BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON GOVERNANCE AND FINANCE
                         Senator Robert M. Hertzberg, Chair
                                2015 - 2016  Regular 

                              
          
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          |Bill No:  |SB 1069                          |Hearing    |4/20/16  |
          |          |                                 |Date:      |         |
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          |Author:   |Wieckowski                       |Tax Levy:  |No       |
          |----------+---------------------------------+-----------+---------|
          |Version:  |4/13/16                          |Fiscal:    |Yes      |
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          |Consultant|Favorini-Csorba                                       |
          |:         |                                                      |
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                                   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  







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          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  








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          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,  








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          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.









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                 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.


           









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          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.









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          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  








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          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. 








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          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. 










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