STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of April 12, 2022
TO: Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Robert Reber, Community Development Director Larissa Alchin, Contract Assistant Planner
SUBJECT: New state legislation (Senate Bill 9) that provides for ministerial approval of up to two residential units and/or a lot split in a residential single-family zone.
RECOMMENDED ACTION:
This is a study session; therefore, no action is required. However, staff recommends that the City adopt an ordinance to incorporate objective standards for ministerial approval of up to two dwelling units on a parcel and approval of lot splits pursuant to SB 9. If no action is taken, state law will govern applications to construct or develop two-unit residences and urban lot split subdivisions in single-family residential zones.
COMMISSION/SUBCOMMITTEE ACTION AND RECOMMENDATION:
No Commission or Subcommittee actions or recommendations are yet applicable for this action. If an ordinance were to be considered, it would require Planning Commission review.
FISCAL IMPACT OF RECOMMENDATION:
If the Council desires an ordinance be drafted, additional but unknown staff and attorney time will be needed to draft the ordinance, notify the public, and hold required public hearings.
BACKGROUND:
Senate Bill (SB) 9 (Atkins), signed into law by Governor Newsom on September 16, 2021, and effective January 1, 2022, allows a single-family zoned parcel (including single-family Planned Unit Developments) to be subdivided into two parcels and/or two residences to be constructed on each parcel lot. The bill requires ministerial approval of the following development activities:
Two-unit housing development – Two homes on an eligible single-family residential parcel (whether the proposal adds up to two new housing units or adds one new unit to one existing unit).
Urban lot split – A one-time subdivision of an existing single-family residential parcel into two parcels. This would allow up to four units (unless a jurisdiction decides to allow additional units).
What Could Be Built Prior to SB 9?
Prior to SB 9, zoning regulations permitted up to three units on a single-family zoned parcel: one primary dwelling, one Accessory Dwelling Unit (ADU), and one Junior Accessory Dwelling Unit (JADU), subject to certain restrictions.
What Changed with SB 9?
Lots Not Being Subdivided
Homeowners can use SB 9 to build two new homes on a vacant lot. If there is an existing home, one additional primary dwelling unit could be added. In addition, one ADU and one JADU would be allowed if no lot split is proposed, for a total of four units.
Lots Being Subdivided
Homeowners that split a lot will be allowed to build two new units on each of the two new lots, allowing for a total of four units. If there are existing units on the lot, new homes can be added, also resulting in a total of four potential units. It is up to jurisdictions to decide if they want to allow ADUs in addition to these four units. The homes must conform to local objective rules, as long as those rules allow on each property at least two units up to at least 800 sf per unit.
SB 9 applies in all Urban Areas (as defined by the US Census Bureau and which applies to all of Hercules), except for the following:
Environmental Sensitivity/Environmental Hazards – Properties designated as:
Prime farmland or farmland of statewide importance
Wetlands
Within a very high fire hazard severity zone (with exceptions) A hazardous waste site (with exceptions)
Within a delineated earthquake fault zone (with exceptions) Within a flood zone (with exceptions)
Identified for conservation or under conservation easement Habitat for protected species
Ellis Act – Properties where the Ellis Act was used to evict tenants at any time in the last 15 years.
Historic Properties – Properties located in a state or local historic district, or properties designated historic landmarks.
Other Restrictions
Deed-restricted affordable housing and rental housing – SB 9 projects may not alter or demolish housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. Nor may SB-9 projects alter or demolish housing that is subject to any form of City rent or price control, or housing that has been occupied by a tenant in the last three years.
No short-term rentals – Rental terms less than 30 days are not allowed.
Limits on demolition – Projects not involving a lot split may not demolish more than 25 percent of existing exterior structural walls unless (a) the property has not been occupied by a tenant for three years or (b) otherwise allowed by the jurisdiction.
Urban Lot Split-Specific Rules
One use – Only one lot split is allowed under SB 9, but further splits may be possible under regular subdivision procedures.
Residential only – The uses on the resulting lots are limited to residential uses.
Approximately equal size – Each new parcel must be “approximately equal” in lot area provided that one parcel shall not be smaller than 40 percent the size of the original parcel.
Minimum 1,200 sf parcel – No parcel shall be less than 1,200 square feet. Jurisdictions may by ordinance adopt a smaller minimum lot size subject to ministerial approval.
Intention to occupy – The subdivider must sign an affidavit stating they intend to occupy one of the units for a minimum of three years. The local jurisdiction cannot impose additional owner occupancy standards. Community land trusts and qualified nonprofits are exempted from this requirement.
Limits on adjacent urban lot splits – Neither the subdivider nor any person “acting in concert” with the subdivider has previously subdivided an adjacent parcel using an urban lot split. SB 9 does not define what “acting in concert” means or how it would be proven.
Local Agency Criteria
Local agencies may not:
For lot splits:
Impose a regulation that requires right-of-way dedications or construction of off-site improvements; Impose any other owner-occupancy requirements in addition to required owner-occupancy affidavit with a lot split; Require the correction of nonconforming zoning conditions as a condition of approval.
For both lot splits and two-unit development projects:
Deny an application solely because it proposes adjacent or connected structures so long as structures meet building code safety standards and are sufficient to allow separate conveyance.
The City may deny a proposed SB 9 project if the building official makes a written finding, based upon a preponderance of the evidence, that the proposed housing development project (1) would have a specific, adverse impact upon public health and safety or the physical environment, and (2) there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact. Hercules would rely on Contra Costa County building officials to determine if a project could be denied on this basis.
Possible Scenarios
The following graphic illustrates potential scenarios that could occur on a single-family zoned property under SB 9:
Figure 1: ABAG Reference Diagram
Potential New Home Creation
It is unclear how many homes will be created by SB 9 over time. While SB 9 increases the zoned potential for residential units in single-family neighborhoods, market conditions and other factors are likely to limit the impacts of SB 9. To assess the potential impact of SB 9 on new housing supply, the Terner Center for Housing Innovation at UC Berkeley conducted an analysis to assess the market feasibility (as of July 2021) of new homes as allowed by the then version of the bill. The analysis found that SB 9’s impact will be relatively low, with few new single-family parcels expected to become financially feasible for added units as a direct consequence of this bill. While this analysis did not attempt to calculate the actual rate of new units that would be built through the provisions of SB 9, it is reasonable to assume it will be a modest uptake. Market-feasibility calculations for Hercules—using Urban Footprint data, Terner Center methodology, and MapCraft Labs mapping— are shown in the table below.
Table 1- Terner Center SB 9 Model Output for Hercules
Hercules
Total single-family parcels
5,400
SB 9-eligible parcels
5,400
Total new market-feasible units
594
Regional Housing Needs Allocation (RHNA)
SB 9 units may be able to count for purposes of Housing Elements and RHNA, but the exact methodology is currently unclear. In future years, it will be based on actual construction trends, but for the upcoming housing element, there is not time to establish a pattern. HCD is expected to come out with guidance on this in the coming months.
Jurisdictions must include all SB 9 units and applications for urban lot splits in their annual progress reports to the state.
DISCUSSION
Hercules can impose objective standards on qualifying development projects so long as the standards do not preclude the construction of at least two units of up to at least 800 square feet each, with minimum required rear and side setbacks no greater than 4 feet.
Two-Unit Ministerial Approval
Unit Size and Maximum Site Coverage: The City could allow two units up to 800 square feet and up to the allowed site coverage of 20% in Residential Single-Family Estate (RS-E) and 50% in Residential Single-Family Low Density (RS-L) zoned districts, whichever is greater. Alternatively, the city could restrict the unit size to 800 square feet regardless of zoning district.
Privacy and Setbacks: Pursuant to SB 9, the City can require a minimum setback of four feet on the side and rear. However, if a four-foot rear or side setback on the second floor is proposed, the City could regulate the kind of windows (opaque) or sill height (e.g., taller than five feet) that can be installed at that setback. The SB 9 implementation ordinance could also include objective standards for landscaping and privacy protection. Additionally, the City could regulate second story balconies to lessen the privacy impacts to adjacent properties.
Parking: SB 9 does not allow the City to require more than one parking space per unit. Moreover, SB 9 projects are exempt from the parking requirement if located within one-half mile walking distance of a high-quality transit corridor or a major transit stop, or within one block of a car share vehicle. A “high-quality transit corridor” means a corridor with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours. A “major transit stop” means a site containing any of the following:
An existing rail or bus rapid transit station.
A ferry terminal served by either a bus or rail transit service.
The intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.
As of this report, the City has no major transit stops or high-quality transit corridors. The Regional Intermodal Transportation Center (RITC) would qualify as high-quality transit corridor in the future. Staff recommends development standards that implement this parking requirement and impose objective standards related to the size and configuration of off-street parking.
Design standards: The City should adopt objective design standards related to the architectural look of the buildings, and Council can provide any specific direction on these items. Examples of design standards:
“If the parcel contains an existing single-family home, the additional unit shall have architectural features, building materials, and paint color same as that of the existing unit.” “New dwelling units proposed in connection with a two-unit residential development shall not exceed 16 feet in height.” Urban Lot Split Ministerial Approval
Access and Easements: The City may require easements for the provision of public services and facilities. The City may also require each unit located on a parcel created through an SB 9 lot split have vehicular access, either by adjoining or providing access to the public right-of-way.
Limitation on ADUs and JADUs: Under SB 9, the City is not required to permit the construction of an accessory dwelling unit or a junior accessory dwelling unit on SB 9 projects that propose both an urban lot split and a qualifying development project. Staff recommends that the SB 9 implementation ordinance clarify any limits on the construction of accessory dwelling units and junior accessory dwelling.
Additionally, the ordinance should define “acting in concert with owner;” and “sufficient for separate conveyance.” Staff must also design application forms, checklists, a deed restriction for short-term rentals, and an affidavit for lot split owner-occupancy requirement.
California Environmental Quality Act (CEQA)
CEQA does not apply to lot split or second unit approval because SB 9 makes these actions ministerial. The ordinances implementing the second unit and lot split provisions are likewise exempt from CEQA.
Next Steps
If directed by Council, the Community Development Department and City Attorney’s Office will develop a draft ordinance to implement SB 9, incorporating any feedback from the City Council.
ATTACHMENTS:
Senate Bill No. 9 Text
2 Date Page 1
Resource: Terner Center's "Will Allowing Duplexes and Lot Splits on Parcels Zoned for Single-Family Create New Homes?"