Memorandum
Date: June 6, 2023
To: Honorable Mayor and Members of City Council
From: Chris Constantin, City Manager
Prepared by: Luis Torrico, Planning Manager
Subject: Continuance of SB 9 Ordinance Discussion
_________________________________________________________________ At the regular City Council meeting of March 28, 2023, the City Council voted 4-0 (Mayor Emmett Badar absent) to continue the discussion to create an SB 9 Ordinance to allow the Mayor to provide input on the ordinance options. The item was on the agenda for the May 23, 2023, City Council meeting but was not discussed and continued to the meeting of June 13, 2023. The attached staff report will be presented to the Council for consideration.
ATTACHMENT 2
Agenda Item Staff Report
To: Honorable Mayor and Members of City Council
For the Meeting of March 28, 2023
From: Chris Constantin, City Manager
Prepared by: Luis Torrico, Planning Manager
Subject: Discuss Zoning, Design and Development Standards the City could include in an Ordinance to Minimize Negative Impacts Related to Senate Bill 9, which Requires Cities to Ministerially Approve Subdivisions of Single-family Zoned Parcels into two (2) Parcels and Developments of Two (2) Residential Units on Single-family Zoned Parcels.
____________________________________________________________________________
SUMMARY
Senate Bill 9 (SB 9) was signed into law in September 2021 and went into effect January 1, 2022. SB 9 requires cities to ministerially approve subdivisions of single-family zoned parcels into two (2) parcels and developments of two (2) residential units on single-family zoned parcels.
SB 9 law allows cities to adopt objective zoning, design and development standards, however, there are limitations, including, but not limited to unit size, setbacks, parking, and off-site improvements for subdivisions.
On January 25, 2022, the City Council approved an initiation for a Municipal Code Text Amendment to amend the San Dimas Municipal Code related to SB 9.
On June 16, 2022, the Planning Commission considered the options prepared by Staff, which could assist in minimizing negative impacts related to SB 9 developments and provided recommendations to the City Council.
On July 26, 2022, the City Council discussed the options recommended by Staff and the Planning Commission. After discussing the options, the City Council directed Staff to bring the item back provide three options that provide development incentives ranging from the least to the most restrictive.
SB 9 Ordinance Options Page 2
For the Meeting of March 28, 2023
RECOMMENDATION
Staff recommends that the City Council
• Discuss the revised proposed options related to Senate Bill 9 (SB 9), consider the Planning Commission’s recommendations related to optional development standards, and direct staff to draft an SB 9 ordinance to present to the Planning Commission and subsequently to the City Council for adoption.
FISCAL IMPACT
There is no fiscal impact for the recommended action.
BACKGROUND
On September 16, 2021, in an effort to ease California’s housing shortage, SB 9 was signed into law by Governor Gavin Newsom, and went into effect on January 1, 2022 (Attachment 1). SB 9 requires cities to ministerially approve urban lot splits and two-unit residential developments for parcels zoned single-family, essentially allowing a single-family zoned parcel to have up to four (4) units, should the parcel be split and developed with two (2) units each pursuant to the new law. Cities are allowed to implement objective development standards; however, these standards would have to allow, at a minimum, 1,200 square-foot lot splits, and 800 square-foot units if developed pursuant to SB 9.
In order to regulate SB 9 projects and retain some local control, on January 25, 2022, the City Council approved an initiation for a Municipal Code Text Amendment (MCTA) to amend the San Dimas Municipal Code related to SB 9. The amendment will include objective zoning, design and development standards in compliance with the law, to allow at a minimum 1,200 square-foot lot splits and 800 square-foot two-unit developments. Prior to bringing the MCTA ordinance before the Planning Commission and City Council, Staff has prepared a list of possible standards the City could adopt to minimize negative impacts related to SB 9.
These standards, which included floor area, height and parking standards, were presented to the Planning Commission at their June 16, 2022, meeting (Attachment 3). The Commission did not agree with the premise of SB 9 but understood that it is the law and the City needs to comply with the law. They agreed in creating standards that would limit impacts related to SB 9 and provided the following comments on the standards presented to them:
• Floor Area
They agreed with providing additional floor area above the 800 square-foot minimum if it would incentivize developments to comply with the City’s existing residential development standards. Specifically, they agreed with any standards that would provide on-site parking for SB 9 units. They recommended that the additional floor area criteria be included in the ordinance.
• Height
The Commission agreed with limiting SB 9 projects to one-story in height unless they provide a two-car garage. As previously mentioned, the Commission agreed with including standards that would provide on-site parking for SB 9 units to reduce any impacts on SB 9 Ordinance Options Page 3
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residential street parking. They recommended that this allowance be included in the ordinance.
• Parking
SB 9 requires that a maximum of one (1) parking space be required for each new unit, unless the property is located within one-half mile of a high-quality transit corridor or a major transit stop. For projects that would be exempt from providing on-site parking, the ordinance could be written to not allow driveways as a mechanism to persuade applicants to provide on-site parking. The Commission understood Staff’s approach to not allow driveways for projects exempt from providing parking to encourage on-site parking.
However, their main concern was to keep vehicles from having to park on the street.
Therefore, they recommended against this option and recommended to allow a driveway to provide a parking pad for parking-exempt projects.
In addition, during the meeting discussion, Staff informed the Commission that some cities were denying annual parking permits for units developed pursuant to SB 9. This was done in an attempt to require SB 9 projects to provide on-site parking. The Commission was not in favor of this procedure, and reiterated that while they did not agree with SB 9, understood that the City needs to comply with the law, but Staff should adopt standards to mitigate negative impacts, specifically those related to on-street parking.
On July 26, 2022, the optional standards, along with the Planning Commission’s recommendations were presented to the City Council (Attachment 2). The Council discussed the options related to floor area, height and parking and how each standard may affect one another and the overall impact. Options were also discussed to make the ordinance as restrictive as possible to limit impacts to existing single-family neighborhoods. Discussion on standards included:
• Floor Area
o Limit units from 800 – 1,000 square feet.
o Allow 1,000 square feet units if they provide a one-car garage or make the units affordable.
• Height
o Allow two-story units on larger lots or lots that abut to non-sensitive uses such as a drainage channel/wash.
• Parking
o Allow units up to 1,000 square feet if they provide a one-car garage.
After discussing the options, the City Council directed Staff to bring the item back after conducting additional research and to provide three (3) options that explore units ranging from 800 – 1,000 square feet in floor area based on incentives, allowing two-story units based on lot size and adjacent uses, and an option to allow larger units if they are restricted to affordable income levels.
In addition, the direction included that the three options include development incentives ranging from the least to the most restrictive.
DISCUSSION/ANALYSIS
SB 9 allows by-right subdivisions and housing developments that could change the character of single-family neighborhoods. The law undermines local control as it requires cities to approve projects ministerially and includes development standards that are less restrictive than what the San Dimas Municipal Code currently allows for lot splits and residential developments. While SB SB 9 Ordinance Options Page 4
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9 projects are allowed by-right, and sets forth minimum requirements, the law gives cities limited control by allowing cities to establish objective development standards.
SB 9 Minimum Requirements
The following are the minimum requirements that must be applied to Urban Lot Splits:
1. The parcel to be subdivided must be zoned for single-family residential and cannot be located within a historic district.
2. The lot split cannot result in more than two (2) parcels, and each newly created parcel would have to have a minimum lot area of 1,200 square feet and must be at least 40 percent the size of the original lot.
3. Each of the newly created parcels could potentially be developed with a maximum of two (2) units, for a total of four (4) units resulting from the one (1) lot split (See Figure 2).
4. Per the law, Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs) are counted towards the maximum number of units on SB 9 developments, and allows cities to prohibit ADUs and JADUs on lot created through SB 9.
5. The parcel to be subdivided cannot have been previously subdivided pursuant to SB 9, and neither the owner of the parcel being divided nor any other person acting in concert with the owner shall have previously subdivided any adjacent parcel pursuant to SB 9.
6. When approving SB 9 lot splits, cities cannot require dedications of right-of-way or the construction of off-site improvements as a condition of approving a lot split.
7. The lot split must not require the demolition or alteration of protected affordable housing or housing that has been occupied by a tenant in the last three (3) years.
8. The applicant is required to sign an affidavit stating that they intend to occupy one of the housing units as their principal residence for at least three (3) years from the date of approval of the lot split; therefore, vacant lots would be disqualified as the occupancy requirement would not be met.
9. Units created under this law cannot be used as short-term rentals.
The law also requires cities to ministerially approve two-unit residential developments, with a minimum floor area of 800 square-feet, on any single-family zone parcel. This could result in up to four (4) units on one (1) single-family zoned lot (See Figure 1). Cities can require compliance with development standards, but cannot preclude an 800 square-foot unit from being developed.
The following are minimum requirements that must be applied to two-unit residential developments:
1. Requires minimum four-foot side and rear yard setbacks for new units, and does not require setbacks for a structure constructed in the same location and to the same dimensions as an existing structure.
2. A maximum of one (1) parking space is required for each new unit; however, if the parcel is located within a half-mile of a high-quality transit corridor or a major transit stop, or there is a car share vehicle located within one block of the parcel, then the City cannot require any onsite parking.
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3. The project cannot require the demolition of more than 25 percent of the existing exterior walls.
4. Lastly, similar to the requirement for Urban Lot Splits, two-unit developments must not require the demolition or alteration of protected affordable housing or housing that has been occupied by a tenant in the last three (3) years, and the parcel cannot be a historic landmark or located within a historic district.
Figure 1 - Two-unit development scenarios for one single-family lot (no lot split). *A JADU would be located entirely within an existing/proposed single-family residence.
Figure 2 - Lot split & two-unit development scenarios for one single-family lot. *A JADU would be located entirely within an existing/proposed single-family residence.
Staff’s initial intent was to draft an ordinance that limited SB 9 development to minimize impacts to existing single-family neighborhoods. Limitations would include limiting units to 800 square feet in floor area and to one-story in height, unless the units were designed to comply with existing setback, lot coverage, and parking requirements. Under those scenarios, units could potentially be as big a 1,000 square feet and/or be two-stories in height. Therefore, those options were presented to the Planning Commission and the City Council. Since the July 26, 2022, City Council meeting, Staff has been doing additional research on what other cities have done and has also been monitoring the Department of Housing & Community Development’s (HCD) website for additional guidance on the law.
While no changes have been made or proposed to the law by HCD, nor has additional guidance been provided, City Staff has become aware of HCD sending letter to cities that have adopted ordinances that violate SB 9 and the Housing Crisis Act of 2019 (Gov. Code, § 66300). Two cities in particular, located within the San Gabriel Valley, received said letters. The violations varied SB 9 Ordinance Options Page 6
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slightly for each of these cities; however, the main takeaway from both of these letters is that HCD raised concerns with ordinances that were more restrictive than the City’s existing single-family residential zoning standards. Examples include, but are not limited to, limiting floor area, height and other limiting standards that do not apply to single-family development. As a result of these letters, one of these cities is in the process of amending their adopted SB 9 ordinance to comply with State law.
Therefore, Staff’s previous recommendations that limited SB 9 developments, if adopted, could be seen as a violation of the law by HCD. As a result, Staff discussed the options and Staff’s intent of limiting impacts related to SB 9 projects with the City Attorney’s office. Their recommendation was to only limit development of one (1) of the two (2) units allowed per SB 9.
The primary unit would be allowed to be developed per the City’s current single-family development standards, and the second unit would be limited by the standards (i.e. floor area & height) that are approved by the Council and adopted as part of an SB 9 ordinance. Taking that approach, the ordinance could be construed as not being more restrictive that the City’s existing single-family development standards, which allow for one (1) unit to be developed in compliance with the existing development standards. Drafting an SB 9 ordinance that allows the primary unit to develop per our current standards and limit development of the second unit, in the City Attorney’s opinion, should not violate State law.
In addition to doing further research on the law itself, City Staff has been monitoring the number of SB 9 applications submitted, not just for San Dimas but for adjacent cities to get a better understanding on how the new law is impacting residential neighborhoods. Since the law went into effect on January 1, 2022, the City of San Dimas has only received a total of five (5) SB 9 applications, of which, three (3) have been deemed complete and two (2) have been deemed incomplete. Staff continues to work with the applicants of the incomplete applications to get the required documents and information to deem the applications complete. Of the three (3) applications that have been deemed complete, only one has submitted for building plan check.
Staff also reached out to six (6) surrounding cities and collectively, only five (5) SB 9 applications were received by the six (6) cities. Cities had concerns on the impact that SB 9 developments would have on single-family neighborhoods, but as it turns out, there has been very limited SB 9 activity. It’s still early to make determinations on the real impact of SB 9 or why property owners are not pursuing SB 9 projects; however, it may be that SB 9 developments are not financially practical for the average single-family parcel in built-out communities, and the development of ADUs, which have less restrictions, would be more financially practical for property owners.
Regardless of the limited activity, Staff’s recommendations would still have the goal of minimizing impacts to single-family neighborhoods. The ordinance will include architectural and site layout objective standard requirements to assist in achieving some consistency with existing singlefamily residential neighborhoods including, but not limited to, design, landscaping, parking and driveway requirements. In addition, the ordinance could include optional incentives to provide flexibilities on unit sizes and height. Previous discussions with the Planning Commission and City Council included options to increase floor area and allow for up to two-stories. Based on direction from the Commission and City Council, and the recent information from the City Attorney’s office related to HCD’s letters to the non-compliant cities, second units would still be limited to 800 square feet and one-story unless the proposed following optional incentives are included in the ordinance.
• Units Larger than 800 Square Feet
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o One-car garage incentive - Under this optional standard, units could exceed the 800 square foot max up to 1,000 square feet if they provide a one-car garage. The garage would require minimum dimensions (interior clearance) of 10-feet by 20- feet, and would have to comply with the setback standards of the underlying zone.
The garage floor area would not count towards the unit’s floor area. o Affordable units – Under this optional standard, units could exceed the 800 square foot max if they are maintained as low or very low income housing. The income levels and the years required to be affordable would be set by the Council. The Council could choose to make the units affordable in perpetuity or set a timeframe such as 20 or 30 years. This could be secured through an affordable covenant that would be tied to the property and would transfer if the property was to be sold. It’s unlikely that applicants would chose this option in exchange for a 1,000 square foot unit; therefore, Staff would recommend that affordable units be allowed up to 1,200 square feet in floor area to increase the likelihood that this option would be pursued. This option would require a significant amount of staff time, and potentially require additional staff to prepare the legal documents, review eligibility standards for new tenants and complete the required annual monitoring of the affordability requirements.
• Two-story units
o Larger Parcels - Concerns with privacy and over-development were raised during the City Council’s discussion. It was suggested that Staff research allowing twostory units on larger parcels. Exploring this option, Staff recommends applying a minimum lot depth as opposed to a minimum lot size. Lots created through SB 9 would be splitting existing parcels; therefore, a lot size minimum that would address the concern is less likely to be achieved through the SB 9 process. If twostory units are allowed on parcels with lot depths of 150 feet or greater, this would provide for additional spacing between the units to address privacy concerns, crowding, and the appearance of over-development. In addition, to address further privacy concerns, the units could be required to be located within the rear one-third of the parcel.
o Parcels Adjacent to Less Sensitive Uses – The Council also suggested allowing two-story units on parcels that abut a flood control channel/wash to address privacy concerns. There are some residential properties that abut the San Dimas Wash located on the north end of the City. While there wouldn’t be any residential uses that could be impacted behind these parcels, two-story units could still potentially create privacy impacts to adjacent lots since the minimum side yard requirement is four (4) feet per SB 9 law. Increased side yard setbacks could be required for these units; however, it would be very difficult to come up with a minimum standard side yard setback requirement that would not create privacy impacts on adjacent parcels, as lot widths and location of adjacent structures and open space areas would vary. Furthermore, parcels that abut to a residential channel/wash and are split using a flag-lot design, would result in only the rear lot (flag-lot) eligible for this criteria. If the Council chooses to include this option, it makes sense to include parcels that abut to other non-sensitive use such as commercial properties and multi-family properties.
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• Affordable Units
o As previously discussed, an incentive to allow for larger units could be provided if the units are made affordable to low-income tenants. As opposed to providing incentives to build affordable units, the Council could decide to require all second units to be affordable, regardless of size. While not a requirement of SB 9 law, one of the intents of SB 9 is to increase the supply of affordable housing in the State.
For every SB 9 development, the second unit would need to be restricted to lowincome rents for a period set by the Council. The likelihood of affordable units to be created are more probable under this option than the 1,200 square foot floor area incentive discussed above. Therefore, if the preference is for affordable units to be created, Staff would recommend pursuing this option and the not the increased floor area option. This option would require a significant amount of staff time, and potentially require additional staff to prepare the legal documents, review eligibility standards for new tenants and annual monitoring of the affordability requirements.
The options discussed above would be in addition to the minimum objective development standards that would be written into the ordinance. Per the last City Council study session, the Council requested that three options, ranging from least to most restrictive, be provided for consideration. To be clear, the development incentives would only apply to the second unit, as the primary unit could be developed per existing single-family development standards with no limitation on floor area or height beyond what the Code currently allows.
Option 1 – Least Restrictive
This option would allow both units to develop pursuant to the City’s existing single-family development standards, with the exception of the reduced setback and parking requirements per SB 9. Under this option both units could be developed with a 20-foot front yard setback, four-foot side yard setbacks, and no rear yard setback. Both units could be two-stories in height and only be limited by the 35% lot coverage requirement. Floor area for both units combined could be as big as the current code would permit. As an example, on a typical downtown residential lot that measures 7,000 square feet, each unit could be as big as 2,450 square feet if both are two-stories.
Under this scenario, no on-site parking would need to be provided as the lot would be within ½ mile of public transit.
Option 2 – More Restrictive
This option could include a mixture of development incentives discussed above. The ordinance can include the incentives to develop larger units in exchange for providing a one-car garage or creating an affordable unit per the terms agreed upon by the Council. The ordinance could also provide an option to develop two-story units if the lot has a depth of 150 feet or more and the unit is located on the rear one-third of the lot. The Council can choose to include some or all of the options to provide some flexibility. Again, these options would only be applicable to the second unit.
Option 3 – Most Restrictive
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This option would be the most restrictive and would not provide any development incentives for the second unit. The second unit would be limited to 800 square feet, which is the floor area included in the SB 9 law text, and would be limited to one story in height. The Council could also add the affordability requirement for the second unit, which would make this option even more restrictive. The second unit would also have to comply with the objective development standards that would be written into the ordinance. It’s Staff’s understanding, through discussions with the City Attorney’s office, that this option is less likely to be flagged as a violation of SB 9 law as the ordinance would allow one (1) unit to be developed without restrictions, thus not making this ordinance more restrictive than our current requirements for the single-family residential zones.
ENVIRONMENTAL REVIEW
Pursuant to CEQA guidelines Section 15061 (b)(3), CEQA does not apply to this item because there is no potential for causing a significant effect on the environment. Therefore, no additional environmental review is needed at this time.
Respectfully submitted,
Luis Torrico
Planning Manager
Attachments:
1. Senate Bill 9 Law
2. City Council Staff Report – July 26, 2022
3. Planning Commission Staff Report – June 16, 2022