MTA Considers New Fee on Residential Developments
You heard that right. Just when 2011 was giving us signs of economic renewal, major new development fees are being considered by the City. A proposal scheduled to be heard by the Municipal Transportation Agency Board of Directors this past Tuesday would expand the existing Transit Impact Development Fee (TIDF) to apply to residential projects. Currently, the TIDF applies only to non-residential uses in the City. MTA has spent the past few years studying the issue, and has made recommendations for the new fee. These recommendations include:
- Expanding the TIDF to apply to new residential developments that include units of 1,000 square feet or greater, at $4.81 per square foot for 2+ bedroom units, at $4.14 per square foot for 1 bedroom and studio units, and $2.76 for senior housing. A reduction in the fee would be provided if parking is provided at levels lower than what is called for in the Planning Code.
- Increasing the TIDF on non-residential uses, from $1 to $4 per square foot. If the TIDF is not expanded to residential developments, MTA staff recommends that the existing TIDF be increased by roughly $3 to more than $7, depending on the use.
- MTA staff has also communicated to the MTA Board that studies will be completed soon that will justify new impact fees to offset the cost of bicycle and pedestrian improvements.
The expansion of the TIDF to residential projects is expected to generate $2 million to $5 million annually. MTA staff admitted at the Tuesday hearing that they conducted very little noticing or public outreach of the fee proposal, which was evidenced by the large and angry crowd of builders, architects and developers that testified at the hearing. In response, the MTA Board sent the item back to staff to conduct public outreach. The proposal must go through an MTA subcommittee, the MTA Board, and the Board of Supervisors (at least) before the increases become the law of the City.
We will certainly keep you posted on the proposed TIDF expansion and any other fees that the MTA takes up in the future.
California Court of Appeals Strikes Down Recent Changes to San Francisco Rent Control Ordinance
In 2008, San Francisco voters approved Proposition M, which broadened tenant protections in the City’s Rent Control Ordinance. Specifically, Prop M lists more than a dozen examples of acts of harassment which are prohibited by the Rent Control Ordinance and which would justify a decrease in rent by the Rent Board. The list includes such acts as abusing the landlord’s right of access to a rental unit, attempting to coerce the tenant to vacate the unit with offers of payment accompanied by threats or intimidation, continuing to offer payments to vacate after the tenant has notified the landlord they no longer wish to receive such offers, and interfering with a tenant’s right to privacy. Prop M also provided a civil remedy for these harassments with potential damages equal to three times the actual damages suffered and also authorized attorneys’ fees for tenants who are successful in an eviction action.
Prop M was challenged after it was passed and on February 23, in Larson v. City and County of San Francisco, the California Court of Appeal for the First Appellate District struck down many of its provisions.
Most of the listed harassments, specifically those that were not easily quantifiable, were removed from the Rent Board’s jurisdiction as a violation of the judicial powers clause of the California Constitution. The Court cited the unquantifiable nature of most of the listed harassments and stated that determining the vague type of damage that comes from such harassment is a judicial function, not appropriately within the jurisdiction of the Rent Board. The Court stated, “Thus, [those listed harassments] pose[] the precise risk the Supreme Court identified…‘of producing arbitrary, disproportionate results that magnify, beyond acceptable risks, the possibility of arbitrariness inherent in any scheme of administrative adjudication.'” A tenant can only receive a decrease in rent for those unquantifiable types of harassment by bringing a successful civil action in California Superior Court.
One type of harassment, which prohibits a landlord from continuing to offer a tenant payment to vacate when a tenant has informed the landlord they no longer wish to receive such offers, was struck down in its entirety as a violation of the First Amendment’s free speech protections, and cannot be enforced even in California Superior Court.
As a result, the only types of harassment defined by Prop M that will be within the jurisdiction of the Rent Board are (1) the interruption, termination or failure to provide housing services required by contract or law, (2) the failure to perform repairs and maintenance required by contract or law, or (3) the failure to exercise due diligence in completing repairs and maintenance once undertaken or the failure to follow appropriate industry protocols to reduce exposure to noise, building materials, toxins or molds with potentially harmful health impacts. The commission of any of these harassments will now provide a basis for the Rent Board to reduce a tenant’s rent.
Prop M’s attorneys’ fees provision for successful tenants in an eviction action (also known as unlawful detainer) was also struck down by the Court, which stated that the City had no authority to amend or add to the unlawful detainer statute – which is a state law.
Please contact us if you would like a copy of Prop M or the Court of Appeals decision.
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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