BILL ANALYSIS Ó SB 1069 Page 1 Date of Hearing: June 15, 2016 ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT David Chiu, Chair SB 1069 (Wieckowski) - As Amended April 26, 2016 SENATE VOTE: 29-3 SUBJECT: Land use: zoning SUMMARY: Establishes required components and maximum standards for local ordinances that permit accessory dwelling units (ADUs), and revises requirements for the approval or disapproval of an ADU application when a local agency has not adopted an ordinance. Specifically, this bill: 1)Makes legislative findings and declarations regarding the importance of ADUs as an essential element of the state's housing supply. 2)Replaces "second units" with "ADUs" throughout the chapter. SB 1069 Page 2 3)Requires a local agency, in its ADU ordinance, to do the following: a) Designate areas within the jurisdiction where ADUs may be permitted, which may be based upon criteria including but not limited to the adequacy of water and sewer services and the impact of ADUs on traffic flow and public safety. b) Impose standards on ADUs including but not limited to parking, height, setback, lot coverage, architectural review, and maximum size of the unit. A local agency may not impose parking standards in the following instances: i) The ADU is located within mile of public transit or shopping; ii) The ADU is located within an architecturally and historically significant historic district; iii) The ADU is part of an existing primary residence; iv) When on-street parking permits are required, but not offered to the occupant of the ADU; or v) When there is a car-share vehicle located within one block of the ADU. c) Provide that ADUs do not exceed the allowable density for the lot upon which the second unit is located, and that the ADU is consistent with the existing general plan and SB 1069 Page 3 zoning designation for the lot. 4)Requires a local agency with an ADU ordinance to consider permits within 90 days of submittal of a complete building permit application. 5)Provides that a local agency that has not adopted an ADU ordinance shall approve or disapprove a permit application ministerially without discretionary review, unless it adopts an ordinance within 90 days after receiving the application. 6)Requires a local agency that has not adopted an ADU ordinance to ministerially approve the creation of an ADU if the ADU meets the following requirements: a) The unit is not intended for sale separate from the primary residence and may be rented. b) The lot is zoned for single-family or multifamily use. c) The lot contains an existing single-family dwelling. d) The ADU is either attached to the existing dwelling and located within the living area of the existing dwelling or detached and located on the same lot as the existing dwelling. e) The increased floor area of an attached ADU shall not exceed 50% of the existing living area. SB 1069 Page 4 f) The total area floor space of the ADU shall not exceed 1,200 square feet. g) Requirements relating to height, setback, lot coverage, architectural review, site plan review, fees, charges, and other zoning requirements generally applicable to residential construction in the zone in which the property is located. h) Local building code requirements, that apply to detached dwellings as appropriate. i) Approved by the local health officer where a private sewage disposal system is being used. 7)Removes the exemption for a local agency to adopt an ADU ordinance upon findings that the ordinance may limit housing opportunities of the region, and further contains findings that specific adverse impacts on the public health, safety, and welfare would result. 8)Provides that a local agency may establish maximum and minimum unit size requirements for both attached and detached ADUs, however no maximum or minimum size for an ADU, or size based upon a percentage of the existing dwelling unit, shall be established by ordinance for either attached or detached dwellings that does not permit at least a 500-foot ADU or a 500-foot efficiency unit to be constructed in compliance with local development standards. 9)Provides that no additional standards, other than those in this section, shall be utilized or imposed to evaluate proposed ADUs, except that a local agency may require an SB 1069 Page 5 applicant for a permit to be an owner-occupant or that the property be used for rentals of terms longer than 30 days. 10)Removes the provision permitting additional parking upon a finding that additional parking is required related to the use of the ADU and consistent with existing neighborhood standards. 11)States that parking requirements may be provided as tandem parking in an existing driveway. 12)Provides that offstreet parking must be permitted in setback areas in locations determined by the local agency or through tandem parking, unless specific findings are made that parking in setback areas or tandem parking is not feasible based upon fire and life safety conditions. 13)Requires ministerial approval by a local agency for a building permit to create an ADU if the ADU is contained within an existing single-family home, has independent exterior access from the existing residence, and the side and rear setbacks are sufficient for fire safety. ADUs shall not be required to provide fire sprinklers if they are not required for the primary residence. 14) Provides that ADUs shall not be considered new residential uses for the purposes of calculating private or public utility connection fees, including water and sewer service. SB 1069 Page 6 15)Provides that no reimbursement is required because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act. EXISTING LAW: 1)Defines "second unit" as an attached or a detached residential dwelling unit, which provides complete independent living facilities for one or more persons. 2)Provides that a second unit must include permanent provisions for living, sleeping, eating, cooking, and sanitation on the same parcel as the single-family dwelling is situated. 3)Permits a local agency, by ordinance, to provide for the creation of second units in single-family and multifamily residential zones as specified. 4)Requires, if a local agency adopts a second-unit ordinance, that applications be considered ministerially without discretionary review or a hearing. Additionally, nothing may be construed to require a local government to adopt or amend an ordinance regulating the issuance of variances or special-use permits for second units. 5)Requires a local agency that has not adopted a second-unit ordinance to accept and approve or disapprove the application ministerially, without discretionary review or hearing, within 120 days after receiving the application. Requires every local agency to grant a variance or special permit for the creation of a second unit if the second unit complies with all of the SB 1069 Page 7 following: a) The unit is not intended for sale and may be rented. b) The lot is zoned for single-family or multifamily use. c) The lot contains an existing single-family dwelling. d) The second unit is either attached to the existing dwelling and located within the living area of the existing dwelling or detached and located on the same lot as the existing dwelling. e) The increased floor area of an attached second unit shall not exceed 30% of the existing living area. f) The total area floor space shall not exceed 1,200 square feet. g) Requirements relating to height, setback, lot coverage, architectural review, site plan review, fees, charges, and other zoning requirements generally applicable to residential construction in the zone in which the property is located. h) Local building code requirements that apply to detached dwellings. i) The unit is approved by the local health officer where a private sewage disposal system is being used. SB 1069 Page 8 6)Provides that no local agency may adopt an ordinance that totally precludes second units unless the ordinance contains findings and acknowledges that the ordinance may limit housing opportunities of the region, and further contains findings that specific adverse impacts on the public health, safety, and welfare would result. 7)Provides that a local agency may establish maximum and minimum unit size requirements for both attached and detached second units. 8)Establishes the maximum standards that local agencies shall use to evaluate proposed accessory dwelling units on lots zoned for residential use that contain an existing single-family dwelling. No additional standards shall be utilized or imposed, except that a local agency may require an applicant for a permit to be an owner-occupant. 9)Provides that parking requirements shall not exceed one parking space per unit or per bedroom, but that additional parking may be required with a finding that additional parking requirements are directly related to the use of the second unit and consistent with existing neighborhood standards. (Government Code Section 65852.2) FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: Background: ADUs, which are referred to in existing law as SB 1069 Page 9 "second units", are additional living quarters on single-family lots that are independent of the primary dwelling unit. Also known as accessory apartments, accessory dwellings, mother-in-law units, or granny flats, ADUs are either attached or detached to the primary dwelling unit, and provide complete independent living facilities for one or more person. This includes permanent provisions for living, sleeping, eating, cooking, and sanitation. In 2002, AB 1866 (Wright) (Chapter 1062, Statutes of 2002), required local governments to use a ministerial process for approving ADUs, notwithstanding other laws that regulate the issuance of variances or special use permits. A local government may provide for the construction of ADUs by ordinance, and may designate areas where ADUs are allowed, as well as require standards for parking, setback, lot coverage, and maximum size. If a local government has not adopted an ordinance governing ADUs, it must grant a variance or special use permit for the creation of ADUs if the unit complies with requirements specified in statute, including size and zoning restrictions. UC Berkeley ADU study: According to a UC Berkeley study, Yes in My Backyard: Mobilizing the Market for Secondary Units by Karen Chapple, second units are a means to accommodate future growth and encourage infill development in developed neighborhoods. The study, which evaluated five adjacent cities in the East Bay, concluded that there is substantial market of interested homeowners; cities could reduce parking requirements without contributing to parking issues; second units could accommodate future growth and affordable housing; and that scaling up second unit strategy could mean economic and fiscal benefits for cities. Despite existing state law, which requires each city in the state to have a ministerial process for approving second units, the study found that local regulations often impede development. SB 1069 Page 10 Easing these burdens to permit more ADUs could permit a family to rent out the unit (about 49% of the units) or provide housing for a family member (about 51% of the units). In fact, the study found that the average second unit was advertised at a rental rate that makes it affordable to a household earning 62% of the area median income. This bill implements several policy recommendations from this study by easing the most significant barriers to the construction and permitting of ADUs. These changes include: a) Provides alternatives and exceptions to parking requirements, such as the case of an ADU located near public transit or if the ADU is part of an existing dwelling. b) Shortens the review period of an application for an ADU building permit from 120 days to 90 days. c) Increases the size of an ADU from 30% of the existing dwelling to 50%. d) Removes the ability for a local agency to adopt an ordinance that completely precludes the construction of ADUs. e) Requires ministerial approval of an ADU contained within an existing single-family home that has independent access from the existing residence and has rear and side setbacks sufficient for fire safety, and removes the requirement for an ADU to have fire sprinklers if they were not required for the primary residence. SB 1069 Page 11 f) Allows a local agency to require an applicant for a permit to be an owner-occupant or that the property be used for rentals of terms longer than 30 days. Need for this bill: According to the author, "In a 2015 Legislative Analyst's Office report, the Legislature was advised to facilitate the development of significantly more private homes and apartments in California. The lack of housing in California has caused a crisis harming communities and families throughout the state. The average California home currently costs about two and half times the national average home price. A person earning minimum wage must work three full-time jobs in order to afford a two-bedroom unit. In California's more heavily populated metropolitan areas, a minimum wage worker would have to pick up a fourth and fifth job to afford the same two-bedroom unit. Throughout the state, the bottom 25% of income earners spends 67% of their income on housing. The high cost of housing is one of the biggest drivers of institutional and generational poverty cycles and will not be resolved until more housing can be developed, especially close to jobs and schools which is consistent with State SB 375 Climate Change Planning Goals. The Legislative Analyst's Office has advised that it is imperative the Legislature facilitate the development of significantly more housing to address the affordability crisis. "Accessory dwellings provide part of the solution to the SB 1069 Page 12 housing crisis. They are the only source of housing that can be added within a year at an affordable price, in existing developed communities served by infrastructure consistent with SB 375, without public subsidy, and action by the State on a few issues will make this possible for tens of thousands of owners to immediately benefit and help their communities. The importance of ADUs as a critical source of infill housing and the barriers preventing them have been documented in studies from UC Berkeley and UCLA including Yes in My Backyard by Karen Chapple. "SB 1069 proposes a common-sense, cost-effective approach that will allow homeowners to share empty rooms in their homes and property, add incomes to meet family budgets, improve the safety of accessory dwellings, and make good use of existing infill property across California while easing the housing crisis. The Governor supported the bill on page 52 of the May Revision of the 2016 Budget, stating that this bill will increase the state's housing supply without creating a state reimbursable mandate." Arguments in support: Supporters point out that ADUs are one of the only widely supported approaches to get thousands of low cost units on the market fast. They point to studies indicating ADUs cost less to build and rent for less than new market rate housing, thus providing lower cost and low-carbon footprint homes in existing neighborhoods consistent with architectural traditions. The Planning and Conservation League states that building small units on existing residential lots uses land efficiently, and "second-unit residents are more likely to live without a car than the overall population living near transit." Supporters also point out that some cities have already approved legislation to facilitate the development of ADUs, including Berkeley, Oakland, San Francisco and Santa Cruz, and that SB 1069 Page 13 Massachusetts and Hawaii are considering similar legislation. Arguments in opposition: Opponents argue that the bill is so prescriptive that it removes any local land use flexibility and limits the public engagement process in regards to ADUs. Some opponents take issue with prohibiting a local government from imposing parking standards when an ADU is within mile of "public transit". The California Association of Counties (CSAC), which has an oppose unless amended position, suggests, among other things, amending the bill "so that it precludes parking requirements when a second unit is being constructed within half a mile of a high-quality transit stop. It is unreasonable to assume that potential tenants will not need adequate parking that does not impact the existing surrounding community if he/she does not have access to robust transit options." Opponents also point out that, since the bill prohibits an ADU from being considered a new residential unit for purposes of calculating utility connection fees, it could result in rate hikes to existing utility customers. The cumulative impact of these new units on a water or sewer system could create financial strains for utility agencies, which could result in rate hikes on existing customers. Staff comment: Under the current version of this bill, ADUs cannot be considered new residential uses for the purposes of calculating private or public utility connection fees. According to the author, the intent of this provision is not to prohibit any utility fees from being charged on ADUs. Rather, it is to ensure that "some utility and hook-up fees can be SB 1069 Page 14 charged provided that these are calibrated to reflect the actual impact of an accessory dwelling on an existing lot that already has utility service, landscaping, and a primary dwelling." The author states that "many ADUs can be constructed by connecting to existing utilities and will not result in total occupancy greater than the designed density of an otherwise under-occupied single family home. The bill allows local homeowners to hook up to existing utilities directly with meters should they choose to do so in which case they would pay for the hookup. When fees are charged to ADUs for utility connections, the bill does not allow accessory dwellings to be charged fees as if they were an entirely new land use (like a new home on a new lot). The bill does allow fees to be charged which are reasonably related to the impact of the ADU on utility services." The Committee may wish to consider amending this provision to better reflect the author's intent. This bill and AB 2299: AB 2299 (Bloom), which has been referred to the Senate Committee on Transportation and Housing and the Senate Committee on Governance, requires cities to adopt ordinances for the creation of second units, and prohibits those ordinances from imposing parking standards when the second unit is within 1/2 mile of a shopping or transit center, or is within a historic district. It also makes changes to setback and replacement parking provisions. In comparison, SB 1069 does not require cities to adopt an ADU ordinance, but does prohibit cities from imposing parking standards for ADUs that meet certain requirements. This bill also does not include the setback or replacement parking provisions found in AB 2299, but makes several other changes to ADU standards. Both bills repeal a local government's ability to prohibit second units. The Committee may wish to consider how these bills will interact should both become law. SB 1069 Page 15 Committee amendment: According to the author, the intent of this bill is to prohibit a local government, regardless of whether it has adopted an ordinance that provides for the creation of ADUs, from imposing parking standards on ADUs in the following instances: i) The ADU is located within mile of public transit or shopping; ii) The ADU is located within an architecturally and historically significant historic district; iii) The ADU is part of an existing primary residence; iv) When on-street parking permits are required, but not offered to the occupant of the accessory dwelling unit; or v)When there is a car-share vehicle located within one block of the ADU. The Committee may wish to consider making an amendment that will clarify the above provision applies to all local governments, regardless of whether an ordinance providing for the creation of ADUs has been adopted. SB 1069 Page 16 Related legislation: AB 2299 (Bloom): Would require, rather than permit, a local government to adopt an ordinance for the creation of second units in single-family and multifamily residential zones. Would restrict the standards local governments may impose on second units by prohibiting imposition of parking requirements on second units within a half-mile of transit, shopping, or within a historic district, constraining the setbacks that local governments may require, and repealing ability to prohibit second units. This bill has been referred to the Senate Committee on Transportation and Housing and the Senate Committee on Governance and Finance. AB 2406 (Thurmond): Would allow 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. This bill is in the Senate Committee on Transportation and Housing pending hearing. Double referred: If SB 1069 passes this committee, the bill will be referred to the Committee on Local Government. REGISTERED SUPPORT / OPPOSITION: Support Bay Area Council (sponsor) SB 1069 Page 17 AARP American Planning Association of California (if amended) Bay Area Building Industry Association BHV CenterStreet Properties, Inc. Bishop Ranch Blue Shield of California Bridge Housing California Association of Realtors California Building Industry Association California Chamber of Commerce California Council for Affordable Housing California Housing Consortium California Renters Legal Advocacy & Education Fund SB 1069 Page 18 California Rural Legal Assistance Foundation Center for Creative Land Recycling Chase Communications City and County of San Francisco City of Berkeley City of Los Angeles City of Oakland Colliers International Comcast Cushman & Wakefield East Bay Leadership Council Eden Housing Emerald Fund SB 1069 Page 19 Facebook Greenbelt Alliance Greenberg Traurig Hallisey and Johnson Law Hanson Bridgett HKS Architects Housing Trust Silicon Valley Individuals (1) Jennifer Hernández, Holland & Knight Joint Venture Silicon Valley Network Karen Chappelle, Professor, College of Environmental Design, City and Regional Planning, UC Berkeley LA-Más Lennar Urban SB 1069 Page 20 Lenny, Mendonca, McKinsey & Company Lilypad Homes Local Government Control Commission Los Angeles Area Chamber of Commerce MacKenzie Communications, Inc. Main Street Property Services Manatt, Phelps & Phillips LLP Marvell Montezuma Wetlands, LLC Nehemiah Corporation of America New Avenue Homes NHA Advisors Nibbi SB 1069 Page 21 Nonprofit Housing Association of California North Bay Leadership Council Nossaman LLP Oakland Chamber of Commerce Orange County Business Council Paavo Monkkonen Ph.D., Department of Urban Planning, UCLA Pier 39 Planning and Conservation League PLANT Construction Company, L.P. Polaris Pacific Radiant Brands Read Investments Redondo Beach Chamber of Commerce SB 1069 Page 22 Reuben, Junius & Rose, LLP Rhoades Planning Group Richard Rosenberg, Chairman and CEO (RET.) Bank of America San Francisco Chamber of Commerce San Francisco Housing Action Coalition San Mateo County Economic Development Association SARES, REGIS Group Silicon Valley Leadership Group SPUR SV@Home SVAngel TechCU The Home Depot SB 1069 Page 23 The Two Hundred TMG Partners Turner Center for Housing Innovation, UC Berkeley United Parcel Service Virgin America Webcor Builders Western Center on Law & Poverty Opposition Association of California Water Agencies California State Association of Counties (unless amended) City of Angels Camp City of Brentwood SB 1069 Page 24 City of Burbank City of Camarillo City of Clearlake City of Cloverdale City of Commerce City of Daly City City of Dublin City of Goleta City of La Miranda City of Laguna Hills City of Lakeport City of Lakewood City of Lodi SB 1069 Page 25 City of Los Banos City of Manteca City of Merced City of Mill Valley City of Placerville City of Rancho Cucamonga City of Rancho Palo Verdes City of Redding City of Riverbank City of Roseville City of San Carlos City of San Clemente City of San Rafael SB 1069 Page 26 City of South Gate City of Sunnyvale City of Tehama City of Thousand Oaks City of Torrance League of California Cities Ventura Council of Governments Analysis Prepared by:Rebecca Rabovsky / H. & C.D. / (916) 319-2085