BILL ANALYSIS Ó SENATE COMMITTEE ON GOVERNANCE AND FINANCE Senator Robert M. Hertzberg, Chair 2015 - 2016 Regular ------------------------------------------------------------------ |Bill No: |SB 1069 |Hearing |4/20/16 | | | |Date: | | |----------+---------------------------------+-----------+---------| |Author: |Wieckowski |Tax Levy: |No | |----------+---------------------------------+-----------+---------| |Version: |4/13/16 |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant|Favorini-Csorba | |: | | ----------------------------------------------------------------- Land use: zoning Establishes required components and maximum standards for local ordinances that permit accessory dwelling units. Background Land Use Regulation. The California Constitution allows a city to "make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws." It is from this fundamental power (commonly called the police power) that local governments derive their authority to regulate behavior to preserve the health, safety, and welfare of the public-including land use authority. Local governments use their police power to enact zoning ordinances that shape development, including setting maximum densities for housing units, minimum numbers of required parking spaces, and setbacks to preserve privacy. These ordinances can also include conditions to ensure fire safety and aesthetics, or to address particular site-specific considerations. Some local ordinances provide "ministerial" processes for approving projects that are permitted "by right"-the zoning ordinance clearly states that a particular use is allowable, and local government does not have any discretion regarding approval of the permit if the application is complete. Local governments have two options for providing landowners with relief from SB 1069 (Wieckowski) 4/13/16 Page 2 of ? zoning ordinances that might otherwise prohibit or restrict a particular land use: variances and conditional use permits. A variance may be granted to alleviate a unique hardship on a property owner because of the way a generally-applicable zoning ordinance affects a particular parcel, and a conditional use permit allows a land use that is not authorized by right in a zoning ordinance, but may be authorized if the property owner takes certain steps, such as to mitigate the potential impacts of the land use. Both of these processes require hearings by the local zoning board and public notice. Second Units. The Legislature has long identified second units, also known as in-law apartments or "granny flats," as a valuable form of housing for family members, students, the elderly, in-home health care providers, the disabled, and others, at below market prices within existing neighborhoods. In 1982, the Legislature first provided a framework for local governments to enact ordinances that permit the construction of second units, while preserving local government flexibility to regulate the units as necessary. When fewer second units than anticipated were developed, in 2002 the Legislature significantly amended the second unit law to address some of the barriers that property owners encountered while trying to develop second units (AB 1866, Wright, 2002). Currently under the second unit law, a local government can adopt an ordinance that allows the creation of second units in single-family and multi-family residential zones. The ordinance can regulate any of the following aspects of second units: (1) designate areas within the jurisdiction where accessory dwelling units will be permitted; (2) impose standards on the units regarding parking, height, setback, maximum size, and potential adverse impacts on historic places; and (3) specify that the units do not exceed the allowed density for the lot and are consistent with the general plan and zoning designation for the lot. A local agency may not adopt an ordinance that entirely prohibits second units unless it makes specific findings regarding adverse impacts from the units. A local agency that has an ordinance must consider the application for a second unit ministerially, without discretionary review or hearing. If the local agency doesn't have an ordinance that is consistent with the second unit law, it must ministerially consider the application within 120 days SB 1069 (Wieckowski) 4/13/16 Page 3 of ? of receiving the application, unless it adopts an ordinance within that timeframe. Local agencies must also grant a variance or conditional use permit for the creation of a second unit that complies with all of the following requirements: The unit is not intended for sale and may be rented. The lot is zoned for single-family or multifamily use. The second unit is either attached to the existing dwelling and located within the living area or detached but located on the same lot The increased floor area does not exceed 30 percent of the floor area of the existing residence or 1,200 square feet Compliance with other generally applicable zoning requirements and building permits that apply to detached dwellings. The unit is approved by the local health officer if a private sewage disposal system is used. The second unit law also limits the parking requirements that local governments may impose to one parking space per unit or bedroom. However, a local government may require higher parking ratios if it finds that the additional parking requirements are directly related to the use of the second unit and are consistent with requirements for existing residences. These parking requirements may be met by off-street parking or tandem parking in an existing driveway unless the local government finds that there are specific site, topographical, or fire and life safety conditions. Local Government Limitations on Second Units. Despite state efforts to encourage second units, many local governments have passed ordinances that constrain their construction. A 2012 report by the Center for Community Innovation at the University of California Berkeley found that there is a substantial market for second units in the San Francisco Bay Area, but that many cities introduce obstacles such as onerous parking requirements, SB 1069 (Wieckowski) 4/13/16 Page 4 of ? minimum lot sizes, and setbacks that preclude the units from being built. Conversely, the city of Santa Cruz saw its second unit production triple following efforts that liberalized its second unit ordinance and made other changes to encourage construction. Some stakeholders want to remove impediments to second unit development contained in local government ordinances. Proposed Law Senate Bill 1069 renames second units as "accessory dwelling units" throughout state law and establishes required components of local ordinances that permit accessory dwelling units. Specifically, it requires local ordinances on second units to: (1) designate areas within the jurisdiction where accessory dwelling units will be permitted; (2) impose standards on the units regarding parking, height, setback, maximum size, and potential adverse impacts on historic places; and (3) specify that the units do not exceed the allowed density for the lot and are consistent with the general plan and zoning designation for the lot. SB 1069 repeals the ability of local governments to enact ordinances that totally prohibit accessory dwelling units. It also limits the ability of cities and counties to impose certain standards on accessory dwelling units. SB 1069 prohibits local agencies from imposing parking standards on units that meet any of the following conditions: The unit is located within one-half mile of public transit or shopping. The unit is located within an architecturally and historically significant historic district. The unit is part of the existing primary residence. When on-street parking permits are required, but not offered to the occupant of the unit. SB 1069 (Wieckowski) 4/13/16 Page 5 of ? When there is a car share vehicle located within one block of the accessory dwelling unit. SB 1069 also prohibits local governments from requiring more than one parking space per unit or bedroom and authorizes the use of tandem parking in an existing driveway to meet this requirement. It also only allows local governments to prohibit off-street parking in setback areas or as tandem parking based on fire and life safety concerns. SB 1069 requires permits for accessory dwelling units to be ministerially approved or disapproved within 90 days of receipt of the application, regardless of whether the local agency has an ordinance governing these units. SB 1069 also mandates ministerial approval of accessory dwelling units that, under existing law, must be granted a variance or special use permit, and increases the size thresholds for approval of attached accessory dwelling units to 50 percent of the existing living area. A local ordinance cannot prohibit an accessory dwelling unit or efficiency unit of at least 500 feet on the basis of the size of the unit or the existing residence. SB 1069 also requires, notwithstanding other provisions of second unit law, ministerial approval of a building permit for any accessory dwelling unit if the unit is within the existing residence or an existing accessory structure and it provides independent exterior access and setbacks sufficient for fire safety. SB 1069 also prohibits local agencies from considering accessory dwelling units as new residential units for the purposes of calculating utility connection fees, including water or sewer service. Local agencies also may not require sprinklers in an accessory dwelling unit if not required for the existing residence. State Revenue Impact No estimate. SB 1069 (Wieckowski) 4/13/16 Page 6 of ? Comments 1. Purpose of the bill . California continues to face a housing affordability crisis, despite changes to state housing element law, incentives for infill development and high density developments, and other state laws intended to allow for the construction of new, affordable housing. Accessory dwelling units provide one option for increasing density while avoiding some of the impacts associated with larger, high density projects such as multifamily housing. These units provide older Californians with an additional revenue stream and also promote infill development. To that end, in 2002 the Legislature encouraged local governments to adopt ordinances providing for the approval of accessory dwelling units. However, some local governments have placed onerous requirements on individuals that want to construct these units on their property, such as parking requirements that can be expensive or physically impossible to achieve, lengthy permitting processes that require variances, minimum lot sizes, and even sprinkler installation. SB 1069 seeks to streamline the process for property owners to develop accessory dwelling units by requiring local agencies to ministerially permit them, establishing commonsense limits on parking requirements, and preventing water and sewer agencies from charging unnecessary connection fees. SB 1069 takes an important step towards making affordable housing available to the millions of Californians who need it. 2. Home rule . Local governments must balance competing priorities when determining the conditions attached to the development of accessory dwelling units. Cities must look at the potential impacts on the community that result from these units: impaired neighborhood character, spillover effects on nearby homes and businesses due to inadequate parking, and loss of privacy for existing homeowners. Some local governments have adopted more involved processes for permitting second units to allow for consideration of these important factors. SB 1069 would prevent local governments from considering these impacts by requiring ministerial permits for many accessory dwelling units. Without some discretion, elected local leaders will be unable to weigh the tradeoffs between enhanced density that accessory dwelling units may provide and any community problems they create. SB 1069 (Wieckowski) 4/13/16 Page 7 of ? 3. Bigger problems . While local zoning ordinances that limit the construction of accessory dwelling units may contribute somewhat to housing affordability problems in California, there are larger issues that drive local governments to adopt these kind of rules. Proposition 13 encourages local governments to prefer commercial development over residential development because commercial development provides greater revenue while consuming fewer costly services. The high cost of housing and the intensity of community involvement in land use decisions provide existing residents with strong incentives-and the means-to object to new development that might lower housing prices for existing units. SB 1069 proposes a solution to add density by relaxing restrictions on accessory dwelling units, but enacting a more comprehensive fix to the incentives that local governments face could obviate the need for the state to intervene on these local matters. 4. Yes Minister . Existing second unit law only requires approval of second units that meet a lengthy list of criteria, including compliance with zoning requirements and building codes. SB 1069 requires a local agency to ministerially approve a building permit for any accessory dwelling unit that is within an existing structure and meets only the barest of criteria for fire safety and access. This departs significantly from existing law and creates large loopholes for the construction of potentially unsafe and unsustainable residences. The Committee may wish to consider amending SB 1069 to eliminate this provision. 5. Water under the bridge ? Water retailers and sanitation agencies levy connection fees to ensure that a new development pays for the costs that it imposes on the water system, such as to maintain water pressure for firefighting or expand wastewater treatment capacity. These fees are a key part of these agencies' rate structures-monthly water and sewer bills don't entirely fund an agency's operations. However, under SB 1069, accessory dwelling units cannot be considered new residential uses for the purposes of calculating private or public utility connection fees. The cumulative impact of thousands of new units on a water or sewer system could create financial strains for those agencies, necessitating rate hikes on existing customers that have already paid their fair share of the water system's costs. The Committee may wish to consider amending SB 1069 to ensure that individuals that construct new accessory SB 1069 (Wieckowski) 4/13/16 Page 8 of ? dwelling units pay the full cost of their water and sewer services. 6. Who benefits ? SB 1069 intends to streamline the development of accessory dwelling units in order to increase housing density, create more affordable housing, and provide an income stream to elderly homeowners. Yet there may be side effects to this liberalization that undermine some of these goals. Local governments have been struggling to develop enforceable ordinances that regulate the use of residential housing for short-term rentals through online platforms such as AirBNB. These rentals can impose some of the same consequences on a neighborhood as commercial lodging, such as increased traffic. In addition, some studies have shown that short-term rentals decrease housing stock, potentially increasing housing costs. SB 1069 may simply encourage the construction of quasi-commercial accessory dwelling units solely for the purpose of short-term rentals. Yet SB 1069 potentially prohibits a local government from placing conditions on a permit to ensure that a unit is used for long-term rental. The Committee may wish to consider amending SB 1069 to specifically authorize a city or county to include such conditions in its accessory dwelling unit ordinance. 7. Technical amendment . SB 1069 deletes a provision of existing law that states that a local government is not required to adopt or amend an ordinance for the creation of section units (65852.2(a)(3)), but leaves a similar provision in place in a related subdivision (65852.2(b)(4)). In order to ensure that the bill is consistent, the Committee may wish to consider amending SB 1069 to delete this contradictory provision. 8. Incoming ! Prior to the arrival of SB 1069 in this committee, it must pass the Senate Committee on Transportation and Housing at its April 19, 2016 hearing. 9. Mandate . The California Constitution generally requires the state to reimburse local agencies for their costs when the state imposes new programs or additional duties on them. According to the Legislative Counsel's Office, SB 1069 creates a new state-mandated local program. But this bill disclaims the state's responsibility for reimbursing local agencies by including findings and declarations that local agencies may levy fees to cover the costs of the program. SB 1069 (Wieckowski) 4/13/16 Page 9 of ? 10. Related legislation . Two other bills relating to second units have been introduced this session. SB 2299 (Bloom) restricts the standards local governments may impose on second units by prohibiting imposition of parking requirements on second units within a half-mile of transit or shopping, constraining the setbacks that local governments may require, and repealing ability to prohibit second units. SB 2406 (Thurmond) allows local agencies to adopt an ordinance that authorizes the construction of "junior accessory dwelling units" of 500 square feet or less and includes standards that local agencies may adopt regarding those units. Support and Opposition (4/14/16) Support : Bay Area Council (sponsor); AARP; American Planning Association of California; Bay Area Building Industry Association; Bishop Ranch; Blue Shield of California; Bridge Housing; California Association of Realtors; California Building Industry Association; California Renters Legal Advocacy and Education Fund; Center for Creative Land Recycling; Chase Communications; Colliers International; Cushman & Wakefield; East Bay Leadership Council; Emerald Fund; Facebook; Hanson Bridgett; HKS; Joint Venture Silicon Valley Network; Karen Chappelle, Professor of City and Regional Planning, UC Berkeley; Lennar Urban; MacKenzie Communications, Inc.; Manatt; Marvell; McKinsey & Company; Nehemiah Corporation of America; New Avenue; Nibbi; Nonprofit Housing Association of California; North Bay Leadership Council; PLANT; Polaris Pacific; Rhoades Planning Group; Richard Rosenberg, Chairman and CEO (RET.) Bank of America; Reuben, Junius & Rose, LLP; San Francisco Housing Action Coalition; San Mateo County Economic Development Association; SPUR; SVAngel; SV@Home; TechCU; Virgin America; Webcor Builders. Opposition : California State Association of Counties. SB 1069 (Wieckowski) 4/13/16 Page 10 of ? -- END --