SF Apartment : July 2016

FEATURE

In-Law Outlaws

by Tom Hui

To create affordable housing, San Francisco is allowing the legalization of illegal in-law units with many incentives for property owners.

The Department of Building Inspection, along with the San Francisco Planning Department, the Board of Supervisors, and Mayor Ed Lee have been working together to creatively and quickly increase the supply of affordable housing units for the city’s growing population.

Solutions include programs for legalizing existing, and often illegal, in-law units, as well as the addition of dwelling units during a seismic retrofit and where the existing building envelope is large enough to add another unit. These new ordinances—including one from last September that waives the plan review fees tied to in-law legalization, saving program participants an average of $1,500—coupled with other future housing construction initiatives, are bringing San Francisco closer to Mayor Lee’s goal of having 30,000 new housing units by 2020.

Allowing the Legalization of In-Law Units
The voluntary legalization of currently illegal in-law units was launched by former Supervisor David Chiu in 2014. His research estimated that there are 40,000 to 50,000 illegal in-law units throughout the city, and that 20,000 to 25,000 of them could easily be legalized with the Planning Department through parking and density waivers. These in-law units provide affordable housing to San Franciscans, while also providing rental income to property owners. However, the remainder of these units were built without permits and do not meet building, housing, and fire code requirements for safe habitability—meaning the owners must make the units compliant with local and state laws.

Former Supervisor Chiu’s Unit Legalization ordinance passed unanimously in 
April 2014 and took legal effect on May 17, 2014—just over two years ago, as Ordinance 43-14. Since then, DBI and Planning have received more than 4,000 customer calls and visits about the program, and nearly 350 building permits have been filed. We have now issued a total of 142 permits, and 35 properties have completed the work required and are now legal. There are more than 100 projects still under review at Planning, and most of them are expected to be approved. In addition, any of these properties with outstanding Notices of Violations (NOV) have now had those code enforcement violations removed from the record.

I encourage property owners with illegal units on their properties to apply for this program. Doing so will ensure the unit and property are safe and habitable, providing owners with long-term income from their investments and possibly preventing legal issues with tenants.

How to Start the Process
Under the Unit Legalization ordinance, there are two preliminary pre-qualifications that properties need to meet in order to participate. First, for an illegal unit to qualify, it must have existed prior to January 1, 2013. Also, no-fault evictions with the Rent Board may not have occurred after March 1, 2014. Once you’ve established that you meet these two requirements with supporting documentation, you must fill out the screening form associated with Information Sheet G-17 (which you can find on DBI’s website).

The Department of Building Inspection will, upon request, provide informal consultations to help property owners through this process; these consultations can be provided anonymously, are non-binding, and free of charge.

Pre-Permitting Process
For details in bringing illegal dwelling units up to current San Francisco Building code, thoroughly review Information Sheet G-17; this form includes details regarding the planning and building codes related to legalization, an informative checklist, answers to frequently asked questions, and explanations of the potential costs. We recommend reviewing this document before submitting an official building permit application.

For code details not included on this form, like sprinkler requirements, which are addressed in Information Sheet FS-05, schedule an optional DBI/Fire pre-application meeting before submitting a building permit. Through the pre-application meeting (see AB-028 or AB-005), DBI and the SF Fire Department shall determine whether building code equivalencies are applicable to the various code issues related to legalization.

On average, the review and permit approval process takes four to six months.
SF Planning’s review will also determine which waivers from the Planning Code are required in order to approve the permit application. The zoning administrator may waive density, parking (if a parking space already exists, another one may not be required), open space, and rear yard requirements. However, some Planning Code requirements that will need to be met include: landscaping, permeability, street tree maintenance, and bicycle parking. (See Information Sheet G-17, Attachment B, Items 4 thru 8.)

Obtaining Permits: Two-Step Process
Submit the screening form: Hire a California licensed architect, civil or structural engineer, or contractor to evaluate the illegal unit and then fill out Information Sheet G-17. File the form at 1660 Mission Street (1st floor, window #8). The form will be reviewed by DBI on the spot. Make sure to attach supporting documents showing that the illegal dwelling unit existed prior to January 1, 2013 and that a no-fault eviction didn’t occur after March 1, 2014.

Submit the building permit: Get permit routing information from DBI’s information desk on the first floor. Fill out and submit building permit application form 3/8 and include a floor plan of the entire building and a site plan (plans should be 11” x 14” minimum). Also attach the accepted copy of the screening form.

The building permit cannot be approved in an over-the-counter review—further review of property details will need to be conducted. Once the San Francisco Planning Department gives approval, a small scope of work may qualify to be reviewed and potentially approved over-the-counter at DBI. Keep in mind that street tree referral must be separately submitted to Public Works at 1155 Market Street.

Incentives for Property Owners
Properties with open NOVs (due to an illegal unit on the property) will have the NOV suspended, once legalization of a unit is pursued. The $52 monthly monitoring fee tied to the NOV will be suspended, and if the unit is legalized within one year, the NOV will be cleared from the property and DBI’s system altogether. 
DBI and Planning plan to also waive review fees for permits filed under the Unit Legalization Program as of September 2015 until January 1, 2020. The legalization permit fee depends on the estimated cost of construction work, but the average fee is $5,000. With the plan review fee waivers, owners will receive substantial savings in permit fees of about $3,000. Note that for work beyond necessary improvement to legalize, owners will need to file separate permits (like for seismic, plumbing, or electrical work). However, permits may refer to the same set of plans.

Answers to Frequently Asked Questions
If a unit has been legally permitted, except for the kitchen, the kitchen will need to be legalized through the process, as mentioned above.

Per Planning code, in-law units are allowed one kitchen, one bath, and one sleeping area.

A legalized in-law unit meets the same rent control requirements as the building it is in.

The legalization of existing housekeeping and manager units is subject to SF Planning’s approval.

After a permit has been issued, owners may apply for separate addresses if they want to separate the water, electrical, and gas meters for the building by submitting a request for an appointment via email with all relevant information to: Wai-Fong.Cheung@sfgov.org.

How Much Does It Cost?
Overall costs will vary depending upon the scope of the legalization work. Consult a licensed civil or structural engineer, architect, or contractor to obtain 
accurate estimates.

However, a change specifically from 2 units to 3 units is usually more costly, because that will trigger other requirements, like sprinklers, from the San Francisco Fire Department. Capital improvement costs for legalization cannot be passed through to the tenant, and the owner must provide temporary relocation compensation to the tenant occupant if applicable per Rent Board standards. After an in-law unit has been legalized, the property owner cannot pursue subdivision or condo conversions with Public Works.

Mandatory Property Re-Appraisal
After an in-law unit has become legal, the Assessor will be notified for property tax assessment. Under state law, the Assessor is responsible for establishing a taxable value on property located in the City & County of San Francisco. A property that legalizes a unit under this program may be subject to an increase in the assessed value depending on whether the building was originally purchased with the existing illegal in-law unit and the extent to which new construction brought the unit into compliance. Please contact the Assessor’s Office at (415) 554-5596 or visit at www.sfassessor.org.

Stay Informed
Over the last year, DBI has developed an informative website for property owners, design professionals, and contractors to obtain the latest information on the program and access related forms and materials at www.sfdbi.org/unitlegalization. 

We have a dedicated staff that can help answer questions and assist through the permitting process. Please visit window #8 on the first floor at 1660 Mission Street, call (415) 558-6117, or email unitlegalization@sfgov.org.

DBI Director Tom Hui, S.E., C.B.O., is a registered civil and structural engineer with numerous technical certifications. He is an active member of the Structural Engineers Association of Northern California and the American Society of Civil Engineers.

The Department of Building Inspection (DBI) oversees the effective, efficient, fair, and safe enforcement of the City and County of San Francisco’s building, housing, plumbing, electrical, mechanical, and disability access codes for San Francisco’s more than 200,000 buildings. Please visit www.sfdbi.org for more information.