House in Order
Governor Gavin Newsom signed more than a dozen bills to address the state’s housing shortage.
CAA and SFAA backed the below noted bills, intending to remove local barriers to housing construction and incentivize higher-density affordable housing and ADU construction. The bills will take effect January 1, 2020.
Streamlining Housing Approvals
SB 330 (Senator Nancy Skinner, D-Berkeley) will decrease the time it takes to get a building permit, limit fees, and block local governments from capping the numbers of homes that can be built. AB 1485 (Assemblymember Buffy Wicks, D-Oakland) will provide financial incentives to encourage moderate-income housing production by building on existing environmental streamlining law.
Accessory Dwelling Units
AB 68 (Assemblymember Philip Ting, D-San Francisco) will reduce ADU approval and construction obstacles. AB 881 (Assemblymember Richard Bloom, D-Santa Monica) will restrict local jurisdiction’s permitting requirements so ADUs get streamlined approval if planned for converting existing garages. SB 13 (Senator Bob Wieckowski, D-Fremont) creates a tiered fee structure for ADUs based on size and location, lessens the application approval timeframe, and helps legalize unpermitted ADUs. AB 671 (Assemblymember Laura Friedman, D-Glendale) will require future local housing plans to encourage affordable ADU rentals. Additionally, the state will create state grants and incentives for affordable ADU construction.
SB 6 (Senator Jim Beall, D-San Jose) will require the Department of General Services to build a database of state excess properties and local land available for residential development. AB 1255 (Assemblymember Robert Rivas, D-Hollister) will require local jurisdictions to report an inventory of surplus land in urbanized areas to the state, who will then digitize the information. AB 1486 (Assemblymember Philip Ting, D-San Francisco) strengthens existing law to ensure affordable housing developers have priority when purchasing surplus land from local governments and agencies.
AB 960 (Assemblymember Brian Maienschein, D-San Diego) will make available more options for California’s most in need families with children and make CalWORKS’ homelessness intervention program more effective. AB 139 (Assemblymember Sharon Quirk-Silva, D-Fullerton), will require local housing plans to more effectively identify people facing homelessness and implement a more targeted strategy for transitioning to permanent housing. SB 751 (Senator Susan Rubio, D- Baldwin Park) will set up the San Gabriel Valley Regional Housing Trust to finance affordable housing projects for homeless and low-income populations.
AB 1763 (Assemblymember David Chui, D-San Francisco) will allow 100 percent affordable housing developments further density bonuses.
AB 587 (Assemblymember Laura Friedman, D-Glendale) will give an exemption for affordable housing organizations to sell deed-restricted land to eligible low-income homeowners.
AB 1483 (Assemblymember Tim Grayson, D-Concord) will require cities and counties to publicly share information regarding zoning, development standards, fees, exactions, and affordability requirements. Additionally, the bill will require the Department of Housing and Community Development to develop and update a 10-year housing data strategy.
New Legislation to Limit “Immediate Length” Rentals and Void “Fixed-Term” Lease Provisions
Following recent controversy over furnished rental properties that skirt the short-term rental regulations by requiring tenants to stay for at least 30 days, Supervisor Peskin introduced legislation aimed at reigning in such projects. The ordinance would create a new “Intermediate Length Occupancy” under the Planning Code and would provide corresponding amendments to the Rent Ordinance.
Planning Code Changes
Under the Planning Code, Peskin’s legislation would define a new Intermediate Length Occupancy residential use “characteristic.” The classification covers dwelling units offered for an initial occupancy of more than 30 days but less than one year. Such units would be subject to a new Planning Code section, which would create a framework for permitting (and limiting) the units.
Projects that have not received a first building or site permit (as of the effective date of the new law), that would create at least 10 new dwelling units (i.e. those projects subject to the Inclusionary Affordable Housing requirements) would be eligible to establish Intermediate Length Occupancy units under the new rules—which would not apply to student housing, residential hotel units (subject to Admin. Code Chapter 41), or to projects with nine or fewer units. Units that are designated as affordable under the Inclusionary Affordable Housing Program, subject to the Rent Ordinance, or otherwise designated as below market rate units under state or federal law, are not eligible to be Intermediate Length Occupancy units.
For qualified projects, the Intermediate Length Occupancy units would be permitted with conditional use authorization in any district that otherwise allows residential use. Such approval would limit the Intermediate Length Occupancy units to no more than 20% of the project, and the units would need to be specifically identified as Intermediate Length Occupancy units. While the units are defined as having an initial tenancy of no more than one year, a designated Intermediate Length Occupancy unit could be offered for a term of more than one year without losing its Intermediate Length Occupancy status.
Like with residential hotels, owners of Intermediate Length Occupancy units would be required to file annual reports detailing the following:
- The location of the Intermediate Length Occupancy unit;
- The number of times the unit was occupied by a natural person for an initial stay for a duration of greater than 30 consecutive days but less than one year, including the duration of each of those stays;
- The average duration of each stay;
- The average vacancy between each stay; and
- The nature of the services, if any, that are provided to occupants.
- Notably, the ordinance states that no more than 500 Intermediate Length Occupancy units may be permitted throughout the city.
Rent Ordinance Amendments
Peskin’s related changes to the Rent Ordinance aim to strengthen tenant protections, prohibit fixed-term tenancies, and increase tenant awareness of Rent Ordinance protections.
For starters, the legislation provides that any lease provision that requires a tenant to vacate a rental unit at the end of a stated term, “shall be void as contrary to public policy.” Such that a landlord may not recover possession of a unit without just cause, except in the limited circumstances where the Rent Ordinance expressly authorizes a fixed lease term or eviction without just cause.
Additionally, the legislation prohibits the lease of rental units to corporate entities and use of a unit for a corporate entity’s own employees or licensees (i.e. a “Non-Tenant Use”). As of February 1, 2020, and subject to limited exceptions, rental units that are subject to the Rent Ordinance may not be used for a Non-Tenant Use. Agreements providing for such Non-Tenant Use would be considered void—and the occupants would be deemed tenants protected by the Rent Ordinance.
Further, beginning February 1, 2020, online listings for units subject to the Rent Ordinance must disclose that the unit is subject to the Rent Ordinance. The legislation gives the Rent Board the authority to monitor online listings and assess penalties of up to $100 a day for non-compliant listings (but no more than $1,000 total for a single listing).
The legislation also includes a civil suit provision—expressly granting authority to the City Attorney’s Office and to nonprofit tenants’ rights organizations to bring a civil action for any violation of these new Rent Ordinance regulations.
Annual SFAA Trade Show: Save Thursday, March 26, 2020 for the annual SFAA trade show at 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 tradeshow will replace the March member meeting. For more information on the tradeshow or to become a sponsor, contact email@example.com.
2020 SFAA Lease Update: The SFAA lease committee will be getting together soon to review and make updates to the current lease. If there are any existing or new lease items, you’d like the committee to consider, email Vanessa Khaleel at firstname.lastname@example.org.
Open House and Toy Drive: The SFAA will host an open house and toy drive in its office at 265 Ivy Street on Thursday, December 12, from 10:00 a.m. – 12:00 p.m. Attendees who bring an unopened and unwrapped toy to donate to Toys for Tots will receive a free 2019 residential lease. For more information on this event, turn to page 39.
Rent Board Fee: The San Francisco Rent Board announced the updated 2019-2020 fees. From July 2019 – June 2020, the updated fee is $25.
Property Taxes due: Don’t forget the first installment of property taxes is due December 10. You can pay online at www.sftreasurer.org.