March 25, 2025
Agenda Item No. 12
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 to Section 15.02.095 of the Newport Beach Municipal Code Related to Timeframes for Completion of Construction 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. 2019-8 to remove the sunset provision and amend Section 15.02.095 of the Newport Beach Municipal Code (NBMC). The amendment would also introduce additional criteria for applicants seeking further time extensions.
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, Amending Section 15.02.095 (Section 105.3.4) of the Newport Beach Municipal Code Related to Timeframes for Completion of Construction, and pass to second reading on April 15, 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 additional year beyond the three initial years. 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 granted by the building official 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 12 still under construction. Additionally, five 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 building official will lose the authority to extend construction permits, and the authority will revert to a public hearing process overseen by an administrative hearing officer.
Property owners seeking extensions beyond the third year 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. The current fee for an extension granted by the building official is $221. If the ordinance sunsets, extensions requiring a public hearing will cost $1,496 due to administrative expenses, including hearing officer fees and public notice requirements.
Transitioning to a public hearing process may also cause delays. If a hearing cannot be scheduled before a permit expires, construction must be suspended until a decision is issued. This could result in project downtime and increased costs for property owners.
Draft Ordinance
The proposed ordinance removes the sunset provision from Ordinance No. 2022-8, granting the building official authority to approve up to two 180-day extensions for projects entering their fourth year. This amendment eliminates the public hearing requirement for these specific extensions, streamlining the process and reducing costs for permit holders. However, any request for a third or fourth extension will still require a public hearing with an administrative hearing officer.
Additionally, the proposed ordinance introduces new requirements for applicants seeking extensions. Requests must include:
A detailed explanation of the reasons for the delay and supporting justification.
A comprehensive completion schedule.
A record of any past complaints or enforcement actions, which will be considered in evaluating the extension request.
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
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Ordinance No. 2025-5: An Amendment to Section 15.02.095 of the NBMC Related to Timeframes for Completion of Construction
March 25, 2025
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