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August 14, 2023
Honorable Nancy L. Fineman
Judge of the Superior Court
c/o Bianca Fasuescu
Hall of Justice - 400 County Center; 2nd Floor
Redwood City, CA 94063-1655
Subject: Response of the City of Daly City to the San Mateo County Civil Grand Jury Report “Accessory Dwelling Units: Affordable Housing’s Panacea or Prevarication?”
Dear Judge Fineman,
Thank you for the opportunity to respond to the Grand Jury report entitled “Accessory Dwelling Units:
Affordable Housing’s Panacea or Prevarication?” The City of Daly City’s response to the findings and recommendations of the report are listed below.
Response to Findings:
F1. Due to recent changes in California ADU-related laws, local governments cannot condition ADU permits in San Mateo County on complying with affordability monitoring and verification.
Response: Agree.
F2. San Mateo County and most of its municipalities rely on ADUs to meet their affordable housing commitments in their RHNA-6 plans.
Response: Disagree. The City of Daly City includes ADUs to meet its affordable housing commitment, but it does not rely on it. As indicated in the City’s Housing Element submitted to HCD, of the 4,838 units in the City’s RHNA, the City is projecting only 503 ADUs. The City projects that only about 30% of the City’s Low and Very Low Income Units will be met with ADUs. Additionally, the City has the following programs to help meet our affordable housing goals: rezoning to allow for increased density, use of housing trust funds to support affordable housing developments, an inclusionary housing ordinance requiring below market rate units in market rate developments, and streamlined permitting processes for affordable housing.
F3. Atherton, Hillsborough, Portola Valley, and Woodside rely on ADUs to meet as much as 80 percent of their affordable housing commitments in their RHNA-6 plans.
Response: No comment.
Honorable Nancy L. Fineman - Judge of the Superior Court Response of the City of Daly City to the San Mateo County Civil Grand Jury Report (2023) Page 2
F4. HCD has instructed San Mateo County jurisdictions to monitor and verify future ADU production and affordability every two years but has yet to specify how to verify whether very low-, low- or moderate-income households are occupying the ADUs as planned.
Response: Disagree. The City of Daly City has not received such instruction. For clarity, HCD requires all California jurisdictions report on all housing production.
F5. Other than Brisbane and Redwood City, San Mateo County and its jurisdictions have yet to articulate how they will monitor and verify ADU production or affordability.
Response: Agree. The City of Daly City recently submitted its Housing Element to HCD and is awaiting HCD comments. The City of Daly City committed to provide reasonable ADU monitoring and reporting to HCD’s satisfaction.
F6. Without effective ADU monitoring and verification, it will be impossible to evaluate whether the jurisdictions are meeting their RHNA-6 obligations for low-, very-low, and moderate-income housing units.
Response: Disagree. The RHNA-6 obligation is to plan for housing at different affordability levels; it is not an obligation to ensure that the units are actually built since market forces, outside of the jurisdiction’s control, influence housing production. The jurisdiction has the obligation to remove governmental constraints to facilitate housing production.
F7. ADU affordability and occupancy could be monitored by agencies such as HIP Housing which has proven systems and processes to verify occupancy of deed-restricted rental properties in San Mateo County.
Response: Agree. For a cost, ADU affordability and occupancy could be monitored. The question facing jurisdictions that do not have a high proportion of ADUs in their housing allocations is how much of the limited public funds available should go toward monitoring of a small number of units, or toward efforts that can have a greater impact for more lower-income households.
Response to Recommendations:
R1. San Mateo County and each City should immediately stop using ADUs to meet their State- mandated very low-, low-, and moderate-income housing targets in their Housing Element submissions until they have also proposed an effective monitoring system that verifies how newly developed ADU’s will be used.
Response: The recommendation will not be implemented because it is not warranted or is not reasonable.
The City of Daly City is committed to improving housing affordability and housing conditions in the City and meeting State law. HCD allows a jurisdiction to include pipeline projects, ADUs and the site inventory in its housing allocation. The City of Daly City includes all potential housing types in the Housing Element. The City of Daly City will monitor ADUs to HCD’s satisfaction.
Honorable Nancy L. Fineman - Judge of the Superior Court Response of the City of Daly City to the San Mateo County Civil Grand Jury Report (2023) Page 3
R2. By February 1, 2024, San Mateo County and each City should develop, adopt, and implement a verification system capable of monitoring and verifying how newly developed ADU’s are being used.
Response: The recommendation requires further analysis. The City of Daly City will work with HCD to receive certification of the Housing Element, including responding to HCD’s comment about monitoring all types of housing production, including ADUs. The City has concerns that a verification system of how ADUs are used may act as a constraint and deter prospective homeowners from actually building ADUs.
R3. By February 1, 2024, San Mateo County and each City should develop and adopt incentives for ADU owners which could be offered in exchange for deed restrictions that would include requirements for ADU tenants to participate in independent monitoring.
Response: The recommendation requires further analysis. The City of Daly City will work with HCD to receive certification of the Housing Element, including how to monitor and incentivize all types of housing production, including ADUs, to the extent necessary as determined by HCD, on a timeline that satisfies HCD.
R4. By February 1, 2024, San Mateo County and each City should track the intended use of ADUs – rented or non-rented – during the permitting process and offer incentives in exchange for deed restrictions that require ADUs to be used as rentals.
Response: The recommendation requires further analysis. The City of Daly City is committed to furthering affordable housing. Since ADUs are a relatively small portion of the City’s allocation, and since there are finite resources available to put towards housing, the City reserves the right to focus resources on efforts that will have the greatest impact, within the law. The City of Daly City will work with HCD to receive certification of the Housing Element, including how to monitor and incentivize all housing types, including but not limited to ADUs, in a manner and timeline that satisfies HCD.
R5. By April 1, 2024, San Mateo County and each City should develop and adopt a new ADU affordability distribution formula specific to each jurisdiction to the extent they are used for meeting the very low-, low-, and moderate-income housing requirements in their RHNA housing elements.
Response: The recommendation will not be implemented because it is not warranted or is not reasonable.
The City of Daly City will work with HCD to ensure compliance with housing laws. If HCD accepts the ABAG affordability assumptions for ADUs, then the City of Daly City will utilize those assumptions.
The ABAG assumptions are based on a UC Berkeley study that surveyed thousands of homeowners statewide with repeat mailing and the data was aggregate to reduce the margin of errors. The margin of error would be too large if we are only surveying a dozen or couple of dozen households. There is also no evidence in the data to suggest significant variation from city to city. The recommendations for an affordability distribution of 30/30/30/10 (very low/low/moderate/above-moderate) had a significant cushion built in to ensure cities did not accidentally underproduce the amount of housing needed.
Since ADUs are a relatively small portion of the City’s allocation, and since there are finite resources available to put towards housing, the City reserves the right to focus resources on efforts that will have the greatest impact, within the law.
Honorable Nancy L. Fineman - Judge of the Superior Court Response of the City of Daly City to the San Mateo County Civil Grand Jury Report (2023) Page 4
R6. San Mateo County and each City should consider working together to address Recommendations 2 and 3.
Response: The recommendation requires further analysis. San Mateo County jurisdictions work collaboratively through 21 Elements to develop, adopt, and implement a range of policies and programs in the county, including housing issues. The City of Daly City will work with HCD to ensure compliance with housing laws and is open to working with 21 Elements on potential collaborative efforts to address housing issues such as those raised by the Grand Jury report. Since ADUs are a relatively small portion of the City’s allocation, and since there are finite resources available to put towards housing, the City reserves the right to focus resources on efforts that will have the greatest impact, within the law.
This response was approved by the Daly City City Council at a public meeting on August 14, 2023.
Sincerely,
Raymond A. Buenaventura
Mayor
1 ORDINANCE NO. 1468
AN ORDINANCE OF THE CITY OF DALY CITY AMENDING THE DALY CITY ZONING MAP – REZONING EXISTING PARCEL LOCATED AT 1618 SULLIVAN
AVENUE FROM C-R/O COMMERCIAL RETAIL AND OFFICE TO C-R/O-CC,
COMMERCIAL RETAIL AND OFFICE COMMERCIAL CANNABIS
(Entire Parcel located at 1618 Sullivan Avenue (APN 006-352-120) in Daly City, California, as more particularly described in attached Exhibit “A”)
BE IT ORDAINED by the City Council of the City of Daly City as follows:
SECTION 1:Findings: The City Council of the City of Daly City finds that:
A. Following a public hearing duly and regularly conducted, the Planning Commission of the City of Daly City submitted to this City Council its recommendation with respect to the zoning amendment hereinafter described, accompanied by the report of the findings and a summary of its hearing, whereupon this City Council duly and regularly set this matter for hearing.
B. Due and regular notice of such hearing has been given as required by law and such hearing was regularly held by this City Council on July 24, 2023, all interested persons were heard and any additional evidence presented was received.
C. This City Council finds and declares that the health, safety, morals, and general welfare of the City of Daly City requires that the real property hereinafter described be reclassified as provided herein.
D. This rezoning is consistent with the Daly City General Plan, which designates the subject real property as Commercial Retail/Office- Sullivan Corridor Specific Plan.
SECTION 2: Zoning Reclassification. The zoning as designated upon the “Official Zoning Map” of the City of Daly City, as adopted by Daly City Ordinance 635, and thereafter amended from time to time, is hereby changed as to the parcel or parcels identified on the attached Exhibit “A”, and that in accordance with Title 17 of the Daly City Municipal Code, the zoning for the real property hereinafter described is hereby amended so as to change the zone classification of the property from Commercial Retail/Office (C-R/O) to C-R/O-CC, Commercial Retail and Office, Commercial Cannabis, as such zones are designated and defined by Ordinance 635, Daly City Municipal Code Title 17.
SECTION 3: Publication.This Ordinance shall be published according to law.
SECTION 4: Environmental Determination.The City Council finds, pursuant to Title 14 of the California Code of Regulations, Section 15378, that this Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) in that it is not a project as provided by the Act, in that it does not have a potential for resulting in a detrimental physical change in the environment, directly or ultimately, as provided in Title 14, Section 15378(a), and that it is also exempt under the definition of "project" in Section 15378(b)(3) in that it concern general policy and procedure making.
2 SECTION 5: Severability.If any section, subsection or sentence of this Ordinance is found by a court of competent jurisdiction to be invalid or unlawful, the City Council finds and declares that the remainder of this Ordinance would be and is enforceable and would have been adopted notwithstanding the finding of invalidity as to any section, subsection or sentence.
Introduced this 24th day of July , 2023.
Passed and adopted as an Ordinance of the City of Daly City at a regular meeting of the City Council of the City of Daly City held on the day of 2023, by the following vote:
AYES, Councilmembers
NOES, Councilmembers
ABSENT, Councilmembers:
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CITY CLERK OF THE CITY OF DALY CITY
APPROVED:
MAYOR OF THE CITY OF DALY CITY
3 EXHIBIT “A”
LOT NUMBER 7, BLOCK 6, SCHOOLHOUSE HOMESTEAD ASSOC., 0.1928 AC MOL PTN OF LOT 7 BLOCK 6 SCHOOLHOUSE HOMESTEAD ASSOC. RSM 1/9