SF Apartment : November 2016


Green Roofs Mandate

The San Francisco Planning Commission unanimously passed an amendment that would add new requirements for green roofs in construction projects. The amendment is expected to pass final approval by the San Francisco Board of Supervisors later in the year.

Currently, Title 24, which provides State standards for building energy efficiency, requires 15% of roof area of new buildings to be “solar ready,” which means 15% of the roof will be un-shaded by the proposed building itself and unobstructed by rooftop mechanical equipment. Title 24 applies to all new residential and commercial buildings of 10 floors or fewer. The Board of Supervisors previously supplemented the State law by requiring that the 15% of roof area set aside actually had solar panels installed on it.

The proposed ordinance would allow for an alternative to the solar panel requirement. Under the proposed ordinance, between 15% and 30% of roof space on most new construction will be required to incorporate solar panels, living (green) roofs, or a combination of both. If the living roof option is selected, the builder will be required to replace the otherwise required solar panels on a 2:1 basis (2 square feet of living roof for every 1 square foot of solar panels otherwise required.)

The city believes that green roofs made from materials such as grass and vegetation will reduce storm-water entering the sewer, reduce energy consumption, enhance biodiversity, sequester carbon, and capture pollution. The city provides resources including a living roof manual, a living roof webpage, and a living roof map of San Francisco. These resources are currently online at sf-planning.org.

With regard to the cost to the builder, the city believes that the one-time installation cost will be largely offset by the avoidance of one-time stormwater management equipment costs that would otherwise be incurred. 

San Francisco would become the first major U.S. city to impose such requirements on new rooftops. The requirements will be implemented by the Planning Department. 

Commercial Density Bonus Law

Governor Brown signed into law legislation creating a temporary density bonus program for commercial developments (“Commercial Bonus Law”) that includes an affordable housing component. Sponsored by Assembly member Santiago (D-Los Angeles), the new law will remain in effect until January 1, 2022.

For qualifying projects, development bonuses must be mutually agreed upon by the local government and developer.  The bonuses available include:  

  • up to a 20% increase in maximum floor area ratio, general plan intensity, and height; 
  • up to a 20% reduction in minimum parking requirements; 
  • use of limited-use/limited application elevators for upper floor accessibility; and
  • other exceptions to a zoning ordinance or other land use regulation.
To qualify under the Commercial Bonus Law, a commercial developer would have to enter into an “agreement for partnered housing” with a housing developer, identifying how the commercial developer will contribute to affordable housing.

The housing component of a commercial bonus project would not have to be 100 percent affordable.  Rather, a minimum of 15 percent of total units would have to be set aside for very low-income households or 30 percent for low-income households. 

The Commercial Bonus Law allows for flexibility in the manner and location in which the affordable housing is provided.  A commercial developer may directly build the units, donate a portion of the site for housing, donate property elsewhere, or make a cash payment to fund the cost of an affordable housing project.  The affordable housing must either be on the site of the commercial project or within the boundaries of the local government of the commercial project, in “close proximity to public amenities including schools and employment centers,” and within one-half mile of a “major transit stop.”  Most of San Francisco is within one-half mile of a major transit stop. 

The Commercial Bonus Law does not specify that some minimum number of housing units must be created to qualify for the bonus.  Presumably, that amount of housing produced would be the subject of negotiation between the developers and the local government. 

This highlights an important–and unfortunate--distinction between the new Commercial Bonus law and the long-standing density bonus laws for residential projects (“Residential Bonus Law”).  The Residential Bonus Law contains clear, mandatory standards requiring local governments to give density bonuses and waive development standards that preclude construction of bonus units. As well, developers are not required to seek changes in zoning laws or special approvals for the density bonus units and related waivers and concessions. They are simply entitled to them as a matter of law.

In contrast, the Commercial Bonus Law lacks straightforward, mandatory directives.  For example, though it states that localities “shall grant” bonuses to qualifying projects, implying a mandate, it then goes on to say that bonuses need to be “mutually agreed upon by the developer and the jurisdiction.”  It also does not specifically provide that zoning changes or other special approvals are not required to achieve the Commercial Bonus.  This means that individual projects trying to use the law may need to enter into development agreements or seek other special approvals.  This could, unfortunately, limit the utility of the new law in jurisdictions where development bonuses are controversial.

The above content was provided by David Silverman and Daniel Frattin of Reuben, Junius & Rose, LLP. The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein.

New Disabled Access Legislation

Governor Jerry Brown signed Assembly Bill 2093 into law in mid-September in an effort to decrease the number of the state’s accessibility lawsuits. The intent is to make commercial tenants aware of any construction-related accessibility violations before a lease is finalized, giving landlords and tenants a chance to determine how any violations will be addressed to avoid ADA lawsuits down the line. The bill was written by Marc Steinorth (R-Rancho Cucamonga).

The bill requires that commercial landlords state whether or not the property has been inspected by a CASp specialist on all rental agreements executed on or after January 1, 2017. Commercial landlords are also required to provide tenants with an up-to-date disability access inspection certificate and inspection report.

If the property does not have the inspection certificate, the bill requires specific language on the lease stating that CASp can inspect the property for compliance with accessibility standards. The lease must also state that while a CASp inspection is not required by law, the owner may not prohibit the tenant from obtaining a CASp inspection of the property. And, finally, the owner and tenant shall mutually agree on the terms of the CASp inspection, including time, payment of fees, and cost of any repairs deemed necessary by the inspection report.

All commercial property lessors must change their rental agreements to include the required language on all leases that are executed on or after January 1, 2017. 

PACE Program Update

With the intention of lowering utility costs and creating an energy efficient future for California homeowners, Governor Brown passed Assembly Bill 2693. The bill was authored by Assemblymember Matt Dababneh (D-Encino).

PACE (Property Assessed Clean Energy) helps local governments give property owners alternative ways to finance energy efficiency, renewable energy, and water conservation upgrades, including solar panels, water pumps, and seismic retrofits, for example. The bill identifies consumer issues with the program and offers solutions to prevent homeowners from financing more than they can actually afford.

Effective January 1, 2017, PACE will be required to disclose important information such as notice of tax liens, interest charged, and details regarding refinancing or selling. PACE customers will also now be given a three-day right to cancel.

Party with the SFAA

The 10th Annual San Francisco Apartment Association Trophy Awards will take place on Thursday, November 10, 2016 from 6:00 p.m. – 9:00 p.m. at the St. Regis in San Francisco. The Trophy Awards honors the firms, employees, and properties leading San Francisco’s Rental Housing Community.

The San Francisco Apartment Association’s annual Holiday Party is on Monday, December 19, 2016, from 6:00 - 8:00 p.m. at the San Francisco Italian Athletic Club, 1630 Stockton Street, San Francisco.

Help us continue San Francisco Apartment Association’s holiday tradition by bringing a new, unwrapped toy that will be donated to the San Francisco Fire Department’s Toys for Tots Drive. All guests who bring a toy will be entered into the SFAA holiday raffle. One toy gets you one raffle ticket.

Parking near the Italian Athletic Club:
  • the North Beach Garage at 735 Vallejo Street,
  • the Vallejo Street Garage at 766 Vallejo Street, and
  • the Portsmouth Square Garage at 733 Kearny Street.
For more information, visit www.sfaa.org/events.

Calling all Writers!

If you’re a San Francisco resident or property manager with a lot to say, we’d love for you to continue Theodore’s legacy and take over the Onsite-Insight column. If this sounds like you, and you have the writing skills to back it up, please contact the magazine’s editor, Pam McElroy, at pam@blackpointpress.com. The column runs trimonthly, and the new columnist’s first article will print in the January 2017 issue.