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Building Boost

Mayor Breed will take proposal
to streamline affordable housing to voters in November.

Mayor London Breed recently introduced the “Affordable Homes Now Initiative,” which would streamline approvals for both 100% affordable housing projects and market-rate projects that exceed the city’s affordability requirements. The proposed ballot measure needs signatures equivalent to at least 10% of the total number of registered voters to be on the November 2020 ballot. Eligible projects would be ministerially approved if they meet the requirements summarized below. Because ministerially approved projects are not subject to environmental review, the ballot initiative would dramatically shorten approval timelines and mandate that both the Planning and Building Departments approve eligible projects within 180 days of submittal.

 

Eligibility Requirements

Affordability: 100% affordable housing projects include residential buildings, as well as mixed-use residential developments with ground floor nonresidential uses. For such projects, all of the residential units must be affordable with up to a maximum overall average of 120% area median income (“AMI”) across all units. However, the maximum rent or sales price for these affordable units cannot be higher than 20% below median market rents or sales prices for the neighborhood in which the project is located. The ballot measure would also extend streamlined approvals to increased affordability housing projects (“IAHP”) as follows:

Projects with fewer than 25 units must exceed the on-site affordable housing requirement under the city’s Inclusionary Affordable Housing Program (“Inclusionary Program”).

Projects with 25 or more units must comply with the Inclusionary Program and provide additional on-site affordable units equal to 15% of the number of units required under the Inclusionary Program.

For example, a 100-unit project with a 24% on-site requirement would be required to provide 24 on-site units under the Inclusionary Program. In order to qualify as an IAHP, an additional 15% of the required 24 units, or 4 units, would need to be provided on-site for a total of 28 below market rate units.

For both 100% affordable projects and IAHPs, each on-site unit cannot exceed a maximum purchase price or rent of 140% AMI. For rental projects, the rent cannot exceed 30% of the applicable household income limit; For ownership projects, the annual housing cost cannot exceed 33% of the applicable income limit. Finally, the units must be restricted as affordable for the life of the project, or a minimum of 55 years, through a recorded regulatory agreement.

Code Compliant: Any eligible housing project must also comply with objective standards of the Planning Code or state law, including height and bulk requirements. Conditional use requirements that might otherwise require Planning Commission approval for height or large lot developments, for example, are waived with the exception of conditional uses for non-residential use, parking, modification of dwelling unit mix requirements, and location of curb cuts. In addition, project sponsors of eligible projects may request certain exceptions as-of-right, and available density bonus programs can be used in conjunction with this streamlining measure.

Additional Requirements: Finally, eligible affordable housing projects cannot involve the removal of existing residential units, demolition of certain designated historic buildings, or construction on lots under the jurisdiction of the Recreation and Parks Department, and must be in a zoning district that allows dwelling units. Projects with more than 30 units must also pay prevailing wages to construction workers.

Streamlined Ministerial Approval

Prior to submitting a development application for a streamlined affordable housing project, the project sponsor must place a poster at the property for 30 days, describing the project and stating that the project is expected to be subject to the streamlined review process. After a complete development application is submitted, the Planning Department would have a 60-day period to: (1) determine whether the project is eligible for streamlining and (2) complete design review.

Projects that meet these eligibility requirements would be ministerially approved and exempt from any discretionary approvals and review by the city, including by the Planning Commission, Historic Preservation Commission, Arts Commission, Board of Supervisors, and Board of Appeals. Any building permits must also be ministerially approved by the Planning Department and issued by the Department of Building Inspection within 180 days of submittal of a complete development application. The Board of Appeals would still have jurisdiction over appeals of building permits issued to eligible affordable housing projects but would only narrowly consider whether the permits comply with objective standards in the Building Code.

Because these projects would be approved ministerially, environmental review under CEQA would not apply. Project opponents often appeal CEQA determinations to the Board of Supervisors, resulting in both subjective political decision-making and significant delays to entitlement schedules. As a result, the ballot initiative would allow eligible affordable housing projects to be approved much faster than they are currently.

The above content was authored by Reuben, Junius & Rose, LLP Attorney Tiffany Kats.

SB1079

State Senator Nancy Skinner (D-Berkeley) has introduced Senate Bill 1079, which would allow governments to seize corporate-owned properties that have been vacant for 90 days or longer and fine corporations that own multiple single-family homes that are left vacant for 90 days or longer. The governments would have first rights on seized properties to use for affordable housing.

The bill would also give tenants of foreclosed properties the exclusive first opportunity to buy the house at a reasonable price during a 90-day period. If the tenants don’t purchase the home, this option would be next passed to community land trusts and nonprofit affordable housing organizations, cities and counties, before being made available to the open market.

Skinner authored this bill to reduce the number of vacant properties in California. The issue of corporations purchasing homes and leaving them vacant was raised by Moms 4 Housing when the group occupied a corporately owned vacant home in West Oakland. According to the most recent Census report, there were an estimated 1.1 million vacant homes in California. In the years after the foreclosure crisis, many corporations purchased foreclosed homes, particularly in economically distressed areas, and either kept the properties vacant or flipped them for much higher prices. Some corporations specifically target areas that restrict the creation of new housing, because as the housing crisis continues, homes in those communities deliver bigger profits for the companies.

SB 1079 would also incentivize corporations to rent out or sell vacant homes by allowing cities and counties to pay the lowest appraised value when using domain powers to purchase corporately owned homes that are vacant for at least 90 days. Local agencies could then rent out the properties as affordable housing or sell them to community land trusts or affordable housing groups to be used as affordable housing. SB 1079 would also allow local jurisdictions to levy civil penalties against corporations keeping homes vacant. Local agencies would be required to use the funds for homeless diversion, rental assistance and other affordable housing purposes.

Minimum Heat Requirements

 The San Francisco Housing Code—amended and in effect January 20, 2020—now has minimum heat requirements for residential units. All residential units must now have a permanent heating source that is capable of maintaining a minimum temperature of 70 degrees, three feet above the floor, in habitable rooms, excluding bathrooms and hallways. If the heat source is not tenant-controlled, the landlord must provide heat 24 hours a day. Portable space heaters cannot be used to meet this new requirement. 

For residential hotel rooms, the code requires a minimum temperature of 68 degrees from 5:00 a.m. to 11:00 a.m. and 3:00 p.m. to 11:00 p.m.

If these minimum requirements are not met, the Department of Building Inspection will issue a Notice of Violation to provide adequate heat with an approved heating source. If the landlord doesn’t comply, the tenant may file a petition at the Rent Board for a decreased services rent reduction.

For more information, contact DBI.