The year has just started, but there are already several pending pieces of housing legislation and other initiatives to watch in 2019, both locally (San Francisco and Bay Area overall) and statewide.  The 2019-2020 legislative session opened in Sacramento just last month and 26 housing bills have already been introduced.  This article summarizes a few key housing undertakings to watch closely in 2019.

Senator Wiener Starts the Legislative Session with SB 50 (version 2.0 for SB 827)

Among the housing bills introduced in December is Senator Scott Wiener’s SB 50, which is essentially a revised version of the failed SB 827 from the 2018-2019 legislative session.  The bill proposes to streamline entitlement processes for certain residential projects that are considered either “Transit-Rich” or “Jobs-Rich” projects due to their proximity to transit (0.5 mile radius from a transit stop along a high-quality bus corridor) or jobs (certain areas identified by the Dept. of Housing and Community Development and the Office of Planning and Research).  Projects that qualify would be entitled to receive an “equitable communities incentive,” which can consist of waivers from maximum density controls and parking requirements that exceed 0.5 spaces per unit, and waivers from height and FAR limits that are less than 45 feet and 2.5 FAR, or 55 feet and 3.25 FAR, depending on whether the project is located within ½ or ¼ mile distance from a major transit stop.

The Return of Redevelopment Agencies (version 2.0 for AB3037)

Among the first bills introduced for the current legislative year, Assembly Member David Chiu introduced AB 11, the Community Redevelopment Law of 2019.  A similar bill was introduced by him last year as AB 3037, however, that bill did not proceed to adoption.  The elimination of redevelopment agencies in 2012 was a significant hit (and loss of funding mechanism) to California cities and counties.  AB 11 would allow cities and counties to form new agencies (referred to as affordable housing and infrastructure agencies) to capture tax increment within certain agency boundaries for the purpose of providing funding and development for certain housing and infrastructure projects, including the issuance of bonds.  If adopted, AB 11 would create redevelopment agencies similar in purpose and powers to the former redevelopment agencies that existed prior to 2012.

CASA and Bay Area’s Housing Crisis

CASA, or the Committee to House the Bay Area, is an initiative by MTC (Metropolitan Transportation Commission) and ABAG (Association of Bay Area Governments) that has been proceeding for the last 1.5 years after the release of the Plan Bay Area 2040 in Summer 2017.  CASA is an ambitious effort that created a blue-ribbon task force that brought together a varied and diverse group of Bay Area leaders and stakeholders, including developers, elected officials, housing advocates, labor representatives, civic leaders, and others, in an effort to fix the housing crisis.  CASA’s objective is no small task, however, the stakes regarding the future of the Bay Area are high as well.

CASA is co-chaired by Fred Blackwell (San Francisco Housing Foundation), Leslye Corsiglia (Silicon Valley @ Home), and Michael Covarrubias (TMG Partners).  In December, CASA came out with “CASA Compact,” a 15-year policy reform document proposing recommendations to alleviate Bay Area’s housing crisis.  Implementation of CASA Compact would require participation from all stakeholders, including legislation from Sacramento, regional ballot measures, and action by local governments, particularly in the next 3-5 years.  CASA Compact includes 10 distinct Elements, covering tenant protections, housing inclusion and capacity, approval processes and timelines, and funding and coordination.  The document also provides several action items, including without limitation, the re-establishment of redevelopment agencies (see AB 11 above), Prop. 13 amendments reallocating the distribution of tax revenues, funding to reduce and prevent homelessness, stabilization of the construction labor force, and legislative changes to the voter thresholds required for passage of bond measures for affordable housing investments and housing production (55% vs. 2/3rds).  The collaboration between different stakeholders that make up CASA and the issuance of CASA Compact is quite impressive, and the implementation and realization of CASA is high on the list of 2019 efforts to follow.

Authored by Reuben, Junius & Rose, LLP  Partner, Tuija Catalano

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.

Unpredictable construction and labor costs continue to have a significant impact on project viability.  A September 2018 Meyers Research study, Cost Drivers Impacting Housing, funded by the California Homebuilding Foundation, identifies construction material shortages and costs as a significant factor impacting the supply of housing.  Framing lumber, ready-mix concrete, plywood/engineered wood, and gypsum were cited as impacting up to 21% of survey respondents.  On October 10, 2018, the Associated General Contractors of America reported double-digit cost increases in common construction materials.  Its chief economist, Ken Simonson, commented that the cost-data likely under-reports actual increases, as data was collected prior to the imposition of new and additional tariffs.  Local press coverage suggests that construction costs are significantly impacting the delivery of housing in the Bay Area.

One way that general contractors can protect against construction cost increases is by confirming material supply bids under California Commercial Code section 2205.  That is, when a contractor receives a quote for construction materials that exceeds $2,500, and it intends to rely on that quote in making its own bid for a construction contract, the contractor should notify the merchant of its intent to do so.  This action makes the material supply quote irrevocable for a period of 10 days after the contract is awarded to the prime contractor, for up to 90 days after the bid was rendered.  The quote can be formally accepted by the contractor in that 90-day time-frame.

The failure to confirm the construction materials quote releases the merchant from its offer.  The consequences to a construction project can be significant insofar as the merchant no longer has an obligation to supply the materials, and it has no obligation to honor the original quote.  Construction delays and cost overruns often result.

Project developers can assure that general contractors obtain a “firm offer” to supply construction materials by including confirmation requirements in the bidding documents for a project.  The obligation to notify the merchant should be reiterated when the construction contract is awarded.  If the contractor fails to confirm the offer, resulting cost increases should not be borne by the developer.

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.

Authored by Reuben, Junius & Rose, LLP  Attorney, Corie A. Edwards

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.

What terms must be included in a lease option to purchase to ensure enforceability?  If a tenant exercises an option to purchase, when does the lease and related obligation to pay rent cease?  A recent Court of Appeal case, Petrolink, Inc. v. Lantel Enterprises, decided just these issues. (21 Cal.App.5^th 375 (2018)).  In Petrolink, the Court of Appeal held that once a tenant exercises its option to purchase under a lease agreement, the lease terminates, the tenant becomes a vendee under a purchase contract and tenant’s obligation to pay rent under the lease ceases.  Further, the Court found it permissible to set the purchase price of the property as the “fair market value”, as determined by an appraiser, rather than a set price.  The Court may insert its definition of “fair market value” if the parties are unable to resolve on a purchase price and the standard is definitive enough to render the option enforceable.

A lease for commercial property in San Bernardino County between Petrolink, as tenant, and Lantel, as landlord, included an option to purchase the property at “fair market value” based on an appraisal.  Petrolink exercised its option to purchase but each party’s appraiser’s valuation was materially different and they could not agree on a price.  The parties sued each other for various causes of action.  During the pendency of the litigation, Petrolink continued to pay rent.  The trial court held that Petrolink had exercised its option and that Lantel was obligated to sell the property to Petrolink at the Court’s determination of “fair market value”.  The trial court denied Petrolink’s request to offset against the purchase price the rental amounts paid since exercising the option and Petrolink appealed.

Where an option to purchase exists in a lease agreement, the exercise of the option to purchase causes the lease to terminate.  The lease is then replaced with a binding contract of purchase and sale.  Since the lease is terminated, the obligation to pay rent also ends at such time unless there is express language in the lease that requires continued rental payments.   The trial court held that the purchase and sale contract was not enforceable unless and until the Court fixed the “fair market value”.  As such, the lease did not terminate, and rents remained due, until such “fair market value” was set.   However, the Court of Appeal held that the lease ceased to exist as of the date of exercise by Petrolink even though the purchase price still needed to be determined – the key date being the date of exercise, not the date all terms were confirmed.  The Court of Appeal did not ignore Lantel’s hardships during litigation.  It held that Lantel, as the seller and landlord, did lose its use of the purchase money during the time between the exercise of option by Petrolink and performance and close of purchase.  As such, the Court held that Lantel was also entitled to some compensation to account for the delay of purchase.

The Court of Appeal did uphold the trial court’s finding that the option to purchase was enforceable even though the purchase option did not specify an exact price.  An option is transformed into a purchase and sale when there is an unconditional, unqualified acceptance by the optionee of the offer in harmony with the terms of the option and within the time span of the option contract.  Typically, an option must set all material terms – especially price – to be enforceable.  In Petrolink the Courts found that “fair market value” at the time of exercise was a standard which could be objectively determined, even if the exact number was not pre-determined in the lease itself.

In Petrolink we understand more about how courts may treat options to purchase in leases – specifically what material terms may be required and the timing of lease termination.  Lease and option language should be drafted carefully to ensure the parties are comfortable with the financial impacts of the exercise of an option to purchase and to avoid any unintended consequences.

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

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.

Two legislative measures introduced at the Board of Supervisors last week provided some updates to land use policy in San Francisco.

Mayor Breed Gives a Lifeline to Stalled Housing Projects

Proposition C, which significantly increased affordable housing requirements on new housing projects, provided some relief with grandfathering provisions for many pipeline projects.  Projects that had applications submitted between January 1, 2013, and January 12, 2016, qualify for the grandfathering if they secure a site or building permit on or before December 7, 2018.

Many of these projects, due to lengthy permit processing times, are at risk of not meeting the upcoming December 7 deadline.  Mayor Breed’s legislation effectively extends this deadline by giving projects that do not get a site permit by December 7 a total of 30 months from the date that the project is approved, including any appeal to an administrative body or City board, to secure a building or site permit.

By some estimates, the Mayor’s measure would keep alive 3,420 units of housing, 498 of which would be permanently affordable.  While promising, this proposal at this time is just that – a proposal.  The legislation must be approved by the full Board of Supervisors to become operative.

Supervisor Peskin Introduces Permanent Union Square Controls

The significant, nation-wide changes that have happened in recent years in the retail economy, caused by the massive growth of online shopping, have had an impact on Union Square.  Large brick and mortar retailers are increasingly rare, and instead, the trend is moving towards experiential retail requiring less floor area, thus leaving significant vacancies in Union Square properties.  The Planning Department, Planning Commission, Mayor’s Office, and Union Square Business Improvement District have been studying these issues over the last two years.

One of the primary questions has been the extent to which office use should be allowed in Union Square (i.e. within the C-3-R zoning district).  Many suggest that allowing office use would fill vacant spaces and vitalize the district, which in turn would help support Union Square retail and restaurants by bringing more patrons to the area.

New office uses in excess of 5,000 sf in the Union Square area have required a conditional use authorization, and thus have been regulated, since the adoption of the Downtown Plan in 1985.  However, in the last few years, due to the changes in the retail industry, policy discussion has taken place on the desired amount and location of office uses in Union Square.  Last week Supervisor Peskin introduced legislation that would impose stricter, permanent controls on office use in Union Square.  Currently, office uses are prohibited on the first floor, but are allowed on upper floors with a conditional use authorization, so that the existing controls have provided Planning Commission the ability to evaluate office proposals on a case-by-case basis taking into its consideration location, amount of street frontage, floor plate size and other circumstances that may impact retail viability.

Pursuant to the proposed office uses would be prohibited on floors 1 – 3.  On floors 4 – 6, a conditional use authorization would be required for a use size greater than 5,000 square feet.  Office use would be allowed on floors 7 and above with no restrictions.  The legislation also imposes a new $4/square-foot impact fee on new retail-to-office conversions.  The legislation is expected to be heard by the Planning Commission on October 18, 2018, which is the first opportunity for any members of the public to comment on the proposed permanent controls.

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

Photo from San Francisco Examiner 

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 August 30, 2018, the San Francisco Planning Commission received an informational debriefing from Planning Department Staff on a proposed new policy (Record No. 2018-005411CRV; the “Policy”) on construction of residential roof decks. The purpose of the Policy is to mitigate potential impacts to adjacent residents resulting from the addition of a roof deck, including, but not limited to, the quality of life from noise, diminishment of privacy, and reduction of light to adjacent properties. The Policy that Staff presented would impose restrictions on the construction of roof decks in residential districts, specifically, RH-1, RH-1(D), RH-2 and RH-3. The Policy would drastically restrict the ability to pull an over the counter permit for a roof deck.

Staff indicated that the Policy was the result of an increasing number of requests for the Discretionary Review of small-scale residential roof deck projects. The impacts referenced by Staff can result from the intensification of use of a building’s area not historically an active space, i.e., space not previously used, including additions of amenities such as outdoor kitchenettes or grills, hot tubs, televisions, and even putting greens.

Interestingly, at the hearing, Staff did not present data on the increased number of requests for Discretionary Review for roof decks as compared to other projects. The increase in requests could be the result of an uptick in requests made across the board generally and not just specific requests pertaining to roof deck additions. Meaning, the percentage of requests regarding roof deck additions could be static with respect to historical figures for discretionary review requests.

As currently proposed, the new Policy would impose the following construction restrictions on roof deck permit applications: (1) limit the size to no greater than one-third of the roof area; (2) 5-foot setback of guardrails except for rear building wall (also recommends 5-foot setback from shared side lot lines and from the edges of light wells); (3) internalized staircase or roof hatch only for single-family dwellings or one minimally sized stair penthouses for multi-unit buildings. Decks that comply with these requirements would still be eligible for an over the counter permit, but those that do not would be subject to more thorough design review.

In addition, Staff indicated that they are still considering the appropriateness of roof decks at the front of buildings. There is a belief that roof decks at the front would provide opportunities to increase eyes-on-the-street. With respect to access, Staff recommended creating a hierarchy of preferred means of access, prioritizing less obtrusive means, e.g., roof hatches and internalized staircases, over stair penthouses, to minimize impact.

While the details are still up for debate, the Planning Commissioners are generally supportive of some version of a streamlined roof deck policy. The Planning Commission indicated they believe that the Policy will lead to greater consistency in the review and approval of roof deck projects. The overarching concern the commissioners had was reciprocal privacy for both the roof-deck owner and adjacent neighbors.

The Planning Commission expressed apprehension to impose use restrictions on roof decks, e.g., no kitchenette, grills, or hot tubs—given that deck appliances and furniture are arguably outside the scope of the Planning Commission and such restrictions would be difficult to enforce. The Planning Commission, however, indicated physical restrictions, e.g., size and setback requirements, would be prudent planning. At this time, no definitive restriction of uses was requested to be added to the Policy by the Planning Commission.

It bears noting that Staff indicated there is a desire to develop similar guidelines, hopefully in a year, for roof decks on larger, multi-unit residential and mixed-use projects. Restriction of roof decks in larger projects could lead to development hurdles with respect to the provision of open space to a project’s future residents or privately-owned public open space required in the Downtown Plan Area. Staff indicated that low-density residential buildings were being targeted first because they are more manageable place to implement restrictions, at least initially.

Because this was an informational presentation, no action was taken on the Policy. The next steps will be for Planning Department Staff to prepare a resolution based on comments received for adoption by the Planning Commission.  Staff did not provide a timeline on when the resolution would be finalized. We will continue to monitor this Policy as it may have far-reaching impacts for all construction projects.

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

Photo from Curbed SF, available at: https://sf.curbed.com/2016/8/3/12371004/roof-deck-marina-rent-apartment

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 contentious new bill to amend state condo law is making its way through the California legislature. Senate Bill 1265 (“SB 1265”), introduced by Senator Wieckowski (District 10), would amend the Davis-Stirling Common Interest Development Act (“Act”) to more tightly regulate homeowners association (“HOA”) elections.

SB 1265 is intended to target perceived abuses of the HOA election process, by limiting an HOA’s ability to impose qualifications on candidates for an HOA board of directors (“Board”).  This bill to amend state law would also add more stringent requirements for notices, meetings, ballots and voter accessibility.  Under the new law, an HOA could not use its own staff or property manager to count ballots, but would need to use a third party.  Under existing state law, an HOA can adopt qualifications for HOA Board positions, such as requiring candidates to be on-site residents and prohibiting convicted felons, or members actively suing the HOA, from running for the Board.  SB 1265 would prohibit an HOA from imposing such qualifications for candidacy.  Additionally, if an HOA member challenges an election in court, and it is determined that election procedures were not strictly followed, the court would generally be required to void the results of the election.  While the bill has garnered support from groups concerned with individual owner rights, it has been opposed by many industry and HOA management groups.

Opponents of SB 1265 raise concerns that the bill would have unintended negative consequences and point out that most HOAs, in fact, do not have the problems being addressed by the bill, yet all HOAs would have to follow the new stringent rules.  Opponents argue it is not worth the burden to HOAs and the trade-offs of loss of control, complicated procedural requirements, and increased costs to HOAs.  Under the new law, an HOA’s right to establish qualifications for the Board would be limited.  There is concern that this bill could allow unqualified, if not conflicted, members to run for HOA Board positions.  The bill could also increase the number of HOA elections voided on minor technicalities, requiring new elections at the expense of the HOA and its members. Another issue voiced by opponents has to do with privacy rights, as the new bill would require HOAs to retain the ballot envelopes, which are signed by the voters, and allow other members to inspect the signed envelopes, thereby providing access to HOA members’ signatures, names, and addresses.

SB 1265 was approved by the Senate in May 2018 and is currently processing through the Assembly.  If passed, the bill will then go to Governor Brown for his signature or veto.

RJR law clerk Meredyth Merrow assisted in the research and drafting of this update.

Authored by Reuben, Junius & Rose, LLP  Attorney, Jay Drake

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.

One of the major themes in San Francisco land use regulation over the last few years has been an ongoing tug of war between the Board of Supervisors and the thriving tech industry.  As tech companies have moved in and brought new life to areas like Mid-Market (and soon Central SoMa), those companies have received push-back from some members of the Board. Most recently, on July 24, 2018, Supervisors Safai and Peskin introduced legislation that would amend the Planning Code to prohibit new employee cafeterias in offices. The cafeteria legislation would ban office food facilities that provide or sell food to employees on a regular basis, where food and drink are not regularly served to the public and cafeteria is not subject to tax.

The cafeteria legislation, currently lacking in detail, does not distinguish between large cafeterias and the small office coffee or snack areas found in offices of all sizes.  Employee cafeterias that lawfully existed on or before July 24, 2018, are not subject to the changes. The legislation does not, however, contain grandfathering for projects currently undergoing Planning review or permitting.

The stated goal of the legislation’s sponsors is to get tech workers out of their increasingly full-service buildings and into the community. Supervisor Peskin has expressed frustration that the tech companies moving into the Mid-Market area have not provided more benefit to local businesses and improvement in street life. The Golden Gate Restaurant Association (GGRA) has endorsed the legislation.

Opponents see the legislation as a significant overreach.  They express skepticism that it will solve any of San Francisco’s or Mid-Market’s problems, which were present long before Twitter and Uber existed. Labor leaders point out that while the legislation could result in some increase in business at surrounding restaurants, it would cause a loss of many jobs that would otherwise be generated at employee cafeterias. In addition, office workers already struggling to pay rent in San Francisco worry about adding food costs to their budgets.

The legislation has garnered nationwide attention and Citywide debate. It remains to be seen where the other Supervisors stand.  We may not know until this fall after the legislation is considered by the Planning Department and Planning Commission, Land Use and Transportation Committee of the Board of Supervisors (currently, Supervisors Tang, Kim, and Safai), and then the full Board. We will watch for clarification regarding the size of facilities covered and any addition of grandfathering for cafeterias already proposed as part of a pending project, with additional updates to follow.

Yesterday, the Board of Supervisors reviewed Supervisor Tang’s legislation that, if passed, will provide more flexibility for San Francisco’s accessory dwelling unit (ADU) program.  The Board unanimously passed the legislation on first reading.  As discussed in more detail below, the legislation proposes a number of amendments to the program including some that would allow expansion of ADUs within the buildable area of existing lots and provide waivers from exposure and bike parking requirements.  Although the legislation takes some steps in the right direction, it does not go as far as recent California state law amendments would allow.

When San Francisco first passed its citywide ADU program in 2016, many expected widespread proliferation of ADUs.  However, reality fell far short of those expectations.  The SF Examiner reported in February of this year that since the legislation was initially passed in 2016 only 109 permits for new ADUS were issued and only 23 of those units have actually been built.

The goal of the proposed legislation is to remove barriers to ADU development and provide more opportunities to increase the City’s housing stock with units that are affordable by design.  Most notably, the legislation would allow the following:

• Construction of ADUs within the buildable area of the lot as opposed to solely within the existing building envelope;
• Construction of ADUs under cantilevered rooms and decks, even if in the required rear yard without neighborhood notification but with a mandatory pre-application meeting with adjacent neighbors;
• On corner lots, one-story expansions of existing standalone garages or other auxiliary structures limited to their existing footprint; and
• Provision of dormers to an existing standalone garage or other auxiliary structure, even if in the required rear yard.

In addition, the legislation provides flexibility to the exposure and bike parking requirements by allowing the Zoning Administrator to waive or modify them.  The original legislation provided the option of fulfilling the street tree requirement through payment of an in-lieu fee, however, Supervisor Tang severed that portion of the legislation and sent it back to the Land Use Committee. The legislation also codifies various provisions that reflect how the ADU program is currently administered.

Perhaps most important is what didn’t make it into the latest version of the legislation.  Initially, the legislation allowed ADUs to be added to new construction involving three units or less, however, that language was scrapped at the Land Use Committee on July 9th due to fears that such a provision would incentivize the demolition of existing buildings.  Supervisor Safai seemed to think that such unintended consequences could be avoided and that a new set of amendments including a provision that would allow ADUs in new construction should be explored.  This would take advantage of a recent amendment in California law that no longer limits ADUs to existing dwellings and instead allows them to be added to proposed developments.

Whether or not California state law requires such a provision to be added to local ADU ordinances is up for interpretation.  For now, San Francisco doesn’t seem to think so and is poised to pass this proposed legislation without a provision allowing ADUs in new construction.

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

The issues discussed 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. RJR specializes in land use, development, and entitlement law. RJR also provides 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 Planning Code Noticing Provisions

Last week, the Board of Supervisors unanimously passed on its first reading an ordinance that would amend the Planning Code to implement a number of process improvements. Included in those amendments are changes to simplify the Planning Code noticing requirements.

The Planning Code currently contains varying notice provisions for several different kinds of approvals. The findings preceding the new ordinance assert that the Code “sets forth more than 30 unique combinations of notification requirements.”

Under the existing notice scheme, Section 311 provides permit review procedures for projects within RH (Residential, House), RM (Residential, Mixed), and RTO (Residential, Transit Oriented) Districts and Section 312 sets forth the notice procedures for projects within the NC (Neighborhood Commercial) and Eastern Neighborhoods Mixed Use Districts, as well as for cannabis retail and medical cannabis dispensary projects in all non-residential zoning districts.

The new noticing rules aim to simplify the notice procedures by eliminating Section 312 and amending Section 311 to cover noticing requirements for the following types of projects:

• Building permit applications in Residential, NC, NCT, and Eastern Neighborhoods Districts for a change of use;
• Establishment of a micro wireless telecommunications services facility;
• Establishment of a formula retail use;
• Demolition, new construction, or alteration of buildings;
• Removal of an authorized or unauthorized residential unit;
• All building permit applications that would establish cannabis retail or medical cannabis dispensary uses, in any zoning district.

All building permit applications for these Section 311 project categories are subject to a 30-day notice period.

The ordinance would also add a new Section 333, which would establish the notice requirements for all other notices required by the Planning Code that are not covered by the amended Section 311. More specifically, Section 333 would apply to: “Any hearing before the Planning Commission Historic Preservation Commission and/or the Zoning Administrator for which public notice is required in this Code, except that the requirements set forth in Section 311 shall be applicable to certain applications as set forth in Section 311.”

Under the new rules, any notice subject to Section 333—rather than Section 311—must have a notice period of no less than 20 calendar days prior to the hearing date. In the case of a building permit application for which no hearing is required, the notice period must run for 20 days before the Planning Department may approve the application.

The ordinance is expected to pass on final reading next week.

Updated Planning Application Procedures

The updated notice process coincides with new Planning application procedures that the Department rolled out last month.

As of June 4, the Planning Department now requires submittal of a single, consolidated Project Application for all projects seeking an entitlement action and/or environmental review. Findings required for a Conditional Use Authorization or Large Project Authorization, for example, must now be submitted as a supplemental form to the Project Application. Any project that is not eligible for over-the-counter approval is required to submit a Project Application in order to obtain Planning Department sign-off.

Notably, Environmental Evaluation Applications (EEAs) are no longer available as a stand-alone application, instead, the EEA information has been rolled into the Project Application. This also means that there is no longer an option to submit an EEA with a Preliminary Project Application (PPA).

The revised application procedures come with a new set of timelines that will (theoretically) streamline and speed up the review process. These are some of the key deadlines:

• Planning will issue a PPA letter within 60 days of receiving a complete PPA application.
• Within 30 days of submittal of a Project Application, the Department will determine whether the application is complete.
• Within 90 days of the date, an application is deemed complete and accepted, Planning will issue a plan check letter identifying the outstanding Planning Code and environmental review issues, as well as any other required materials or applications.
• Planning will determine whether the response to the plan check letter is complete or incomplete within 30 days of submittal. A complete response results in a “stable project description.”
• At that point, housing projects with more than two new units will be assigned a target hearing date within 6-22 months, depending on the necessary level of environmental review. There is no target hearing date policy for 1-unit or non-residential projects.

Additional information on the new application processes can be found here.

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

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.