To Fourplex or Not to Fourplex

| Thomas P. Tunny
fourplex

Senate Bill 9 (SB 9), which took effect January 1, 2022, enables property owners to split their single-family residential lot into two separate lots and build up to two new housing units on each lot.  A key component of SB 9 is that it requires ministerial approval of such projects.  In San Francisco (the “City”), that means no discretionary review process and other opportunities for project opposition.  The City’s policymakers and housing advocates were influential in the adoption of SB 9.  And yet, now that it’s here, the City’s lawmakers can’t seem to decide if they like SB 9.

Housing advocates hailed SB 9 for facilitating the construction of new, smaller dwelling units throughout the City.  Everyone can agree that the City needs housing.  However, the City’s new housing production in recent years has been heavily concentrated in the eastern and southeastern parts of the City, with 90% of all new housing produced in just ten eastside and central neighborhoods.  Development in these neighborhoods has at times been subject to significant conflicts and prevented from moving forward.  At the same time, roughly 60% of the City’s developable land area is in residential zoning districts, concentrated primarily on the City’s west side, with 38% of the City’s developable land area zoned exclusively for single-family homes.  Just 3% of housing built since 2005 was added in areas that allow one to two units (only 6% of affordable housing when ADUs are counted).  SB 9 presents a fresh approach.

When Supervisor Rafael Mandelman proposed his “fourplex” legislation last summer, allowing any single-family home to be turned into a fourplex, and corner lots to have six units, it seemed SB 9 would be embraced, and that some of the City’s more vexing housing challenges would be addressed.  It wasn’t that easy.

Last Monday (April 11), the Board of Supervisors’ Land Use Committee considered Supervisor Mandelman’s fourplex legislation.  Supervisor Mandelman, facing significant political push-back, had amended his legislation to upzone all single-family residential districts (RH-1 and RH-1(D)) in the City to two-family density (RH-2 and RH-2(D)).  The elimination of single-family zoning is a means of ensuring the approval of new fourplexes and six-unit projects would not be ministerial, and that discretionary review of these projects would continue.  This is because the ministerial provisions of SB 9 apply only to single-family residential districts.

Advocates of preserving the discretionary review process cite the need for the City to maintain design review control over new housing.  But discretionary review is not about design review.  Discretionary review has become a process that project opponents manipulate to stop new development.  It adds significant time, cost, and risk to the production of housing, thereby discouraging new units.  If design review is the concern, there are better ways to accomplish that without leaving it to discretionary review.

Other related issues addressed by Supervisor Mandelman’s legislation include residency and tenancy controls, measures to prevent demolition, condominium conversion and subdivision controls, and rent protections.

In the end, at the Land Use Committee on Monday, the Committee approved certain amendments proposed by Supervisor Melgar that sought to encourage larger units, incentivize marginalized homeowners to create more units, and waive the application fees for Historic Resource Assessments,  and then voted to continue its consideration of the legislation to the April 25 meeting.

 

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

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.

Supervisor Safai Introduces Competing Fourplex Legislation

| Sabrina Eshaghi
affordable

On November 30, 2021, Supervisor Ahsha Safai introduced legislation that would allow up to four units on lots zoned RH-1(D), RH-1, and RH-2 with the addition of affordable housing for moderate-income families. This competes with Supervisor Rafael Mandelman’s fourplex legislation, which would allow up to four units in all RH zones without any affordability requirement. Supervisor Safai’s legislation takes a different approach that would require at least one deed-restricted middle-income housing unit in order to build a fourplex. Safai’s legislation would also allow exceptions to certain Planning Code requirements, provide priority processing, and eliminate 311 notice and discretionary review.

Specifically, the legislation would create what it calls the Affordable Housing Incentive Program, which would apply to lots that are (1) located in the RH-1(D), RH-1, or RH-2 districts, (2) within one mile of a major transit stop, and (3) no smaller than 2,500 square feet. In addition, the project cannot be subject to any other density bonus programs and any existing “protected” units, which includes rent controlled or affordable housing units, must be replaced.

Under the Program, one affordable housing unit is required to allow up to three units per lot and two affordable units are required to allow up to four units per lot. The affordable housing units must be provided at 110% of the area median income (“AMI”) for rental units, or 140% AMI for owned units. Currently, these income levels for a single person household translate to $102,600 and $130,550, respectively. At the 110% AMI level, base rent for a one-bedroom unit would be limited to $2,713 and $3,010 for a two-bedroom unit. The affordable units are also subject to certain size requirements.

In exchange for the affordable housing, the Program allows a variety of Code modifications and shorter processing times. For example, lots in the RH-1(D) and RH-1 zoning districts are currently limited to a height of 35 feet, but the Program would generally allow up to 40 feet. In addition, projects under the Program would be entitled to reduced rear yard, dwelling unit exposure, and open space requirements. The Planning Director may also grant minor exceptions from Code requirements to allow building mass to appropriately shift to respond to surrounding context when the proposed modification would not substantially reduce or increase the overall building envelope. Likewise, the provisions of the Residential Design Guidelines related to “building scale and form” and “building scale at the mid-block open space” would not apply.

To provide more certainty in the approval process, the Program requires projects to be approved within 180 days of submittal of a complete project application, unless an environmental impact report is required. It also eliminates 311 neighborhood notification and discretionary review. Instead, the only opportunity to appeal would be through the associated building permit.

The legislation is currently in a mandatory 30-day holding period before any Planning Commission or Board Committee hearings can take place. Meanwhile Supervisor Mandelman’s legislation has already advanced from the Planning Commission and is awaiting a Land Use Committee hearing date. It remains to be seen what version of the fourplex legislation will make it to the full Board.

 

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

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.

Supervisor Mandelman’s Fourplex Legislation Clears Planning Commission

| Mark Loper
legislation

On Thursday, November 18, 2021, the San Francisco Planning Commission unanimously recommended that the Board of Supervisors approve legislation proposed by Supervisor Rafael Mandelman to allow four units on any residential lot, as well as up to six units on corner lots, in “RH” zones.

Supervisor Mandelman’s proposal—actually two pieces of legislation—only proposes minor changes to the Planning Code itself, and is quite simple in its effect: (1) up to four dwelling units per lot would be allowed either on every corner lot or on every lot in an “RH” zoning district, and (2) those sites would be subject to the development controls of the RH-3 zoning district. All other aspects of the SF Planning Code would continue to apply. That includes height, rear yard, setback, and open space requirements, as well as the standard entitlement and environmental review process. The Planning Commission also recommended the Planning Department’s proposed modifications, including that the Board of Supervisors allow six units on corner lots.

Supervisor Mandelman has been pushing for this legislation for nearly a year. He expanded the reach of the ordinance after the state passed SB 10, which allowed moderate upzoning near transit without a cumbersome and years-long CEQA review process that ordinarily would be required (not to mention that each project utilizing the increased density would undergo its own CEQA review). In spite of well publicized denials of major housing projects by the Board of Supervisors, Supervisor Mandelman proposed legislation that can become a key solution to San Francisco’s housing crisis. This is not an easy time to propose pro-housing laws in San Francisco, much less expanding its scope when presented with the opportunity.

The Planning Department’s staff report contains an insightful point that seems to get lost in the debate over adding new units in formerly single-family housing districts. 12,568 residential buildings in San Francisco have more units than would be allowed under current zoning. That represents about 31% of all homes in the city. As the Planning Department’s staff report notes, Supervisor Mandelman’s proposal rectifies policy decisions made in the 1970s which effectively downzoned large swaths of western and southern San Francisco. Multifamily buildings coexist with single-family homes currently and can in the future.

The Planning Department’s recommendations included an increase on corner lot density to six units, amending the residential design guidelines to add objective standards, eliminating the RH-1 zoning district and adopting a local alternative to SB-9, increasing funding for supportive housing programs, and establishing an impact fee on homes over 4,000 square feet. Ensuring all San Franciscans have access to capital in order to benefit from the legislation will be crucial to create new fourplex housing. Development impact fees have become a primary cost consideration for development projects; taxing housing instead of looking for a more generalized funding source might not prove successful. Also, establishing objective residential design guidelines will be critical to ensuring that fourplex projects can actually be approved, and in an orderly fashion without overburdening Planning Department staff or dissuading San Franciscans wary of an overly complicated set of guidelines or process. For example, in spite of the RH-4 zoning, the Residential Design Guidelines could effectively limit some sites to a lower density.

As noted above, Supervisor Mandelman’s ordinances as currently proposed are straightforward and clear to understand and execute. They now move to the Board of Supervisors, which will be able to add the Planning Commission and Planning Department’s suggestions and make proposals of their own. It remains to be seen what final form the legislation could take.

Finally, this update includes two maps from the Planning Department’s staff report. The first shows the areas in San Francisco that are currently zoned RH, where the proposed legislation would allow fourplexes. The second shows where new housing has been built in San Francisco since 2005. The maps generally do not overlap.

 

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.