City Council
Report
City Council Meeting: March 15, 2022
Agenda Item: 4.A
1 of 22
To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Study Session on California Senate Bill 9: The California Housing Opportunity and More Efficiency ("HOME”) Act
Recommended Action
Staff recommends that the City Council:
1) Review and comment on the impacts of Senate Bill 9, the California Housing Opportunity and More Efficiency (HOME) Act, in Santa Monica; 2) Provide direction to staff regarding concepts to be considered in an implementation ordinance; and
3) Direct staff to return with an ordinance to codify regulations for implementation of SB 9 that are within the City’s discretion.
Summary
The California Housing Opportunity and More Efficiency (“HOME”) Act, Senate Bill 9 (“SB9”), was signed by Governor Newsom on September 16, 2021, and became effective on January 1, 2022. SB9’s provisions largely are directed towards providing an incentive for homeowners to add more units to properties with an existing single-unit dwelling, by either adding an additional dwelling unit or splitting an existing lot in two.
SB9 applies only to the City’s single-unit dwelling zoning districts (i.e., R1 and OP1 zones) and requires cities to issue approvals without public hearings for qualifying projects if they meet:
• State and local law requirements,
• Certain pre-conditions as specified in SB9, and
• City’s zoning ordinance and codes, to the extent they do not conflict with SB9. 2 of 22
SB9 has two primary pathways for applicants:
1. Option 1 - “Duplex”: Constructing two units on an existing single-unit zoned parcel; or
2. Option 2 - “Lot Split”: Subdividing a single-unit zoned parcel into two lots.
These pathways are further described in this report and can be used together such that an applicant could subdivide a lot and add two units on each parcel, for a total of no more than four units. The summary of SB9’s key provisions and how they apply to Santa Monica largely repeats the information presented in the SB9 Information Item, dated December 29, 2021.
Staff has analyzed SB9 and identified areas where SB9 appears to provide opportunity for the City Council to exercise local control. The purpose of this study session is to receive policy direction from the City Council regarding options that staff has identified in the course of reviewing the bill. Based on direction given at the study session, staff will return to Council with an ordinance to implement SB9 within the City.
Background
While SB9 requires the City to issue approvals without public hearings for qualifying projects, the one exemption is if the project would have a specific, adverse impact on public health and safety or the physical environment, as specified in Government Code Section 65589.5(d)(2). Per guidance from the State legislature, the conditions under which a project could be denied are intended to be rare. SB9’s overarching requirement is that the City’s objective municipal code standards must be applied in a manner so as not to preclude a project applicant from achieving two units of at least 800 square feet on a single lot.
While SB9 includes a list of pre-conditions that projects must meet to be eligible to proceed, it is important to note that all SB9 projects will be subject to the local, regular entitlement and plan review process that applies to any new construction in Santa Monica that is subject to ministerial review. Projects will still be reviewed by various City Departments (e.g., Community Development, Fire, Public Works, Rent Control, 3 of 22
Department of Transportation, etc.) to ensure compliance with applicable municipal code standards and technical codes (i.e., Building Code & Fire Code).
Unlike State Accessory Dwelling Unit (ADU) law, SB9 does not exempt SB9 units from the City’s fees. This means that existing standards and fees would be applied to SB9 projects, including but not limited to:
1) Existing R1/OP1 Standards: The City’s existing R1 and OP1 zone standards will apply to all SB9 projects. In 2019, after an extensive public process, the R1 zone standards were updated to address concerns regarding the size of new homes and have standards that encourage remodel over new construction.
2) Existing Affordable Housing Production Program (AHPP) In-Lieu Fees:
Santa Monica’s Affordable Housing Production Program, which requires the payment of an affordable housing in-lieu fee for projects involving the construction of two or more units, would apply to SB9 projects that result in two dwelling units. As a result, the City will be able to collect affordable housing in-lieu fees without any changes to the AHPP.
3) Existing Development Impact Fees and Requirements: SB9 allows the City to charge generally applicable impact fees such as Transportation and Parks and Recreation Impact Fees, utility connection fees, school fees, and fees for water neutrality and energy reach codes that require net zero energy buildings and more energy efficient buildings, and AHPP in-lieu fee payments, as applicable.
The only express exception from local requirements that SB9 provides is with respect to lot splits: in this scenario, the City cannot require dedication of new rights-of-way or offsite improvements.
Past Council Actions
On February 9, 2021, Council took a formal position to oppose SB9, as drafted, due to concerns regarding the lack of affordability requirements in the bill and concern 4 of 22
regarding the potential effects in Santa Monica (Attachment A). In response to Council’s stated concerns regarding SB9 as drafted at the time and as indicated in the City Manager’s report on December 7, 2021, staff has been taking a conservative approach in the interim period in order to be consistent with Council’s prior direction on SB9. The full text of SB9 is provided in Attachment B.
Summary of Planning Commission Discussion and Direction On February 16, 2022, the Planning Commission held a study session to review possible concepts for consideration in an implementing ordinance for SB9. The Commission voted 4-0 (2 abstained) that it was the sense of the Planning Commission that the City Council’s implementation of SB9 ought to facilitate the certification of the Housing Element. The following summarizes the Planning Commission’s recommendation on key issues to consider in the SB9 ordinance:
• Do Not Allow Accessory Dwelling Units (ADUs) in Combination with SB9 Projects o Allow applicants to add ADUs to all SB9 projects as an incentive in North of Montana, Northeast, and Sunset Park R1 neighborhoods where lots may be large enough to accommodate the units. However, do not allow applicants to add ADUs to all SB9 projects in Pico and Ocean Park where lot sizes tend to be smaller, on average.
o The Commission’s recommendation was within the context of Housing Element certification and intended to expand SB9’s provisions in certain R1 neighborhoods as a strategy to demonstrate the City’s efforts to Affirmatively Further Fair Housing.
• Deed Restriction for Rental Units
o The Commission did not come to a consensus recommendation on this issue but there was general support for this concept as a way to ensure new units are used as permanent housing.
o Commissioners who did not support this concept were:
▪ Concerned requiring SB9 units to be rental units could be a constraint to feasibility of SB9 projects.
5 of 22
▪ More interested in finding ways to support SB9 units as ownership units instead.
• Owner Occupancy for Duplex Path
o The Commission discussed the challenges in implementing and enforcing a requirement that an applicant only needs to intend to occupy one of the SB9 units as their primary residence.
o One Commissioner also expressed concern that requiring owner occupancy in the duplex path would make that option infeasible as it would not allow a homeowner to demolish an existing home and replace it with two units. • Increase Demolition Allowance for Duplex Path and Reconcile with Demolition Thresholds for Properties on Historic Resources Inventory (HRI) o The Commission did not come to a consensus recommendation on this issue but generally did not support increasing the demolition limits for the duplex path beyond 25% unless there are effective ways to protect HRI properties. • Require that an Occupant of a SB9 Unit Must be Natural Person o Planning Commission supports this concept.
• Update Land Division ordinance
o Planning Commission supports this concept.
Discussion
SB9 Eligible Properties
SB9’s provisions only apply in single-unit dwelling zones. In Santa Monica, these are the R1 and OP1 zones as shown in Figure 1. In Santa Monica, single-unit dwelling zones are designated as R1 and OP1, which represent approximately one-third of Santa Monica’s land area.
6 of 22
Figure 1: Map of Single-Unit Dwelling Zones Where SB9 Projects Could be Proposed (note that there are pre-conditions that must be met that might disqualify some parcels) What Does SB9 Allow? Option 1 – Duplex Path
Option 1 allows the establishment of two units on a single-family zoned property. Cities are required to issue by-right approvals for two residential units within a single-unit zoned parcel, provided the project meets the following requirements:
1) Restrictions on Location - The parcel is not located in any of the following restricted areas (note: most conditions do not apply to Santa Monica):
a. Farmland
b. Wetlands
c. Very high fire hazard severity zone
d. Hazardous waste site
7 of 22
e. Earthquake fault zone unless the development complies with applicable seismic protection building code standards
f. Special flood hazard area or regulatory floodway, unless certain Federal Emergency Management Agency (FEMA) requirements are met g. Lands identified for conservation in an adopted natural community conservation plan
h. Habitat for protected species
i. Lands under conservation easement
j. Within a historic district or is a designated historic resource (this includes resources designated under the SMMC Chapter 9.56, the Landmark and Historic District Ordinance of the City of Santa Monica) 2) Anti-Displacement Measures - SB9 includes limitations on the types of singleunit dwellings that are eligible for redevelopment as part of an SB9 project as well as the applicant pool that may utilize SB9’s provision in an effort to reduce displacement of tenants and to restrict speculative investor use of SB9. SB9 projects must not include demolition of:
a. Housing with an affordable housing deed restriction. b. Rent-controlled housing or housing subject to any form of price control. In addition to Santa Monica’s Rent Control law, AB1482 was enacted by the State in 2019 and established Statewide rent control. AB1482’s provisions contain limited exemptions for owner-occupied single-unit dwellings including where ADUs or JADUs are rented. However, AB1482 only applies to units that are owned by a real estate investment trust, a corporation or LLC in which at least one member is a corporation. c. Housing occupied by a tenant in the last three years. 3) Parcel has not had Ellis Act removal within 15 years from date of application. 4) Does not require demolition of more than 25% of existing exterior structural walls unless:
a. The local ordinance allows more than 25% demolition
b. Site has not been occupied by tenant in the last three years 8 of 22
What Does SB9 Allow? Option 2 – Lot Split Path
Option 2 allows the subdivision of a single-family zoned parcel into two lots. Like the duplex path, cities are required to issue by-right approvals for lot splits within a singleunit zoned parcel, provided the project meets all of the same requirements for the duplex path and the following additional requirements:
1. Lot Split Standards:
a. The resulting lots are at least 1,200 square feet
b. Both lots are approximately equal in size
c. Neither lot is less than 40% of the original lot size d. Meet all of the City’s requirements that would apply to subdivisions, including, but not limited to, requirements that parcels have access to a public right-of-way and utility or access easements
e. The property has not previously been split through SB9 (a lot can only be split once using SB9)
f. The same applicant may not split adjacent properties in succession
2. Owner Occupancy: The owner must reside on the parcel for three years from the date of approval of the lot split. Owner occupancy restrictions are intended to ensure that the applicant intends to occupy one of the housing units as their principal residence.
It should be noted that the statute is not clear about how this requirement where the applicant must occupy one of the units as their principal residence for three years from approval of the lot split would be practically applied in the case of a proposed demolition and replacement of the primary residence as part of an SB9 project and in the case of vacant land. Approval of the lot split is not the same as approval of building permits for structures on the resulting lots, which will occur sometime after the lot split is approved. It appears that the lot split pathway could only be used by property owners with an existing dwelling unit on the parcel that is to be split. For example, the language could be read to mean that:
9 of 22
a) A dwelling unit must remain on the property as part of the SB9 lot split to provide a primary residence for the applicant to occupy. This has the practical effect of preventing an applicant from purchasing a single-unit dwelling, have a lot split approved, and then propose a duplex project that requires the demolition and replacement of the dwelling unit on the property.
If the plan review and construction process take three years, it is possible that the applicant would never occupy the property for three years after approval of the lot split; and
b) In no case could a vacant lot (i.e. no existing dwelling units on the lot) be subdivided under SB9. This is because SB9’s requirement that the applicant intend to occupy one of the units as their principal residence three years from the approval (emphasis added) of the lot split. If there are no units for the applicant to reside at the time of the lot split’s approval, it appears this condition cannot be met.
SB9 prohibits the City from requiring a dedication of right-of-way or construction of offsite improvements as a condition of approving the lot split. The City Engineer, however, retains full authority, in accordance with Santa Monica Municipal Code (“SMMC”) Section 7.04.800, to require improvements to provide proper access for users and to prevent congestion and other hazards related to new development such as alleys, curbs, gutters, street trees, replacement of damaged existing sidewalks in addition to other off-site improvements that would be generally required of any new development.
Standards and Process to Review SB9 Projects: Existing Objective R1/OP1 Zoning Standards
SB9 generally allows the City to apply it’s “objective zoning standards”, “objective subdivision standards” and “objective design review standards” to projects seeking approval under SB9 so long as the standards to not conflict with the provisions of SB9 or prevent the establishment of two dwelling units on a single parcel of at least 800 square feet. The City’s existing Zoning Ordinance contains objective development standards for both the R1 and OP1 zones. These standards regulate new construction, 10 of 22
including additions to existing structures, in all R1 and OP1 zones. The R1 standards were updated in 2019 in response to community concern regarding the size of new home construction. The R1 standards update was intended to address the size of new home construction, incentivize the retention of existing homes, and make the standards more user-friendly. Some of the key changes included:
• Revisions to maximum allowable parcel coverage – this standard controls how much of the parcel homes can cover in addition to their overall floor area; • Exempting ADUs from parcel coverage calculations – this was intended to incentivize retention of existing homes and encourage the production of ADUs; • Revisions to maximum building height;
• Increased minimum front and side upper-story stepback areas – this standard results in the second floor of homes to be smaller than the first floor; and • Size limitations on upper-story outdoor spaces – this standard places a limit on second floor outdoor spaces like balconies and decks.
The City’s current R1 standards also already allow for a duplex to be proposed in the R1 zone with a Minor Use Permit (requires Zoning Administrator approval, which is a public hearing). Duplexes are not a permitted use in the OP1 zone. A duplex is defined in SMMC Section 9.51.020(A(1)(c) as:
A single building that contains 2 dwelling units or 2 single unit dwellings on a single parcel. This use is distinguished from accessory dwelling units and junior accessory dwelling units, which are accessory residential units as defined by State law and Division 3, Section 9.31.025, Accessory Dwelling Units and Junior Accessory Dwelling Units.
As a result, SB9 would make duplexes that satisfy SB9’s minimum requirements a permitted use that do not require a public hearing. Figure 2 illustrates the review process for SB9 Projects.
11 of 22
Figure 2: Review Process for SB9 Projects Using Duplex and/or Lot Split Paths
Allowable Objective Standards
The City cannot apply objective standards that would have the effect of physically precluding the construction of two units of at least 800 square feet each or that directly conflict with the provisions of SB 9. Existing Santa Monica Zoning Code objective standards that directly conflict with SB9 are shown in Table 1.
Table 1: Comparison of SB9 Standards vs. Santa Monica Zoning Code Standard SB9
Santa Monica Zoning Code
(Briefly summarized from R1 standards in
SMMC Section 9.07.030)
Setbacks • None required for:
o Existing structure, or
o Structure constructed in same
location in the same dimensions as
existing structure
• Option to require up to max of 4 feet
from side and rear parcel lines for new
construction
• Cannot require correction of nonconforming zoning conditions, but the project also cannot increase an existing
non-conformity
• Side, generally 10% of parcel width
• Would typically require
reconstructed structures in same
location to conform to current zoning
standards
Accessory • Not permitted if SB9 project utilizes both • Local ADU ordinance in SMMC 12 of 22
Dwelling
Units
(ADUs) and
Junior
Accessory
Dwelling
Units
(JADUs)
“duplex” and “lot split” pathways, i.e., the
parcel has been split into two lots and a
duplex is constructed on both lots.
• Not permitted to add an ADU or JADU if
there are already two existing units on a
parcel that has been split. This includes
a scenario where there is a single-unit
dwelling and ADU or JADU already on a
parcel that is subject to a lot split under
SB 9.
Section 9.31.025, based on State
law, which allows multi-unit
properties to either convert
existing non-habitable space to
ADUs or add two detached ADUs
All other development standards would apply to SB9 projects, as they would apply for any new development, to the extent the objective standards do not prevent the construction of two units with a minimum 800 square feet each, including: height, parcel coverage, and limitations on upper-story outdoor space that are already established in the Zoning Ordinance for R1 and OP1 zones.
Parking
SB9 does not permit the City to impose a minimum parking requirement in areas that are within one half-mile of a high-quality transit corridor or major transit stop. High quality transit corridors are defined as a corridor with fixed route bus service with service interval no longer than 15 minutes during peak commute hours. (Public Resources Code Section 21155(b).) Major transit stops are defined as 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. (Public Resources Code Section 21064.3)
As depicted in Figure 3, nearly all of Santa Monica is located within one-half mile walking distance of a high-quality transit corridor or major transit stop, except for some limited R1 areas that are north of Montana and a portion of Sunset Park. Areas located within one-half mile walking distance of a high-quality transit corridor or major transit 13 of 22
stop are collectively referred to as High Quality Transit Areas (HQTAs). The City is not permitted to impose a minimum parking requirement on SB9 projects in those HQTAs.
However, SB9 does permit the City to require one parking space for each SB9 unit that is not in an HQTA. Properties located within the Coastal Zone will be required to obtain a Coastal Development Permit, which may have parking requirements in accordance with the provisions of the California Coastal Act.
Figure 3: Map of High Quality Transit Areas in Santa Monica. These represent areas where the City cannot impose minimum parking requirements for SB9 projects (based on current bus schedules).
Leasing of SB9 Units
Pursuant to SB9, the City must require that the rental of any unit created pursuant to SB 9 be for a term longer than 30 days. The City does not need to enact any additional regulations in this regard. The SMMC already has prohibitions on short-term rentals, 14 of 22
except as provided in Chapter 6.20 related to home-sharing. The City’s home-sharing regulations would prohibit a host from residing in one unit created on a parcel under SB 9 and renting out the other unit created under SB 9 as a home-share. Further, Chapter
6.22 sets forth the City’s residential leasing regulations which require that all residential housing units be leased unfurnished, to a natural person, for an initial term of a minimum of one year, as the tenant’s primary residence.
Feasibility of Requiring On-Site Affordable Housing Units in SB9 Projects in Santa Monica
As part of the Housing Element update process, HR&A analyzed several scenarios to evaluate the feasibility of increasing maximum density in the City’s R1 zones (Attachment C). The purpose was to understand the feasibility of enacting affordability requirements for any new construction in the R1 zones if additional units were allowed, and the tipping point at which on-site inclusionary units would be feasible. The analysis found that a minimum of 6-7 units would be needed to support an on-site inclusionary unit in R1 zones and that replacing single-unit dwellings in R1 zones with two- and three-unit 100% market-rate ownership (i.e. condominium) projects with no affordable units would be infeasible. Since SB9 would only allow two-unit projects that would likely be rental units, due to the requirement that applicants occupy one of the units as their primary residence or that the existing unit must be owner-occupied in the first place, it is unlikely that requiring on-site affordable housing units in SB9 projects would be feasible in Santa Monica as it would effectively prohibit the creation of any additional housing in direct conflict with the objective of SB9 by creating an obstruction to implementation.
Intersection of SB9 and ADU Law: Limitations on Maximum Number of Units that the City Could Establish
SB9 gives the City express authority to place limits on allowing additional ADUs/JADUs.
Specifically, SB9 explicitly does not require the City to allow ADUs or Junior ADUs (JADUs) on parcels that have: 1) used the lot split pathway; and 2) either construct two dwelling units on each of the resulting parcels, or already have two units (e.g. parcels that already have a single-unit dwelling and ADU and are subject to a lot split). This 15 of 22
particular provision of SB9 appears to place a cap of no more than four units that could be established on an existing single-unit dwelling zoned parcel.
SB9 does not contain limitations on ADUs and JADUs for SB9 projects that have constructed two units under SB9 but have not split the lot. However, based on preliminary guidance from the California Department of Housing and Community Development, parcels with an existing single-unit dwelling and existing ADU are considered to have one existing unit for purposes of SB9 (the ADU is not considered a primary dwelling unit). This means that one more additional SB9 unit could be added to the parcel. In this scenario, the City could enact a local ordinance that prohibits the addition of more ADUs or JADUs.
Potential Impact of SB9 in Santa Monica
While some cities have taken action to enact urgency ordinances to implement SB9’s provisions, as noted above, Santa Monica has existing development review and plan check processes that will govern processing of SB9 projects. A concern that has been raised by community members is how SB9 projects may alter R1 and OP1 neighborhoods. This section provides an initial assessment based on the City’s existing rules and currently available analyses and studies.
As shown in Table 2, the North of Montana neighborhood has majority lot sizes of generally 7,500-8,000 sf. A very typical lot size is 50’W x 150’D. There are larger estate-size lots north of San Vicente Boulevard and in the Palisades Tract. In Sunset Park, lot sizes are typically approximately 6,000 square feet and in Pico they are generally around 5,000 sf.
16 of 22
Table 2: Parcel Size by Neighborhood by Number & Percentage All of the R1 standards would apply to any new development on these parcels. In the case of an applicant choosing the “duplex” path, while adding a unit may violate the 55% parcel coverage limitation, SB 9 would still require the City to approve a new unit with a maximum size of 800 square feet. In the case of a lot split, creating two lots would result in lot sizes of possibly between 2,500 to 3,750 sf with lot widths of approximately 25 feet. In this case, there may not be sufficient physical space on the parcel to build more than one single-unit dwelling other than on very large lots, of which there are a limited number in Santa Monica.
SB9’s Interactions with SB8
SB8 also went into effect on January 1, 2022, and prohibits cities from reducing the intensity of land use within an existing zoning district below what was in effect as of January 1, 2018. The statute defines “reducing the intensity of land use” to include reduction in height, density, floor area ratio, new or increased open space or lot size requirements, new or increased setback requirements, minimum frontage requirements, or maximum lot coverage limitations, or any other action that would individually or cumulatively reduce the site’s residential development capacity. 17 of 22
After review of SB8’s provisions, including its extensions of key provisions of SB330 previously adopted in 2019, staff has concluded that the City can apply all objective standards that are already applicable in the R1 and OP1 districts to the extent they do not preclude the construction of SB9 units or directly conflict with SB9. However, the City cannot adopt standards that would result in reduced residential development capacity than allowed under existing zoning (i.e., reduced parcel coverage, height, etc.).
Considerations for SB9 Ordinance + Concepts for Council Direction Based on staff’s analysis of SB9’s requirements and the City’s existing codes and requirements, the following are potential concepts that could be included into an SB9 implementation ordinance. Council should consider each concept and provide direction as to whether Council agrees or disagrees with the concept as proposed by staff.
Where appropriate, a table showing the range of policy options from minimum SB9 compliance to incentivizing use of SB9 is also provided with each concept.
1. Applicability of ADU law to Multiple-Unit Dwellings
a. What local discretion does SB9 allow?
i. ADU regulations require that the City allow the addition of up to two detached ADUs or the conversion of non-habitable space into ADUs for existing multiple-unit dwellings. SB9 does not require the City to allow an applicant to add ADUs to an SB9 project, which would be considered a multiple-unit dwelling.
b. Question
i. Should the City require that ADU law for multi-unit developments in R1 zones only apply to multiple-unit dwellings existing as of January 1, 2022?
c. Purpose
i. If yes, the purpose of this would be to ensure that the SB9 duplex path does not eventually result in the establishment of 6 units (including ADUs and JADUs) from one R1 parcel but protects the 18 of 22
ability for single-unit dwellings in multiple-unit zones to still convert to multiple-unit development and exercise rights of ADU law.
Range of Policy Options
Minimum SB9 Compliance Approach Incentivize SB9
• Require that applicants choose either
ADU or SB9 project
• Allow applicants to combine ADU and
SB9 allowances on lots of at least
7,500 sf
2. Deed restricting SB9 unit as rental unit
a. What local discretion does SB9 allow?
i. The duplex and lot split paths do not have any requirements that resulting SB9 units be rented or sold. Should an applicant choose to rent any resulting units, SB9 requires that the rentals be for a term longer than 30 days. Rental of residential units is already regulated by Chapter 6.20 (Home-sharing and Vacation Rentals) and Chapter 6.22 (Residential Leasing Requirements) so no change to the Municipal Code is necessary in this regard. SB9 does not prohibit cities from requiring rental or sale of resulting units, as long as it does not impede construction of the SB9 unit.
The lot split path on its own would only result in land division so while not required, it would be possible for the property owner to sell one or both lots without any new development or if a homeowner wanted to sell the units constructed on the resulting lot, it would require a subdivision.
b. Question
i. Should the City require that the additional SB9 unit created under the duplex path or a combination lot split/duplex path be rented or sold (note that ownership units would require a subdivision)? c. Purpose
i. The purpose of this would be to ensure that multiple-unit dwellings created under the SB9 duplex path will contribute to alleviating Santa Monica’s housing needs. This ensures that SB9 units actually create more housing units and aligns with the City’s 19 of 22
Affirmatively Further Fair Housing (AFFH) strategy, adopted in the 6 th Cycle Housing Element1
.
Range of Policy Options
Minimum SB9 Compliance Approach Incentivize SB9
• SB9 contains no provisions requiring
that SB9 units are rented or sold
• Require that SB9 units are rented or
sold
• Do not impose any requirements that
SB9 units be rented or sold
3. Owner Occupancy for Duplex Path
a. What local discretion does SB9 allow?
i. The lot split path requires that the applicant sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of approval of the lot split. SB9 does not allow the city to impose any additional owner occupancy requirements under the lot split path. The duplex path has no owner occupancy requirements. b. Questions
i. Should the City require that one of the units created under the duplex path be subject to an owner occupancy requirement? c. Purpose
i. Applicants choosing to pursue a SB9 lot split are required to declare that they intend to occupy the primary dwelling unit for 3 years following approval of the subdivision. Adding this requirement to applications for the SB9 duplex path would make the requirements for both pathways consistent.
Range of Policy Options
Minimum SB9 Compliance Approach Incentivize SB9
20 of 22
• SB9 does not require owner occupancy
for duplex path
• Similar to lot split path, require that
applicants for duplex path occupy one
of the resulting units as their primary
residence
• Do not impose any owner occupancy
requirements on applicants for duplex
path.
4. Increase Demolition Allowance for Duplex Path
a. What local discretion does SB9 allow?
i. SB9 does not require the City to allow an applicant to demolish more than 25% of the existing structure in the duplex path. b. Questions
i. Should the City allow projects using the duplex path to demolish more than 25% of the existing structure?
c. Purpose
i. Increasing the demolition allowance beyond 25% would facilitate the demolition of existing single-unit dwellings and replacement with two units. This could result in more SB9 projects that involve demolition and replacement of existing single unit dwellings with two units instead of SB9 units that are added to parcels while retaining existing single-unit dwellings.
Range of Policy Options
Minimum SB9 Compliance Approach Incentivize SB9
• Do not allow more than 25% of an
existing single-unit dwelling to be
demolished for duplex path
• Allow more than 25% of an existing
single-unit dwelling to be demolished
for duplex path
5. Reconcile Demolition Thresholds with Historic Resources Inventory (HRI) Properties: The HRI is an informational listing of potential historic resources throughout the city. The HRI is the result of a cursory survey of properties as visible from the public right-of-way and consists of approximately 2,000 properties, a significant percentage of which are located in the R1 neighborhoods. The City’s demolition ordinance considers an HRI property demolished if 25% of the street-facing exterior is removed. Because SB9’s duplex path only requires that cities allow a minimum of 25% of the exterior walls 21 of 22
to be removed as a pre-condition, it is possible that this provision will nullify the intended review process for technical demolitions of HRI properties because SB9 requires only a ministerial process. Therefore, the SB9 ordinance would need to make clear that State law would override the local demolition ordinance for HRI properties.
a. Purpose: Adding this clarification to the SB9 ordinance would mean that HRI properties that become technically demolished (because more than 25% of the street-facing exterior has been removed) would not be required to go through the 75-day demolition waiting period.
6. Occupant must be natural person: Clarify that the applicant who is occupying one of the units per SB9 must be a natural person.
a. Purpose: This would be consistent with the requirements already established in the City’s leasing regulations (Chapter 6.22) and would reduce concern of SB9’s use by speculative investors.
7. Update Land Division ordinance: Update the land division ordinance to codify the ministerial process for SB9 lot splits.
a. Purpose: There is already a defined workflow for subdivisions so this would simply restate the process, eliminate the requirement for a Planning Commission hearing, and clarify findings that don’t apply.
As staff receives inquiries and possibly applications for SB9 projects, there may be other development standards that may need to be adjusted or clarified.
Prior to adoption of a formal implementing ordinance, the City is still required to follow State law, including SB9’s applicable provisions related to ministerial approval of qualifying projects. However, as the City Manager explained in his oral City Manager’s Report at the Council’s December 7, 2021, meeting, due to lack of specificity in some areas of SB9, staff will take a conservative approach in the interim period in order to be consistent with Council’s prior direction on SB9.
Following Council direction on these concepts, staff proposes to return with an ordinance that would apply to SB9 projects.
22 of 22
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of recommended action. Should additional single-unit or multi-unit units be completed, modest fees will be collected. The addition of an ADU is exempt from most of the fees beyond construction fees. Staff will return to Council if specific budget actions are required in the future.
Prepared By: Jing Yeo, Planning Manager
Approved Forwarded to Council
Attachments:
A. Attachment A - Council 13 item February 9 2021
B. Attachment B - Full Text SB9
C. Attachment C - HR&A SaMoAHPP R1 Analysis
D. Written Comments