Planning Commission to Consider BMR Grandfathering Ordinance this Thursday

As we last reported, Supervisors Peskin and Kim have introduced “grandfathering” legislation at the Board of Supervisors that would reduce the 25%/33% BMR requirement set in June’s Charter amendment for projects that are not yet approved but have had an application on file since at least before January 1, 2016.  The Planning Commission will be considering the legislation this Thursday at noon in room 400 of City Hall.

As the details of the grandfathering legislation have been absorbed over the past few weeks, two things have become clear.  First, the legislation would modestly increase the on-site BMR rate from 12% to a range of 13%-14.5% for projects with environmental evaluation applications filed prior to January 1, 2016.  Second, there are sizeable “carve-outs” from this grandfathering for projects in the following categories:

– Located in the UMU zoning district and demolishing any existing PDR use;

– Located in the Mission Street NCT district;

– Located in the Youth and Family Zone Special Use District;

– Are 120 feet in height or taller (these projects would be grandfathered if providing BMR units on-site; the off-site and in-lieu fee options would not be grandfathered and rather subject to the 33% rate)

Planning Department staff has prepared a thorough analysis of the legislation, which can be found here:  http://commissions.sfplanning.org/cpcpackets/2016-003040PCA.pdf.  Staff also proposes a number of modifications to the legislation, including the removal of the carve-outs listed above.  These carve-outs would subject numerous projects to the increased BMR rates despite having an application on file for years just like other projects eligible for grandfathering.

We recommend members of the development community send letters or attend the Planning Commission hearing to support the elimination of these broad carve-outs.  The Planning Commission will vote on Thursday on what revisions to the ordinance to recommend to the Board of Supervisors.

Oakland Impact Fees Move Forward to Full City Council

Last week, the Community and Economic Development Committee of the Oakland City Council considered draft legislation to establish development impact fees in the City.  After a 2+ hour public hearing, the committee voted to send the proposal to the full City Council for consideration.  The following is an overview of the current proposal.

Residential Impact Fee 

The residential fee will differ in three different geographic zones of the city:  (1) Downtown/North Oakland and Hills, (2) West Oakland, and (3) East Oakland, as follows:

Somewhat different fees would apply to townhome and single-family home developments. An on-site affordable housing option is available to exempt projects from the bulk of these residential impact fees.  The exemption applies to projects that provide 10% of their units affordable to moderate income households (120% AMI), 10% of their units affordable to low-income households (80% AMI), or 5% of their units affordable to very-low income households (50% AMI).  Providing affordable housing at these rates will also qualify a project for the City’s density bonus program.

Non-Residential Impact Fee 

Non-residential impact fees would be phased in over the next five years.  The office fee will be phased in as follows:

Permit filed prior to July 1, 2016:  No fee

Permit filed July 1, 2016 – June 30, 2017:  $0.85/sf

Permit filed July 1, 2017 – June 30, 2018:  $0.85/sf

Permit filed July 1, 2018 – June 30, 2019:  $2.00/sf

Permit filed July 1, 2019 – June 30, 2020:  $2.00/sf

Permit filed July 1, 2020 or later:  $4.00/sf

The date a building permit application is filed after all planning approvals have been granted is the date used for applying the new impact fees.

The City Council is expected to take up the impact fee legislation in April.  We will continue to monitor the Oakland impact fee process as it moves forward to final approval.

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.

​This week we got our first look at what the grandfathering from the 25% BMR increase on June’s ballot would look like.  Here’s the scoop:

1.  If a project’s environmental application was submitted prior to 1/1/14, the inclusionary requirements are:

• 13% on site
• 25% offsite/in-lieu fee

2.  If the environmental application was submitted prior to 1/1/15, the inclusionary requirements are:

• 13.5% onsite
• 27.5% offsite/in-lieu fee

3.  If the environmental application was submitted prior to 1/12/16, the inclusionary requirements are:

• 14.5% onsite
• 30% off site/in-lieu fee

4.  If the environmental application is submitted after 1/12/16, the project will need to fully comply with the ballot initiative at 25% affordable (assuming it passes), broken out between 15% at very low income (55% of AMI for rental, 80% AMI for sale) and 10% at moderate income (100% of AMI for rental, 120% AMI for sale).

5.  Any project 120 feet or taller is not eligible for a grandfathered in-lieu fee and must pay a 33% fee.

6.  The following types of projects are not eligible for any grandfathering:

• Projects located in the UMU zoning district that propose to remove existing industrial/PDR space;
• Projects located in the Mission Street NCT zoning district;
• Projects located in the Youth and Family Zone Special Use District.

Keep in mind that this is simply Supervisor Kim and Peskin’s proposed legislation.  It still needs to be approved by six members of the Board of Supervisors and signed by the Mayor. We will keep you posted as the situation develops.

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.

​At the 11th hour, a compromise was reached on affordable housing. But those interested in hard and fast numbers based on an independent study or specific details on application to pipeline projects will have to sit tight and wait at least a few more months. 

The Board voted 11-0 to send Supervisors Kim and Peskin’s charter amendment to the voters in June. This proposed amendment allows the Board of Supervisors to adopt a new inclusionary housing ordinance, and sets “interim” rates until that new ordinance is adopted. Interim inclusionary percentages for projects adding 25 units or more would be set at 25% on-site/33% off-site/33% in-lieu fee, unless a project has “procured a final first discretionary development entitlement approval” and resolved all appeals.  

The obvious concern for those wary of this charter amendment is that these interim rates would become de-facto permanent, with no feasibility study done to support those percentages. It appears this concern was at least partially addressed by a resolution also unanimously adopted by the Board yesterday evening. 

The resolution committed the Board to adopt trailing legislation in mid-April that would address a number of topics of concern to the Mayor’s office and moderate supervisors. A copy of the adopted resolution was not immediately available for review so we cannot confirm specifics, but Supervisor Yee said it contained the following topics, among others: (1) a grandfathering provision to provide fairness to projects in the development pipeline; (2) completing a feasibility analysis by May 31 that would form the basis for new affordability percentages; (3) setting “middle income” at 100% AMI; and (4) providing for development agreements to allow deviations from inclusionary requirements. According to news reports, the resolution also calls for the Board to amend interim controls within three months of the feasibility analysis and incorporate its findings in the new inclusionary housing ordinance. 

So another chapter in the affordable housing debate concludes, with a compromise but no final answers. We will continue to monitor the progress of this trailing legislation and the results of the feasibility study. Ultimately, San Francisco voters will get to decide if they think their elected officials made a good deal.

Railyard Alternatives and I-280 Boulevard Presentation

On Tuesday of last week, Gil Kelley from the San Francisco Planning Department’s Long Range Planning division made a presentation at the Potrero Recreation Center about the Railyard Alternatives and I-280 Boulevard project, which the City is calling RAB for short. The presentation discussed the first phase of this study that is currently underway, a technical feasibility analysis. It touched on development-related issues, but largely discussed potential new transportation options in SoMa, Mission Bay, and Showplace Square/Lower Potrero Hill.

The RAB is supposed to evaluate a comprehensive, regional approach to transportation and land use alternatives in this area. Currently, four potential projects are being studied: (1) making I-280 into a boulevard; (2) determining how to best engineer Caltrain and High-Speed Rail into the Transit Center (via the DTX); (3) adding a loop track and/or East Bay extension from the Transit Center; and (4) reducing in size and/or relocating some of Caltrain’s activities at the 4th and King railyard.  

Mr. Kelley acknowledged that the second and fourth projects would create opportunities for development or repurposing of residual land. The discussions associated with development opportunities were very conceptual. With regards to turning I-280 into a boulevard, the RAB is considering “boulevarding” a roughly 1.2 mile stretch, starting as far south as Mariposa. This could open up a stretch of residual land similar to the Central Freeway parcels along Octavia.  For the 4th and King railyard, the City is evaluating if there are ways to use this land more “efficiently.” Potential railyard functions could be relocated further south in the city or could be consolidated on the site, opening up land for reuse. The RAB study at some point will address the possibility of new infill development, roads to connect neighborhoods, open space, and other public amenities. But he offered no details on these topics and did not put a timetable on further study of the “tens of acres” of residual sites.

The primary focus of Mr. Kelley’s presentation involved the transportation-only alternatives. The RAB will study value-engineering the DTX to make it more useful and efficient, reviewing construction methods, track capabilities (including handling both electrified Caltrain and the California High-Speed Rail), and realignments including running by or near Mission Bay. The City is also working with state and regional transportation agencies to evaluate a loop track at the Transit Center that could also open up an extension to the East Bay. A loop track would increase the Transit Center’s capacity.

The City is just getting started on these long-range plans, and selecting a preferred project alternative is not estimated to occur until late 2018 or early 2019.

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.

​2016 has started with a bang as the City debates competing affordable housing initiatives proposed for the June 7 election by Mayor Lee and by Supervisor Kim. The Mayor’s proposal would require the Planning Department to conduct an economic feasibility study and make a recommendation to the Board of Supervisors within nine months of the effective date of the legislation, and then no less than every 24 months moving forward. The Kim proposal would increase the affordable housing requirement set by the City Charter from 12% to 25%, with 15% of units required to be affordable to lower income households (for sale units must be affordable to households of 80% AMI; rental units must be affordable to 55% AMI) and 10% of units required to be affordable to middle income households (for sale units must be affordable to households of 140% AMI and rental units must be affordable to 100% AMI).  The 25% requirement would be an interim control until new legislation is adopted by the Board.

The development world has been watching closely to determine what affordable housing requirements will be moving forward, and whether a grandfathering provision will be added to allow projects already in the pipeline to proceed under current requirements. Last night, the Board of Supervisors finally debated these questions sitting as a Committee of the Whole. 

Debate was intense, but the Board generally agreed on several issues. First, a higher level of affordable housing is appropriate. Second, a feasibility study would help the Board to determine the proper level of affordable housing moving forward. Finally, affordable housing policy should be implemented through Board action and not dictated by City Charter. 

However, the Board did not agree as to next steps. Supervisor Kim favors moving forward with a ballot measure to modify the City Charter to require 25% affordable housing, while Supervisor Peskin suggested that the Board come to agreement as to alternate legislation prior to the June election, potentially withdrawing both ballot initiative proposals prior to March 1. Supervisors Yee, Cohen, Wiener and Tang stated that further study is necessary to determine the appropriate level of inclusionary housing and what grandfathering provision should be included.

Supervisors Wiener and Tang also pointed out that while there has been significant publicity about large projects such as 5M providing higher levels of affordable housing – touting 40% as the new 12% – those numbers are misleading. Those projects received some level of public subsidy. In addition, the calculation of affordable units in those projects would not comply with the levels of affordability included in the current proposals, and therefore would not qualify as providing 25% affordable housing.

Supervisor Cohen introduced an amendment to the Kim Charter Amendment that would push any changes to affordable housing off until the Planning Department can study the issue and come up with a recommendation, no later than December 31, 2016. That proposal failed.  

In the end, the matter was continued to the March 1 meeting because at least six days must intervene between first hearing and a Board decision to submit an initiative to the voters. The deadline for submitting a Charter Amendment to the Board of Elections for the June 7 election is March 4. There will, no doubt, be considerable behind the scenes negotiations between now and the March 1 hearing, as any ballot initiative will need the support of six of the eleven members of the Board. We will continue to provide updates as this matter unfolds.

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.

​Construction or repair of property in urban environments can be quite challenging.  Many properties lack sufficient space to perform work without using the neighbor’s adjacent property.  This could include routine repairs such as painting and waterproofing work.  The challenge is even greater when major renovations are performed that involve shoring or excavation.   (Note that there is a code provision regarding protecting a neighbor’s property when doing excavation. California Civil Code Section 832.)  In many situations the adjacent owner will act as a “good neighbor” and grant permission to access his or her property.  Unfortunately, some neighbors view a request for cooperation as an opportunity to slow or stop construction work, or to make unreasonable financial demands.  

There is no absolute right to require a neighbor to grant access for construction.  While a potential legislative solution has been discussed at the local level, there is the concern that such legislation could be subject to constitutional challenges or that property owners would not be supportive.  

An existing state law could, in some cases, provide a property owner with a right to use the neighbor’s property, if absolutely necessary.  This private right of eminent domain (Civil Code Section 1002) allows a temporary right of entry for repair or construction work if the following conditions are met:

1. There is a necessity to do the work;

2. There is a great necessity to enter upon the neighbor’s property because either (i) the work cannot be done safely without entry, or (ii) the cost of the work would be substantially higher;

3. The property that is being repaired adversely affects the surrounding community without the repair; 

4. The right to enter will be exercised in the least intrusive manner feasible; and

5. The hardship to the constructing party clearly outweighs the hardship to the impacted owner.

A court order finding that these standards have been met is required prior to entry, and the court may require a deposit to cover potential damage, and the payment of reasonable rent.  

These standards are difficult to satisfy in most cases.  The requirement that “the property being repaired would adversely affect the surrounding community if not repaired” is especially challenging.  It is unclear if a court would consider the lack of fresh paint or leaking windows to adversely affect the surrounding community.  Perhaps it could be argued that a deteriorating building would cause blight and lead to an unhealthy urban environment.  The other requirement that is troublesome is that the “work cannot be done safely without entry.”  In most cases, the issue is not safety but the impossibility of doing the work without entry, at least over the airspace of the adjacent property.  If a court interpreted this requirement to also mean the work cannot be performed at all, without considering the safety issue to be a requirement, then this standard could more easily be satisfied.  

Given the high threshold established by Civil Code Section 1002, and the length of time to get to trial, it is not surprising that there are no reported appellate cases interpreting this statute.  While the effectiveness of this right may be uncertain, it could be a tool to be used during negotiations with a neighbor. The threat of a lawsuit may be enough to convince a recalcitrant owner to grant construction access without unreasonable demands.

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.

​Recognizing the shifting development attention towards Oakland and the East Bay, Reuben, Junius & Rose is excited to announce the opening of its new outpost in Oakland.  Located in the Old Oakland neighborhood, the office is three blocks south of the 12th Street BART station and four blocks south of City Hall.  Reuben, Junius & Rose will continue to provide full service land use and real estate legal services in San Francisco and throughout the Bay Area, now with a footprint in one of the fastest-growing and most exciting markets in the region.  Come visit us in our new digs at 476 9th Street on the second floor.  All calls can still be made to our main number at (415) 567-9000.

Oakland City Council Continues Deliberations Over New Impact Fees

The City Council’s Community and Economic Development Committee held its second hearing on the proposed new development impact fees on Tuesday.  There was significant public comment and the council members spent significant time discussing various aspects of the proposal.  Ultimately, the item was continued to the committee’s February 23rd hearing.  At that time, staff will present a draft ordinance for the committee to consider, which could be considered by the full City Council at their March 1st hearing.

The council members suggested that the following modifications to the program could be made:

• The ultimate residential impact fee would be $24,000 per unit after the three year phase-in;

• Projects would be required to commence construction within 12 months of filing their building permit application, otherwise the fee applicable at the time the 12 months expires would apply; this could not only have the effect of incentivizing construction sooner rather than later, but also could limit the ability of projects to avoid the impact fees by filing building permit applications prior to enactment of impact fees;

• Phase-in of the impact fees would begin September 1, 2016, increasing annually until the full fees are achieved (2018 for residential; 2021 for non-residential);

• Zone 3 (East Oakland) impact fees delayed by 1-2 years;

We will continue to track the impact fee process in future updates.

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.

​In the ever-changing legal landscape in San Francisco, we often receive inquiries concerning ways to determine which regulations will apply to a proposed development.  In the face of proposed changes to regulations, ordinances and fees that could have a dramatic impact on the viability of a proposed development, many property owners and developers want some level of certainty that the rules will not change on them in the middle of the development process.

One method to obtain a greater level of certainty concerning regulations that will apply to a project is through a Vesting Tentative Map (“VTM”).  A VTM is authorized under the California Subdivision Map Act (“Map Act”) (see Cal. Govt. Code 66498.1 – 66498.9) as well as the San Francisco Subdivision Code.  A VTM is intended to establish vested rights to proceed with a project in substantial compliance with the regulations in effect at the time the VTM application is determined to be complete by the local agency.  The lead local agency in San Francisco is the Department of Public Works (“DPW”).

Under the San Francisco Subdivision Code, all the requirements of a standard tentative subdivision map application are still required.  A VTM application must also include additional plans and information, such as floor plans, a parking plan, landscaping plans, as well as civil engineering plans for proposed street improvements, grading and utilities.  Importantly, a VTM application must also include all primary project approvals and entitlements (e.g. Planning Commission approvals) that will be required for the proposed project.

Once a VTM application is submitted to DPW and reviewed for sufficiency it will eventually be determined to be complete as of a certain date.  After processing of the completed VTM application has occurred and it has been reviewed and approved by various City agencies, the VTM will be approved by DPW.  Once the VTM is approved, it is only those local ordinances, polices and standards in effect on the date DPW determines the VTM application to be complete that may be applied to the development.  Thus, the primary operative date for the vested rights provided by a VTM is when the VTM application is determined to be complete.

A critical question is what rules are “in effect” as of the date the VTM application is determined to be complete, especially when faced with proposed changes to the rules that may impact a proposed project.  Generally, for an ordinance, policy or standard to be in effect at the time the VTM application was complete, the developer must have constructive notice of the rule, or the ordinance, policy or standard must have been in existence or stem from an existing rule, before the VTM application was determined to be complete.  This is largely a factual determination, depending on the circumstances.  The critical issues center around whether some official action was taken, and/or whether the timing and notice of the proposed new regulation was legally sufficient to put a developer on notice of the new rules.  Given the right facts and timing, the VTM would protect a developer from subsequently adopted regulations.

Under the Map Act, local agencies may also impose reasonable conditions on future permits and approvals.  What constitutes reasonable conditions is not clearly defined in the Map Act and may depend on the situation.  The rights vested by a VTM generally remain valid for two years, and may be subject to an extension.

While there are exceptions that may limit the rights vested by a VTM, a VTM can offer a developer a valuable benefit by locking in the laws and rules that will be applied to a development.  The security provided by an approved VTM should allow a developer to expend resources and incur liabilities with a reduced risk of the project being frustrated by subsequent local regulations.

Louis Sarmiento contributed to this Update.

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.

​A recent California case dealt with a very important issue to many San Franciscans, that of rent control.  Rent control affects many residential properties in San Francisco and is governed by the San Francisco Residential Rent Stabilization and Arbitration Ordinance (“Rent Ordinance”), which establishes limitations on rent and grounds for eviction.  The Rent Ordinance explicitly authorizes a Rent Board to promulgate rules and regulations to effectuate the intent of the Rent Ordinance.  In Foster v. Britton, the Court of Appeal analyzed whether a specific rent control rule was preempted by conflicting state law  and whether the Rent Board exceeded its authority in issuing such rule.  (242 Cal.App.4th 920 (2015)). 

In Foster, the new owner of a residential building sent all of the month to month tenants a notice of new “house rules” (which included sharing the backyard equally, maintaining tenant’s own garbage service and keeping personal property inside your unit).  The noticed advised that the new “house rules” took effect 30 days after the notice was received by the tenant and that if the tenant disagreed with the rules, they could terminate their lease and vacate the premises.  One tenant, Foster, sued the landlord, Britton, and alleged that the new “house rules” conflicted with the terms of her lease (which guaranteed garbage service and the exclusive use of garden space, among others) and were a violation of Rule 12.20 issued by the Rent Board.  Rule 12.20 says in pertinent part that “notwithstanding any change in the terms of a tenancy pursuant to Civil Code section 827, a tenant may not be evicted for violation of a covenant or obligation that was not included in the tenant’s rental agreement at the inception of the tenancy, unless (1) the change in the terms is authorized by the Rent Ordinance or required by federal, state or local law; or (2) the change in the terms of the tenancy was accepted in writing by the tenant”.   

Britton disagreed that Rule 12.20 applied here and relied on Section 827 of the California Civil Code which says that “a landlord may change the terms of a month to month lease after giving 30 days notice and that the new terms become part of the lease if the tenant continues to hold the premises after the notice takes effect”.  Britton alleged that Section 827 as a state statute preempted the conflicting local rule.  

The Court set forth the standards for state preemption of local law which include the premise that the matter must be so particularly covered by state law that it has become exclusively a matter of state concern.  The Court also reviewed case-law which had upheld local rent control legislation against challenges based on state preemption.  In those previous cases, as long as the procedural protections of state law on evictions were not adversely impacted (for example, notice requirements), local law could legislate further restraints on the substantive restrictions to evict for rent control purposes.  Based on precedent and the fact that the Court determined that rent control laws were not exclusively a matter of state concern, the Court in Foster held that Section 827 of the California Civil Code did not preempt local Rule 12.20 because Rule 12.20 regulated substantive grounds for eviction and did not limit procedural protections guaranteed under state law.

The Court also addressed the question of whether the Rent Board had exceeded its authority in publishing Rule 12.20 itself.  They analyzed whether (1) the regulation is within the scope of the authority conferred, and (2) whether the regulation is reasonably necessary to effectuate the purposes of the statute.  Section 37.9(a)(2) of the Rent Ordinance allows a landlord to evict a tenant who has violated a lawful obligation of tenancy.  The Court discussed that the grounds for eviction were essential to the efficacy of the Rent Ordinance, otherwise landlords would circumvent the rent limitations by evicting tenants in order to increase rents to market rate upon the next new occupant.  The Court in Foster held that Rule 12.20 “fills up the details” by clarifying that a “lawful obligation of tenancy” does not include unilaterally imposed “house rules”.  Therefore, the regulation is within the scope of the authority granted to the Rent Board and serves the purposes of the Rent Ordinance.

Based on the decision in Foster, it seems that state courts will give local governments broader latitude with respect to their promulgation of rent control laws as long as any conflict with state law does not limit procedural protections guaranteed by the same.  Both residential landlords and tenants in rent control municipalities like San Francisco should be aware of this case and the possible implications to their leases.     

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.

On January 14, 2016 the Planning Commission adopted revised Mission Interim Controls that planning staff has been working on over the past 7 months.  The Interim Controls will apply to all projects in the Mission District (that have not received entitlements by January 14, 2016, excluding projects with less than 25 dwelling units or 25,000 gross sq. ft.  This would capture all pipeline projects that have not been reviewed by the Planning Commission. (The boundaries of the Mission District are 13th and Division Streets to Mission Street, to Cesar Chavez, to Potrero Avenue, and back to 13th and Division Streets – except that the Mission Street boundary would include any parcel with a property line on either side of Mission Street.)

Following is a table summarizing the adopted Interim Controls.  The information described below is intended to supplement the information currently required by the Planning Code for pending and future projects.

1. Loss of one or more rent-controlled dwelling unit.

Projects must meet a majority (at least four) of the following criteria:

* Free of serious, continuing Code violations;

* Maintained as decent, safe and sanitary housing;

* Does not convert rental to other forms of tenure;

* Conserves existing housing to preserve neighborhood diversity;

* Protects relative affordability of existing housing;

* Increases permanent affordable housing stock; and 

* Increases family-sized housing stock.

2. Medium Projects.

Projects which provide either:

* Net addition or new construction of between 25,000 and 75,000 gross sq. ft. (if non-residential), or 

* Between 25 and 75 dwelling units.

The application is required to submit the following additional information:

* Housing Production:  Maximum allowable density, proposed density or project, and evaluation of project’s ability to effectively house future residents;

* Affordable Housing Production:  Analysis of project alternatives and feasibility of additional affordable housing;

* Housing Preservation:  Discussion of existing housing on site;

* Tenant Displacement:  Disclosure of eviction and buyout history at the site; and 

* Proximal Development:  Discuss proposed and recent projects within ¼ mile radius of the site.

3. Medium Projects that displace PDR – including institutional, recreation, arts and entertainment uses.

In addition to the above, the following information will also be required if PDR displacement is proposed:

* Relocation Assistance:  In non-PDR zoning districts, discuss last known use and relocation benefits provided to previous tenant; or 

* Business & Community Building-Uses: If no relocation benefits were offered, discuss potential impacts to the community; and

* Inventory of Similar Uses: Discussion of existing businesses within the neighborhood that are similar to the use being displaced;

* Non-Residential Displacement: Discuss existing businesses and non-profit organizations that will be displaced by the project and within the last 12 months.

4. Large Projects.

Projects that include the:

Net addition or new construction of 75,000 gross sq. ft. (if non-residential) or more than 75 dwelling units.

The applicant is required to submit the following additional information:

* Demographic Changes: Discussion and evaluation of socio-economic characteristics and effects of the project on the neighborhood;

* Economic Pressure: Discussion and evaluation of additional housing supply provided by the project and resulting indirect and direct displacement;

* Housing Production: Maximum allowable density, proposed density and evaluation of projects ability to effectively house future residents (the additional net supply of housing units);

* Affordable Housing Production: Analysis of project alternatives and feasibility of additional affordable housing; and

* Tenant Displacement: Eviction and buyout history.

5. Large Projects that displace PDR – including institutional, recreation, arts and entertainment.

In addition to the above, the following information will also be required if PDR displacement is proposed:

* Relocation Assistance: In non-PDR zoning districts, discuss last known use and relocation benefits provided to tenant; or

* Business & Community Building-Uses: If no relation benefits were offered, discuss potential impacts to the community;

* Jobs & Economic Profile: Discuss economic and fiscal impacts and their benefits to area residents;

* Available Space in the Mission: Discuss availability of vacant space to replace use type being lost;

* Affordability of Community Building Uses: Assess affordability of community-building uses; and

* Non-Residential Displacement: Discuss existing businesses and non-profit organizations that will be displaced by the project and within the last 12 months.    

The Interim Controls will be in effect for 15 months commencing on Jan. 14, 2015.   Much of the required additional information required by the Interim Controls set forth above regarding affordable housing production, availability of space in the Mission, and displacement is already available in existing studies and reports maintained by the Planning Dept., and citations to the existing reports will be acceptable to meet the requirements.  Required information not contained in existing reports shall be based upon independent study by a qualified professional. To determine which projects are “Projects that replace PDR”, the Planning Dept. will look back a maximum of 3 years for PDR uses.  If another use has replaced PDR, or if PDR has been abandoned for 3 years or more, the project will not be considered to replace PDR.   

The following projects will be exempt from the Interim Controls:

1. 100% affordable projects;

2. Residential and mixed-use projects that (a) provide at least 33% of the units as affordable for households of low and moderate income, or (b) provide a dedication of land to the Mayor’s Office of Housing for a project that will result in 33% of the units as affordable for households of low and moderate income; and

3. Production, distribution, and repair uses if exclusively PDR, or that are mixed-use and include PDR uses and meet either of the two criteria above.

 New LPA and Conditional Use Requirements

a. Loss of Rent-Controlled Units – any project that would result in the loss of one or more rent-controlled residential units shall require conditional use authorization.

b. Medium Projects – any residential or mixed-use project that is between 25,000 and 75,000 gross sq. ft. of non-residential use or has between 25-75 units shall require a Large Project Authorization (LPA), unless the project is already required to obtain a conditional use authorization, in which case the additional information described above shall be considered by the Planning Commission as part of the Conditional Use application.

c. Large Projects – any residential or mixed-use project that would include the net addition or new construction of 75,000 gross sq. ft. or includes more than 75 dwelling units shall require conditional use authorization.  The application shall include the information set forth in the chart above. 

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.

​It’s a new year, and we are immediately reminded that the zoning environment in 2016 will look much different than in 2015.  After a year of waiting, the details of the highly-anticipated Oakland development impact fee proposal were released over the holidays.  The fees will apply to both residential and non-residential development, and will phase in over the coming years beginning in July of 2016.  Projects will be subject to impact fees based upon the filing of their building permit application.  

Residential Impact Fee – Central/North Oakland and Hills

The residential fee will differ in three different geographic zones of the city:  (1) Central/North Oakland and Hills, (2) West Oakland, and (3) East Oakland.  Only the fees for Zone 1 have been released.  The residential impact fee for multifamily development in Zone 1 would phase in over the next three years as follows:

Permit filed prior to July 1, 2016:  No fee

Permit filed July 1, 2016 – June 30, 2017:  $5,710 per unit

Permit filed July 1, 2017 – June 30, 2018:  $10,710 per unit

Permit filed July 1, 2018 or later:  $20,710 per unit

Non-Residential Impact Fee – Citywide

Non-residential impact fees would be phased in over the next five years.  The office fee will be phased in as follows:

Permit filed prior to July 1, 2016:  No fee

Permit filed July 1, 2016 – June 30, 2017:  $0.85/sf

Permit filed July 1, 2017 – June 30, 2018:  $0.85/sf

Permit filed July 1, 2018 – June 30, 2019:  $2.00/sf

Permit filed July 1, 2019 – June 30, 2020:  $2.00/sf

Permit filed July 1, 2020 or later:  $4.00/sf

The office impact fee would apply in addition to the $5.44/sf Jobs Housing Linkage Fee (for office projects of more than 25,000 sf).

Next Steps

The City Council’s Community and Economic Development Committee will hold a public hearing on the new impact fees on January 26, 2016.  City staff will release details on impact fees in Zones 2 and 3 before then.  The staff report on Zone 1 impact fees can be found at City of Oakland – Citywide Impact Fee Update.  We will keep you posted as the fee proposal makes its way through the legislative process.

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.