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.

Legislation introduced by Supervisor Katy Tang would potentially allow a broader range of projects to use San Francisco’s local density bonus program, called HOME-SF. Supervisor Tang—who championed the original program—is proposing a three-tier system that links affordability percentages to the height increase a project seeks, along with other changes meant to speed up the entitlement process and provide more certainty to project sponsors that elect to do a HOME-SF program. It is being considered by the Planning Commission this afternoon, with the Planning Department suggesting a few additional refinements and modifications.

The overarching idea behind the modifications is to find a way to make HOME-SF more feasible, while still ensuring the city’s desired number of on-site affordable units. Sponsors considering or currently processing residential projects on sites where HOME-SF is available should pay close attention to the legislation to see if the modified HOME-SF program makes sense for their project.

To provide greater flexibility and encourage sponsors to utilize the HOME-SF program, a three-tier system would be put in place that requires between 20% and 30% affordability, depending on the amount of additional height. Cutting through some of the details: a HOME-SF project that proposes 20% on-site affordability (at three AMI levels) would get relief from numerical density limits but no height increase. One additional story of height is allowed in exchange for 25% affordability, or two additional stories with 30% affordability. The three-tier system—illustrated in the table below—is proposed for a trial period through the end of 2019, with the city revisiting the program at that time to assess its effectiveness

For background, the HOME-SF program was approved unanimously by the Board of Supervisors about a year ago, in June 2017, along with legislation implementing the state density bonus law and a hybrid program. HOME-SF allows unlimited residential density, in contrast to the state law which only allows a bonus up to 35%. Presumably, the hope was that projects in zoning districts with set numerical density limits would choose HOME-SF instead of the state law so they could have more units. However, since the programs became law, only four residential projects have selected HOME-SF, with many eligible projects using the state program instead.

The legislation also proposes a very important procedural change: a 120-day processing period, starting on the day a “complete” HOME-SF application and plan set is submitted. This would be a significant shift from the current processing timeline of HOME-SF projects, which are given priority status but not guaranteed a hearing within 120 days. The Planning Department is recommending removing the strict 120-day limit, on the grounds that it is infeasible given staffing levels and CEQA processing requirements, and instead continuing to give HOME-SF projects priority processing.

We have found that staff is indeed doing what it can to process HOME-SF projects quickly, and they are moving faster than other residential projects; priority processing is assuredly not an empty promise. And the Planning Department does have a new policy to “target” hearings for most infill projects within one year of the Department determining it has all information needed to process the project. But a strict deadline enshrined in the Planning Code as opposed to a “target” hearing date—even if it’s not 120 days—would provide a much-needed degree of certainty currently only available to just a few kinds of housing developments, such as SB 35 or AB 73 projects.

We will continue to monitor this important piece of legislation as it makes its way through the approval process.

 

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.

Last Monday, the Board of Supervisors’ Land Use and Transportation Committee voted unanimously to recommend approval of legislation that would increase the Transportation Sustainability Fee (“TSF”) citywide for large, non-residential projects by $5, except within the proposed Central SoMa Plan area, where the associated increase would be $2.

The TSF was adopted in November 2015, replacing and expanding upon the former Transportation Impact Development Fee.  TSF requires citywide residential, non-residential, Production, Distribution, and Repair projects to pay a fee towards provisions of transit infrastructure and services necessary to accommodate increased demand generated by development.

The pending legislation, sponsored by Supervisor Peskin, would increase the TSF for large non-residential projects (those containing more than 99,999 gsf) citywide from $19.04/gsf to $24.04/gsf, and would increase the rate associated with such projects in the proposed Central SoMa Plan area from $19.04/gsf to $21.04/gsf.  The legislation would not impact TSF rates for residential or smaller-scale development.

Proponents argue that this fee increase is needed to address a $22 billion dollar shortfall anticipated by the Transportation Task Force 2045 for transportation projects over the next 27 years.  SFMTA staff estimated that the legislation will generate around $11.4 million in additional fees – approximately 8.2 million of which would come from Central SoMa Plan area projects.

Two weeks ago, the San Francisco Planning Commission voted unanimously to recommend approval of the increased TSF fee, contrary to Department staff’s recommendation to explore modifications such as exempting Central SoMa Plan area development.  Staff’s recommendation was based on concerns that imposition of additional TSF fees would impact the financial feasibility of large development in Central SoMa, which will already be subject to a range of new and increased development impact fees.  The Central SoMa Plan is anticipated to generate approximately $2 billion dollars in public benefits ($5 million of which is pegged for local and regional transit improvements).

At last week’s Land Use Committee hearing, Committee members voted unanimously to recommend approval of the legislation, but noted a need to take a comprehensive look at impacts of the broader public benefits package for the Central SoMa Plan, which is anticipated to come before them in late June.

This isn’t the first attempt to increase the TSF.  In 2016, Supervisors Avalos, Campus, and Marr introduced similar legislation to increase TSF fees by $2/gsf on large non-residential development, but it was ultimately vetoed by Mayor Ed Lee.

The TSF legislation is anticipated to come before the full Board within the next few weeks.

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

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

On May 1^st, Mayor Farrell and Supervisor Kim introduced San Francisco’s first “Housing Sustainability District”.  This legislation was made possible by California State Assembly Bill (“AB”) 73, which was sponsored by Assemblymember David Chiu and signed into law in September 2017.  The new “Central South of Market Housing Sustainability District” (“Central SoMa HSD”) will allow residential projects that meet certain standards and requirements to take advantage of a 120-day streamlined review and approval process.

Housing Sustainability Districts (“HSD”) are meant to facilitate the construction of housing in areas that are served by existing infrastructure.  They function as an overlay zoning district and provide additional controls and standardized processes for qualifying residential projects.  The intent of the HSDs are to allow project sponsors of residential projects to receive ministerial permits in return for including at least 10% of dwelling units on-site as affordable to lower income households and to pay prevailing wages or use skilled labor for the construction of the project.  In return for creating HSDs, municipalities are entitled to receive a ‘zoning incentive payment’ from the California Department of Housing and Community Development.

The new Central SoMa HSD includes all parcels within the Central SoMa Special Use District and does not change any of the height, bulk, land use, or density controls in the proposed Central SoMa Plan.  Instead, it will allow a streamlined ministerial approval.  This approval would be issued by the Planning Department within 120 days from receipt of a complete application for qualifying housing projects.  Individual projects must meet all of the following eligibility requirements below in order to qualify for entitlement under the Central SoMa HSD:

1. Projects with a height of 160 feet or less (note that 100% affordable projects qualify regardless of height);

2. The project is located in a zoning district that principally permits residential uses and does not propose less than 50 units/acre or more than 750 units/acre;

3. A majority of the project’s gross square footage must be designated for residential uses.  A project is not deemed to be for residential uses if it is infeasible for actual use as a single or multifamily residences;

4. The project must provide no less than 10% of its affordable dwelling units on-site and designate them as affordable to very low or low-income families, as defined in Section 415. Projects not subject to Section 415 must enter into a regulatory agreement with the City agreeing to provide the units on-site and restricted to very low or low-income families for at least 55 years;

5. All nonresidential uses must be principally permitted in the underlying zoning district. Therefore, if a nonresidential use requires a Conditional Use Authorization then the project is not eligible;

6. Projects that propose more than 24,999 gross square feet of office use are not eligible;

7. Projects containing a building that is designated under Article 10 or Article 11 of the Planning Code are not eligible;

8. No existing residential units can be removed, demolished, or converted to another use;

9. If the project is seeking a density bonus pursuant to California Government Code Section 65915 et. seq., it must demonstrate that it will not result in a significant shadow impact;

10. The project must comply with all Mitigation Measures in the Central SoMa Environmental Impact Report; and

11. The project must comply with all applicable zoning and adopted design review standards, including the San Francisco Urban Design Guidelines and Central SoMa Plan’s Guide to Urban Design.

In addition, if a project is proposing 75 units or more, then it must use a skilled and trained workforce to construct the project.  This threshold drops to projects of 50 or more on January 1, 2022.  If the project proposes less than 75 units, it must pay prevailing wages to all workers involved in the construction project.  This threshold drops to 49 or few units on January 1, 2022.

Projects meeting all of the above criteria are eligible for ministerial approval by the Planning Department within 120 days from receipt of a complete application.  No hearings are required for approval.  If a project would normally trigger a Large Project Authorization under Section 329 (in the Central SoMa Special Use District, those projects greater than 85 feet or involving a net addition/new construction of more than 50,000 gross square feet), those processes do not apply (i.e., no Planning Commission hearing).  Further, no requests for Discretionary Review can be accepted or heard by the Planning Commission or Board of Appeals.

The Central SoMa HSD does require that eligible projects file a Preliminary Project Assessment (“PPA”) before an application will be accepted (which is not included in the 120-day review and approval timeframe).  The purpose of the PPA process is for applicants to provide detailed evidence of eligibility compliance and to provide feedback on compliance with applicable design guidelines.  Further, all eligible projects must have an “informational hearing” before the Planning Commission within 100 days of receipt of a complete application.   Once the project is found to comply with the Central SoMa HSD requirements, the Planning Department approves the permit(s).

The Planning Department may deny a project within the Central SoMa HSD if it finds that it does not fully comply with all adopted design review standards, or that, based on substantial evidence in the record, that the project will have a specific adverse impact on the public health or safety and there is no feasible method to mitigate or avoid the impact.  Failure to meet all of the requirements of the Central SoMa HSD are also grounds for denial.  Decisions made pursuant to the Central SoMa HSD are appealable directly to the Board of Appeals within 10 days, which must decide the issue no later than 30 days after filing.  There are no opportunities for rehearings of the Board of Appeal decisions.

Projects that receive approval under the Central SoMa HSD must obtain the first site or building permit within 36 months of the Department’s issuance of a written decision.  The Planning Director must hold a hearing on the project’s status if a permit is not obtained within 36 months.  Finally, the Central SoMa SHD is effective for seven years, unless renewed by the Board of Supervisors for a term not to exceed 10 years.

How will the Central SoMa HSD impact housing development in the Central SoMa Plan Area?  Projects that meet the eligibility criteria will benefit from the 120-day streamlined review.  However, questions remain about when that time period begins, as the legislation does not define when an application is determined to be complete.  Further, projects must meet all applicable design guidelines, which are inherently subjective and could be used to stall projects.  Overall, the proposed Central SoMa HSD is a step forward that furthers the goals of former Mayor Lee: to improve and streamline the regulatory review and approval processes for housing projects.

Link to AB 73: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB73

Link to 18-0453: https://sfgov.legistar.com/View.ashx?M=F&ID=6229757&GUID=1B5E5740-752A-4688-8BA3-47ECFA9B7659

 

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.

 

Currently under review by the San Francisco Board of Supervisors is 171284 – an ordinance to amend and clarify the City’s Slope Protection Act (SPA).  The ordinance would expand the existing SPA to include construction projects proposed on properties whose average slope exceeds 25% grade (excluding properties already subject to the Edgehill Mountain Slope Protection Area or the Northwest Mt. Sutro Slope Protection Area), the properties within SPA are presently identified by the Earthquake Induced Landslide Zone.

The proposed amendments create a heightened layer of review by a Structural Review Committee; include additional mapped areas of the City, update map references, augment the title to be The Slope and Seismic Hazard Zone Protection Act; and implement a Structural Advisory Committee to review written reports from representatives of the Department of Planning and Public Works, and the Fire Department –  each of whom would perform a site visit and then submit their reports to the building official regarding the safety and integrity of the proposed design and construction in relation to slope instability mitigation and drainage as well as other geotechnical issues.

The enhanced peer review by committee would apply to permit applications seeking to perform construction of new buildings or structures with over 1,000 square feet of new projected roof area and horizontal or vertical additions having over 500 square feet of new projected roof area and would be implemented for any permits related to the proposed project including: shoring, underpinning, excavation, or retaining wall work; grading; excavation or fill, of over 50 cubic yards of earth materials; “or any other construction activity that in the opinion of the Building Official, may have a substantial impact on the slope stability of any property.” The impact on properties within the vicinity of the proposed project will be considered as part of the review.

As drafted, these amendments would have a substantial effect on small residential project timelines for permitting. Given the extensive documentation by structural and geotechnical engineers already required for these projects at the Planning review phase; and then again at the peer review currently in place and required by the Building Department Director– the revisions proposed to this ordinance are important issues for consideration and further discussion before adoption. With the potential to critically overburden an already robust review cycle, the public should have more clarity on the level of authority that the Structural Advisory Committee would be given to impact design and scope of a proposed project and at what stage in the permitting phase. Broad steps towards multi-agency site visits and additional written reports without recognizing the established measures in place should have a further assessment to account for the seemingly ever lengthening road to entitlement and final construction.

 

Authored by Reuben, Junius & Rose, LLP  Permit Consulting Manager, 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.

Yesterday the much-debated Senate Bill 827 (SB 827) authored by Senator Scott Wiener failed to make its way out of its first policy committee hearing, effectively dooming its chance of passing this year.  SB 827 would have provided a “transit rich housing bonus” to qualifying urban, infill projects on transit corridors that provided required percentages of affordable housing.  That bonus would override local zoning restrictions, providing substantially increased heights and density and reducing parking requirements.  Our prior update on SB 827 can be found here.

As SB 827 goes down, Senator Wiener’s Senate Bill 35 (SB 35) from last year’s legislative session is starting to bear fruit.  SB 35 created a “by right” approval process for multi-family, infill housing projects in urbanized areas that provide affordable housing.  The “by right” approval process applies in areas that fail to issue sufficient building permits to meet their State-mandated affordable housing goals (the vast majority of cities and counties in California fail to do so).  In a city or county that does not issue sufficient building permits for above moderate income units, a project that dedicates at least 10% of its units to households earning below 80% of the area median income (AMI) qualifies for ministerial review.  If a city or county does not issue sufficient building permits for households earning below 80% of AMI, a project that dedicates at least 50% of its units to such households qualifies for ministerial review.  SB 35 projects are generally required to pay prevailing wage, and restrictions apply to avoid displacement of existing tenants.  A city or county is required to approve an SB 35 project within 180 days.  Our prior update on SB 35 can be found here.

Three SB 35 Projects Now Underway in the Bay Area

SB 35 was part of a package of fifteen housing bills signed by Governor Brown in September 2017 that sought to tackle a wide range of issues, from streamlining of project approvals to funding for local planning and affordable housing to strengthening the Housing Accountability Act.  SB 35 went into effect on January 1, 2018.  On January 31, 2018, the Department of Housing and Community Development released its analysis of cities and counties subject to SB 35 streamlining for failing to meet their affordable housing goals (378 failed to meet their above moderate income goals, and 148 failed to meet their 80% AMI goals).  As of today, there are three projects that are seeking approval under SB 35.  Based on the timeline for approval under SB 35, all three expect to receive their approval within 180 days.

1900 Fourth Street, Berkeley

The project sponsor had sought approval of a development at this site for approximately 5 years.  The site, currently a parking lot, is designated for housing in the city’s general plan and zoning and is located near the Amtrak Capitol Corridor Train and buses.  However, vigorous opponents argued that the development of the site would harm cultural resources and have other deleterious impacts.  In March 2018, after years of negotiating with the opponents and a prolonged environmental review process, the project sponsors changed tack and sought a denser development of the site using SB 35 and the State Density Bonus Law.  The project now proposes 260 units, 50% of which will be affordable to households making less than 80% AMI, 27,500 square feet of retail and restaurant space, a community park area, and a community center.

Vallco Town Center, Cupertino

The owner of the nearly-vacant Vallco Shopping Mall had sought approval of a development at the site for nearly 6 years.  Several years of vigorous opposition had stalled the specific plan that would have allowed for the renovation of the property.  In April 2018, the project sponsors took a different approach and revamped the project to utilize SB 35 streamlining.  The revised project reduces the office area from 2.4 million to 1.8 million square feet, reduces retail from 640,000 square feet to 400,000 square feet, and increases housing units from 800 units to 2,402 units, of which 50% will be affordable to households earning less than 80% AMI.

681 Florida Street, San Francisco

As a result of a market-rate housing development next door, the city became the owner of this parcel which it would develop into a 100% affordable housing development.  The city chose two affordable housing groups to develop the project, one of whom actively opposed passage of SB 35 before it became law.  However, as the two groups moved forward with the project it became apparent that the normal approval process would be time consuming and uncertain, preventing them from bringing the project to market as quickly as they hoped.  In April 2018, the groups chose to reformulate their proposed development at the site to proceed under SB 35 and the State Density Bonus Law, which they expect will allow a 130-unit project where normally only 86-units would have been possible.

The Future of SB 35

In a statement following yesterday’s committee vote on SB 827, Senator Wiener stated his intention to keep working on the bill and suggested that perhaps it would take more than one legislative session to get the necessary support.  He compared the bill to Governor Brown’s 2016 budget trailer bill that would have streamlined approvals by creating “by right” land use approvals for multifamily, infill housing developments within “transit priority areas” that also include affordable housing.  The Governor’s trailer bill failed when environmental and labor groups walked away from negotiations, but some have speculated that the trailer bill may have paved the way for SB 35 the following year.  Perhaps the ambitious changes that SB 827 proposes will take another legislative session to enact.  However, if SB 827 is coming back next year, the Senator will not only need to persuade the Legislature to pass it, he will also have to persuade a new governor to sign it.

Authored by Reuben, Junius & Rose, LLP  Attorney, Matthew Visick

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.