March 11, 2025
Agenda Item No. 13
TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
Seimone Jurjis, Community Development Director - 949-644-3232, [email protected] PREPARED BY:
Tonee Thai, Deputy Community Development Director/Chief Building Official - 949-718-1867, [email protected] TITLE:
Ordinance No. 2025-5: An Amendment Deleting Section 5 of Ordinance No. 2022-8 Removing Sunset Date of April 21, 2025 ABSTRACT:
On April 23, 2019, the City Council adopted Ordinance No. 2019-8, setting a three-year time limit to complete construction of one-unit and two-unit family dwellings. The COVID-19 pandemic disrupted supply chains for certain building materials and fixtures causing delays in completing construction. As a temporary solution to supply chain delays, the City Council adopted Ordinance No. 2022-8 on March 22, 2022, authorizing the building official to grant an extension of the time limit to complete construction for up to one additional year. The temporary solution would sunset on April 21, 2025.
For the City Council's consideration is an amendment to Ordinance No. 2022-8 to remove the sunset provision and permanently grant the building official authority to extend building permits for up to one additional year (Attachment A).
RECOMMENDATIONS:
Find this action exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; and Waive full reading, direct the City Clerk to read by title only, introduce Ordinance No. 2025-5, An Ordinance of the City of Council of the City of Newport Beach, California, Removing the Sunset Provision from Ordinance No. 2022-8 Thereby Retaining Section 15.02.095 (Section 105.3.4) to Timeframes for Completion of Construction, and pass to second reading on March 25, 2025.
DISCUSSION:
Ordinance No. 2019-8, adopted on April 23, 2019, established a three-year construction time limit for one- and two-family dwellings. Under this ordinance, extensions require an administrative hearing officer's approval following a public hearing, with a maximum extension of one year. Further extensions beyond the fourth year necessitate City Council approval.
The COVID-19 pandemic caused significant disruptions to the construction industry, including supply chain delays, material shortages, and labor constraints. As a result, many projects that would have been completed within the original three-year timeframe faced unavoidable delays.
To address these challenges, the City Council adopted Ordinance No. 2022-8 on March 22, 2022, granting the building official temporary authority to extend construction time limits by one year. This ordinance is set to expire on April 21, 2025. Extensions under this ordinance are granted based on adequate project progress and necessity for completion. Any additional extensions beyond the one-year period still require a public hearing before an administrative hearing officer. The administrative hearing officer may grant up to two 180-day extensions.
Applicants seeking further extensions must submit a request through the City Clerk to the City Council for consideration through a public hearing. This request must be filed at least 45 days before the expiration of the last granted extension. To date, no applicants have requested extensions from the City Council.
Projects that have exhausted all administrative remedies are referred to the City Attorney’s Office (CAO). The CAO may either prosecute the applicant for violating the City’s ordinance or work with the property owner to establish a completion schedule through a settlement agreement.
The ordinance provides a consistent framework for granting extensions, ensuring they are approved only when circumstances warrant additional time or when delays are beyond the control of the property owner, applicant or contractor.
Since the adoption of Ordinance No. 2022-8, the building official has granted extensions for 150 projects, with 106 successfully completed. During the same period, 24 projects required public hearings for extensions, resulting in 12 completed projects and one still under construction. Additionally, seven settlement agreements have been reached, and four projects are currently under review by CAO.
The high completion rate (71%) for projects granted extensions by the Building Official demonstrates the effectiveness of this streamlined approach. It reduces administrative burdens, minimizes delays, and supports project completion.
Impacts if Ordinance No. 2022-8 Sunsets
If Ordinance No. 2022-8 expires, the authority to extend construction permits will revert to a public hearing process overseen by an administrative hearing officer. Property owners seeking extensions must submit applications to the City Clerk, subject to a maximum extension of 180 days per request. The property owner may request up to two extensions.
Additionally, the cost of obtaining an extension will increase. Currently, the fee for an extension granted by the building official is $221. If the ordinance sunsets, the fee for an extension request requiring a public hearing will rise to $1,496 due to administrative costs, including hearing officer fees and public notice requirements.
The transition to a public hearing format may also introduce delays. If a hearing cannot be scheduled before a permit expires, construction activities must cease until a decision is rendered, leading to project downtime and increased costs for property owners.
Draft Ordinance
The proposed ordinance removes the sunset date from Ordinance No. 2022-8, permanently granting the building official the authority to grant additional extensions, for a total of 365 days, for projects entering their fourth year. This amendment eliminates the requirement for a public hearing for this specific extension, streamlining the process and reducing costs for permit holders. Extensions beyond the fourth year will still require a public hearing.
FISCAL IMPACT:
There is no fiscal impact related to this item.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. The adoption of the amendment does not authorize new development or change the density or intensity of any potential future development.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A – Ordinance No. 2025-5
Attachment B – Redlined Ordinance
13-3
13-1
Ordinance No. 2025-5: An Amendment Deleting Section 5
of Ordinance No. 2022-8 Removing Sunset Date of April 21, 2025 March 11, 2025
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