Supervisors Pass New EV Charging Rules

legislation

Back in March, we wrote about pending legislation that would amend the Planning Code to specifically address electric vehicle (“EV”) charging uses. At the time, the legislation was headed to the Planning Commission for initial consideration. On Tuesday, the Board of Supervisors unanimously passed an amended version of that legislation on the first reading.

As we explained in our March update, the Planning Code does not currently contemplate EV charging at all—leaving operators to work with the Planning Department on a case-by-case basis to determine the permissibility and approval path for any new EV charging site.

In order to meet the City’s climate action targets (which include a goal of 100% registered private vehicle electrification by 2040), the legislation aims to create a Planning framework to streamline the approval of publicly accessible EV charging stations and to regulate (though not necessarily streamline) the approval of new fleet vehicle charging sites.

The legislation creates two new Planning Code use categories, both under the umbrella of “Automotive Use.” The new “Electric Vehicle Charging Location” (“EV Charging Location”) use covers public-facing charging locations and “Fleet Charging” covers EV charging facilities that are dedicated to a private entity and not available to the general public.

The initial draft of the legislation would have required Conditional Use (“CU”) Authorization for Fleet Charging in most zoning districts, except in PDR-1-D, PDR-1-G, and PDR-2 districts, where Fleet Charging would have been principally permitted. That draft also would have prohibited Fleet Charging in the Neighborhood Commercial Districts. The earlier version of the ordinance called for more permissibility related to EV Charging Locations, which would be permitted in most districts, and would be principally permitted wherever the existing use is already some type of Automotive Use. This provision remains in the version passed on Tuesday.

The legislation was heard by the Land Use and Transportation Committee three times after it came out of the Planning Commission on April 14 with a handful of recommended changes. Several more amendments were made at those three Committee hearings—mostly to further restrict the permissibility of Fleet Charging uses—as outlined here:

  1. While the initial version of ordinance would have allowed EV Charging Locations to dedicate up to 1/3 of spaces as accessory Fleet Charging, the final version of the ordinance prohibits Fleet Charging as an accessory use to EV Charging Locations or to any other use. I.e., no accessory Fleet Charging, period.
  2. Consistent with the Planning Commission’s recommendation, the final legislation permits Fleet Charging in most of the Neighborhood Commercial Districts with approval of a CU.
  3. The Land Use and Transportation Committee opted to require a CU for Fleet Charging in all of the PDR districts, primarily based on a concern that Fleet Charging uses could displace businesses that provide blue collar jobs. However, existing Private Parking Lots and Vehicle Storage Lots in the PDR-1-D, PDR-1-G, and PDR-2 districts will be able to convert to Fleet Charging without a CU. Supervisor Peskin explained that this minor exception would cover a limited number of properties located in District 10.

In addition to the above changes incorporated into the version of the legislation approved by the Board this week, the Land Use and Transportation Committee also created a duplicated version of the file in order to add a set of new CU findings that would apply to Fleet Charging projects. As drafted, a proposed Fleet Charging use would require consideration of the following criteria:

  1. The proposed Fleet Charging use will not induce demand for low occupancy vehicles in highly congested areas or in transit-rich areas.
  2. Vehicle movement on or around the Fleet Charging use will not unduly impact pedestrian spaces or movement, transit service, bicycle movement, or the overall traffic movement.
  3. If the vehicles accessing the proposed Fleet Charging use are owned by one ownership entity, that the ownership entity establishes that it has secured sufficient parking spaces for vehicles when not in operation within San Francisco or adjacent counties.

The second finding essentially codifies a question that a Fleet Charging project’s environmental review would already address—i.e., would a new vehicle-oriented use significantly impact traffic in the vicinity of the project? The Planning Department is experienced with traffic circulation issues and how they should be addressed as part of the land-use process. So, we don’t anticipate a significant amount of uncertainty related to this second finding.

The first and third findings, however, leave open some critical questions of interpretation.

The first finding speaks to low occupancy vehicles. The Planning Code doesn’t define that term, but it is generally understood to mean a vehicle with one or two people in it. It’s not clear what this finding would mean as applied to a Fleet Charging use serving EV rideshare vehicles—which may sometimes carry only one passenger at a time. Other types of fleets, including delivery vehicles and service vehicles, will often have a driver and no passengers. Depending on how it’s applied, this finding could actually discourage the electrification of rideshare fleets—contrary to a 2021 California Air Resources Board mandate that rideshare companies reach zero GHG emissions and ensure that 90% of their vehicle miles are fully electric by 2030.[1]

It’s also unclear what exactly the third proposed finding aims to accomplish. EV chargers are likely to be installed at parking facilities, such that vehicles can be parked and charged in one place. Discouraging a dual charging/parking use would seem to run contrary to vehicle miles traveled (“VMT”) reduction goals.

Hopefully, these questions will get answered as the duplicated version of the ordinance makes its way through the legislative process. The duplicated legislation has been referred back to the Planning Commission, but as the Commission and Board of Supervisors head into August recess, we’ll have to wait until the fall to see how this shakes out.

[1] California Air Resources Board, Resolution No. 21-10 (May 20, 2021); see also California Air Resources Board Bulletin, California requires zero-emissions vehicle use for ridesharing services, another step toward achieving the state’s climate goals (May 20, 2021), available at: https://content.govdelivery.com/accounts/CARB/bulletins/2da5a7a.

 

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 Expands CUA Appeal Rights to Tenants

Appeal

On Tuesday June 14th, Supervisor Melgar introduced a new version of legislation (“Appeal Legislation”) that will change, and effectively lower the threshold, for appeals of Conditional Use Authorizations (or denial) by the Planning Commission.

A Conditional Use Authorization (“CUA”) refers to the use or development of a parcel that is not permitted as-of-right but requires additional scrutiny by the Planning Commission. These land uses have special characteristics or a unique nature that may be suitable only in certain locations or operated and arranged in a particular manner. As such, they have a higher threshold for approval. The San Francisco Planning Code states that a CUA can be approved if they are “necessary or desirable for, and compatible with, the neighborhood or the community” (Section 303(c)(1)), along with other specific findings. CUA appeals are acted upon by the Board of Supervisors.

Because the standard for granting CUA’s are highly subjective, public opinion and political pressures often come into play in determining the “necessity or desirability, and compatibility” of a project. While land use justifications are given for classifying certain uses as conditional, other motives are often in play: to protect existing, local businesses from competition by formula retail or an overconcentration of similar businesses; to preserve the amenity and value of existing buildings by making height above 40 or 50 feet a conditional use, even in high-density districts where height limits allow for taller buildings and tall buildings are prevalent. With subjective standards for both approvals and appeals at the Board of Supervisors, some decisions may effectively become a popularity contest and create a great deal of uncertainty for applicants, property owners, and tenants. This is particularly true for businesses requiring a conditional use. Prior to new state laws setting stricter standards for disapproving or reducing the density of housing developments, new residential construction was downsized more frequently for compatibility with adjacent buildings.

Currently, a decision by the Planning Commission on a CUA may only be appealed within 30 days by either 1) five members of the Board of Supervisors; or 2) the owners of at least 20% of the property within 300 feet of the exterior boundaries of the subject property. Where a property has joint ownership, the signature of each owner is calculated as representing the affected property in “direct proportion to the amount of total ownership of that property attributable to the owners subscribing to the notice of appeal” (Section 308.1(b)(4)). A CUA may only be overturned or modified by a 2/3 vote of the Board.

The primary substantive change in the Appeal Legislation would count the signature of “Verified Tenants” as well as those of property owners toward meeting the 20% threshold for filing an appeal (currently, only owners are eligible). After receiving the signatures, the Department of Public Works (“DPW”) would have five days to verify whether the 20% requirement had been fulfilled.

In a city where the vast majority of owners and businesses rent or lease, and many owners do not live or operate businesses on their property, the policy motivations of the Appeal Legislation are self-evident: to give the people living or running a business in a building who may be most affected by a CUA decision standing to file an appeal regardless of whether they own the affected property.

With some narrow exceptions (e.g., property owners voting to tax themselves for community benefit districts that provide additional services), conditioning public participation or voting on property ownership is an anachronism. (North Carolina, the last state to make property ownership a prerequisite to voting in presidential elections, abolished its requirement in 1856.) With that said, the Appeal Legislation does raise several questions about the relative weight given to verification of tenant signatures, tenant votes, and the potential for double-counting votes in some instances:

  • Verified Tenants or Honor System? Only a “Verified Tenant” may subscribe to an appeal. A Verified Tenant is a commercial or residential tenant who declares under penalty of perjury that they lease an entire property or a unit on the property with a lease term exceeding 32 days. A Verified Tenant must maintain proof of tenancy (lease or other government document showing residency/occupancy) and have occupancy longer than 32 days as of the date of signing the appeal.

However, the Department of Public Works is not required to verify tenant documentation; it “may” request documentation at its discretion. It also does not specify that the signature from a business must be an authorized signatory for the business. For example, during the installation of street seating under COVID emergency orders, there were instances of unauthorized employees granting permission for structures with seating for adjacent restaurants to encroach on another store’s frontage without the business owner’s knowledge or consent. Given that DPW only has five days to determine the validity of an appeal, the verification process seems more like an honor system with a bare minimum of time for DPW to calculate the percentages based on self-reporting by signatories.

Five days does not provide a reasonable amount of time for requesting and verifying even a random sample of documentation from Verified Tenants. Further, defining a Verified Tenant as one occupying a unit pursuant to a lease should require a tenant to provide a copy of the lease. Other documents (DMV records, federal income tax records, and utility bills) may demonstrate that a tenant lives somewhere, but not that they are an authorized occupant with a lease. Verifying property ownership, the current requirement for CUA appeals, is an easier process since ownership is a matter of public record. Under the Appeal Legislation, the relevant documents to prove up occupancy for Verified Tenants are not a matter of public record and an applicant has no right to demand an audit by DPW. At minimum, a random audit of a percentage of tenant signatories should be included and the overall total counted toward the appeal discounted accordingly. This could be accomplished without extending overall timelines for a 5-day preliminary acceptance of the appeal, subject to an additional period for DPW to conduct a random audit to determine the percentage of invalid signatures. If the rate of valid signatures in the sample would cause the overall number of signatures to fall below the 20% threshold, the appeal would be rejected. (This is similar to the approach used for a preliminary evaluation and rejection of signatures in support of ballot measures.)

  • One Tenant Speaks for All Tenants in a Unit & All Units Are Equal. Where a rental unit is occupied by more than one tenant, the signature of one tenant in a unit effectively speaks for all tenants in the space. Similarly, all rental units are counted equally toward the 20% threshold. For example, in a multi-unit property, a 10,000 square foot commercial rental unit would be given equal weight as a 500 square foot studio unit. Compare this to the treatment of jointly owned property, where only the portion of the property attributable to a single signatory is counted.
  • Potential for Double-Counting. Where a joint owner and a tenant sign on to an appeal, each signatory is counted according to the method laid out for each. As an example, if an owner of one unit in a 2-unit condo building has a 50% interest in the property and rents that unit out, their two signatures would be added together such that they would effectively represent 100% of the property for appeal purposes. If the other owner or tenant joined, the percentage counted toward the appeal would not increase beyond 100%. On the other hand, if the other owner also rented and both that owner and tenant opposed the appeal, they would effectively be disenfranchised in determining the appeal threshold.

Depending on the number of rental units and ownership structure of buildings near the project, the Appeal Legislation could significantly reduce the 20% threshold, effectively negate the voice of supportive property owners and tenants, and, without any mandatory verification mechanisms for tenants, undermine transparency and trust in the validity of an appeal.

With that said, the Appeal Legislation does include other terms that reduce confusion and promotes administrative efficiency. For example, it requires the Planning Commission’s final, signed approval to be transmitted to the Clerk of the Board within 10 days of the Planning Commission’s action. No such reporting is currently required, and final decisions are not always issued within 10 days. Thus, the 10-day limit should broadly benefit all recipients of CUA approvals and reduce the burden on the Clerk of verifying the Planning Commission’s action. Appeals may not be filed “earlier than ten business days” or later than 30 days from the date of action by the Planning Commission. Although this technically shortens the appeal window to 20 days, the overall 30-day time period remains unchanged and there is no tolling of the appeal period if the final Planning Commission decision is not transmitted to the Clerk within 10 days.

Since most CUA appeals are filed towards the end of the 30-day appeal period, the change should have minimal, if any, effect on the length of the CUA appeal process. It does, however, lower the bar for appeals and increases the risk of delay and cost overruns, particularly for small businesses.

Given San Francisco’s slower-than-average recovery from COVID-19 job losses, the broader question the Appeal Legislation raises is one of priorities and goals for the city’s future. Is this the time to introduce more uncertainty and procedural hurdles into the business and housing environment?

Or should policymakers be focused on bigger questions facing our city: the revival of downtown and Union Square, restoring the tourism sector, and creating space for more flexible models for living, working, and doing business in a post-pandemic (or COVID endemic) world. Is a CUA really necessary for banks, architect’s offices, or small-scale hotels in Neighborhood Commercial Districts? Or for enlarging a successful business into an adjacent storefront? Are minor changes like these worth the time and attention of San Francisco’s elected officials? On balance, does the extent of regulatory oversight strike the right balance between public participation, public policy goals, and the costs, both in time and money, to applicants.

Public participation in the Planning process should be—and is—a given. But right now, shouldn’t that participation be focused on how to fill vacant spaces and addressing a persistent housing shortage and widespread homelessness, rather than adding time, cost, and risk for businesses and projects that fulfill those goals? By making big moves to provide flexibility and fast, by right-approvals for new housing and new/expanding businesses, San Francisco can send a strong signal that it is still the adaptable, dynamic, creative city that will continue to be an economic and cultural powerhouse—and not the dystopia the national press has portrayed it as of late. Tenants—both residential and commercial—should of course have a place at the table when major changes are proposed. But that participation should be focused on major changes in zoning rules and large-scale projects that need exceptions from standard regulations. At a bare minimum, an expansion of the right to bring a CUA appeal should be accompanied with the elimination of CUA requirements that stand in the way of important public policy goals.

Regardless of where one stands on these amendments, if approved, they will change the CUA Appeal landscape. The legislation was introduced at the June 14th Board of Supervisors hearing and requires review and comment by the Planning Commission before it is taken up by the Supervisors. Stay tuned for updates on this legislation.

 

Authored by Reuben, Junius & Rose, LLP.

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.

To Fourplex or Not to Fourplex

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.

Planning Commission Considering EV Charging Regulations

EV

This Thursday, the San Francisco Planning Commission will consider an ordinance that would amend the Planning Code to address electric vehicle (“EV”) charging uses. The Planning Code does not contemplate EV charging currently—leaving operators to work with the Planning Department on a case-by-case basis to determine the permissibility and approval path for any new EV charging site.

As summarized in the Planning Commission Staff Report, 2022-000549PCA (“Staff Report”), for the legislation, the City’s climate action targets include the following transportation goals:

  • By 2030, 80% of trips taken by low-carbon modes such as walking, biking, transit, and shared EVs.
  • By 2030, increase vehicle electrification to at least 25% of all registered private vehicles, and, by 2040, to 100% of all such vehicles.

The International Council on Clean Transportation (ICCT) predicts that in order to serve the 170,000 light duty EVs predicted to be registered in San Francisco by 2030, “the number of publicly accessible charging stations in San Francisco needs to increase from about 800 in 2019 to 2,000 by 2025, and over 5,000 by 2030.” (See Staff Report.) The proposed ordinance aims to create a regulatory framework to guide the slew of EV charging projects that the City expects to see over the next several years in response to that demand.

As currently drafted, the legislation would create two new Planning Code use categories, both under the umbrella of “Automotive Use.” The new “Electric Vehicle Charging Location” use would cover public-facing charging locations and “Fleet Charging” would cover EV charging facilities that are dedicated to a private entity and not available to the general public.

For reference, the proposed amended definition of an Automotive Use would read as follows:

A Commercial Use category that includes Automotive Repair, Ambulance Services, Automobile Sale or Rental, Automotive Service Station, Automotive Wash, Electric Vehicle Charging Location, Fleet Charging, Gas Station, Parcel Delivery Service, Private Parking Garage, Private Parking Lot, Public Parking Garage, Public Parking Lot, Vehicle Storage Garage, Vehicle Storage Lot, and Motor Vehicle Tow Service. All Automotive Uses that have Vehicular Use Areas defined in this Section of the Code shall meet the screening requirements for vehicular use areas in Section 142.

If the legislation is enacted as drafted, Fleet Charging uses would require Conditional Use Authorization in most zoning districts except for in PDR-1-D, PDR-1-G, and PDR-2 districts. Fleet Charging would be prohibited in the Neighborhood Commercial Districts. Electric Vehicle Charging Locations would be more widely permitted, and would be principally permitted in most districts where the existing use is already some type of Automotive Use. Such conversions from an existing Automotive Use to an Electric Vehicle Charging Location would also be exempt from the Section 311 building permit review and noticing requirements—meaning those projects would not be subject to the City’s often costly and time-consuming discretionary review process.

While most Fleet Charging projects will require Conditional Use approval under the new rules, the legislation does allow some limited Fleet Charging as an accessory use to public charging, with Fleet Charging limited to a maximum of 1/3 of the total charging stations.

Planning Staff has recommended the following two changes to the legislation:

  1. Require Conditional Use Authorization in all C-3 Districts for Electric Vehicle Charging Locations and change the code to make Gas Stations a Conditional Use in the two C-3 districts where they are currently principally permitted.
  2. Exempt the conversion of existing automotive uses to EV Charging from Section 142 Screening requirements.

After the Planning Commission hears the legislation on Thursday, it will then go to the Land Use and Transportation Committee before being heard by the full Board of Supervisors. You can track the ordinance’s progress 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.

Oakland ADU Updates: Legalization Amnesty Program

Amnesty

As I previously reported, Oakland is in the process of updating its Planning Code regulations pertaining to accessory dwelling units (“ADUs”). On December 21, 2021, the Oakland City Council heard and passed on first reading legislation amending Oakland’s ADU controls (the, “Legislation”). The proposed amendments encourage ADU production by reducing barriers through the adoption of streamlined approval processes consistent with State law. One of the proposed programs by the Legislation is an amnesty program to legalize unpermitted ADUs established and occupied in Oakland prior to January 1, 2021.

The amnesty program consists of two elements that encourage the legalization of existing eligible unpermitted ADUs. First, a property owner may request a waiver from provisions of zoning or development standards, e.g., setbacks, that would preclude the preservation of an eligible unpermitted ADU.

Second, a property owner may request a five year delay in enforcement of Building Code requirements if the unpermitted ADU was built prior to the effective date of the Legislation. The ability to request a five year enforcement delay is available until January 1, 2030. Property owners would be allowed to bring their existing, eligible, unpermitted ADU into compliance with current Building Code standards without incurring any enforcement penalties or fines. This amnesty would last up to five years from the date the enforcement delay is granted, meaning the latest the five-year enforcement delay can be in effect for a specific ADU is December 31, 2034. Amnesty  does not apply to structures that pose an immediate risk to public health and safety.

In addition to creating an amnesty program for legalizing existing unpermitted ADUs, the Legislation makes several changes to the existing ADU development controls, including:

  • Category Three ADU. The Legislation establishes a new attached ADU category that may combine both converted space within an existing envelope of a multifamily building and a newly built addition to a building footprint.
  • Height Increase. Exceeding State law, the Legislation allows two-story ADUs up to a maximum height of 20 feet, as compared to 16 feet, if an ADU complies with the minimum four-foot side and rear setbacks required for detached ADUs.
  • Envelope Expansion. The Legislation permits additional envelope expansion as part of the conversion or replacement of an existing accessory structure on a small lot to allow construction of one internal conversion ADU. The ADU must have a total structural footprint no greater than 800 square feet, with the height of the addition no more than 16 feet. A “small lot” is defined as those no greater than 3,000 square feet or no greater than 35 feet in lot width mean.
  • Trees. The Legislation calls for project sponsors to plant one new tree on the subject lot or within the public right of way fronting the subject lot per every 500 square feet of detached ADU floor area.
  • ADUs in Front Setback. Consistent with State law, the Legislation permits one ADU of a minimum size of 800 square feet, up to 16 feet in height, in the front setback if the lot’s configuration precludes creation of the ADU anywhere else on the lot.
  • Multifamily Internal Conversion ADUs. The Legislation clarifies that multifamily properties are permitted one internal conversion ADU or up to a number equal to 25% of the existing units per multifamily building (not per lot). This clarification addresses situations where more than one multifamily building is located on a single lot. In which case, each multifamily building on the lot would be allowed to add internal conversion ADUs up to a number equal to 25% of existing units.

The Legislation is scheduled to return to the Oakland City Council for the second and final hearing for passage. Having been unanimously passed at the December 2021 Council meeting, it is anticipated that the Legislation will be finally passed by the Council next week. We will continue to monitor the Legislation and keep readers updated.

 

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

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

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

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.

Planning Commission Recommends Big Changes for Large Residence Legislation

Planning Commission

On September 23, 2021, the Planning Commission unanimously voted to disapprove Supervisor Mandelman’s updated proposed large residence legislation after a robust conversation on the potential sweeping effects it could have on homeowners throughout San Francisco. As we have discussed in prior updates on July 29th and March 31st of this year, the large residence legislation was originally introduced to discourage large residential homes over 2,500 square feet by generally requiring a conditional use authorization for any such new home, with some exceptions. The Planning Commission, in its disapproval, provided seven recommendations to significantly change the legislation ahead of its move to the Board of Supervisors.

The seven recommendations and some of the reasoning discussed by commissioners include:

  1. The legislation should focus on Noe Valley only. The legislation was designed with three particular neighborhoods in mind that are disproportionately affected by construction of large homes: Noe Valley, Dolores Heights, and Glen Park. As the legislation stands, the Planning Commission viewed the scope too broad with massive potential unforeseen effects if enacted citywide as proposed. The Planning Commission was supportive of testing modified regulations in Noe Valley before enacting broader legislation.
  2. Much more community outreach and input is needed in the particular areas of concern that would be affected by the legislation. Given the potential broad effects of the legislation, the City needs to make sure that it creates opportunities and spaces to hear from affected homeowners or future homeowners.
  3. The effective date of the legislation should be changed to the date of enactment with no grandfathering. Though the legislation has yet to take a clear form, the effective date of the current legislation is the date it was introduced, with only people who submitted applications earlier this year grandfathered from the effects.
  4. Appropriate limitations for home sizes should be form based rather than formula based. The formulas created to measure whether a home qualifies as a “monster home” seem arbitrary. Commissioners discussed alternatives, such as height limits, that have effectively limited home sizes.
  5. Tenant issues should be explored to ensure no tenants will be displaced or negatively affected by the legislation.
  6. The legislation should be crafted to ensure that areas within an existing home can be finished without running afoul of the legislation. As the legislation stands, a person could violate the legislation simply by making an area within the home’s existing envelope livable space. Commissioners were concerned with the legislation’s potential unintended effect of discouraging homeowners from making use of unfinished space within homes that are not considered “monster homes.”
  7. The legislation should find ways to encourage density. The current legislation discourages large homes through adding process. However, adding provisions to encourage density would help the City achieve more housing.

In addition to the seven recommendations, commissioners also noted several additional concerns including: life safety issues, lack of demolition discussion in the legislation, large ADU sizing requirements in the legislation, lack of design standards, and what should qualify as a monster home. Ultimately, some Planning Commissioners expressed hope, that with much more work, the legislation could be a starting point for future housing regulation in the City.

 

Authored by Reuben, Junius & Rose, LLP Attorney Kaitlin Sheber.

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 Seeks Water Conservation in New Buildings

non-potable

To conserve water in the midst of another extreme drought, Supervisors Rafael Mandelman (District 8), Gordon Mar (District 4), and Myrna Melgar (District 7) proposed legislation (“Legislation”) to strengthen the 2012 Non-potable Water Ordinance (Article 12C of the San Francisco Health Code). The Legislation’s goal is to preserve the City’s water supply by requiring the use of non-potable water, which is water not suitable for drinking, for other productive uses such as toilet flushing, irrigation, decorative fountains, dust control and cooling applications. Across the nation, non-potable water is used to reduce pressure on natural water resources, and the use of onsite non-potable water may also reduce flows into the sewer, reducing strain on the City’s sewer system.

Effective since 2015, most new projects of 40,000 square feet or more are required to utilize the San Francisco Public Utilities Commission’s (“SFPUC”) Water Budget Calculator to assess the available supply of onsite alternate water sources and determine the demand for toilet and urinal flushing and irrigation. Large new projects of 250,000 square feet or more of gross floor area are required to construct, operate, and maintain an onsite non-potable water system to treat and reuse the identified available sources of rainwater, graywater, and foundation drainage to meet the planned demand for non-potable water uses.

In the Legislation introduced on June 29, 2021, the threshold for new projects that must construct, operate, and maintain an onsite non-potable system to treat and reuse available sources of water is reduced to 100,000 gross square feet for projects receiving a site permit after January 1, 2022. The systems required and sources of water to be used are also expanded and will be determined based on building type. For commercial buildings, most available sources, such as rainwater, graywater, blackwater, and foundation drainage, must be used if needed to satisfy as much toilet and urinal flushing and irrigation as possible. For systems providing water to residential and mixed-use projects, available sources of rainwater, greywater, and foundation drainage must be used for toilets, irrigation, and other end uses like clothes washing.

In analyzing the Legislation’s impact on pipeline projects, SFPUC staff determined that the lower threshold would result in a 20,000 gallons per day of potable water savings. This represents just 2% of the total savings anticipated by the Legislation. However, the cost burdens are not linear. For example, the SFPUC’s analysis found that the cost of a graywater system would only be 15% less for a 100,000 square foot building than a 250,000 square foot building. The SFPUC found that there is not sufficient data at this time to say conclusively whether the Legislation would be a net benefit or cost to smaller buildings. Additional cost-benefit analysis by SFPUC staff is expect before the next hearing.

Appreciating the costs for installation of onsite water reuse systems, the SFPUC has in place an Onsite Water Reuse Grant Program to encourage water users to voluntarily reduce SFPUC water supply usage through use of alternate water sources for non-potable application. To incentivize building owners to install alternate water source systems, SFPUC recently lowered the threshold of eligibility for the grant program.

The Legislation has been continued to the call of the Board of Supervisors’ chair and no hearing date has been set for consideration by the Board of Supervisors Public Safety and Neighborhood Services Committee. We will continue to monitor and keep readers updated.

 

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

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.

Planning Commission Considers Two New Pieces of Legislation

SUD

The Planning Commission considered two pieces of proposed legislation at its regular meeting last week.  One was the elimination of the Life Science and Medical Special Use District (to which staff added a proposal to eliminate the Industrial Protection Zone (IPZ) Special Use District), and the second was Supervisor Mandelman’s so-called “Large Residence” legislation (which we have discussed in a previous update).

Life Science and Medical and IPZ Special Use Districts

The Life Science and Medical Special Use District (SUD) is generally bounded by Mariposa Street to the north, 3rd Street to the east, 23rd Street to the south, and Iowa Street to the west. The SUD was adopted as part of the Central Waterfront Plan in 2009, and was established in the northern part of the Plan Area to support the creation and expansion of life science and medical uses, given the proximity to the UCSF campus at Mission Bay. The Dogpatch Historic District and Neighborhood Commercial District are generally excluded from the boundaries of the SUD. Almost all parcels in the SUD are classified as Urban Mixed Use (UMU) zoning.

The SUD principally permits medical services, life science offices, and life science laboratories. Among other controls facilitating the development of these uses in the SUD, the uses are exempt from PDR replacement requirements. The Planning Department’s broader concern with the loss of PDR uses was one of the reasons driving the elimination of the SUD.

The other reasons behind the legislation are the Planning Department’s view that the City has enough supply of life science and laboratory space (including projects at Pier 70, Potrero Power Station, Mission Rock, and in SoMa, Central SoMa, and Mission Bay), and concerns with some of the ambiguities in the Planning Code concerning life science and laboratory uses. These ambiguities have contributed to uncertainty for project sponsors, an increased need for letters of determination, and the departure of businesses. The Department is studying a more comprehensive code update to clarify controls related to laboratory uses.

The IPZ SUD consists of a large area in the Bayshore and Bayview neighborhoods now classified as PDR-2. Staff recommended eliminating the IPZ SUD to close what it considered a loophole allowing self-storage, big box retail, and heavy industrial uses in PDR neighborhoods.

The Commission voted unanimously to recommend to the Board of Supervisors that both SUD’s be eliminated, with a grandfathering clause for the Life Science and Medical SUD that exempted any projects with submitted applications as of July 22, 2021.

Large Residence Legislation

As we have reported previously, Supervisor Mandelman’s proposed large residence legislation would discourage residential units over 2,500 square feet by requiring, with some limited exceptions, a conditional use for them in RH zoning districts. Last week, the Planning Commission had a lengthy discussion of the merits of the legislation, before voting to continue the matter until September 23, 2021.

Ranging from some support to some pointed concerns, here are the highlights of the discussion:

  • There was some consensus that the legislation, while perhaps identifying a problem for Supervisor Mandelman’s District 8, was not appropriate as a City-wide control where other areas might not have the same issues.
  • More than one Commissioner questioned the 2,500 square-foot number, calling it arbitrary. The Commissioners discussed FAR as a more accurate measure, but identified concerns with that approach as well.
  • At least one Commissioner questioned the lack of data concerning how many projects this was designed to address, and the lack of research supporting the legislation generally.
  • One Commissioner questioned the wisdom of telling homeowners how big their bedrooms and other rooms should be, and how many bedrooms they should have.
  • Commissioners also expressed some support for the intent of the legislation, due to ongoing concerns with the lack of affordable and moderately-priced housing. One Commissioner suggested that the proposed controls should not be enforced as a conditional use authorization, but rather as legislated Planning Code controls, from which property owners could seek variances.

Following the discussion, the Commissioners agreed there were too many unresolved issues and voted to continue the matter until September 23, 2021.  They wanted to consider it at the same time as Supervisor’s Mandelman’s proposed “fourplex” legislation for corner lots in RH districts (which we have discussed in a previous update). The Commission also discussed possibly delaying the legislation so it could be considered with the planned Housing Element update.

 

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.