The NEWS

Housing Crisis Act

To deny a housing project application, cities and counties will now have to make an objective determination and make it more quickly.

The Housing Crisis Act will strip cities and counties across California of their ability to avoid housing production because it removes the main tool used by housing opponents—unpredictability, subjectivity and delay. To deny a housing project application, cities and counties will now have to make an objective determination and make it more quickly.

The Housing Accountability Act already limits a jurisdiction’s ability to disapprove or conditionally approve a residential housing project for lower and moderate-income residents (up to 120% of the area’s median income level) if the project is consistent with the local zoning and general plan and it meets objective standards.

The Housing Crisis Act of 2019, also known as SB 330, continues to move state housing law toward objectivity and predictability. It applies to urbanized jurisdictions and will be determined by the Department of Housing and Community Development by July 2020 based on US Census data. We expect urbanized jurisdictions to include San Francisco and much of the Bay Area, Los Angeles area, San Diego area, and the Highway 99 corridor through the Central Valley. The new law went into effect on January 1, 2020 and will sunset on January 1, 2025.

An urbanized jurisdiction may not rezone or “downzone” properties where housing was allowed in 2018 in a way that would discourage residential development without “up zoning” elsewhere within the jurisdiction. This includes changes in height, density, FAR, minimum lot size, minimum frontage, and moratoriums or caps on housing approvals. Similarly, an urbanized jurisdiction no longer can adopt subjective design standards or apply those adopted after January 1, 2020 to proposed housing projects.

In an urbanized jurisdiction, residential units cannot be removed from the market. Any project that proposes to demolish protected residential units, including below market rate, rent controlled, or Section 8 units, must replace those units at similar affordability levels. A housing applicant must also provide relocation assistance and an opportunity for those tenants to rent the new units.

An applicant can lock the then-current land use controls in an urbanized jurisdiction by filing a preliminary application. A full application must be made within 180 days of the preliminary application and the applicant has 30 months to begin construction. This does not limit existing fees with automatic annual adjustments.

Local planning departments are going to have to plan their hearing calendar carefully for these housing projects. Once a housing development project application is deemed complete (for an entirely residential project or a mixed-use project on land zoned to require at least 2/3 residential), a jurisdiction may only hold five hearings on the project. Workshops and continuances count toward the five-hearing limit. An appeal hearing also appears to count toward the five-hearing total. The number of hearings may not be extended by the applicant. Permit Streamlining Act timelines limit a jurisdiction’s ability to delay the five hearings.

A housing applicant, a qualified potential resident, or a housing organization may bring an action to compel an urbanized jurisdiction to comply with these requirements. A court must take action within 60 days and the burden of proof is on the local jurisdiction to show that they complied.

 

Cities like San Francisco are already taking seriously these new changes. Other jurisdictions are likely waiting for HCD’s official determination later this year. The determination could be a pivotal moment for communities that are on the cusp of urbanization and use discretionary tools to slowly kill housing projects. We will be watching closely.

Please keep in mind that there are many subtleties to both new and existing law. The above content was authored by
Reuben, Junius & Rose, LLP Attorney Jonathan Kathrein.

Eviction Control
At the end of last year, Mayor London Breed signed an ordinance expanding just cause protections to most rental units in San Francisco, with few exceptions. The ordinance covers single family homes and multifamily homes built within the last 15 years. The Board of Supervisors voted unanimously in favor of the ordinance, which went into effect in January. For more information, turn to “Mighty Small” on page 34. 

In San Francisco, evictions are essentially limited to tenant-fault evictions, such as lease violation or nonpayment of rent. Some no-fault evictions are still permitted, such as an owner or a family member moving in or leaving the rental property industry altogether. In these cases, the owner must pay relocation costs. In San Francisco, these costs start at $6,980 per tenant, but cannot exceed $20,939 per unit (this number is greater if tenants are minors, disabled or older than 60).

SFAA Updates
Annual SFAA Trade Show: Save Thursday, March 26, 2020 for the annual SFAA trade show at the Fort Mason Center. Attendees will learn all about the latest trends, products and services in the multifamily housing industry. Consult with legal and management professionals, get to know service providers, improve your overall effectiveness at the free educational classes, and meet peers in the San Francisco rental property market.  The event is free and open to the general public, so bring your friends and enjoy! Please note that the trade show will replace the March member meeting. For more information on the trade show, turn to page 10, and to become a sponsor, contact vanessa@sfaa.org.

2020 SFAA Lease Update: The SFAA lease committee is reviewing and making updates to the current lease. Visit www.sfaa.org in March for the 2020 lease.

Updated CAA Forms: Each year the California Apartment Association updates their forms. This year brings many changes due to new laws. A full list of the changed forms for California can be found by logging into the CAA website: www.caanet.org.

Annual Allowable Rent Increase
Effective March 1, 2020 through February 28, 2021, the allowable annual rent increase amount will be 1.8%. This amount was determined by taking 60% of the percentage increase in the Consumer Price Index. To calculate the allowable rent increase, multiply the tenant’s base rent by .018. For more information, visit the San Francisco Rent Board website at sfrb.org or call them at (415) 252-4600.