code

Bigger Code Violation Fines In SF’s Future?

| Mark Loper

We kick off Reuben, Junius and Rose’s 2023 client updates by discussing a proposed San Francisco ordinance that would significantly enhance penalties for unpermitted work eliminating or adding residential units and significantly altering historic resources, and increase administrative and civil penalties for violations of the Building and Planning Codes. The legislation, co-sponsored by Supervisors Ronen, Peskin and Chan, was introduced in July 2022 (Board File No. 220878). In October 2022, the Building Inspection Commission voted unanimously to recommend approval. A Planning Commission hearing is scheduled for next Thursday, January 19th. After the Planning Commission, hearings would take place at the Board of Supervisors’ Land Use and Transportation Committee, followed by the full Board. The ordinance would increase the Zoning Administrator’s authority to impose significant monetary fines on property owners who carry out unpermitted work associated with a residential demo, merger, or change of use, and significant alterations to historic buildings. For unpermitted alterations, mergers, or demolition that eliminate one or more residential units, and also for unpermitted additions of more than two unauthorized units, the property owner would be liable for an administrative penalty of up to $250,000 for each unit. The owner also would be required to file a permit and request retroactive permission from the Planning Commission to eliminate the dwelling unit with a Planning Code Section 317 Conditional Use permit. The Planning Department’s Zoning Administrator would ultimately determine the amount of the fee; the ordinance directs the Planning Commission to adopt factors and criteria for the Zoning Administrator to consider. The ordinance would also punish property owners who carry out alterations that are tantamount to demolition without securing a Section 317 Conditional Use permit. For five years, no permits authorizing construction or alteration are allowed. There would be one exception: the permit would need to have the same or more residential units, with the same or higher proportion of residential to non-residential units as the building as it existed before the unpermitted work occurred. Also, the replacement units need to be at least 40% of the size of the largest unit in the project. They also could be subject to rent control; as written, this provision of the draft ordinance is unclear. The ordinance would also enhance the potential penalties for unpermitted damage to historic properties. For historic properties that are designated locally or on the California or National registers, a penalty of up to $500,000 is available for each structure that is “significantly altered or damaged,” or “demolished.” Similar to the unpermitted residential work, the Historic Preservation Commission would be tasked with adopting factors and criteria for the Zoning Administrator, and would also need to define the terms “significantly altered or damaged” and “demolished.” Also, for all Notices of Violation (“NOVs”)—not just NOVs relating to unpermitted work on residential or historic buildings—the ordinance would add the following additional factors when considering whether to uphold the NOV and whether to assess administrative penalties: if a violation was willful or intentional; the extent to which it resulted in financial gain; if tenants were displaced; if the violation is reversible; and if it created a nuisance, health hazard, or dangerous condition. Also, the daily administrative penalty would be increased from $100 to $200. On appeal to the Board of Appeals, if the Board upholds in whole or in part the Zoning Administrator’s decision on the amount of the penalty, it can reduce the penalty, but not below $50,000 for each residential unit or $100,000 for each historic property. The ordinance would also allow a court to assess a daily civil penalty of between $200 and $1,000 and adds criteria for a court to consider when assessing the amount of any civil penalty for any Planning or Building Code violation. They include: the nature and seriousness of the misconduct, number of violations, the persistence of the misconduct, length of time, willfulness of the defendant, if any tenants were displaced, if the violation is reversable, if the violation impacted an historic resource, the financial gain because of the violation, and the defendant’s net worth. Finally, the ordinance adds some procedural teeth. Any time after issuing an NOV, the Zoning Administrator can issue a “Notice of Additional Compliance Actions and Accrued Penalties” that requires a responsible party to perform additional abatement actions, and/or sets out the total penalties accrued to-date. Final NOVs or Notices of Violation and Penalty Decisions (“NOVPD”) may be recorded as an Order of Abatement on title, which also would spell out the steps necessary to abate the violation. The Ordinance would also make transferees responsible for daily penalties that accrue after the transfer if an NOV or NOVPD has been recorded on title; if not, the Zoning Administrator can only start assessing daily penalties if a notice and an opportunity to cure the violation are provided. We will continue to track this interesting piece of legislation as it moves forward.   Authored by Reuben, Junius & Rose, LLP Attorney Mark Loper. The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient.  Readers should consult with legal counsel before relying on any of the information contained herein.  Reuben, Junius & Rose, LLP is a full service real estate law firm.  We specialize in land use, development and entitlement law.  We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

housing

Cars to Casas Nearing Adoption

| Tuija Catalano

Approximately a year ago we reported on Mayor London Breed’s introduction of the “Cars to Casas” legislation which proposed to make it easier to build housing on existing parking lots, gas stations and properties improved with certain other automotive uses.  The legislation has now been rebranded as “Automotive Uses to Housing Uses” and made significant progress in the last two weeks with a positive recommendation from the Land Use and Transportation Committee on Monday, December 5th, and unanimous votes at the full Board of Supervisors on first reading on Tuesday, December 6th and on second and final reading on Tuesday, December 13th.  The legislation will be forwarded next to the Mayor for her signature, and if signed, will become effective 30 days thereafter. The legislation has been pending since October 2021, in part due to the Land Use and Transportation Committee’s request for an economic analysis.  If adopted, the legislation will eliminate a conditional use authorization requirement that currently applies to conversion of existing gas station uses, and would create an exception to the permitted residential density at eligible sites.  Sites that are eligible under the legislation are those that are currently used for auto-oriented uses, allow residential uses as a principally permitted use but do not currently contain any residential uses, and have not had a Legacy Business on the site within four years prior to the application submittal date. As proposed, including amendments by the Land Use and Transportation Committee, the legislation will not apply to any properties that are zoned for the RM (Residential-Mixed) or RC (Residential-Commercial) district, or to properties that are located in a historic district. The permitted residential density for RH (Residential-House) districts is up to four units per lot, and for all other eligible sites density is unlimited provided the project complies with applicable height, bulk, setback and other Planning Code requirements.  That said, eligible sites can also utilize the state density bonus program, which can allow waivers and concessions from otherwise applicable Planning Code requirements. The legislation is one example of efforts by Mayor Breed and the City to make it easier to build more housing and to get entitlements and permits for development proposals, and as such, a welcome proposal.  If the legislation is signed by the Mayor in the next 10 days, it will become effective in approximately mid-January 2023.   Authored by Reuben, Junius & Rose, LLP Attorney Tuija Catalano. 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.

EIR

CEQA Litigation Win

| Sabrina Eshaghi

RJR Attorneys Successfully Defend 180-Unit Housing Development Earlier this month, the First District Court of Appeals handed down a win for our client in a CEQA lawsuit challenging the approval of a 180-unit residential project in Petaluma (Project). (Save North Petaluma River and Wetlands v. City of Petaluma (Nov. 14, 2022, A163192) [nonpub. opn.].) Matthew Visick and Sabrina Eshaghi of our office represented the developer during entitlements and litigation. The Court confirmed: The “baseline” conditions against which biological impacts are measured can be drawn from site visits, studies, and habitat evaluations that were undertaken both before and after the Notice of Preparation (NOP) for the Environmental Impact Report (EIR) is issued; and The EIR need not contain a standalone analysis of evacuation impacts, despite expert testimony to the contrary, where substantial evidence indicates large-scale evacuations would not be necessary. The Project went through an extensive environmental review process that resulted in the release of a Draft EIR in 2018. The City allowed for an extended public comment period on the Draft EIR and held two hearings to solicit additional comments before preparing the Final EIR. As intended under CEQA, the developer adjusted the project multiple times to respond to comments received during the hearings on the Draft and Final EIR. Despite the developer’s efforts to respond to community input, opponents of the Project submitted a letter from an attorney to the City on the day the City Council approved the Project asserting a broad range of alleged errors in the Project’s CEQA review. Soon after the City Council approved the Project, the opponents filed a lawsuit seeking to invalidate the approval. At the Trial Court, in addition to challenging the adequacy of the EIR’s biological resources and emergency evacuation analysis, the opponents claimed the developer had deprived the public of its right to meaningfully participate in the CEQA process by making changes to the Project in response to public and City input after publication of the Final EIR, failed to analyze the impact of formaldehyde off gassing from composite building products, and failed to adequately analyze potential impacts related to flooding from the adjacent Petaluma River. The Trial Court rejected the opponents’ wide-ranging claims and upheld the EIR’s certification. The opponents promptly appealed. The Court of Appeal affirmed the Trial Court’s decision as to the two issues raised on appeal: the “baseline” for measuring biological resources impacts and the adequacy of the Project’s emergency evacuation analysis. First, the Court agreed that information and analysis conducted both before and after the NOP is issued can be the basis for establishing the “baseline” against which Project impacts are measured. The state CEQA Guidelines generally require existing baseline conditions to be based on the environmental conditions at the time the NOP issues. Here, the NOP was published in 2007, but a special status species report for the EIR’s biological resources analysis was drafted in 2004. The EIR indicated its analysis included updated database reviews and information gathered from site visits in the years following the NOP. The Court confirmed that the use of materials from before and after the NOP issued did not require additional justification because there was no indication that the conditions had changed. Instead, the Court determined that the “inclusion of the post-2007 information indicates that the EIR was prepared with an eye toward ‘completeness’ and ‘a good faith effort at full disclosure.’” The Court also rejected the opponents’ argument that the EIR must provide additional documentation from the biologist’s studies and site visits to allow the opponents to evaluate whether they support the analysis in the EIR, confirming that factual information in the EIR itself may constitute substantial evidence. The Court also noted that the opponents could have obtained this information if they had raised their comments during the public comment period rather than on the day the Project was approved. Second, the Court agreed that where the City has substantial evidence that large scale evaluations will not be necessary, the EIR need not include a stand alone analysis of evacuation impacts. While the EIR did include an analysis of the Project’s impact on adopted emergency response and evacuation plans, the opponents argued that the EIR also needed to evaluate egress and evacuation safety due to neighborhood concerns regarding flooding and grass fires as well as a letter from a “national evacuation expert” opining on allegedly dangerous public safety impacts in the event of an evacuation. The Court reaffirmed that CEQA does not allow courts to reweigh conflicting evidence when reviewing an EIR and that case law allowed the City to rely on the expertise of its staff to determine that the Project will not have a significant impact. Here, City staff prepared a memo reiterating that the Project is outside the 100-year floodplain and is not within the high fire severity zone, and the Assistant Fire Chief confirmed the Fire Department did not have significant flood or fire access/egress concerns. Given the analysis in the EIR and the corroborating statements from City staff, the Court concluded that the opponents failed to prove any inadequacy of the public safety analysis in the EIR. This opinion affirms the deferential review that the Courts will give to an EIR. So long as the EIR reasonably sets forth enough information to allow informed public participation and allows the City to make a reasoned decision whether to approve a project, the Courts will not second guess the City’s decision to approve a project.   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

PDR

PDR Protections & Higher Fees for Large Institutions in Housing Element Package

| Melinda Sarjapur and Daniel Frattin

San Francisco’s Housing Element Update (“Update”) has been in the works since mid-2020, and the City is sprinting to adopt it before a January 2023 deadline that could open the door to Builder’s Remedy Projects and eventually a loss of state funding for affordable housing and transportation. (See Exhibit D to the Planning Department’s Update Initiation Memo). The Update’s primary focus is to spur residential construction to meet the state-mandated RHNA target of 82,000 new homes over eight years and to shift more housing development – especially affordable housing – to transit corridors on the westside. However, through “conforming amendments” to other elements of the City’s General Plan, the City sets the stage for new restrictions on the conversion or displacement of existing Production, Distribution, and Repair (“PDR”) or Industrial uses. It also targets large institutions – one of the sectors where in-person activity tends to be higher in the era of hybrid work – for new development impact fees. Two of these amendments are shown below.  For each item, text from the existing General Plan is shown in plain text; proposed additions to the General Plan are underlined. Air Quality Element: Policy 3.3: Continue existing city policies that require housing development in conjunction with office development and expand this requirement to other types of commercial and large institutional developments. The intent is to require large institutional employers that aren’t currently subject to the City’s Jobs-Housing Linkage Fee to conduct an analysis of the housing demand of their employees and then show how they will meet that demand in their Institutional Master Plans (“IMP”). It could also pave the path for extending the JHLF to large non-institutional uses that are not currently subject to it (hospitals/schools/etc.). In a bit of revisionist history, the Planning Department notes that the “IMP” caused colleges to realize the housing needs of their students and credit that as causing many private non-profit colleges to build student housing. In fact, IMPs had nothing to do with colleges building housing. The need was obvious; in reality inclusionary housing requirements were too expensive for them to shoulder. It was only when the City exempted student housing from inclusionary requirements that several private schools embarked on ambitious housing construction programs. Non-profit colleges and healthcare providers will find it difficult to grow in San Francisco if the Jobs-Housing Linkage Fee – currently ranging from $26 – $76 per square foot for other uses – is extended to them. Commerce & Industry Element: Policy 4.5: Control encroachment of incompatible land uses on viable industrial activity. Production, Distribution, and Repair (PDR) areas offer economic opportunity for adjacent neighborhoods, especially for low-income communities and communities of color. PDR businesses can provide stable job opportunities, good wages, and diversity in types of activities and jobs Restrict incompatible land uses, such as housing and office, and the conversion of industrial buildings to other building types in PDR districts and in areas of concentrated PDR, construction, or utility activities. In mixed-use districts or areas adjacent to PDR districts, avoid the displacement of existing businesses, protect the affordability of PDR space, and, if displacement is unavoidable, replace some or all the PDR use with viable, affordable industrial space on-site or off-site in a PDR district. This revised language paves the way for the City to adopt additional restrictions on the types of uses permitted in PDR districts – specifically the conversion or new construction of laboratory uses that frequently complement PDR. Engineering labs, for example, often need PDR to supply parts for prototyping, testing, and may well grow into small-scale manufacturing (PDR) uses themselves. This flexibility has served both PDR and lab uses well. How is a policy that replaces synergy with inflexibility good for the City? Why is industrial protection in districts where housing is not even permitted a “conforming” amendment to the General Plan? Even more ironically, this policy amendment sets the stage to say “no” to housing in the very areas that have been most successful at producing it: rezoned PDR areas accounted for roughly ¾ of housing production by striking a balance between preserving space for industry and allowing much higher residential density. Proposition X made it harder to build housing in certain districts by requiring replacement space. However, this policy could reach much further and set up yet another restriction on housing in favor of preserving industrial space. The Update is supposed to remove barriers to housing. This one fails that test. A full list of the General Plan updates proposed in connection with the Housing Element Update is available on the Planning Department’s website. The full Housing Element Update is anticipated for adoption by the Planning Commission on December 15, 2022, and Board of Supervisors in January 2023.   Authored by Reuben, Junius & Rose, LLP Attorney Melinda Sarjapur and Daniel Frattin. 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.

measures

November 8th Elections Update – Real Estate Edition

| Tara Sullivan

Now that the election is a week behind us, the final results of the various political races and ballot measures are becoming clear. There are still 15,500 votes left to count as of November 15th, but many of the results are final. Below are the results that most impact land use and real estate in San Francisco. Board of Supervisors With Supervisors Stefani (D2), Mandelman (D8), and Walton (D10), cruising to easy re-elections, the focus has been on Districts 4 and 6. In both, the race has been between a mayoral-backed, moderate candidate and a Board-backed, progressive candidate. The outcome of these two races will shift the makeup of the Board and impact how land use decisions are made, particularly housing policy and project decisions. Currently, the Board leans more progressive and is somewhat conservative when deciding many land use decisions. Recent examples of project denials are 469 Stevenson Street and 450 O’Farrell Street – both of which may have been approved with a more moderate make up of Supervisors. As of Tuesday November 15th, Joel Engardio is leading Supervisor Gordon Mar, the incumbent, in District 2 at 51% to 48.9%. In District 6, Supervisor Matt Dorsey has won the seat with 51.6% of the vote. If the current count stands in District 2, then the balance of the Board of Supervisors is sure to tilt to a more moderate stance that is friendlier to the development of housing projects. SF Propositions There were 14 propositions on the November ballot, with the following of most interest to land use and real estate. Prop D & Prop E – Fast Track Affordable Housing These two measures were perhaps the most written about and discussed (at least in land use circles). Prop D was put on the ballot by the Mayor, Prop E by the Board of Supervisors. Both have a goal of streamlining the approval process for affordable housing developments. However, they differed in qualifying requirements, types and level of affordable units, and project review timing. Each needed a simple majority to pass; if both reached 50% then the measure receiving the most votes wins. As of this writing, both measures are expected to fail. Neither has reached the 50% threshold, although Prop D is closer at 48.5% (compared to 45.3% for Prop E). With the defeat of Prop D, it will continue to be difficult to review, approve, and construct affordable housing in San Francisco. Prop M – Vacancy Tax on Landlords Perhaps one of the more controversial measures on the ballot, this measure will tax landlords that keep residential units vacant and off-market. It applies to property owners with at least three units who keep them vacant for more than 6 months. Fines start at $2,500 and $5,000 per empty unit, increasing annually. While this measure penalizes owners who choose not to be landlords or keep units vacant for a variety of reasons, it does exempt single-family and duplex owners. Meaning, owners of homes with Accessory Dwelling Units (ADUs) and the like that are not rented out will be able to continue to keep them vacant. Prop M passed with 53% of the vote, which some say shows how the citizens are fed up with the high number of empty units. For others, it is overreach into the private business doings of property owners. Prop M contained language allowing the Board of Supervisors to amend the tax by 2/3rds vote and without voter approval. Meaning, those with ADUs may soon be subject to this tax. Regardless of how one feels about this, it will be interesting to watch how it plays out over the next several years. Prop I & Prop J – Vehicles on JFK Drive and the Great Highway Another set of competing land use measures, this time relating to keeping certain roads vehicle-free. Both were spurred by the Board of Supervisors approval to make JFK Drive permanently car-free in 2020. Prop I would allow cars back on JFK Drive, except on all Sundays, Saturdays during the summer, holidays and special events. Prop I would fully reopen the Great Highway to cars as well. Prop J would affirm the Board’s decision and keep JFK Drive vehicle-free. Prop J overwhelmingly passed. Residents utilized JFK Drive during the COVID lockdown, and Rec & Park’s efforts to turn the road into a safe public gathering space helped people see the long-term benefits of keeping it car-free. Now that the road’s fate is determined, it will be interesting to see if the city can make it into a true public benefit. Prop L – Sales Tax to Fund SFMTA Projects This measure to extend the city’s 0.5% sales tax to fund transportation projects has passed with nearly 71% of the vote; it needed a two-thirds majority vote to pass. The current tax isn’t set to expire for years, but the last measure extending it set strict limits on how the money could be spent. Prop L would allow San Francisco to continue spending funds from the tax on categories where it has currently reached or is nearing its spending cap, including buying new light rail vehicles.   Authored by Reuben, Junius & Rose, LLP Attorney Tara Sullivan. 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.

bills

2022 Housing Legislation Round-Up

| Justin A. Zucker and Daniel J. Turner

This year was a blockbuster year for housing legislation coming from Sacramento. Last week, Governor Gavin Newsom signed into law more than three dozen bills related to housing and housing production. Below please find a brief overview of twelve housing bills signed by the Governor that become effective next year. AB 682. Density Bonus for “Shared Housing” Buildings AB 682 amends the State Density Bonus Law to create a density bonus for “Shared Housing” developments. Shared housing, or group housing as it is commonly known, is characterized by single-room units with shared access to common kitchen and dining facilities. Each unit is typically intended for one or two occupants and features a small kitchenette. This new density bonus will allow shared housing developments to build at greater densities in exchange for dedicating a percentage of units to affordable housing, with the same affordability requirements and bonus amounts as is currently available to standard-unit developments. Notably, shared housing developments can provide up to 25% of their floor area as standard-unit housing and still qualify for a density bonus. AB 916. No Public Hearing to Increase Bedroom Count AB 916 prohibits cities from requiring a public hearing for a permit to add up to two bedrooms by reconfiguring existing space within an existing dwelling unit. AB 1551. Commercial Development Bonuses for Providing Affordable Housing AB 1551 creates a density bonus for commercial developers who partner with housing developers and support the provision of affordable housing through land donation, cash payment, or by directly building units. A commercial developer is eligible for up to a 20% density bonus. To qualify, the housing development supported by the commercial developer must provide either 30% of units as affordable for low income (<80% AMI) or 15% of units as affordable for very-low income (<50% AMI). AB 2011. Affordable Housing and High Road Jobs Act AB 2011 provides streamlined, ministerial approval of multifamily housing developments that contain affordable housing units located in commercial zones. Two tiers of development are available, depending on the amount of affordable housing provided. A project dedicating 100% of units as affordable for lower income households can be developed by right on most parcels zoned for retail, office, or parking uses. A project with market-rate units that provides a specific percentage of rental or ownership units as affordable for either lower income or very-low income households can be developed by right on parcels zoned for retail, office, or parking if the site has at least 50 feet of frontage on a commercial corridor (a street between 70 and 150 feet wide). AB 2011 projects are also subject to certain prevailing wage and skilled workforce requirements. We have discussed AB 2011 in greater detail in previous updates on August 24, 2022, and September 1, 2022. SB 6. Middle Class Housing Act SB 6 is intended to increase the development potential for middle-income housing by principally permitting housing developments that meet specific criteria in areas zoned for office, retail, or parking uses. Eligible developments are required to meet or exceed certain density thresholds established in the state’s Housing Element law, such as 30 units per acre in metropolitan settings or 20 units per acre in suburban settings. SB 6 projects must also meet certain prevailing wage and skilled and trained workforce requirements, although a development can be exempted from these in certain circumstances. AB 2334. Density Bonus in Very Low Vehicle Travel Area AB 2334 expands the available density bonus for 100% affordable housing developments in very low vehicle travel areas. A “very low vehicle travel area” is a transit analysis zone where existing residential development generates 85% or fewer vehicle miles traveled per capita than the regional area in which it is located. Qualifying density bonus projects are not subject to maximum density controls, are entitled to up to 4 development incentives, and may receive an additional three-stories of height. This additional density bonus is only available in the counties of the Bay Area, Sacramento, the Southern Coast, and Inland Empire. AB 2334 also clears up the grey area for application of the state density bonus in a form-based zoning district, requiring calculation of an “average unit size” multiplied by the density bonus amount to determine increase in floor area allowed. AB 2653. Housing Element Reporting AB 2653 alters some of the requirements for annual housing element reports cities must submit to the state. Cities must include greater detail, including the numbers of all new and demolished housing units in the jurisdiction, as well as data on all approved density bonus projects. AB 2653 also provides a mechanism for the state to request corrections and make referrals for enforcement. AB 2668. SB 35 Streamlining Updates AB 2668 amends SB 35 clarifying streamlined SB 35 projects are not subject to any non-legislative discretionary approval and that density bonus units are not considered when calculating whether a project satisfies SB 35’s affordability requirements. Further, the bill prohibits cities from denying an application for missing materials if there is enough information to allow a reasonable person to conclude the development is consistent with the applicable objective standards. AB 2668 also brings important change to how the Cortese List affects SB 35 eligibility. Placement on the Cortese List, which is the aggregate of the state’s decentralized hazardous waste sites databases, disqualifies a site from SB 35, until it is cleared for residential use by the authority having jurisdiction. However, longstanding confusion over the mechanism of clearing a site meant that once a site was listed, it was effectively barred from SB 35 permanently, even if it had undergone extensive remediation. AB 2668 establishes specific criteria, documentation, and agency determinations that allow a “listed” site to qualify for SB 35. AB 2221 & SB 897. ADU Law Updates AB 2221 and SB 897 make a number of changes to existing ADU law to provide for greater development flexibility and ensure consistent and efficient project review. Under these bills, a city that denies an ADU application will be required

inspection

Inspection Requirements – Elevated Elements in CIDs

| Michael Corbett

Civil Code Section 5551, a statute within the Davis-Stirling Act and applicable to common interest developments with three (3) or more unit, obligates homeowners’ associations (“HOA”) to satisfy certain inspection requirements of all exterior elevated elements within a project that are more than six feet (6’) off the ground and supported in substantial part by wood or wood-based products. Examples of such exterior elements include balconies, decks, stairways and walkways. These visual inspections – used to determine whether these elements are in a generally safe condition and performing in accordance with applicable standards – must be performed by a licensed structural engineer or architect, with the initial inspection being completed by January 1, 2025.[1] Thereafter, subsequent inspections must be undertaken and completed at least every nine (9) years. Based upon the inspector’s visual inspections, further inspection, and construction and materials expertise, the inspector must then prepare and issue a written report containing the following information: (1) The identification of the building components comprising the load-bearing components and associated waterproofing system. (2) The current physical condition of the load-bearing components and associated waterproofing system, including whether the condition presents an immediate threat to the health and safety of the residents. (3) The expected future performance and remaining useful life of the load-bearing components and associated waterproofing system. (4) Recommendations for any necessary repair or replacement of the load-bearing components and associated waterproofing system. Civ. Code. § 5551(e). The inspector’s report must be stamped or signed by the inspector, presented to the board, and incorporated into the HOA’s reserve study as required by Civil Code Section 5550. Inspection reports must be maintained in the HOA’s records for two inspection cycles. Civ. Code § 5551(f), (i). Partner Engineering and Science, Inc., will be holding a webinar to address these inspection requirements in more detail. Registration for this event may be completed here. [1] Note: the inspection of applicable buildings for which a building permit application has been submitted on or after January 1, 2020, must occur no later than six (6) years following the issuance of a certificate of occupancy.   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.

ZIP

Downtown Oakland Specific Plan: ZIP Update

| Justin A. Zucker

As previously reported, the Downtown Oakland Specific Plan (“DOSP”) is working its way to the City Council for adoption, currently anticipated in late 2022. The DOSP includes Zoning Amendments (which we’ve previously reported on) and a Zoning Incentive Program (“ZIP”). Initial details for the ZIP were released earlier this summer (which we’ve previously reported on). Below are additional details regarding the ZIP based on the economic analysis reports prepared by Hausrath Economics Group, dated August 2022 and September 16, 2022, in addition to recent community meetings on September 13 (presentation slides) and on September 19 (presentation slides). The ZIP was developed in response to community concerns to allowing development downtown without obtaining community benefits. The ZIP allows developers to voluntarily elect to provide community benefits, in one of four forms, to increase allowed development capacity, either additional market-rate dwelling units or commercial space. The four on-site community benefits options include providing (1) affordable housing, (2) below market-rate ground floor commercial space, (3) public restrooms, or (4) streetscape, open space and flood control improvements exceeding basic city requirements. Alternatively, the ZIP includes the option to provide community benefits through payment of an in-lieu fee instead of providing on-site benefits, or some combination of on-site benefits and an in-lieu fee. The ZIP is a voluntary program that creates additional value for a development project with the City capturing a portion of the value increase. The increase in value from the additional, higher-intensity development is calculated as the difference in value of development under the maximum intensity zoning compared to the base zoning. The value is expressed in dollars per building square foot of added development for commercial and dollars per dwelling unit added for residential. As currently analyzed, the ZIP is structured so that a third of the additional value from the more intense development is captured in the form of a community benefit. The remaining two-thirds is split with one-third to the developer to incentivize development at increased intensity and a third to the owner to account for increased resulting land value, which in turn results in increased property taxes. During recent community meetings, there has been discussion of adjusting this formula to increase the City’s value capture share. In creating the incentive, the ZIP considers the costs and economic variables specific to development types, i.e., change from Type III or V (mid-rise/low-rise) to the more costly Type I (high-rise) construction. Properties with large increases in density supporting high-rise development over mid-rise/low-rise projects can have lower value capture per additional dwelling unit or per additional building square foot due to higher costs involved. To account for this, the ZIP establishes three Zoning Incentive Areas that reflect similar market contexts, development patterns and potentials, parcel sizes, and existing land uses. There are three areas each for residential development (map) and commercial development (map), with R-A, R-B, and R-C zones for residential and C-A, C-B, and C-C for commercial development. The ZIP incentive areas allow additional density ranging from 11% to 800% more density with 65% of cases more than doubling density. The large density bonus accounts for increased costs associated with change in construction typology to Type I for high-rise development. Based on location, a commercial development could obtain an additional 100,000 sf of office space with the provision of below market ground floor commercial space totaling 6,828 sf (Zone C-A), 4,655 sf (Zone C-B), or 3,724 sf (Zone C-C). The ZIP is available to a developer in lieu of or in addition to the State Density Bonus set forth in Government Code Section 65915, et. seq. Meaning, a project could layer the State Density Bonus on top of the ZIP to increase development intensity. In instances when the ZIP and State Density Bonus are used in tandem, the project’s ZIP development intensity is the base density not the underlying base zoning density. The DOSP and ZIP are slated to return to the Zoning Update Committee (“ZUC”) before advancing to the Planning Commission and City Council. While previously schedule to return to the ZUC on September 29, that hearing has been cancelled to allow additional public meetings. The ZUC hearing has not yet been rescheduled. We will continue to track this significant rezoning and community planning effort as it moves forward. 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.   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.

DBI

Building Department Update

| Gillian Allen

The San Francisco Department of Building Inspection (“DBI”) is working hard to improve on permit review and processing times. They launched a program called “Enhanced In-House Review Permit Application Process” on July 1, 2022, which should streamline the review and issuance of small and medium sized projects, and there are many new faces at the over-the-counter shifts which inevitably gives more seasoned staff time to work through their backlog. The Enhanced In-House Review program incorporates suggestions from stakeholders and internal staff and creates new plan check categories. Until recently, DBI had only two options for plan review—Over-the-Counter and In-House review. For a project to qualify for Over-the-Counter review, the plan review needed to be an hour or less at each plan review station. Under their new Pre-Plan Check system launched on July 1, they added two new plan check categories for small to medium-sized projects that don’t qualify for Over-the-Counter review, but could be reviewed in one day after their assignment to a reviewer. Projects are now pre-screened per the criteria below: Plan Check Category OTC Level 1 In-House Level 2 In-House Level 3 In-House Level 4 Time for plan review <1 hour 1-4 hours 4-8 hours >8 hours New Central Queue The new system also changes the way DBI assigns projects to plan reviewers. Previously, they assigned projects to plan reviewers as they came in—so if a plan reviewer had a large workload or went on vacation, customers waited longer for plan review. Under the new system, projects now go into a central queue and will be assigned to plan reviewers on a weekly basis. For customers, it means that once your project is assigned to a plan reviewer, you can expect DBI to begin review on your project in the next few business days. Over the past three weeks, the new process has effectively increased the quality of plan submissions and is helping DBI manage its workload better. DBI’s next step is to remove projects from individual plan checker’s queues and to move all the existing in-house review project submissions into one queue and then begin assigning them to plan reviewers on a weekly basis. The program has been in action for about two months, and according to the August update, DBI is pleased with the progress on the transition to the new process. About 68% of new applications have been accepted as complete and all of the older priority projects, such as affordable housing and Accessible Dwelling Units, have been assigned to a plan reviewer. The new system also establishes a minimum 20 business days and maximum 40 business days target for DBI to respond to the application with comments for the applicant to clarify or address. Other agencies will attempt to match these turnaround thresholds but may have exceptions. To ensure clear communication and to keep projects moving, DBI staff comments that cannot be or are not addressed with two resubmittals (ie: resubmitting revised plans), will be automatically escalated to a DBI plan check supervisor. Should a project have unresolved comments after four resubmittals, the project will automatically be escalated to the Deputy Director of Permit Services. DBI plans to start posting updates to their website in September to let you know the date range of projects being assigned to DBI staff every week and appreciates your support as they move from the old system to a new system that will serve you better. Learn more here.   Authored by Reuben, Junius & Rose, LLP Manager, Post Entitlement Division Gillian Allen. 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.

HAU

HCD Cracks Down on S.F. Housing Practices; S.F. Real Estate Tax Appeal Deadline

| Thomas P. Tunny

Last month, the State Department of Housing and Community Development (“HCD”) announced that its Housing Accountability Unit (“HAU”) will conduct a first-ever Housing Policy and Practice Review of San Francisco, aimed at identifying and removing barriers to approval and construction of new housing in the City. According to the City’s self-reported data, it has the longest timelines in the state for advancing housing projects to construction, among the highest housing and construction costs, and the HAU has received more complaints about San Francisco than any other local jurisdiction in the state. U.S. Census data shows that Seattle – a city of comparable size – approves housing construction at more than three times the rate of San Francisco. Over the next nine months and beyond, the HAU, in partnership with the U.C. Berkeley Institute of Urban and Regional Development and others, will conduct a comprehensive analysis of San Francisco’s housing approval policies and practices. The review will examine discretionary decision-making patterns that lead to abnormally long housing delays. The review also intends to identify barriers to the approval and development of housing at all income levels, including housing that is affordable to lower- and moderate-income households. Separately, in an August 8 letter to Planning Director Rich Hillis, HCD was both critical and encouraging of the City’s Draft Housing Element. California cities are required to update their General Plan Housing Elements by January 2023. HCD praised the City’s “bold and meaningful actions to both reduce barriers to higher-opportunity neighborhoods while simultaneously reinvesting in historically underserved neighborhoods.” Yet HCD also identified a number of revisions that would be necessary for the Housing Element to comply with state law. In yet another letter on August 11, HCD asked the City to explain itself concerning a specific project approval, expressing concern that the City violated housing law. HCD was concerned with the City’s decision, in granting conditional approval, to downsize a 19-unit group housing project at 3832 18th Street in the Mission District. HCD expressed concern that the downsizing violated the State Density Bonus Law. This project-specific letter follows HCD’s letter to the City last November expressing concern that the City’s denial of two large housing projects, at 450 O’Farrell Street and 469 Stevenson Street, may have violated state law. In those cases, the Planning Commission had approved the projects, but the Board of Supervisors denied them. The aforementioned Housing Accountability Unit at HCD is part of an unprecedented new initiative to support the production of housing statewide. According to its website, “California’s housing crisis has reached historic proportions despite the passage of numerous laws intended to increase the supply of housing affordable to Californians at all income levels.” As part of the 2021-2022 state budget, HCD received additional staff to grow its accountability efforts and formed the HAU. The HAU holds jurisdictions accountable for meeting their housing element commitments and complying with state housing laws. One of its primary tools is technical assistance to the public and enforcement letters. More information on these powers is available at the HCD website. San Francisco Real Estate Tax Appeal Deadline The deadline for San Francisco property owners to appeal their property’s value for the 2022/2023 tax year is September 15, 2022.  Deadlines for other California counties vary.  Please contact Kevin Rose (krose@reubenlaw.com) if you have questions about the tax appeal process.   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.

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