejected anti-housing voter initiatives on the grounds they violated SB 330, either one of which could be appealed and become binding case law. We will continue to keep you up to date on major housing-related legal developments.

 

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.

Monument Referencing Before Construction

| Gillian Allen
Monument

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

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

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

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

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

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

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

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

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

 

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

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

New Interim Density Controls for Residential-Commercial Districts

| Tara Sullivan
interim zoning controls

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

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

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

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

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

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

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

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

 

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

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 Increases Density Bonus to 50%

| Mark Loper
density bonus

Starting in 2021, residential projects in California with on-site affordable housing can get a density bonus of up to 50%.  Currently, under Government Code Section 65915—commonly known as the Density Bonus Law—the maximum bonus is 35%.  It is available for projects that include 11% very low income below market rate (“BMR”) units, 20% low income BMRs, or 40% moderate income BMRs.  Under a new law that flew somewhat under the radar during the last legislative session in Sacramento, a 50% bonus is available with increased affordability.  Specifically, 15% very low income, 24% low income, or 44% moderate income allow the full 50% bonus.

The new state law, AB 2345, requires cities and counties to comply even if they have not yet updated local implementing ordinances.  This means starting January 1, 2021, all jurisdictions in California are required to process projects proposing up to 50% additional density as long as those projects provide the additional BMRs in the “base” portion of the project, unless the locality already allows a bonus above 35%.

AB 2345 also lowered the BMR thresholds for concessions and incentives for projects with low income BMRs.  For background, in addition to waivers from development controls that preclude a project from achieving the density bonus it is guaranteed (with some narrow exceptions) in exchange for on-site BMRs, the Density Bonus Law allows sponsors to ask for “concessions and incentives” from zoning and development regulations that would make the project more expensive to construct.  Starting in 2021, projects with 17% low income BMRs can qualify for two concessions or incentives, and projects with 24% low income BMRs can qualify for three.

Finally, density bonus projects within one-half mile of a major transit stop and with direct access to the stop may be able to avoid minimum parking requirements.

All-Electric New Construction in San Francisco Starting in June 2021

On Tuesday, the San Francisco Board of Supervisors passed a law mandating new construction projects be all-electric.  The building or project will need to use a permanent supply of electricity as the source of energy for all space conditioning including heating and cooling, water heating, pools and spas, cooking appliances, and clothes drying appliances.  Gas or propane piping systems are not permitted from the point of delivery at the gas meter.

The all-electric requirement takes effect on June 1, 2021.  Starting then, all new building or site permit applications will need to comply.  Sponsors should keep in mind there is currently a multi-month delay to file permits at the Department of Building Inspection (“DBI”), and should not wait until the last minute to get their building or site permits on file.

There are two minor exceptions.  If it would be physically or technically infeasible to construct an all-electric building, DBI can grant modifications, but only to those portions of the building where infeasibility can be demonstrated, and the alternative design provides equivalent health, safety, and fire protection.  Importantly, financial considerations cannot be used to show infeasibility.

Also, a restaurant is allowed to have gas facilities used exclusively for cooking equipment.  For permits filed through December 31, 2021, permits identifying a restaurant use will be allowed to have gas facilities.  After 2021, the exception is narrowed and DBI has to determine that the gas system is necessary for the specific restaurant using the space.  Identifying a specific restaurant tenant that early in the process will likely be a challenge for many new construction projects.

 

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.

Task Force Recommends Fee and Permit Changes

| Tara Sullivan
Task Force

There are few cities that have not been negatively impacted by COVID-19.  Since March, San Francisco and the surrounding cities have been largely shut down, with businesses opening in a staggered manner based on infection and death rates.  Nonessential office workers remain at home.  Seven months into this “new normal”, a number of studies and reports have been issued, analyzing the impact the virus has had on the local economy.  Without a doubt, San Francisco appears to have been hit particularly hard, as more and more companies are allowing employees to work remotely, many through July 2021.  The result is an empty business district and what appears to be an exodus of residents from the City.  The lack of office employees working and residing in the City has had a drastic effect on the economy.  A few key statistics:[1]

  • 1% office vacancy rate in Q3
  • 43% decline in sales tax receipts from April to June as compared to 2019
  • 65% decrease in sales at restaurants and bars and consumer goods stores
  • 50%+ storefronts are not operating as of August 2020
  • 1% increase in online sales tax receipts

Recognizing that the City was facing a looming financial crisis, Mayor Breed and Board President Yee convened a task force – the Economic Recovery Task Force – in the spring to advise the City and provide recommendations to support the recovery efforts from COVID-19.  Consisting of over 100 members, the Task Force received 1000 surveys and conducted an additional 900 interviews with residents and business owners in San Francisco.  The Task Force issued its final report on October 8th, listing 41 recommendations ranging from economic stimulus to safe reopening guidelines.

Several of the recommendations focus on the real estate and construction industry.  Construction is a revenue-generator for San Francisco: in addition to bringing in permit and impact fees, statistics show that each $1 million spending in construction translates into approximately 5.93 jobs.  While a recession often leads to a significant slowdown in construction, San Francisco has not seen the resulting stoppage, largely due to projects that were already underway.  However, falling rents and sales prices, high construction costs, and broad economic uncertainty have resulted in developers unable to secure financing for their projects and a slowdown in development projects breaking ground.

The Task Force makes the following recommendations relating to development in San Francisco:

  1. Focus on the major development projects and public infrastructure investments

The Task Force recognizes that there are already many projects that could boost construction – ones that have already received approvals and/or been identified by the City.  The City recently underwent a major rezoning in Central SoMa, with several large projects approved.  In addition, there are several significant long-term projects underway on SF Port property.  Further, the City’s last 10-year Capital plan allocated $39 billion in investments from 2020-2029.

The Task Force calls for the City to continue focusing on its major developments, such as the Shipyard, Mission Rock, Pier 70, Treasure Island, and Central SoMa, as these projects bring with them thousands of jobs and support for local business.  They also call for an update to the City’s Capital plan, focusing on projects that promote good state of repair for its buildings, right-of-way, public spaces, and other infrastructure assets.  If these projects can begin (or continue) construction within the next year, then it would provide needed jobs for the construction industry while developing spaces for the eventual reopening of the City.

  1. “Redesign” the building permit processes and consider an application fee “holiday” or reduction to incentivize permits

The Task Force calls for the overhaul of the City’s permit processes – not a new idea but one that has gained traction over the past months.  The Task Force calls out DBI, Fire Department, SFPUC, and Planning, as agencies that should implement programmatic and regulatory changes to redesign the permitting process, increase transparency, make the permitting process as easy and affordable as possible, and to remove permitting and process requirements not directly related to health and safety.

The Task Force also calls for an application fee “holiday” – a temporary reduction or elimination of fees – that would incentivize owners (both business and residential) and developers to pull permits and undertake construction projects.

  1. Allow for the deferral of Development Impact Fees

Development Impact Fees are imposed on certain projects that will cause an increase in demand of public services, infrastructure, and housing.  Impact fees are imposed at project approval and collected at the issuance of the first construction document, often several years before a development receives its certificate of occupancy.  The City has implemented fee deferral programs before, most notably in 2010-2013 during the Great Recession, as well as 2019’s fee waiver for 100% affordable housing projects and Accessory Dwelling Units (ADUs).

The Task Force recommends that the Planning Department develop another fee deferral program for a limited time that would allow developers to defer paying impact fees until each project receives the first certificate of occupancy, at the end of construction, rather than at issuance of first construction document.  This would help developers secure financing on projects that would likely not be able to break ground and pay impact fees otherwise.

These three recommendations are a few of the 41 that address the financial impacts of COVID-19.  Any application fee reductions, impact fee deferrals, or other fee “holidays” will require legislation by the Board of Supervisors.  Application fees are imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections and audits, and the administrative enforcement and adjudication.  Simply put, the application fees charged go back into the City’s General Fund and are used to maintain City services and agency functions and for employee salaries.  According to the 2020-2021 City Budget, Planning experienced a decrease in application and permit volume of 10% – numbers that have likely increased due to COVID-19.  Reduction in applications results in a budget shortfall, impacting the City’s ability to review projects and permits.  Impact fees are used to create new affordable housing, build infrastructure projects such as parks, bike lanes, and street improvements, and fund new childcare facilities, to name a few areas where the fees are allocated.  These fees are integral to the City’s major improvement projects outlined in the first recommendation above.  The Board of Supervisors will have to balance these concerns when considering whether and how to implement the Task Force’s recommendations.

It is unclear at the date of this writing whether the Mayor’s Office or Board of Supervisors will seek legislation to reduce, eliminate, or defer application and impact fees.  Reuben, Junius, & Rose, LLP will continue to monitor these recommendations.

[1] Recovery Task Force Report, October 2020, City and County of San Francisco/OneSF, pgs. 16 – 19.

 

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, subdivision and condominium work.

DBI Changes to Permit Submittals and Process

| Gillian Allen
online permits

The Department of Building Inspection (DBI) and the Permit Center are temporarily limiting the types of permits that may be submitted online through the digital permit submission process to new 100% affordable housing projects, new permits for Development Agreement projects, and addenda and revisions for already submitted digital in-house review permits.

They are working to retool the digital system and make workflow and process improvements to increase efficiency and integrate the system with DBI’s Permit Tracking System (PTS).  Trades permits will still be offered online—see details below.

While they are improving the digital permitting system, DBI will continue to offer limited in-person services for paper applications and will continue to process digital permit applications that have already been submitted online.  If you submitted a permit application online, you will remain in the queue for permit processing or be asked to resubmit your permit application in paper.  Below are details on how they are handling specific permits.

Over-the-Counter Permits

Starting on Monday, August 17, 2020, DBI will no longer offer online permit submission for Over-the-Counter (OTC) projects.  All OTC projects will be processed in paper.  Below is a breakdown of how to submit in accordance with the type of project:

  • OTC without plans: Starting August 17, 2020, they will no longer accept online permit applications for OTC without plans permits.  Customers can register through Eventbrite for drop-in permit services Monday through Friday from 7:30 a.m. to 9:30 a.m.  DBI currently offers 40 tickets per day for customers to drop in to get an OTC permit without plans.  This service is limited to two permits per customer per day.
  • OTC with plans previously submitted online: Starting August 17, 2020, DBI will no longer accept online permit applications for OTC with plans permits.  Many customers have already applied online for an OTC permit with plans.  If you applied online for an OTC with plans permit, the Permit Center will contact you next week to offer you an appointment to submit your permit application in paper.  Appointments to drop off OTC with plans permit applications in paper are scheduled Monday through Friday from 9:30 a.m. and 3:30 p.m.  This service is limited to two permits per customer per appointment.
  • Submitting new OTC with plans: If you have a new permit application for an OTC with plans permit, you will have the opportunity to make an appointment to drop off your permit application.  Calendar the appointment here.

In-House Review Permits

Larger and more complicated projects that are not eligible for OTC review are brought in house for review.

  • If you previously submitted an in-house review permit application online, you will remain in the queue for permit processing.
  • New 100% affordable housing projects, new permits for Development Agreement projects, and addenda and revisions for existing digital in-house permits can be submitted online here.
  • Commercial projects: If you have a new permit application for an in-house review project, please email dbicustomerservice@sfgov.org with the following information about your project:
    1. Contact Information (applicant name, phone number and email)
    2. Property Address (block and lot or Assessor’s Parcel Number)
    3. Short description of the scope of work

DBI will contact customers to begin the pre-screening process in the order received.  Note that DBI has received a large number of in-house review permit applications, so the queue for this is several weeks.

Fire-Only Permits

Starting August 17, 2020, DBI will no longer accept online permit applications for OTC fire-only permits.  If you are applying for a permit that requires Fire Department review only, you can drop off your fire-only permit application (Form 3 or 8) Monday through Friday from 7:30 a.m. to 9:30 a.m.  Customers can register through Eventbrite for fire-only permit drop-off.  SFFD/DBI currently offer 40 tickets per day for customers to drop in to get an OTC permit without plans or to drop off a fire-only permit application.

  • Fire-Only Permits previously submitted on-line: If you submitted online for a fire-only permit prior to August 17, 2020, the Permit Center should have contacted you to offer you an appointment to submit your permit application in paper.

Other Emergency Projects

DBI will continue to accept permit applications for emergency projects.  Examples of emergency projects include damage to a building from a fire or flooding, compromised gas lines or sewers, foundation or structural issues or other serious issues affecting the habitability of a building.  If the permit you’re filing is in response to an emergency event at your property, please contact DBI at dbi.emergencyresponse@sfgov.org for assistance.

Permit Pick-Up and Issuance

Customers can drop in between 9:30 a.m. and 3:30 p.m. to pick up permits after DBI contacts you that your permit is ready for pick-up.  To complete the permit issuance process, payment is required and can be made online or you can forward a check to DBI.  When your permit is ready for issuance, you will receive an email invoice with information on how to pay online.  If you have questions or need help, please contact dbicustomerservice@sfgov.org for assistance.

Trades Permits

Trades permits (electrical, plumbing, mechanical and boiler-to-operate) are offered online using a contractor account or by emailing dbi.iprrequest@sfgov.org and are not available during drop-in times.

  • If you have a DBI contractor account online, visit here to start the online permit process.
  • If you don’t have an online contractors account, you can email DBI staff to file your trades permit. B license contractors filing trades permits and homeowners needing to file a permit can also email
  • If you are a licensed contractor qualifying for online permit submission and would like to set up an online account, visit here to start the registration process.
  • Trades Permits Forms:
    1. Permit to Operate Boiler Application
    2. Electrical Application
    3. Mechanical Application

The Post Entitlement Team with RJR is available to answer any questions or help facilitate the steps above for your projects.

 

Authored by Reuben, Junius & Rose, LLP Manager – Permit Consulting Division Gillian Allen.

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