TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Carrie Tai, AICP, Community Development Director
Talyn Mirzakhanian, Planning Manager
SUBJECT:Title
Consideration of an Urgency Interim Zoning Ordinance Adding Objective Standards for SB 9 Development Projects, and Adopt a Fee Resolution Approving an SB 9 Development Review Application Fee (Community Development Director Tai).
A) ADOPT URGENCY ORDINANCE NO. 21-0009-U
B) ADOPT RESOLUTION NO. 21-0120 TO ESTABLISH A FEE FOR REVIEW OF SB 9 PROJECTS
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council:
1) Consider an urgency ordinance providing additional specificity for SB 9 regulations; and
2) Adopt a resolution to establish a fee for review of SB 9 projects.
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FISCAL IMPLICATIONS:
There are no fiscal implications associated with this item. Staff anticipates that existing staff time will be used to develop application forms and review processes. Staff is proposing an application fee to recover the cost of staff time associated with the review of SB 9 development projects for compliance with applicable zoning regulations.
BACKGROUND:
On December 7, 2021, the City Council requested a future agenda item on SB 9 and 10, both of which were signed into law by the Governor on September 16, 2021, and take effect on January 1, 2022. Both bills seek to advance the production of housing, as the State has declared a housing shortage. SB 9 and 10 are among many housing laws passed by the State in recent years, preempting local land use regulations. As noted below, SB 10 does not impose any requirements on the City, and is strictly voluntary, so this staff report focuses primarily on SB 9.
Senate Bill 9 (See attachment for legislation)
Senate Bill (SB) 9 requires a city to approve ministerially (no public hearing or discretionary review) housing developments containing two housing units on a lot in a single-family zone. (An accessory dwelling unit (ADU) could then be constructed onto each housing unit for a total of four units on an existing single-family lot.)
SB 9 also requires cities to ministerially approve an urban lot split, which is a subdivision of one lot in a single-family zone into two lots, of approximately equal size. With a maximum of two units allowed on each of the lots, what was once a single lot could be split into two parcels under SB 9 and accommodate up to four residential units (that could include accessory dwelling units). While the implementation of SB 9 is not optional, similar to ADU regulations, the State allows local jurisdictions to adopt ordinances that include customized development standards for the applicable zone, such as height, front setbacks, lot coverage, etc., as long as the standards are objective and do not preclude development of, at a minimum, two 800 square-foot units on each parcel.
SB 9 regulations are summarized as follows:
Additional Units
• Prohibits demolishing more than 25% of an existing unit’s structural walls if the site has been occupied by a tenant in the last three years
• Allows the City to require setbacks of up to four feet from side and rear property lines
• City cannot preclude the development of two units of at least 800 square feet each per parcel
• No setbacks may be applied to existing structures or structures constructed in the same dimension and same location
• Cities may require one off-street parking space for each new unit, unless the parcel is located within one-half mile of a “high quality transit corridor” or “a major transit stop” (these terms are defined by State law, sections 21155 and 21064.3 of the Public Resources Code).
• Short-term rentals are prohibited, as are all non-residential uses.
Urban Lot Splits
• No more than two parcels may be created by an urban lot split
• New parcels must be approximately equal in size, with one parcel being no smaller than 40 percent of the original lot’s size
• Both parcels must be at least 1,200 square feet
• May not split a lot previously created by an SB 9 urban lot split
• City cannot preclude the development of two units of at least 800 square feet each per parcel
• City cannot require right-of-way dedication
• Requires owner occupancy on one of the lots for at least three years
• Short-term rentals are prohibited, as are all other non-residential uses
• City may not require correction of non-conforming zoning conditions
SB 9 does not apply in a variety of areas, including farmland, wetlands, fire hazard severity zones, hazardous waste sites, flood zones, habitats/protected areas, zones that permit multi-family development, or sites designated as a historic landmark or in a historic district. SB 9 development projects cannot replace:
• Housing restricted to moderate, low, or very-low incomes
• Housing subject to a local rent control ordinance
• Housing occupied by a tenant in the last three years
• Housing withdrawn from the rental market pursuant to the Ellis Act within 15 prior to the development application submittal.
SB 9 allows jurisdictions to adopt local ordinances to implement the new regulations. Absent a local ordinance, staff would implement the provisions of State law. However, local ordinances provide cities the ability to improve specificity to State regulations by adding objective standards where needed. A local ordinance cannot be more restrictive than minimum State provisions to accommodate additional units or urban lot splits enabled by SB 9.
Senate Bill 10
Senate Bill (SB) 10 allows jurisdictions in an urbanized area to adopt a zoning ordinance that permits up to ten residential units on a single parcel within certain areas. SB 10 is voluntary, meaning that no jurisdiction is mandated to adopt such an ordinance, or allow ten residential units on a single parcel. Unless directed otherwise, the City does not intend to pursue an ordinance pursuant to SB 10.
DISCUSSION:
SB 9 is applicable in zoning districts that limit housing to single-family homes and as such, is only applicable in the City’s Residential-Single Family (RS) zone. The RS zone is located in Area Districts I, II, and portions of III, generally consisting of single-family neighborhoods east of Vista Drive, Grandview Drive, Valley Drive, and Crest Drive. There are approximately 8,440 lots in the RS zone. There are no RS-zoned lots in the Coastal Zone.
In anticipating the number of applications the City is likely to receive for construction of additional units, staff reviewed the accessory dwelling unit (ADU) regulations, which are similar to SB 9 in allowing additional units on lots developed with single-family homes. Furthermore, ADU regulations are more permissive in that ADUs can be built in single- and multi-family residential zones and parking is not required due to all parcels in the City being within ½ mile of a bus stop. In the past three years, that City has received/approved approximately 30 applications for ADUs. This indicates that approximately 0.3% of all RS-zoned residential lots in the City have pursued additional units on lots with single-family homes.
While the majority of lots in the RS zone are eligible for urban lot splits, the feasibility of an urban lot split depends on existing development on the lot, access to the public right-of-way, lot width, setback and open space requirements, and the ability to accommodate parking and driveways. Given that the majority of residential development in recent years has approached the maximum buildable floor areas of the lots, urban lot splits may be feasible only on properties where there has been no construction since their initial construction in the 1950s-1960s. During that time, many lots were developed with smaller homes, such as bungalows between 600 and 1,200 square feet, with undeveloped lot areas remaining. Based on these factors, staff estimates that approximately 3% of RS lots will pursue urban lot splits. This comports with a study performed by The Terner Center for Housing Innovation at University of California Berkeley, which estimated that it was feasible to develop 1.5% and 5.4% of single-family lots in the State utilizing the provisions of SB 9.
Draft Interim Zoning Ordinance
In addition to State regulations in SB 9, applicants proposing an SB 9 development project will need to comply with applicable regulations in the Municipal Code. Furthermore, SB 9 allows location jurisdictions to adopt objective standards to ensure that SB 9 development projects are developed consistently with each jurisdiction’s requirements. Staff has prepared a draft interim zoning ordinance that includes objective standards for development, and a requirement for a recorded covenant for each SB 9 development project. The covenant would commit current and future property owners to the requirements of SB 9 for the life of the project.
The interim zoning ordinance contains the following objective standards for SB 9 development projects:
• Requires an application and application fee
• Requires an applicant to provide a sworn statement affirming eligibility with SB 9 regulations
• Provides for an applicant-funded verification process
• Must record a covenant on the property agreeing to:
- No non-residential uses on the site
- No short-term rental usage
- If urban lot split
§ No subsequent urban lot splits of parcels created by SB 9
§ Owner must occupy the property for three years
§ Maintain access to the public right of way in perpetuity
- Maintain all required parking
• Objective standards for development
- Required parking of one space per unit; access via an alley if there is one
- Conceal private electrical equipment
- Paint flashing, vents, pipes to match the roof or wall
- Must provide a refuse storage area, concealed from view
- Provide pedestrian access from the right-of-way to the unit
- Setbacks for garages
- Maximum 10-feet wide driveway for narrow (<= 30 feet) lots
- If urban lot split,
§ No flag lots if adjacent to an alley, corner, on through lot
§ Minimum lot width is 20 feet
§ Must demonstrate access to the public right-of-way in perpetuity
Application Fees
State law authorizes public agencies to charge fees to recover the costs of processing applications. The initial development of application materials, review processes, and staff training are absorbed into overhead costs. However, the costs of staff time to review and process each individual application may be borne by the applicant. Staff estimates each SB 9 project would take approximately four hours to review, including correspondence with applicants, review of plans in accordance with regulations, preparation of plan review comments, and processing of approval documents, including covenants. At the Associate Planner fully-burdened hourly rate at $143.01, this cost comes to $572.04. Staff proposes a fee of $572 for SB 9 Development Review, as detailed in the accompanying fee resolution. This fee is in addition to other applicable fees, such as the associated Records Retention Fees and Technology Surcharge, and building plan check fees.
POLICY ALTERNATIVES:
ALTERNATIVE #1: Take No Action. Beginning January 1, 2022, staff would implement the SB 9 regulations as written and implement applicable Municipal Code regulations.
ALTERNATIVE #2: Adopt an Interim Zoning Ordinance on an Urgency Ordinance and Adopt Fee Resolution. While this option would still mandate that City staff carry out the provisions in SB 9, the interim zoning ordinance would provide improved specificity to the regulations and ensure long-term compliance with SB 9. The adoption of an interim zoning ordinance as an urgency ordinance prevents unintended consequences of relying solely on State law on January 1, 2022, when SB 9 takes effect. An interim zoning ordinance would enable reassurance that the long-term operations of the parcels or units created by SB 9 would remain as approved, providing protection to the City, and surrounding properties.
Four Councilmember votes in favor are required for an urgency ordinance. If adopted, the interim zoning ordinance would have a term of 45 days, with an expiration date of February 4, 2022. The interim zoning ordinance may be extended for 10 months and 15 days. Government Code Section 65858(d) requires that 10 days prior to the expiration or extension of any interim zoning ordinance, the City Council must issue a written report describing the measures taken to alleviate the condition which led to the adoption of the ordinance. If the Council adopts the draft ordinance, staff intends to present a 10-day alleviation measures report to the City Council on January 18, 2022, and schedule a public hearing to consider a 10 month 15 day extension ordinance for February 1, 2022.
PUBLIC OUTREACH:
While additional public notice beyond Brown Act requirements is not required, staff will provide updated application materials and a description of the SB 9 application process on the City’s website prior to January 1, 2022.
ENVIRONMENTAL REVIEW:
This Ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (“CEQA”), the State CEQA Guidelines, and the environmental regulations of the City. The City Council hereby finds and determines that the Ordinance is exempt from the CEQA pursuant to Government Code Section 65852.21(j) effective January 1, 2022. Furthermore, this Ordinance is exempt from CEQA based on the following reasons. This Ordinance is not a project within the meaning of Section 15378 of the State CEQA Guidelines, because it has no potential for resulting in physical change in the environment, directly or ultimately. This Ordinance is categorically exempt from CEQA under Section 15308 of the CEQA Guidelines as a regulatory action taken by the City pursuant to its police power and in accordance with Government Code Section 65858 to assure maintenance and protection of the environment pending the evaluation and adoption of contemplated local legislation, regulation and policies. This Ordinance is not subject to CEQA under the general rule in CEQA Guidelines Section 15061(b)(3) that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Any development that would be contemplated under this Ordinance must be treated ministerially, and any such projects would be exempt from the environmental review requirements. For the reasons set forth herein above, it can be seen with certainty that there is no possibility that this Ordinance will have a significant effect on the environment.
Pursuant to Section 15273 of the State CEQA Guidelines, CEQA does not apply to the establishment of a fee to meet operating expenses.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary, and has approved as to form the draft ordinance.
ATTACHMENTS:
1. Urgency Ordinance No. 21-0009-U
2. Resolution No. 21-0120
3. Senate Bill 9
4. Senate Bill 10
5. PowerPoint Presentation