Study Session
Agenda Item Staff Report
To: Honorable Mayor and Members of City Council
For the Meeting of May 14, 2024
From: Chris Constantin, City Manager
Prepared by: Luis Torrico, Director of Community Development Subject: Update on Proposed SB 9 Ordinance
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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.
On June 13, 2023, the City Council directed Staff to draft an SB 9 Ordinance that would limit the second unit to 800 square feet, one-story in height, would have to be affordable, and subject to objective development standards as required by the Ordinance.
SB 9 Discussion Page 2
For the Meeting of May 14, 2024
RECOMMENDATION
Staff recommends that the City Council
• Provide direction related to concerns raised with the proposed affordability requirement for the second unit and should the affordability requirement be removed.
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 4). 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 residential street parking. They recommended that this allowance be included in the ordinance.
SB 9 Discussion Page 3
For the Meeting of May 14, 2024
• Parking
SB 9 requires that a maximum of one (1) parking space can 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, after being continued from the July 12, 2022, meeting, the optional standards, along with the Planning Commission’s recommendations were presented to the City Council (Attachment 3). 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.
On June 13, 2023, after being continued from the March 28, 2023, meeting, the City Council considered the three (3) options (Attachment 2) and voted 5-0 to direct Staff to draft an ordinance that would implement the most restrictive of the three (3) options. The proposed ordinance would limit the second unit to 800 square feet, which is the floor area included in the SB 9 law text and would limit the second unit to one story in height. The Council also directed Staff to include an affordability requirement for the second unit. These three (3) requirements would only be SB 9 Discussion Page 4
For the Meeting of May 14, 2024
applicable to the second unit. The primary unit would be allowed to be developed without restrictions but would have to comply with the existing requirements for the single-family residential zone.
DISCUSSION/ANALYSIS
Staff has completed drafts of the two ordinances: Urban Lot Splits and Two-Unit Projects implementing the Council’s direction. As part of the process, the City attorney’s office reviewed the ordinances to ensure compliance with SB 9 and any other applicable laws. During their review, concerns were raised with the affordability requirement for the second unit in the Two-Unit Projects Ordinance. The concerns consist of:
1. Affordability requirements cannot be imposed on ADUs. Therefore, an applicant that creates a new lot through the SB 9 process, where a maximum of two (2) units will be allowed, can circumvent the affordability requirement by building an ADU instead of a second unit. The only situation in which the affordability requirement could not be circumvented is if a Two-Unit project is proposed, with no lot split, where up to four (4) units (primary unit, second unit, ADU, JADU) can be built on one single-family parcel.
Under this development scenario, the second unit would have to be affordable. However, Staff doesn’t foresee many of these developments occurring, especially if there is an affordable requirement. Since the law went into effect in 2021, the City has received a total of eight (8) SB 9 applications, all of which included a lot split. If the applications were subject to the affordability requirement, all of them could have circumvented the affordable requirement by building an ADU instead of a second unit. In other words, if the affordability requirement is imposed on second units, it is unlikely to ever actually apply to any unit, since developers will simply construct an ADU instead of a second unit.
2. If the City is going to impose an affordability requirement, Government Code 65850(g) requires that the City create an alternative means of compliance that may include, but is not limited to, in-lieu fees, land dedication, off-site construction, or acquisition and rehabilitation of existing units. The City does not have an existing alternative method so a program will have to be created as part of this process. This would delay the SB 9 Ordinance to allow Staff time to research and create the appropriate alternative compliance method, which will take time and City resources, so that the City can impose an affordability requirement that will rarely, if ever, affect any unit, as described in #1 above.
3. The affordability requirement potentially could be considered a governmental constraint to housing development, which could raise several concerns under the Housing Crisis Act and State Housing Element Law. The City could be found to be out of compliance with its Housing Element’s commitment to eliminate development constraints. Violations of these State laws may lead to consequences including revocation of housing element certification and/or referral to the California Office of the Attorney General.
While the affordability requirement for second units developed pursuant to SB 9 would make it more restrictive, as the Council preferred, the likelihood that it will lead to the creation of affordable units is minimal. As previously mentioned, all the SB 9 applications that have been submitted include a lot split which creates a loophole to avoid the affordability requirement. Therefore, any benefit of the affordability requirement, which will seldom, if ever, apply to any unit, is outweighed by the City Staff time and resources needed to create an alternative compliance program and the risk created by adopting the affordability requirement.
SB 9 Discussion Page 5
For the Meeting of May 14, 2024
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
Director of Community Development
Attachments:
1. Senate Bill 9 Law
2. City Council Staff Report – June 13, 2023
3. City Council Staff Report – July 26, 2022
4. Planning Commission Staff Report – June 16, 2022