The Teeth! Consequences of Housing Element non-compliance

Cities are reeling from their new, higher housing allocations. Some cities are saying that they can’t possibly zone for their new allocation. [For potentially over 100 cities that have voter passed growth controls, they may be right, more on that in a future post].

What are the consequences for a city that is unable to pass a housing element, or unable to get HCD to certify their housing element? CLICK HERE TO FIND OUT and share this easy to understand reference with whoever you think needs to see it.

The most well known, and immediate consequence is that the city will no longer qualify for several state and even federal grant programs. This consequence is immediate. No lawsuit necessary. By not being certified they are automatically disqualified, or else they may lose points on their applications for funding.

The least well known consequence, but most exciting for YIMBYs, is that (per the HAA) if a city does not have a certified housing element, the city has to approve ANY proposed housing development that includes 20% low income units, irrespective of the zoning or general plan designation (the tenant protecting demolition controls in Section 66300(d) still apply). You read that right, yes, it is exactly as epic as it sounds.

Watch this space for our next blog post, which will list and discuss the 100 or so cities that are going to have the hardest time passing a certified housing element, and few dozen cities that currently don’t have a certified housing element.

Happy Purim! Happy Lunar New Year!
Have a great weekend.

Links to relevant resources:
California Code, Government Code - GOV § 65755
2015 Memo prepared for Los Gatos’ Housing Element Advisory Board on the consequences of non-compliance
2013 list of Housing Element Litigation results prepared for Menlo Park by Goldfarb & Lipman

18 month vacation from variances, for certain projects in San Francisco.

On January 22nd, Supervisor Peskin introduced and passed an emergency zoning ordinance that would exempt proposed residential developments that meet certain conditions from variances and height limits. This emergency ordinance lasts 18 months. The zoning change applies in the RC, RM and RTO districts, excluding RTO-M (lots that have form based zoning). Here is a map that shows what lots are affected: 

(Map Credit, Robert Fruchtman: https://twitter.com/_fruchtose/status/1347632079777849345/photo/1)

Under the new rule, any project in these districts that doesn’t maximize density has to have a Conditional Use Permit. In addition, any project that doesn’t tear down existing housing, maximizes density and whose units are each less than 2000 sq ft that would ordinarily need a variance to achieve the maximum density, now no longer requires a variance. 

Bypassing variances will allow project sponsors to build larger apartment buildings on smaller lots, cover more of the lot, build to the edge of the lot, avoiding commonly required setbacks. It will exempt them from providing private open space and give greater flexibility in choosing what areas apartment windows will look out onto. In short, all of the subjective and aesthetic regulations about building size and location on a lot will be stripped out, leaving only the regulations that protect health and safety. 

In addition, based on the text of the law, if a height limit increase would ordinarily be needed to accomodate the maximum density, the proposed project would also automatically get the necessary height increase. 

“FURTHER RESOLVED, That if existing lot conditions or form-based restrictions on development (e.g., height, bulk, rear yard requirements) are such that a proposed project cannot maximize density without seeking a variance or subdividing existing units on the lot, and while adhering to the minimum unit size requirements set forth in Planning Code, Section 206.3, Conditional Use Authorization under Planning Code, Section 303 shall not be required if a proposed project increases density on a subject lot, does not include any single unit greater than 2000 square feet in size, and would not be subject to Conditional Use Authorization under any other provision of the Planning Code;”

https://sfgov.legistar.com/View.ashx?M=F&ID=9053989&GUID=3ACFE8AA-FE29-4F76-B542-708B413B061A

This zoning change didn't go through the ordinary process. It wasn't heard before the planning commission, there was no staff report written by the planning department. It had one hearing at the BoS land use committee and then went straight to the Board of Supervisors. We strongly advise property owners to act as soon as possible. When the emergency ordinance expires in 18 months, it is unlikely that it will be extended. 

The public comment at the land use subcommittee was almost uniformly negative. Out of about ten commentators, only one spoke in favor. The public commenters, most of them YIMBYs, spoke out against the legislation because although it facilitates building more housing, it does not apply city-wide. Instead, it applies mostly in neighborhoods that are already heavi targeted for development, including the Mission District and Chinatown. YIMBY commentators averred that the fair and progressive way of achieving the goal of the legislation - promoting more multifamily development and discouraging large single family homes - would be to rezone the single family neighborhoods in San Francisco to become multifamily, and to allow this legislation to apply city-wide. 

Keep Housing Permitting Going!

Governor Newsom’s Covid-19 shelter in place order recognized housing as essential infrastructure and therefore explicitly allowed construction to go forward. However, the California League of Cities, is advocating for permission to delay housing permitting for the duration of the Covid-19 emergency orders. Here is their letter to Governor Newsom making this request.

We oppose this request. Because housing is essential infractructure, every part of the housing production process should continue during the state of emergency. It doesn’t make sense for different parts of the pipeline to operate under different rules. Moreover, planners can work from home, so there is no public health reason to arrest housing permitting.

Read our coalition letter here. We sent this April 1. If you would like to sign onto this letter, email sonja@yimbylaw.org.

A Win for Housing in Clayton

We are happy to announce that, last week, Yimby Law’s latest effort has resulted in the approval of 81 units of senior housing in Clayton. The project was denied by the Clayton Planning Commission in early 2020 but was successful on appeal with the Clayton City Council voting 3-2 in favor of granting the project permits. This new housing will be an important addition for a city that has struggled to add new housing supply as its population ages.

Clayton is a small city of 11,076 people that sits in the shadow of Mount Diablo, just Southeast of Concord. Even compared to other cities in the far east bay Clayton has a relatively old population. Clayton is, however, very similar to other cities in the region in that it is composed of primarily single-family home neighborhoods with a small downtown core. For these reasons, a senior specific housing development right next to the downtown commercial area makes a ton of sense in Clayton. Not only does it provide new, high quality accessible units it also locates residents closer to the city center and reduces the need for car trips.

Unsurprisingly, many of the project’s neighbors in Clayton were not particularly enthused by the proposed development. They felt that the project was too large and inappropriate for the area. The project is taking advantage of the State Density Bonus law to add more units and so some neighbors asserted that the city should not honor state law and restrict the number of units that could be built on the site.

In the initial planning commission meeting for the final version of the project commissioners expressed concerns about the quantity and type of parking that the project committed to provide. Commissioners felt that the project should be required to provide additional parking and fewer compact-car spaces. The reasoning for this was that neither the city, the developer, or the independent third party contracted to study the project could have possibly adequately assessed the amount of parking and car-use the project would require. This is ridiculous on its face. Commissioners also felt that the city had improperly implemented the State Density Bonus Law by calculating the density bonus for the whole project rather than on a building by building basis. Both these concerns were dismissed by city staff as uninformed and improper grounds for denial.

Despite this, at the next Planning Commission meeting on the project the Commission adopted findings of denial, citing safety concerns relating to traffic to justify denying the general plan and zoning compliant project. By this point we had already submitted several letters notifying the Commissioners of their responsibilities under the Housing Accountability Act. They were aware enough of requirements to attempt to couch their denial in safety concerns but not enough to think through the potential strength of those arguments in a lawsuit. Were this case to progress to a lawsuit we are very confident we would prevail due to the lack of objective findings in the finding for denial approved by the Planning Commission.

Thankfully, the City Council saw through the neighbors’ opposition and were very cognizant of the legal liability the city could face if they denied this project. Several of the City Councilmembers were very well-informed on the legal issues facing the city and were able to clearly enumerate them to their colleagues and the public. Ultimately, though two of the City Councilmembers were opposed to the project three of them voted for it, thereby ensuring the Planning Commission’s denial was overruled and the project was approved.

This is a fantastic victory for us. We were prepared to file suit in the event that the project was ultimately denied and we successfully conveyed that to the city. They took our threat seriously and understood the consequences well enough that they were willing to approve the project despite significant opposition from neighbors. This is exactly how our model is supposed to work and we look forward to many future successes along these same lines.

Summarizing 2020's Most Prominent New Housing Bill: SB 330

SB 330, one of this legislative session’s most prominent housing bills, took effect on January 1st, 2020. The bill represents an important effort to reform the legal processes around housing development in California and imposes a variety of new standards on permitting bodies. These changes can be broken down into four categories: 

1. “No net loss” downzoning prohibitions, 

2. Objective standard requirements, 

3. Tenant Protecting Demolition Controls 

4. Timeline streamlining. 

No Net Loss and Anti-Downzoning

The first category of changes, the no net loss requirement and anti-downzoning provision, is the portion of the law that has gotten the most attention thus far. This section prohibits cities from reducing the intensity of residential use permitted for a given site or zone unless the city replaces the lost residential capacity elsewhere. Importantly, this applies to both zoning and general plan changes made by a city through the normal legislative process, and also to changes made through electoral initiatives. Moratoriums are expressly prohibited as are any annual numerical caps on residential units.  

Objective Standard Requirements

The second category of changes involves the strengthening of existing state law requiring objective design standards for housing developments. Currently, the Housing Accountability Act  requires that for general plan compliant housing projects, only violation of objective standards can be used as a valid grounds for denial.* SB 330 further enshrines this principle by explicitly prohibiting cities from enacting any new design standards that are not objective, or enforcing existing design standards that are not objective. Cities may continue to enforce objective design standards passed before January 1, 2020, but only for projects that require a general plan amendment. 

Tenant Protecting Demolition Controls

The third major change made by SB 330 is the institution of limited demolition controls and replacement requirements for certain protected units. Protected units includes a variety of different scenarios: rent controlled units, units occupied by low income tenants, units with low-income rent levels, units where an Ellis Act eviction has taken place in the last 10 years, and units with BMR rents instituted as part of a deed restriction or covenant. Developers are required to replace all units fitting these descriptions as part of any development on a site with existing housing. The previous tenants are entitled to return to the replacement units at their old rent, and are entitled to relocation costs. You can read more about replacement requirements here and you can read more about how tenants can claim their right to return here.

Timeline Streamlining

The fourth category of changes made by the bill relate to permitting timelines and streamlining. There are two major provisions that are important in this regard. 

The first requires that the effective date for application completeness for any given project is the day the application is submitted. Previously, planners had 30 days to consider an application before deeming it complete or incomplete. Now, planners still have 30 days to determine whether an  application is complete, but the effective date of certification is the day the application was submitted rather than the day the determination was made. In other words, SB 330 makes the application completeness certification retroactive. This is important because once a project is deemed complete, it is subject only to design and zoning standards in place at that time. This protects projects from cities passing new restrictions designed to obstruct a specific proposed development. .

The other provision relating to streamlining is a requirement that no project will be subject to more than five public hearings. This provision only applies to general plan and zoning compliant projects. This will  prevent cities from subjecting projects to endless hearings or continuances as a way of killing projects through attrition. There really is no reason a general plan compliant project should require more than five public hearings. Importantly, a continued hearing counts as a new hearing.The law also requires that affordable projects in particular must be approved or disapproved within 60 days of a certified EIR. This is slightly shorter than the current 90 days mandated for all projects in the Permit Streamlining Act.

All of the new rules in SB 330 will require cities to carefully examine their existing policies and identify ways in which their permitting processes no longer comply with state law. Enforcing SB 330 is going to be a group effort. We need YIMBY groups all over the state to make sure that their planning commissions and city councils aren’t enforcing subjective standards, downzoning, killing projects with too many continuances, or letting developers tear down existing housing without replacing it at the old rent.

Protecting SB 35 in Lost Altos

SB 35, passed in 2017, has had a successful few years. The permitting streamlining bill has been utilized by developers in a variety of cities to compel ministerial permitting processes for projects that might otherwise face lengthy permitting battles. It is crucial therefore, that we work to protect this law from cities that seek to water it down and narrow its scope.

With this in mind we continue to be involved in the 40 North Main St. Case in Los Altos. The case concerns a development in Downtown Los Altos that applied for ministerial approval under SB 35. The Los Altos Planning Department refused to approve the project, citing a variety of alleged non-conformities and issues. The developer disagreed with these assessments and sued after it became clear that the city was not properly following the protocol laid out in SB 35.

The first point of contention between the developer and the city, which has since been resolved in favor of the developer, is a confusion over which of the two affordability thresholds in SB 35 apply to this project and to Los Altos more generally. Due to a failure to submit an annual housing report to HCD on the part of the city, the applicable percentage at the time of the application was 10%. The planning staff in Los Altos did not realize this at the time and so in their initial response to the developer claimed that the project should be subject to the 50% affordable units threshold. They have since realized and admitted their mistake.

The second point of contention is over the underground parking structure proposed as part of the project. To save space, the developer proposes to use a lift system. The city alleges that this is a violation of the their rules governing parking entrance and egress. The evidence they cite to make this assertion is a single diagram buried in their building code that sets out guidelines for parking ramps. The city believes that this diagram constitutes a requirement that developers must use parking ramps and cannot use parking lifts without permission. Other projects in Los Altos have been allowed to use parking lifts without needing any additional permissions or permits.

These first two points of contention were the only ones brought up to the developer within the 60 days allowed by law. The city did also raise concerns, outside of the legally allowed time period, about the number of density bonus units in the project and the percentage of the project devoted to non-residential space.

In regards to the square footage concerns, the city’s allegation that the residential parking cannot be considered residential square footage is ridiculous. This has been confirmed by HCD who agrees that under any reasonable interpretation this project is at least two thirds residential uses by square footage. Mixed-use SB 35 projects are common due to the need to subsidize the affordable units in some way. This project is not exceptional in that regard.

Now that the case is fully underway, the city has added some additional arguments to its defense. They claim that the lawsuit was filed too late and that therefore the developer is not entitled to any legal remedy. This rests on the idea that the developer incorrectly waited until after an appeal to the city council before filing their lawsuit. The City alleges that the appeal they directed the developer to submit and participate in was unlawful. They further allege that the developer and their lawyers should have known that the city was acting unlawfully and should have ignored the city and filed their lawsuit before exhausting all possible remedies. This seems like a particularly weak legal argument and thus far there has been no indication that the judge in the case takes this seriously.

Thus far, the judge has seemed sympathetic to the developer’s arguments and has not accepted any of the city’s requests to throw out the lawsuit on technical grounds. After a hearing last week both the lawyers for the city and the lawyers for the developer have been directed to prepare additional briefings for an additional hearing at a future date.