​At this November’s general election, the San Francisco electorate will vote on a variety of issues that concern housing, short-term rentals, development along the waterfront, and public disclosure of lobbying activities.  In addition to the Mission Housing Ballot Initiative (discussed in last week’s article – July 16, Mission Housing Ballot Initiative) the following notable measures will appear on the ballot. Expenditure Lobbyists Ordinance. The Ethics Commission placed this measure on the ballot to expand the definition of lobbyists to include “expenditure lobbyists” and reinstate the reporting of all spending aimed at influencing local legislative or administrative action.  If passed, this ordinance will require individuals and businesses to register and report as “expenditure lobbyists” if they make payments totaling $2,500 per month to solicit, request or urge other persons to communicate directly with a City officer in order to influence local legislative or administrative action.  Labor unions, prospective City contractors, and non-profit organizations are not exempt from these requirements. The threshold can be met by paying for various activities, including public relations, media relations, advertising, public outreach and research to the extent used to further efforts to urge persons to communicate directly with a City officer about the drafting, enactment, defeat, approval, granting or denial of any resolution, motion, appeal, application, petition, nomination, ordinance, permit, license, entitlement to use, or contract.  However, “expenditure lobbying” will not include payments made to a registered lobbyist for lobbyist services; payments made to an organization for membership dues; and payments made by a client to a representative to appear in an adjudicatory proceeding. Expenditure lobbyists will be required to register as a lobbyist, pay a $500 registration fee, and file monthly reports disclosing, among other things, the action that the lobbyist sought to influence, the amount of payments made to influence the action, each payment of $1,000 or more, including who received the payment and a description of the consideration for which the payment was made, and campaign contributions of $100 or more.  Although this measure seeks to encourage public disclosure of lobbyists and efforts to influence local decision-making, these new regulations could impose considerable burdens on land use practitioners and non-contact lobbyists. If passed, this measure would become operative on February 1, 2016. Short-Term Residential Rentals. This measure, sponsored by the housing activist group Share Better SF, seeks to restrict short-term rentals in San Francisco.  The regulation of short-term rentals has been a contentious topic over the past few months.  On July 14, 2015, rather than supporting Supervisor Campos’s ordinance to effectively restrict short-term rentals to 60 days per year, the Board of Supervisors voted to uphold existing law and restrict “unhosted” short-term rentals to 90 days per year and allow for unlimited “hosted” short-term rentals.  “Hosted” rentals are where hosts stay in the units while guests are visiting.  “Unhosted” rentals are where hosts are not present in the units while guests are visiting. If approved, this measure will cap all short-term rentals at 75 nights per year, regardless of whether the rental unit is hosted or unhosted.  Conditional use approval from the Planning Commission would be required to rent a unit on a short-term basis for more than 75 days per year.  If granted, the unit would have to operate as a bed and breakfast establishment.  Hosting platforms like AirBnB will be required to stop listing a unit for short-term rental if the unit has been rented on a short-term basis for 75 days per year.  Hosting platforms will be subject to severe penalties of up to $1,000 per day for violating these rules.  Further, homeowners will be prohibited from renting their in-law units on a short-term basis.   This initiative also expands the definition of “interested parties” who can sue to enforce the City’s law.  Currently, only persons who live in the same building as a short-term rental unit are deemed “interested parties” with legal standing to sue violators of the law.  If passed, this measure will expand the definition of “interested party” to any person who lives within 100 feet of a unit used for short-term rental, or any housing-related non-profit organization.   San Franciscans are clearly divided over how to regulate short-term rentals.  Sharing sites claim that home sharing allows homeowners to make additional income by renting units on a short-term basis.  They also claim that the City benefits from increased tax revenue by way of hotel taxes paid by hosting platforms to the City.  On the other hand, proponents of the measure argue that unregulated home sharing exacerbates the current “housing crisis” by removing dwelling units from the market.   If passed, this measure would become operative on January 1, 2016. Mission Rock Development Initiative. This initiative, sponsored by the San Francisco Giants, is intended to comply with Prop B, adopted in June 2014, which prevents the City from allowing development along the San Francisco waterfront to exceed height limits that were in effect as of January 1, 2014, unless voters approve the height limit increase.   If approved, this initiative will authorize height limit increases at the 28-acre Mission Rock site, which includes Pier 48 and Seawall Lot 337, mostly used as a surface parking lot.  As of January 1, 2014, and currently, the Pier 48 building height limit is 40 feet and the remainder of Mission Rock is open space with building height limits of one-story high. This measure would retain the Pier 48 height limit and Pier 48 apron as open space and limit buildings to one-story high on open space elsewhere at Mission Rock.  In fact, there will be no height limit in excess of 40 feet within 100 feet of the shoreline and building heights will step down as they approach the shoreline.  The measure, however, proposes height limit increases elsewhere at Mission Rock with heights ranging from 90 feet to 190 feet for office and retail uses, and 120 and 240 feet for housing. This initiative will effectively allow the Giant’s Mission Rock development project to move forward, thereby creating new mostly

​Mission Housing Ballot Initiative Certified After the Board of Supervisors rejected a moratorium on new market-rate housing developments in Mission in June 2015, the proponents of such a moratorium proceeded to gather signatures that would qualify a similar ballot initiative for the November ballot.  On Tuesday, the Department of Elections certified that a sufficient number of valid signatures by registered San Francisco voters were submitted with the petition, and thus the ballot initiative has been deemed to have qualified for the November ballot.  If approved by the voters in November, the initiative will impose an 18-month moratorium prohibiting issuance of building permits that seek to demolish, convert or construct a housing project with five (5) or more units, or demolish, convert or eliminate a PDR use, with the exception of projects seeking to construct 100% affordable housing projects.  The language of the moratorium initiative would allow the term to be extended by an additional 12 months by a majority of the Board of Supervisors.  The Mission moratorium would apply in an approximate area south of US 101, west of Potrero Avenue, north of Cesar Chavez Street and east of Guerrero Street.   Introduction of Mission 2015 Interim Controls by Planning Commission In addition to the pending ballot initiative, the Planning Commission initiated its own “Mission 2015 Interim Controls” at last week’s hearing.  If adopted, the Interim Controls would require project sponsors for new market-rate housing, retail and office developments to obtain a conditional use authorization during a proposed 6-month period for any project that would result in the loss of more than one (1) rent-controlled dwelling unit, creation of five (5) or more dwelling units, or demolition or conversion of certain community and arts uses.  The Interim Controls would not prohibit market-rate housing projects (with five (5) or more units), however, they would make the approval process more difficult as such projects would need to have a “displacement study” prepared, wherein economic data and analysis on affordable housing impacts that would occur as a result of the project would need to be provided, including an evaluation of whether, and to what extent, the project would affect nearby housing costs, property values, and number of units available to lower-income groups along with an estimate on the likely demographics for the project occupants.  As currently proposed, the Mission 2015 Interim Controls would apply to projects located in an approx. area south of Division Street, east of Potrero Avenue, north of Cesar Chavez Street and west of Mission Street, albeit including properties on both sides of Mission Street.  The Interim Controls would not apply to projects for which a planning, building or environmental application was filed on or before December 31, 2014, or to 100% affordable housing projects. The purpose of the Interim Controls would be to provide time for the City to complete an analysis on affordable housing and PDR needs while imposing additional scrutiny to certain projects during the 6-month period.  An informational hearing on the Mission 2015 Interim Controls will take place before the Planning Commission on July 23, 2015, and consideration of the adoption of the controls will take place on or after August 6, 2015.   Expansion of BMR Requirements to Group Housing Projects The Planning Commission recently also approved an amendment to the City’s Inclusionary Affordable Housing Program after a 5-2 vote, which upon approval of the Board of Supervisors would impose the requirements of the said program to group housing projects.  Until now, the inclusionary requirements under the Planning Code have applied only to projects exceeding certain number of “units” (currently set at ten (10) or more units), and thus the requirements have not been applied to group housing projects since group housing is not considered to consist of “units.”  As proposed by the Planning Commission, those bedrooms in group housing projects that contain less than 350 sf would be subject to pricing equal to 75% of the maximum purchase price for studio units.  The Planning Commission forwarded its approval recommendation to the Board of Supervisors and in order for the amendments to become effective, the Board of Supervisors will need to adopt the proposed ordinance.  On Monday, the Board of Supervisors’ Land Use and Transportation Committee amended the measure and continued it to July 20, on a 3-0 vote (including Supervisor Wiener), which means it is likely it will ultimately pass the full Board.   Introduction of Interim Signage Controls for Transit Center District Plan Area Last week Supervisor Jane Kim introduced interim zoning controls for the Transit Center District Plan area which, if approved, would 1) restrict new signs that are located within 200 feet of, and visible from, an existing or planned public park or open space so that such signage could not exceed 50 sf in size and could not be located higher than 35-ft height, and 2) require any illumination for new signs between 30-100 ft in height to provide only indirect illumination or halo-style lighting, to be dimmable, and to be turned off between 9 pm and 6 am.  The Interim Signage Controls would apply to the Transit Center District Plan area (i.e. an approx. area south of Market Street, west of Steuart Street, north of Folsom Street and east of New Montgomery and Third Street), and in an area bounded by Folsom, Harrison, Essex and Second Streets, but excluding projects located within the so-called Zone 1 of the Transbay Redevelopment Plan and in the planned Rooftop Park on top of the Transbay District Center.  The Interim Signage Controls will be heard by the Land Use and Transportation Committee of the Board of Supervisors in all likelihood sometime in September 2015 after the BOS’ August break. “Unaffordable” Housing Exemption from Dwelling Unit Merger Approval Eliminated in Interim Controls Earlier this month, legislation proposed by Supervisor Avalos that would require conditional use authorization for all dwelling unit mergers went into effect.  Most importantly, the exemption from Planning Commission approval for mergers of “unaffordable” units (appraised at more than $1.506M) is

​Pre-Hearing Exchange of Information The San Francisco Assessor’s office has instituted a new policy concerning real estate tax appeals.  If  a taxpayer fails to respond to the Assessor’s pre-hearing request for information about the subject property, the Assessor will typically request a “pre-hearing” with the Assessment Appeals Board and ask that the hearing be postponed until the taxpayer complies with the information request.  The Assessor has a right to require property owners to provide “information and records” concerning the real or personal property owned or controlled by the taxpayer.  This right is quite broad and includes construction and development costs and details of the taxpayer’s acquisition of the property.   (California Revenue and Tax code Section 441(d)).  In many cases, the taxpayer was not providing the Assessor with information prior to the hearing or would fail to appear at all, which would create unnecessary work for the Assessor’s office and add to the pending backlog of appeals.  This new policy is to allow the Assessor to prepare for the hearing, with the added benefit of pressuring the taxpayer to decide whether to proceed with the hearing or withdraw the appeal.  Property owners with appeals pending should be prepared to respond to this request for information in a timely manner to avoid delays. On the flip side, taxpayers also have the right to receive the information and analysis that the Assessor intends to use at the tax appeal hearing, provided that a request is made at least 30 days prior to the hearing.  This is a powerful tool that may be used to fully prepare for a tax appeal hearing and allows the taxpayer to formulate arguments in response to the Assessor’s position. Big Brother is Watching The Assessor has also recently requested that certain large commercial property owners provide the Assessor with detailed information concerning their tenants, including copies of the rent roll, leases, tenant contact information and lease abstracts.  The purpose of this request is stated to be “for updating records in the Assessor-Recorder’s Office, including identification and assessment of business and personal property”.  Apparently there is a concern that certain businesses operating in San Francisco have not properly registered with the Tax Collector and that there is lost personal property tax revenue on the table.   Landlord’s are justifiably concerned that providing this information could result in unintended consequences, including unhappy tenants, or, in a worst case, legal claims for disclosing confidential information.  While the landlord may be protected from any such claims due to the fact the request came from a government agency, the intrusive nature of such requests have made some landlord’s feel uneasy.  Some landlord’s have relied on existing case law that arguably limits the extent of information that may be requested concerning third parties.  Regular Assessment Appeal Period Opens July 2 The open filing period for appealing assessed property values for 2015-2016 begins on July 2, 2015 and expires on September 15, 2015.  No appeals may be filed after September 15, 2015.  Although the current real estate boom in San Francisco has raised most property values, there is still the opportunity to appeal this years’ assessed value due to particular circumstances or an excessive assessment that remains on the roll. Backlog Remains Although the economic situation has helped reduced the backlog of assessment appeals, there are appeals pending from as early as 2007.  The Appeals Board reports that approximately 3,957 appeals remain in process.  This is quite a daunting task for a small office of only 4 staff and three separate part-time Appeals Boards, but the office has done an admirable job of resolving the many appeals that were filed during the real estate downturn. 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.   

​No conversation can be had about the future of San Francisco without including the Central SoMa Plan.  The Plan is coming at a time of both unprecedented growth and wealth along with unprecedented housing instability and need.  As a result, the Plan is very quickly becoming a vehicle to harness new growth to meet the city’s increasing needs.  In this environment, the Planning Commission began a conversation with its staff this afternoon about the financial aspects of the Plan. Before we get to the new specifics, the big ideas.  The Planning Department sees the potential of up to $2B in new public benefits being generated by the Plan, through the capture of 66%-75% of the new value created by the rezoning and height increases proposed by the Plan.  This is clearly not a zero-sum process, which means the Plan represents opportunity for both the public and private sectors.  Planning Department staff should get credit for heavily emphasizing the need for a “Goldilocks” result here:  Too much public benefits will result in no development, too little public benefits will result in lost public benefit potential, so the Plan needs to hit the sweet spot in the middle that generates development along with sufficient public benefits.  Planning sees no less than eight different policies competing for public benefits dollars, and not all of them can be maximized in the Plan while actually allowing for new development. Planning sees the potential for up to 3,600 new units of affordable housing (potentially 31% of all new units created).  $100M in new funds for open space and $60M new funds for child care are also expected.   Enough for the high-minded policy.  On to the new details: New fees.   We finally received some specific proposals for the new fee increases in the Plan. The Plan proposes to extract additional public benefits above current levels only from sites receiving a zoning change or height increase of 15 feet or more.  These sites are generally located south of Harrison Street.  Proposed fee increases include the following: The Jobs-Housing Linkage Fee for office development is proposed to increase by $12/sf. The Central SoMa Impact Fee for projects receiving zoning benefits is proposed to increase by up to $10/sf. BMR Rates. The BMR rate for projects receiving zoning benefits is proposed to increase up to 20% for on-site and 30% for off-site or the in-lieu fee. Mello-Roos.   While the proposed Mello-Roos district results in an increase in property taxes after a new project, Planning Department staff provided per-square-foot estimates of what the fee could be for each type of use.  The fee is estimated at $4/sf for office use, $4.50/sf of rental housing, and $5/sf for condominiums.  If based on the same methodology as the Transit Center Mello-Roos District, this fee would apply annually for 30 years.  Keep in mind that the Mello-Roos District could not be established just through legislation – a vote would be required of the owners of parcels located within the District.  There are quite a few additional details and process steps involved with the Mello-Roos District formation. Non-profit office requirement aired.   Planning Department staff proposed the potential for requiring new office developments to provide a floor of non-profit office use (similar to the proposed PDR requirement).  This was merely one potential component of the Plan (to be balanced against other requirements put in place), but its highlight in the hearing today suggests it is being considered seriously by staff. Despite the quite generous public benefits staff estimates it can capture, the general consensus from the Planning Commission (across the narrow SF political spectrum) was that staff should keep pushing the public benefits aggressively.  Planning Director John Rahaim was quick to remind the Commission that what was proposed today was only the current proposal, and that a nexus study was still underway to confirm whether these public benefits increases would even be allowed under state law.  But the message was pretty clear:  the Planning Commission wants to maximize public benefits to the fullest degree possible. Back when the draft Plan was first made public in 2013, it was a “jobs space” plan (remember Mayor Lee emphasizing the need to lure new jobs to the city?).  In just two years, it is very clear that the Plan is being adapted to the changing political environment. Yes, this means more affordable housing, but more fundamentally it appears the Plan is becoming an opportunity to use the recent and rapid growth to benefit the city as a whole. One could say that this is merely another attempt to slow the change coming to the city, but in essence the Plan embraces these changes to ensure the city continues to be a great place to live for another generation.  In that sense, the Plan represents a win for smart growth.  As always, the devil will be in the details. 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.

​Passed in 1978 by 65% of voters, in response to a perception of out of control property tax increases, Proposition 13, among other things, sets the property tax rate at 1% of assessed value, restricts annual increases of assessed value to not exceed 2% per year, requires that local special tax increases be approved by voters with a two-thirds vote, and requires that state tax increases be approved by a two-thirds vote of each house of the Legislature.  Since that time, Prop 13 has been blamed for everything from poor schools to potholes. Last week the latest attempt to change California’s legendary Prop 13 tax system was unveiled.  Senator Holly Mitchell (D-Los Angeles) and Senator Loni Hancock (D-Oakland) advanced a plan for a split roll property tax measure and held a press conference with a number of public employee labor groups to announce the effort.  “Split roll” literally means splitting the tax rules so that home owners will still be protected by Prop 13, but commercial property would not. SCA 5 would amend the State Constitution to allow for regular reassessments of commercial and industrial property to their fair market value (rather than establishing the value once, at the time of purchase), starting with the 2018-19 fiscal year. However, the constitutionally mandated 1 percent tax rate would be retained.  Proposition 13 protections would continue to apply to residential rental property and agricultural property.  If approved by two-thirds of the Legislature the measure would be placed on the November 2016 ballot.  The Governor’s signature is not required. The measure would also provide for a five-year phase-in of regular fair market value reassessments for certain commercial and industrial property owners; and exempt from personal property taxes $500,000 of tangible personal property used for business purposes, beginning January 1, 2019. The California Business Properties Association is coordinating with Californians to Stop Higher Property Taxes and allied groups such as the California Chamber, CalTax, and Howard Jarvis, to respond.  The anti-tax folks have come up with some pretty compelling facts and arguments as to why Prop 13 should be left alone: * According to a 2012 report by the Legislative Analyst’s Office, “Property tax revenues increased throughout the recession while other major revenue sources declined significantly.”  * A Pepperdine study showed that in 2008-09 when California property values faced the dramatic decline in the wake of the sub-prime crisis and the market collapse (industrial and commercial values fell 6.5%), property taxes collected from these same properties actually rose 5.0%.  * Board of Equalization data shows that the average annual growth of property taxes for non-homeowner property is 7.34% and for homeowners it is 6.82% since Proposition 13 was put in place. Business property taxes have increased at a higher rate than homeowner property taxes.  * Local government services and schools can more easily plan out their future budgets because property tax revenues are more predictable and stable than other sources of revenue.  We will keep an eye on this effort as it moves forward. 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.

​It is no secret to anyone who travels around and through San Francisco that its transportation infrastructure is in need of a serious facelift. From BART and MUNI capacity to bike lanes, damaged roads, and public transit vehicles themselves, San Francisco – and the greater Bay Area – are struggling to upgrade critical aspects of our multi-modal transportation infrastructure. This week, the Planning Department presented refined plans for the City’s Transportation Sustainability Program (TSP). The TSP has three principal components: a Transportation Sustainability Fee (TSF) for new development; a change to how transportation analyses under CEQA are conducted; and a standardized menu of options for implementing transportation demand management (TDM) tools in new developments. These new changes could begin rolling out by the end of the year. First, the new impact fee. The Transportation Sustainability Fee would replace the current Transit Impact Development Fee (TIDF). Where the TIDF only applies to non-residential projects, the TSF will apply to both residential and non-residential project. For new projects, the TSF is currently proposed as follows: $7.74/sf for residential, $18.04/sf for non-residential, and $7.61 for PDR. Projects entitled when the new fee is enacted will still pay the existing TIDF only. Projects with pending entitlement applications will not pay the TIDF and instead pay a reduced TSF rate that is roughly 75% of the fees listed above. Projects with plan area fees (i.e. Eastern Neighborhoods, Market/Octavia) will pay a reduced TSF fee, based on the portion of the plan-area specific impact fee allotted to transportation. For example, Eastern Neighborhoods projects will pay a reduced TSF fee equal to the amount of the EN Infrastructure Impact Fee that is directed to transportation infrastructure. The reduction will vary depending on plan area.   Next, the CEQA change. San Francisco is set to implement a statewide change to how transportation impacts are analyzed. Currently, CEQA focuses on how the Level of Service at nearby intersections is impacted by a new project. This translates to an inherent disadvantage for urban infill projects, which are much more likely to be located near a busy intersection than a suburban subdivision. The new approach would focus on Vehicle Miles Traveled, which is an inherent benefit to urban infill projects which generate much less vehicle miles traveled due to better public transit and the dense, walkability of cities. As a result of this change, the Planning Department expects that traffic from most new projects in the City will likely have a less than significant impact on the environment. The City estimates that all but the largest of new projects will be able to avoid preparing a project-specific transportation study. This will have a truly transformative impact on the entitlement process, since a transportation study typically takes 6-9 months to complete and transportation is the most likely environmental issue to trigger environmental review. The final piece in the puzzle is the City’s Transportation Demand Management program. Under the program, there will be a standardized menu of options for project sponsors to choose from when implementing a TDM program for their development. These measures will be implemented citywide and will be put into legislation so that it is codified as a requirement, like the Maher and greenhouse gas ordinances. Between the City and the State, there are numerous next steps. Planning is completing the technical analysis of TSP and confirming a policy approach. It has already begun public outreach to present the program and receive feedback. We can expect the introduction of the new impact fee and the standardized Transportation Demand Management Program to the Board of Supervisors in the summer or early fall, which are projected to be adopted in late fall. Finally, State action on the CEQA reform is expected in the winter, and the City will begin working to implement the new changes shortly after state CEQA rules are amended. This update was prepared with significant contribution from one of Reuben, Junius & Rose’s newest attorneys, Louis Sarmiento. 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.

​After a lengthy and, at times, raucous hearing, the Board of Supervisors rejected a moratorium on most new housing developments in the Mission on a 7-4 vote.  Co-sponsored by Supervisors Campos, Mar, Kim, Avalos, and Yee, the 45-day moratorium would have prohibited all city departments from approving permits for (a) the construction of a housing project with five or more units and (b) the elimination of PDR (light industrial) space.  Only 100 percent affordable housing projects would have been exempt from the ban. Supervisors Christensen, Farrell, Tang, and Wiener voted against the measure.  (As an urgency ordinance, nine votes were required for passage.) The 45-day moratorium was widely viewed as the first step toward the maximum two-year ban allowed under state law.  In his introductory remarks, Supervisor Campos noted that only seven percent of new housing in the Mission has been set aside as affordable, while average rents have climbed to $4,500 per month.  Along with other proponents of the moratorium, Supervisor Campos argued that the “pause” in market-rate development would allow the city to plan for the acquisition of 13 specifically identified large development sites where up to 850 new affordable units could be built. Several supervisors who voted against the moratorium acknowledged the citywide housing shortage, but that shutting off the supply of new housing would only make the situation worse:  the moratorium has no funding attached, would not produce any affordable housing in the near term, and would reduce the flow of affordable housing and infrastructure fees paid by market-rate developers.  Planning Department staff estimated a two-year moratorium could result in a loss of more than $125 million in affordable housing fees alone. Though the moratorium was defeated for now, the threat of one remains.  A similarly worded ballot initiative was filed with the Department of Elections last month. The City Attorney has until today to issue the title and summary.  To qualify for the November ballot, proponents would have to gather 9,711 valid signatures by July 6th. Alternatively, four members of the Board of Supervisors can put an ordinance on the ballot directly.  The deadline for them to do so is June 16th.  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.

​The California state legislature is constantly tinkering with state condo law, and recently enacted several bills that affect common interest developments (CIDs) such as condominium projects.  The following is a brief summary of some recent changes to the primary state law governing CIDs, the Davis-Stirling Common Interest Development Act (California Civil Code Section 4000 et seq.).  Of particular note are bills related to California’s persisting drought.  Assembly Bill 2100.  This bill amends Civil Code Section 4735 to prohibit a homeowners association (HOA) from imposing a fine or assessment against a unit owner for reducing or eliminating the watering of plants or lawns, if the Governor or local government has declared a state of emergency due to drought.   Senate Bill 992.  This bill also amends Civil Code Section 4735 and in this case allows an HOA to impose a fine or assessment against a unit owner for reducing or eliminating the watering of plants or lawns if the project uses recycled water for landscaping, if the Governor or local government has declared a state of emergency due to drought. Assembly Bill 2104.  And yet another bill to address the drought conditions in our state, this bill further amends Civil Code Section 4735 by prohibiting a project’s governing documents from restricting the replacement of existing turf (lawns) with low-water plants, if the Governor or local government has declared a state of emergency due to drought.  Assembly Bill 1738.  This bill amends Civil Code Sections 5910 and 5915 to stipulate that a dispute resolution process involving a condo owner and an HOA must have a written resolution signed by both parties, and that written resolution is judicially enforceable so long as it is not in conflict with the law or the project’s governing documents.  The bill also provides that both a unit owner and an HOA have a right, at their own cost, to have an attorney or another person present to explain their position during a dispute resolution procedure.  Assembly Bill 968.  This bill amends Civil Code Section 4775 to delineate the default responsibility between an HOA and a unit owner for repairing, replacing, and/or maintaining various spaces in a condo project.  Unless otherwise provided in the project’s governing documents, the default rule provided by this bill is as follows: 1) the owner is responsible for repairing, replacing, and maintaining his or her condo unit; 2) the owner is responsible for maintaining the exclusive use common area appurtenant to his or her condo unit; and 3) the HOA is responsible for repairing and replacing the exclusive use common area.  Typical examples of exclusive use common areas are private patios, decks, yards, storage rooms and parking spaces, but would include other portions of the common area that exclusively serve an owner’s unit.  Note that this bill takes effect January 1, 2017. Assembly Bill 2430.  This bill amends Civil Code Sections 4528 and 4530 regarding disclosures that a condo unit seller is required to provide to a prospective buyer.  An HOA must provide copies of the project’s governing documents and other policies if requested by a unit owner, so the owner can provide the documents to a prospective buyer.  An HOA may charge reasonable fees to produce such documents.  This bill requires the HOA to use a specified form to list the fees charged for the documents.  Such fees must be separately stated and billed from all other fees and costs of the sales transaction, and must be paid by the seller.  If any of the required documents are provided to buyer directly from the seller, then the seller may not charge a fee for such document.  The required documents must be separately provided to a buyer, and not bundled together along with other documents related to the sales transaction. This Update utilizes legislative information and material obtained from the California Bureau of Real Estate. 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.

​As we reported on May 7, 2015, Supervisor Campos has introduced a legislation that would place a temporary moratorium on Planning approvals or issuance of permits for all market-rate residential projects with five or more units in the Mission District. The proposed 45-day moratorium could be extended for up to two years under state law. A hearing on the legislation before the Board has been scheduled for June 2, 2015 at 3:00 p.m.   Passage requires the votes of 9 of 11 Supervisors, which will be a tough hurdle for the legislation, but given the importance of the measure to a number of proposed development projects, we will continue to monitor this one closely.  We are also watching development of the impending ballot initiative that would ask voters to weigh in on a Mission moratorium in November. The language of the initiative, which has now been released, covers a larger area than the proposed legislation, adding the area between Guerrero and Valencia Streets and the area between Bryant Street and Potrero Avenue north of 20th Street. More to follow in future updates, as the battle between advocates for housing development and anti-gentrification forces will likely play out in the Mission for years to come. Also on November’s Ballot – Mission Rock Not far from the dust-up in the Mission, in an area once connected to it by Mission Creek, an entirely different development picture is coming into focus for the November election. The Giants have filed paperwork for a ballot measure to permit their proposed Mission Rock project on 28-acres just south of AT&T Park over the Mission Creek Channel. The plan includes 1,500 apartments (33 percent of which are proposed to be affordable), 1.5 million square feet of commercial space, and eight acres of parks, plazas and open space.  The Project must be approved by the voters because it proposes towers of up to 240 feet for residential development (previously proposed to be as tall as 380 feet) and up to 190 feet for office and retail development, as well as several other slightly lower towers throughout the site. San Francisco Proposition B, passed last year, requires voter approval for any increase in the existing height limits for property currently under control of the Port of San Francisco. The Mission Rock project also proposes a large new home for the Anchor Brewing Company on Pier 48. Anchor plans to renovate the Pier and install a state of the art brewing facility, as well as restaurant, museum and educational facility. Although Anchor plans to keep its Potrero Hill facility, the new Pier 48 location will allow it to significantly ramp up production. While the Mission Rock development will add a significant influx of new housing in an underutilized area of the City, it may take a decade to be completed. In the meantime, expect to see a Giants public relations blitz on behalf of Mission Rock between now and November. 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.

City residents who live in Mixed Use (Commercial – Residential) Zoning Districts have long battled music venues, night clubs and other places of entertainment (“POE”) over noise issues, which are currently regulated primarily by a noise limitation in the Police Code.  Under existing law, neither the Building Code nor the Planning Code specifically addresses conflicts related to noise between POEs and nearby residents. The Board of Supervisors has stepped in on behalf of the POEs by adopting an ordinance which amends the Building, Administrative, Planning, and Police Codes to protect the POEs against complaints by residential neighbors. The Ordinance, adopted by the full Board on May 12, 2015, found that POEs are a major source of employment, economic activity, and tax revenue for San Francisco, and would benefit from protection against noise and nuisance complaints.  Subsequent amendments during the Board hearings expanded the reach of the Ordinance to additional noise producing uses and areas of the City. New residential construction in proximity to noise producing areas, including night time entertainment venues, industrial areas, highways, and rapid transit lines, where noise levels exceed 60 decibels, must be designed to prevent the intrusion of exterior noises beyond levels prescribed by the Municipal Code.  Proper design to accomplish this includes appropriate orientation of the residential structure, setbacks, shielding, and sound insulation of the building such that habitable rooms shall be subject to a maximum day – night average of 45 decibels.  All residential structures in noise producing areas shall require an acoustical analysis showing that the proposed design will limit exterior noise intrusion to the prescribed level.  The Planning Department will produce a map of noise producing areas of the City where the Ordinance will apply, in addition to POE areas. The Ordinance directs the Planning Commission and Planning Department to take all reasonably available means through the City’s design review and approval processes to ensure that the design of new residential buildings takes into account the needs and interests of both the POEs and the future residents. Significantly, no POE establishment that has held a permit to operate as a place of entertainment within 300 feet of a building for which construction or conversion for residential use was completed on or after January 1, 2005, shall be or become a public or private nuisance on the basis of noise disturbance for a resident of that building, if the place of entertainment operates in compliance with the municipal code and the terms of its permits.  This section of the Ordinance is an effort to prevent lawsuits against places of entertainment based on neighbor complaints of excessive noise. Residential builders seeking entitlements for new projects in close proximity to POEs shall be required to notify the Entertainment Commission of its intent to submit such application and provide materials describing the proposed project.  The Entertainment Commission shall determine whether to hold a public hearing on noise issues related to the proposed project and any POE within 300 feet of the proposed project.  The project sponsor will be required to attend a public hearing at the Entertainment Commission and present evidence regarding current noise in the area of the proposed project, including an acoustical analysis; the project’s proposed noise attenuation features; the projected level of interior noise for residential units in the project; and the project sponsor’s engagement or plans for engagement with the POEs.  The Entertainment Commission shall provide written comments and recommendations pertaining to noise issues related to the proposed project to the Planning Department and the Department of Building Inspection for their consideration during the permit process. Sellers and Landlords of residential property within noise producing areas shall be required to provide a disclosure notice in a prescribed form to all potential purchasers and tenants.  The disclosure includes the following statement:  “If you live near a place of entertainment, you should be prepared to accept such inconveniences or discomforts as a normal and necessary aspect of living in a neighborhood with mixed commercial and residential uses.”  For the full text of the required disclosure, please see Board of Supervisors Ordinance No. 141298. At the time a residential project is approved, a Notice of Special Restrictions must be recorded with the Assessor – Recorder that states all of the restrictions that are included in the required disclosure, and any other conditions that the Planning Commission or Planning Department places on the property. The Ordinance will apply to all projects for which a building permit has not been issued, or in the case of a site permit, for which a first addendum has not been issued.  The Ordinance, which passed by a unanimous vote of the Board of Supervisors, will now proceed to the Mayor for signature.  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.