New, Smaller Dwelling Units On Their Way To San Francisco

As many of our readers have likely heard, Supervisor Wiener has proposed an amendment to the Building Code that would reduce the minimum size of efficiency apartments by 70 square feet.  These “micro-units” or “efficiency dwelling units” would have to be at least 220 square feet in area with a primary living space of at least 150 square feet.  The California Building Code allows cities and counties to make this change and several jurisdictions in California and elsewhere have done so in an effort to bring down housing costs. 

After being unanimously recommended for approval by the Building Inspection Commission and Land Use Committee, the full Board of Supervisors continued the micro-unit legislation so that the concerns of so-called housing advocates could be addressed.  As is often the case with land use policy in San Francisco, facts and real-world data can take a back seat to amorphous fears and worst-case conjecture.  The debate over micro-units is no exception, with opponents of the legislation alleging that they would drive up land prices, create a shortage of affordable housing sites, and result in units that are occupied almost exclusively by reverse-commuting tech workers or that will be illegally converted to hotels.  

In fact, most small units in San Francisco have been built for special needs populations, particularly youth transitioning out of foster care and the formerly homeless.  In Seattle, where 11 micro-unit projects have been built, vacancies are at about one percent and rents are about one-third the price of an average apartment. 

In spite of the evidence that micro-units provide a low-cost housing alternative, opponents insisted on a cap on the total number of market-rate micro-units that can be built under the new ordinance. On October 9, 2012, Supervisor Wiener introduced an ordinance to do just that.  

The ordinance as drafted would create a pilot program whereby the number of market-rate efficiency dwelling units with reduced square footage that may be approved by the Planning Department would be limited to 375 units total.  Affordable units or units used for student housing would be exempt from the limit.  At the time when 325 efficiency units of reduced size have been approved by Planning, the Planning Department must submit a report to the Board of Supervisors that would evaluate the new program, including an analysis of whether additional reduced square footage efficiency dwelling units should be allowed.  Also included in the ordinance is a requirement that, whenever possible, efficiency dwelling units with reduced square footage provide 10 square feet of usable common open space per unit, such as a reading room, media room, game room, or fitness facility.  The ordinance would apply only to new construction.  Owners of existing structures may not subdivide dwelling units to take advantage of the reduced square footage.

Yesterday, the Planning Commission expressed doubts about the need for a cap and whether it could be effectively administered.  Nonetheless, it recognized the cap as a necessary political compromise brokered by Supervisor Wiener and endorsed the concept of a cap to allow future study.   The Board of Supervisors is scheduled to consider both the Building Code and Planning Code amendments next week.   

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, 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.

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