Zoning

Oakland: Housing Approved & Zoning Updates

| Justin A. Zucker

Golden West Project CEQA Appeal Denied Yesterday, the Oakland City Council unanimously denied the appeal of a 222-unit State Density Bonus project, including 16 units for very low income households, on a vacant lot next to the West Oakland BART Station, aka the Golden West project (the “Project”). The City Council upheld the Planning Commission’s March 3, 2021, unanimous approval of the Project. Appellant appealed the Planning Commission’s decision approving the Project and the environmental review performed for the Project. Appellant argued the Project’s environmental review did not comply with the California Environmental Quality Act (“CEQA”), demanding that a focused or infill EIR be prepared alleging hazardous materials impacts. An EIR was prepared, however, which the Project tiered off of. The Project site is within the West Oakland Specific Plan area and was evaluated by the West Oakland Specific Plan Environmental Impact Report (“EIR”). The City’s independent environmental consultant analyzed and determined there was nothing peculiar about the Project than what was programmatically analyzed in the West Oakland Specific Plan EIR. Upon review, City staff determined that “all hazardous materials concerns were previously addressed in the [West Oakland Specific Plan] EIR” and “conclude[d] that the requirement for any supplemental and/or infill EIR would be inappropriate and not justified.” No further CEQA review was required. Tiering off the West Oakland Specific Plan EIR was found to be proper. Reuben, Junius & Rose, LLP, led by Justin A. Zucker, is happy to have successfully assisted Project sponsor in navigating this Project from concept and entitlement through appeal. Downtown Oakland Specific Plan Zoning Incentive Program Released As previously reported, the Downtown Oakland Specific Plan is working its way to the City Council for adoption. One of the main purposes of the new specific plan is to address issues with existing zoning controls. A key element of the Downtown Oakland Specific Plan is establishment of a Zoning Incentive Program (“ZIP”). On July 7, 2022, Oakland released the details of the Downtown Oakland Specific Plan ZIP. The ZIP allows developers to elect to provide one or more community benefits or pay an in-lieu fee to the City to fund such benefits, in exchange of increases in allowable building height and/or density. Projects may only participate in the ZIP if they are within one of the three ZIP areas designated in the Zoning Map. The three areas are generally located in: Jack London Square – area along the Embarcadero, including the Victory Court area; Central Downtown Oakland – area extending one to three blocks out from Broadway between 10th and 20th Streets and from 14th Street between Castro Street to Lake Merritt Boulevard; and Koreatown/Northgate – area surrounding Telegraph Avenue along 23rd, 24th, 25th, 26th, 27th and 28th Under the ZIP, a project providing one of the following will result in allowance for additional density or non-residential floor area: On-site, below market rate ground-floor commercial space – ground floor space provided at fifty percent (50%) of market rate rent for qualified retail, commercial, arts, and non-profit tenants; On-site affordable dwelling units – providing on-site affordable dwelling units allows for increases over base density but not non-residential floor area; Public restroom facility(ies) – provision of ground-floor, gender-neutral restroom facilities open to the public during work hours; Streetscape, open space, and flood control improvements – provision of public streetscape and/or open space improvements includes landscaping, tree planting, and public art installation with flood control improvements including raising public lands, construction of drainage facilities, retaining walls, and other similar improvements; In-Lieu Fees – provision of an in-lieu fee to be used by the City for the above-listed community benefits or for job training programs. The in-lieu fee per square foot of commercial development (non-residential floor area) ranges from $10 to $20 with the residential development in-lieu fee ranging from $12,000 to $22,000. On July 13, 2022, the Zoning Update Committee held a hearing on the proposed ZIP. At that hearing, no action was taken by the Zoning Update Committee. An economic analysis of the ZIP is being prepared and will be reviewed and analyzed at the next scheduled Zoning Update Committee hearing on August 24, 2022. Reuben, Junius, & Rose LLP has experience with entitlement projects and land use diligence throughout Oakland, and we are pleased to have worked on some of the largest housing projects approved in the city over the last several years. We will continue to track this significant rezoning and community planning effort as it moves forward.   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.

Appeal

Legislation Expands CUA Appeal Rights to Tenants

| Reuben, Junius & Rose, LLP

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

Housing

November Ballot Measure Seeks to Increase Affordable Housing Production

| Melinda Sarjapur and Daniel Frattin

The “Affordable Homes Now” measure submitted in March by a coalition of labor and housing advocates, has successfully collected the 52,000 signatures required to qualify for San Francisco’s November 2022 ballot. Citing a study by the Terner Center for Housing Innovation at UC Berkeley, the measure describes San Francisco’s four-year average to permit multifamily residential buildings as “one major obstacle to the goal of increasing affordable housing.” The measure attributes soaring housing costs to the difficulty many small businesses and essential service providers have with hiring and retaining workers, resulting in high turnover among public school and community college teachers. Finally, it notes that the lack of a “large, stable, and productive construction workforce” is a further constraint on housing production, driving delays, cost overruns, and safety incidents. Affordable Homes Now takes aim at these issues with a program to bolster and expedite the production of local affordable housing by providing streamlined, ministerial approval for the following types of development: “100% Affordable Housing Projects,” in which (a) all residential uses are restricted as affordable housing with a maximum overall average income of 120%, and (b) maximum sales or rental prices do not exceed 80% of median market rents or sales for the neighborhood, as determined by the Mayor’s Office of Housing and Community Development (“MOHCD”). To provide for the “missing middle” that is not served by existing affordable housing programs, households earning up to 140% of AMI would be eligible for residency, so long as they comply with the overall average affordability requirements above. Qualifying projects may include non-residential use at the ground floor, and those accessory to and supportive of on-site housing; “Increased Affordable Housing Projects,” which contain 10 or more units, and agree to provide on-site affordable units in an amount that is 15% greater than otherwise required under the City’s Inclusionary Housing Program or local HOME-SF density program. For example, a project subject to a 21.5% on-site requirement under the Inclusionary Program would be required to make 24.7% of its units affordable under the Affordable Homes Now measure. In a 100-unit project, the total number of affordable units would increase from 22 to 25; and “Educator Housing Projects,” as currently defined in Planning Code Section 206.9. Among other criteria, this includes providing all residential units as deed-restricted for the life of the project for occupancy by at least one employee of the San Francisco Unified School District (“SFUSD”) or San Francisco Community College District (“SFCCD”); providing at least 4/5ths of all units as affordable to households with income ranging from 30%-140% of AMI, with the overall average of 100% AMI across all units, and the remaining 1/5th of all units affordable up to a maximum 160% AMI. To protect historic buildings, recreational resources, prevent tenant displacement or development that would conflict with certain zoning standards or preexisting uses, the measure would not apply to Projects that: Remove or demolish historic landmarks, contributory buildings to a designated historic district, or Category I or II “significant” buildings under Article 11 of the Planning Code; Are located on Recreation and Parks Department property; Are located on sites not zoned for residential use; Demolish, remove, or convert any residential units, movie theaters, or nighttime entertainment use; or Include non-residential uses that require Conditional Use Authorization under the Planning Code. Similar to the statewide SB-35 legislation which took effect in 2018, qualifying Affordable Homes Now projects that meet objective zoning standards would receive streamlined processing and be exempt from the California Environmental Quality Act (“CEQA”). Such projects would require no discretionary approvals by City Boards, commissions, or officials, and would not be subject to Discretionary Review. Associated building permits and other city permits necessary for construction would also receive streamlined, ministerial processing. Projects qualifying under this measure could also utilize State Density Bonus Law to increase residential density, in which case any waivers, concessions or incentives would be considered consistent with objective zoning standards. However, for projects that do not utilize State Density Bonus Law, the measure would allow for administrative waivers or reductions from certain development standards including residential density; ground floor ceiling height; rear yard setback; dwelling unit exposure; loading; parking and open space. Affordable Homes Now projects would not be required to submit for a Preliminary Project Assessment before filing a formal development application. Following submission of a complete development application, the City would have approximately six to nine months to approve qualifying projects, depending upon the number of residential units they contain. Finally, the measure aims to attract a larger, more stable, and skilled construction workforce by setting minimum labor standards for Affordable Homes Now projects. These standard scale up based on the size of a project: 10+ units – All workers must be paid at least the applicable prevailing wage. 40+ units – In addition to the prevailing wage requirements, contractors that will employ construction craft employees for 1,000 or more hours are (a) required to provide medical insurance or make an $11.90/hour contribution to Healthy San Francisco per hour worked up to a weekly maximum of $476 and participate in state-approved apprenticeship programs; or (b) use contractors that are a signatory to a collective bargaining agreement that requires participation in a state-approved apprenticeship program. If no apprentices are available, projects may move forward without delay. The labor requirements are to be monitored through San Francisco’s Office of Labor Standards Enforcement, with contractors and subcontractors required to submit monthly reports confirming compliance with the above standards. Failure to submit a monthly report is subject to a $10,000 fine per month for each month the report is not provided, as well as fines of $200 per worker per day employed in contravention of Affordable Homes Now requirements. The Affordable Homes Now Initiative is proposed by a coalition of labor and housing advocates, including the Nor Cal Carpenters Union; Housing Action Coalition; Habitat for Humanity; Greenbelt Alliance; YIMBY Action; SPUR; and Grow SF. It is backed by Mayor London Breed; Senator Scott Weiner; and Supervisor Matt Dorsey. The

statute of limitations

What is S.O.L. for Bringing Quiet Title Claim?

| Michael Corbett

Imagine being at home one day when you receive news that someone (or some entity) is claiming to be the true owner of that same property you worked so hard, and paid so much, to purchase. Is there a chance there is actual merit to such a claim? What does this mean for your ability to sell the property in the future? Could the unthinkable happen, and you lose your home? Most importantly, what should you do next? When a dispute arises between parties as to who holds superior title to all or a portion of certain real property, a complaint to “quiet title” (among other causes of action) is typically brought before the court. The purpose of quieting title is to establish clear title against adverse claims to real property or any interest in the same. Cal. Civ. Code § 760.020. In other words, a quiet title action is a legal proceeding where a party claims title to all or a portion of specific real property and requests that the court find that party’s title to be superior to any interest that is claimed by the other party. One of the most common defenses to such actions relies on the applicable statute of limitations. While California Code of Civil Procedure does not have a specific statute of limitations for quiet title actions, the courts have provided guidance on when such claims must be brought, depending on the underlying theory of relief. Muktarian v. Barmby, (1965) 63 Cal.2d 558, 560. In 2015, the appellate court in Salazar v. Thomas, (2015) 236 Cal.App.4th 467, 477, ruled that the likely statute of limitations applicable to various underlying causes of actions were as follows: 3 years for claims based on fraud or mistake; 4 years for claims based on the cancellation of an instrument; and 5 years for claims based on adverse possession. Complicating matters further, quiet title actions have special rules for when the limitations period begins. Id. Importantly, no statute runs against a plaintiff seeking to quiet title while he is in possession of the real property in dispute. Muktarian, supra, at pp. 560-561. However, possession does not provide a party with an unlimited tolling period without qualification. Instead, the statute of limitations commences on a quiet title action when the party is no longer in “undisturbed possession.” Mayer v. L&B Real Estate, (2008) 43 Cal.4th 1231, 1238. In determining whether such a disturbance has arisen, courts will consider the following questions: When were the plaintiffs no longer owners in “exclusive and undisputed” possession of the land; When was defendants’ adverse “claim …pressed against” plaintiffs; or When was defendants’ hostile claim “asserted in some manner to jeopardize the superior title” held by plaintiffs? Salazar, supra, at 478. In the case of our homeowner who was notified of an adverse claim, the court would look to the factual history of the adverse claim being asserted, and to what extent, if any, the party asserting such claim had previously acted to move it forward. For example, where the underlying cause of action is based on the cancellation of an instrument, appellate courts have held that a notice of default (Salazar, supra, at p. 481) and a notice of trustee’s sale followed by a postponed sale (Huang v. Wells Fargo Bank, N.A., (2020) 48 Cal.App.5th 431), were insufficient to dispute or disturb the property owners’ possession and trigger the statute of limitations. Further, in Mayer, supra, at 1231, the California Supreme Court held that although a defective notice of tax sale did not disturb possession, a subsequent letter from the tax collector notifying the owners that the property had been sold at public auction was sufficient. (Id. at p. 1240.) And, in the recently published appellate court opinion of Kumar v. Ramsey, (2021) 71 Cal.App.5th 1110 – a matter involving a property in South Lake Tahoe, purchased out of foreclosure, where the buyer was aware of certain, previously recorded, land coverage transfer agreements – the court found that buyer’s mere knowledge of previously recorded agreements, which buyer’s counsel found legally invalid, posed only a dormant threat to buyer’s title, thus tolling the statute of limitations until the party asserting the adverse claim attempted to sell those alleged property rights to a third party. Lingering adverse claims on title create a cloud on the same, negatively impacting the marketability of the subject property, or worse, leading a court to find another party has superior title. The more complex the factual history regarding an adverse claim, the less one can be certain how a court will rule on the issue of when the statute of limitations period should commence. Property owners would be wise to promptly act upon being informed of an adverse claim against their real property, and request the court formally quite title to the property in such party’s favor. Because, unless title is made quiet, how can the issue ever really be put to bed?[1] [1] Note: The remedy provided in a quiet title action in California is cumulative and not exclusive of any other remedy, right of action, or proceeding provided by law for establishing or quieting title to property. Thus, a quiet title action may be brought in conjunction with another cause of action (e.g., declaratory relief or ejectment). Cal. Civ. Code § 760.030(a).   Authored by Reuben, Junius & Rose, LLP Attorney Michael Corbett. 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.

Zoning

Draft Zoning Amendments Released for Downtown Oakland

| Justin A. Zucker

The Downtown Oakland Specific Plan (“DOSP”) is Oakland’s sixth area plan and has been in the works since the mid-2010s. On April 27, 2022, Zoning Code Amendments to implement the objectives of the DOSP were released. The DOSP’s objectives, include new and equitable housing production, economic opportunity, social justice, culture keeping, quality urban form, climate-friendly mobility, and climate-responsive development. The Zoning Amendments consist of changes to both the Oakland Zoning Map and the Planning Code. Key elements of the proposed Zoning Amendments include: Establish a Zoning Incentive Program. The Zoning Incentive Program allows developers to elect to provide one or more community benefits, or pay a fee to the city to fund such benefits, in exchange for increases in allowable building height and/or density. Community benefits in the Zoning Incentive Program were selected to increase housing affordability, provide affordable rent for small businesses, train Oakland’s workforce, and create resources that support public health. Details of the Zoning Incentive Program have yet to be released and are expected sometime in mid-May. New area-specific regulations. The current Central Business District includes four zoning districts and will increase to ten, each with development standards and allowable uses tailored to specific conditions, objectives, and geography. High-density efficiency units. Allowing for dwelling units of 500 square feet or less at a higher density than regular dwelling units. Office Priority Combining Zone. Establishing an Office Priority Combining Zone within which properties must dedicate at least sixty percent of building floor space to office uses before other uses are allowed. Green Loop Combining Zone. Establishing a Green Loop Combining Zone to provide safe, inviting pedestrian connections between commercial, cultural, recreational, natural and entertainment areas of the Downtown District. Controls include the provision of pedestrian-oriented amenities along ground-floor storefronts and development standards for attractive, inviting open space between buildings and sidewalks. Transfer Development Rights (“TDR”) program. Establish a TDR program to protect historic buildings from demolition by allowing their owners to sell development rights to owners of sites in less historic areas of downtown. The DOSP has undergone revisions in response to extensive community review of the draft released in 2019. In conjunction with release of the Zoning Code Amendments, the Planning and Building Department will be hosting several additional community outreach meetings and hearing in the coming months. Individuals interested in the DOSP and its Zoning Amendments are encouraged to attend one or all of the following upcoming meetings: Special Districts, May 16 6:00-7:30 p.m. Development Standards and Zoning Incentive Program, June TBD 6:00-7:30 p.m. Community Advisory Group (CAG) Meeting, TBD Zoning Update Committee (ZUC) Hearing, TBD Later this year, the City Council is anticipated to consider both the Final Draft Zoning Amendments and Final DOSP for adoption. Reuben, Junius, & Rose LLP has experience with entitlement projects and land use diligence throughout Oakland, and we are pleased to have worked on some of the largest housing projects approved in the city over the last several years. We will continue to track this significant rezoning and community planning effort as it moves forward. 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.

moratorium

San Carlos Enacts Northeast Area Development Moratorium

| Matthew Visick

Pending Specific Plan Will Streamline CEQA Review of Future Life Science Projects On April 25th, the City of San Carlos enacted a development moratorium covering approximately 120 acres of land in the north side of the City, and east of Old County Road (see map below).  San Carlos has seen significant life science and R&D development in recent years, and the northeast area is anticipated to see an expansion of those uses.  The moratorium is broad, applying to virtually all development applications other than tenant improvements and projects with complete, filed applications.  It is expected to be in effect for two years while the City prepares a Specific Plan that will guide future development, articulate the public benefits future projects will provide, and streamline CEQA review of projects consistent with the Specific Plan. State law allows a City Council or County Board of Supervisors to enact a development moratorium of up to two years after it makes findings that approving projects would create an immediate threat to the public health, safety, or welfare.  The moratorium is initially limited to 45 days but can be extended with another vote of the City Council or Board of Supervisors to a maximum of up to two years.  Both the vote to enact the moratorium and the vote to extend must be approved by a supermajority (i.e., 4/5ths) vote. The San Carlos City Council found development in the northeast area would have health, safety, and welfare impacts unless the Specific Plan considered how it would affect the “supply of land and adequate sites suitable, feasible, and available for the development of housing.”  The findings anticipate that the Specific Plan will “develop policies and strategies to incorporate housing as a part of this new development.” While not expected, it is possible the City Council will carve out additional projects when it considers whether to extend the moratorium.  Several project sponsors opposed the enactment of the moratorium at the meeting on April 25, urging the Council to exempt projects with applications pending even if those applications were not yet complete.  At least one Council member appeared sympathetic to those arguments during the May 25th meeting (as noted above, at least four of the five Council members would need to vote to extend the moratorium). Planning Department staff will hold a public meeting with stakeholders on May 11th to gather stakeholder input and that input will be shared with the Council. Planning Department staff emphasized at the April 25th hearing that the Environmental Impact Report (EIR) the City is preparing for the Specific Plan will help streamline the approval of future projects that are consistent with the Plan.  State law provides several CEQA streamlining tools for projects consistent with a specific plan analyzed with an EIR.  Development under Redwood City’s Downtown Precise Plan (DTPP) provides a good example of the advantages of this approach for both the City and the applicable project sponsors.  Projects consistent with the DTPP required little to no additional project-specific CEQA review, allowing them to move through the approval process in a fraction of the time normally required.  In an ideal world, this strategy allows over-stretched Planning Department staff to redirect their time from project-level CEQA review to other priorities, and project sponsors to significantly reduce the often inordinate time and cost associated with CEQA review of individual projects.   Authored by Reuben, Junius & Rose, LLP Attorney Matthew Visick. 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.

EERO

Update on Emergency Escape for R-3 Occupancies

| Gillian Allen

The Department of Building Inspection and the San Francisco Fire Department have drafted a new Information Sheet EG-02, which provides guidelines for R-3 projects that are unable to meet the Building and Fire Code (SFBC) Section 1030, which requires emergency escape and rescue openings (EEROs) to open directly into a public way or to a yard or court that opens to a public way. The draft language below has been approved by the Code Advisory Council and has been submitted to the Building Inspection Commission for final approval. “SFBC Section 1030 requires emergency escape and rescue openings (EEROs) to open directly into a public way or to a yard or court that opens to a public way. In addition, on December 3, 2018, the California State Fire Marshal issued a Code Interpretation that EEROs in Group R occupancies are required to be accessible to emergency rescue personnel using ground ladders. This information sheet addresses the condition where the EEROs open to a yard or court that does not open to a public way for R-3 occupancies and thus inhibits the ability for ground ladder access to the EEROs for rescue. The intent of the code is that windows required by SFBC Section 1030 be available so that occupants may self-rescue and escape from a sleeping area from the EERO to the exterior of the building without having to travel through the building itself. Additionally, the EERO is available for the Fire Department to enter sleeping areas to rescue occupants. If the EEROs open to a yard or court that has no access to a public way, they will not meet the requirements of the code where both escape and rescue can be accomplished. Trigger: SFBC Section 1030 identifies when EERO requirements are applicable. In addition, any project where proposed scope of work further restricts access for the Fire Department to perform rescue at the EEROs will be subjected to SFBC Section 1030 review. Projects may request for approval of local equivalency where both of the following conditions are met: The escape criteria for the EERO may be accomplished where the EERO opens into a yard with a minimum of 25 feet depth. The rescue criteria for the EERO at a yard or court that has no access to the public way shall be proposed by the project sponsor and evaluated at the time of submittal on a case-by-case bases by the Supervisor or Manager. All other conditions will also be evaluated on a case-by-case basis by the Supervisor or Manager. A pre-application meeting and/or approval of AB-005 is required. ACCEPTABLE LOCAL EQUIVALENCIES: In the event that EEROs open to a yard or court that does not open to a public way for R-3 occupancies, the following are four local equivalencies acceptable by the Department of Building Inspection and the Fire Department. Request to use the following local equivalencies shall be accompanied by a request for approval of AB-005 and will be reviewed on a case-by-case basis. These requirements do not alleviate and shall not diminish any other code requirements established in the SFBC and SFFC. Alternative 1 – Fire Department Ground Ladder Access: The escape criteria for the EERO may be accomplished where the EERO opens into a yard with a minimum of 25 feet depth. The rescue criteria for the EERO at a yard or court that has no access to the public way shall be accomplished with a minimum 3 feet wide continuous pathway that can accommodate a 22-foot straight ladder from the Public Right of Way to the yard or court shall be provided. A path of travel diagram shall be provided showing the ability for a 22-foot ladder’s ability to navigate from the public way to the yard or court where the EERO faces. Commentary 1: The Fire Department uses a 22-foot straight ladder or a 35-foot extension ladder to reach EERO’s on the 2nd and 3rd floors. Thus, the Fire Department needs a minimum clear 3 feet wide pathway to carry the 22-foot straight ladder and 35 foot extension ladder (21 feet unextended) from the street, through a building, to the ground below the EERO. Alternative 2 – Increased Fire Protection: For existing buildings only, increased fire-rated construction shall be provided throughout the building along with a fire sprinkler system throughout. Commentary 2: SFBC Section 1030 exception allows higher occupancy of R1 and R2 classifications with type A construction equipped throughout with an approved automatic sprinkler system to be exempt from requirements of Section 1030. Similarly, for existing buildings only, where the existing building envelope spans such that the EEROs open to a yard or court that does not open to the public way, increased fire protection for SFBC Section 1030 exception will be acceptable since R3 occupancy pose a less hazardous occupancy than R1 or R2 occupancy in which this exception applies. However, alternative 2 will not be acceptable for new R3 buildings since SFBC Section 1030 shall be accomplished. Alternative 3 – Roof Access for Rescue: The escape criteria for the EERO may be accomplished where the EERO opens into a yard with a minimum of 25 feet depth. The rescue criteria propose rescue access from the roof level into EERO’s where EERO’s open to a yard or court that has no access to the public way. The roof slope shall be limited to not more than 4:12 pitch at any location along the roof access route to the yard or court. The vertical access component with the following requirements is required between the roof level and the level of each EERO: Stairs compliant with CBC Section 1011 with the exception that spiral stairways and alternating tread devices are not permitted. Alternate stair design shall have a maximum stair incline of 72 degrees from horizontal. A balcony, deck, or landing is required directly outside of each EERO: Minimum 3 feet wide in the direction perpendicular to the EERO. Minimum length shall be the width of the EERO opening. Any intermediate landings or

housing fees

State Takes Aim at Housing Fees and Permit Delays

| Sabrina Eshaghi

After a productive legislative year in 2021, the state legislature is continuing to tackle California’s ongoing challenges related to the housing crisis and lengthy processing times. Two bills would aim to minimize some of the roadblocks facing housing projects by bringing down both direct costs and holding costs. First, AB 2063 proposes to codify the state’s often disregarded stance that affordable housing fees do not apply to density bonus units. This would eliminate a significant cost for density bonus projects, which play a vital role in increasing housing production across the state. Second, AB 2234 proposes to enact time limits on processing and approving post-entitlement permits to create a more efficient and consistent process.  Both of these bills would help address some of the root causes of the high cost of building housing, including increasing impact fees and long-term holding costs associated with permitting. AB 2063 This bill would update the State Density Bonus Law to clarify that affordable housing fees cannot be applied to density bonus units, except in limited circumstances. Although this is a relatively simple bill, its impact would be huge for housing projects in jurisdictions that have been requiring hundreds of thousands, and sometimes millions, in affordable housing fees on top of the on-site affordable housing units needed to qualify for the density bonus. The Attorney General issued an opinion in 2019 that this practice of applying impact fees on density bonus units was not permitted under the State Density Bonus Law. The Attorney General’s reasoning was that the imposition of these fees on density bonus units disincentivizes what the legislature clearly wished to incentivize—the construction of affordable housing. Despite the Attorney General’s opinion, some cities continue to apply affordable housing fees on density bonus units. This bill would codify the Attorney General’s opinion, putting this practice to rest. The bill was introduced on February 14, 2022 by Assembly Member Berman and is sponsored by the Housing Action Coalition, a nonprofit that advocates for building more housing for California residents of all income levels. It was unanimously passed by the Assembly Housing and Community Development Committee on April 5th and the Assembly Local Government Committee on April 20th. It is now under review by the Appropriations Committee. AB 2234 The Permit Streamlining Act sets time limits for the review and approval of entitlements. Its impact has been limited since its time limits run from completion of CEQA review, which is typically the main driver of entitlement schedules. This bill aims to put a similar, but more effective, framework in place for post-entitlement approvals. Due to challenges associated with staffing, permitting backlogs have long been a problem, especially in large cities with high volumes of construction. These delays increase holding costs and slow overall housing production. Given today’s inflationary environment, delays are even more problematic. The bill would apply limits on the review process for all nondiscretionary permits for projects that are at least two-thirds residential. This would apply to building permits and permits for off-site improvements, demolition, excavation, and grading. Failure to meet any of the time limits would be treated as a violation of the Housing Accountability Act. Specifically, the bill would require local jurisdictions to: Publish an online checklist of requirements for applications to be deemed complete along with an example of an ideal application that developers can use as a reference. Cities with a population of at least 250,000 will also be required to accept and update the status of applications online, including noting whether anything is required from the applicant. Provide written notice regarding whether the application is complete within 15 days. If a local agency does not make a timely determination, the application will be deemed complete. Approve or deny a post-entitlement permit within 30 days of deeming the application complete for projects with up to 25 units, or within 60 days for projects with 26 or more units. This would not apply if the city makes a written finding that the permit may have a specific adverse impact on public health or safety and additional time is necessary to process the application. Provide a process for applicants to appeal an incomplete determination and denial of a complete application within 60 days for projects with up to 25 units, or 90 days for projects with at least 26 units. The bill was introduced by Assembly Members Rivas and Grayson on February 15, 2022 and is cosponsored by the Housing Action Coalition and Silicon Valley Leadership Group. It is scheduled to be heard by the Assembly Local Government Committee today. We will continue to monitor these bills and keep you updated as they move through the legislative process.   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.

fourplex

To Fourplex or Not to Fourplex

| Thomas P. Tunny

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.

DBL

Density Bonus Law & CEQA Tiering Upheld

| Mark Loper

This winter, two California Courts of Appeal issued decisions that reaffirm some of the positive aspects of state laws related to housing production, from both a CEQA perspective and via the State Density Bonus Law (“DBL”). In the first case, out of East Bay city Newark, the First District Court of Appeal upheld a tiered CEQA review for a 469-lot subdivision based on a program-level EIR prepared for a Specific Plan. About a week later, the Fourth Appellate District upheld San Diego’s approval of a 20-story residential tower, relying heavily on the protections afforded to mixed-income residential projects under the DBL. We discuss each below. In Newark, the City approved a specific plan in 2010 for up to 1,260 units, as well as a golf course and related facilities, relying on an EIR. The EIR specifically noted that Newark would proceed under CEQA Guidelines Section 15168 for specific development proposals and “tier” off of the EIR to the extent applicable. In 2019, the applicants submitted a subdivision map proposing 469 residential lots, but no golf course. Other changes from the development analyzed in the EIR included filling and elevating only certain areas on the site (the project site is located next to the San Francisco Bay) and locating the filled and elevated areas directly next to wetlands, with riprap along the western banks. The City prepared an exemption checklist comparing the EIR to the subdivision’s impacts and conducted background technical studies, including an updated sea level rise analysis. The checklist found that the subdivision would be consistent with the specific plan, and that there were no changed circumstances or new information that might trigger the need for more CEQA review than what was done for the EIR. It was a classic example of CEQA “tiering.” The Court of Appeal upheld the City’s use of the checklist. First, it rejected an argument that the project changes made tiering inappropriate. The Court helpfully pointed out that changes in and of themselves do not eliminate the ability to tier off an EIR; instead, the environmental consequences resulting from those changes must be new, greater, or substantially different than what was analyzed in the EIR. Here, they were not. The Court also rejected the appellant’s claim that the amount and rate of sea level rise was different enough to require a new EIR, finding that the EIR’s unambiguous finding of a significant impact due to sea level rise was adequate, as was some language in the EIR noting that the rate of sea level rise was uncertain and might be accelerating. Finally, the Court determined that adaptive management plans for sea level rise do not improperly defer consideration of mitigation measures. Taking a refreshingly common-sense approach to climate change and CEQA, the Court would not fault Newark for acknowledging in the EIR that adaptive management would be required. “The City’s potential responses to environmental conditions between 50 and 80 years from now cannot be considered part of the project,” it concluded. “Because the City currently can only dimly guess what measures will be needed to respond to conditions several generations from now, the City was not required to analyze the impacts of the adaptive pathways” as part of the project. The Court of Appeal’s opinion in San Diego generated more buzz, particularly among the pro-housing groups that have done yeoman’s work in recent years to strengthen California’s housing protections. The case was originally not certified for publication, in part because San Diego’s City Attorney was reluctant to have a published case that so clearly spelled out the limits of the City’s discretion to deny or downsize density bonus projects. Nevertheless, after receiving petitions to publish it, the Court did. It is helpful in several ways, reaffirming the City’s evidentiary burden to deny waivers or concessions; harmonizing General Plan consistency findings with the DBL; and applying the conclusion the First District Court of Appeal reached in Wollmer v. City of Berkeley that a density bonus project can be approved with residential amenities such as a courtyard. The Project—a 20-story, 204-unit mixed use tower at 6th Avenue and Olive Street across from Balboa Park—faced pushback from neighbors, at least some of whom the Court implied would lose their view of the park. Somewhat surprisingly, instead of arguing that the project would have an unmitigable health and safety impact on the adjacent park, the neighbors argued administratively, at the trial court, and at the Court of Appeal that the project should be denied because it did not comply with several General Plan and Community Plan guidelines that call for contextual development and massing moderation of tall towers. They also argued that the City should not approve waivers that contradicted the guidelines, and that the City should have approved a shorter and squatter development that had the same number of units but a smaller courtyard. The Court began its analysis by noting that the neighbors had “sidestepped” the implications of the DBL, not discussing it at all in its opening brief and then dismissively claiming the DBL is not a “free pass.” The Court identified the narrow grounds by which a City can shrink or deny a DBL project and pointed out that the neighbors simply failed to make any arguments about that point. It then went on to explain that the developer specifically requested concessions under the DBL that were germane to each of the General Plan and Community Plan guidelines the neighbors claimed the project did not comply with. The City Council expressly made a finding that there was no evidence to support the denial of the requested incentive, which the Court found to be determinative—acknowledging that the burden on this issue has now shifted to cities if they attempt to deny a project, not the developer proposing an incentive. It also concluded that the project’s waivers were correctly layered on top of the project with requested concessions, meaning a project qualifies for waivers based on its form with both the density bonus and the

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