Move to Increase Housing Density Through ‘In-law Units’

By Thomas K. Pendergast

Attempting to “streamline” the process for legalizing Accessory Dwelling Units (ADU), changes to the City’s planning code have been approved, while avoiding a potential conflict with state law.

In a unanimous vote on July 31, the SF Board of Supervisors approved changes in the city code that would authorize the expansion of an ADU within a site’s buildable area; waive or modify bicycle parking requirements for ADUs; allow more than one unit already constructed without a permit to be legalized; exempt permit notification requirement for ADUs constructed within the existing building envelope; allow for conversion of an existing stand-alone garage, storage structure or other auxiliary structure to an ADU; and expansion of an existing building envelope to add dormers.

The new ordinance will also require that all relevant department staff members be present during a project sponsor’s pre-application meeting, including from the Department of Building Inspection, SF Fire Department and the Planning Department.

When the legislation was brought to the board on July 17, District 6 Supervisor Jane Kim, whose district has been heavily impacted by new development and its associated displacement of people and small businesses, praised District 4 Supervisor Katy Tang for modifying the codes governing ADU legalizations.

“As units, particularly in my district, are climbing to close to $800,000 per door, ADUs are increasingly going to become the more affordable way for us to increase our housing capacity here in San Francisco and throughout the Bay Area,” Kim said. “It’s going to double the capacity in our single-family home neighborhoods throughout San Francisco. It’s going to build housing more cheaply and more quickly than all of the multi-unit buildings in the district that I represent.”

San Francisco first enacted an ADU ordinance in 2015 and since then has updated the program in response to amendments to the state law.

According to Planning Department figures, looking at ADU permit applications since September of 2016, which make up 73 percent of the total, a majority of permit submittals were for multiunit buildings, as opposed to 12 percent of overall filings for single-family homes seeking to add an ADU to the property.

The department further notes that about 60 percent of all the permits filed have been since June of 2017, when San Francisco’s version of the state law was enacted for single-family homeowners.

A survey the department conducted of the rental rates for occupied ADU units indicates an average of $2,600 per month is paid for a one-bedroom ADU in the City. The survey was primarily conducted in districts 3 and 8, plus it indicated that some of the rental units were being rented to family members at below the market rate, or they were not charged rent at all.

At the hearing District 11 Supervisor Ahsha Safai mentioned a part of the legislation that did not make the cut.

“There was some conversation at the Planning Commission, there was some reservation and fear about encouraging demolitions,” Safai said. “I think we need to have a conversation about the ability to work with ADUs in new construction only, not somewhere where there has been a demolition but where there is new construction.”

Safai acknowledged that there are bad actors who game the system by taking advantage of the law, and that many people are also concerned with the construction of “monster homes,” but said present checks against dubious demolitions and evictions are enough under current laws. He also thought there needed to be more clarification between “demolition” and “new construction.”

The Planning Commission meeting he was referring to took place on June 7, 2018, where Commissioner Dennis Richards questioned the inclusion of ADUs in new construction in cases where there had previously been a demolition of a single-family home that did not already have an ADU.

Richards brought up a recent state law called the Housing Accountability Act, that, he said, could be used by unscrupulous developers to demolish single-family homes under the guise of adding ADUs as a kind of legal hammer, forcing the Planning Commission or Board of Supervisors to approve a Conditional Use authorization (CU) to allow a developer to build a “McMansion.”

“I’m worried about this, I really am,” Richards said, then gave an example of someone proposing a four-unit building to replace a single-family home and using the Housing Accountability Act to force them to give the developer the CU they wanted.

“I’m going to say under new construction, I’m going to add an ADU, which is now two dwelling units,” Richards said, as an example of what a developer might potentially do to get approval.

“So, I’m going to come get a CU to raze the house, like we’re seeing all over the City, and they’re going to stand there and threaten us and say, ‘you can’t stop me from razing that house because I’m building another unit.’”

A staff member of the Planning Department acknowledged that while this scenario was possible, including ADUs in new construction was not meant as an incentive to demolish single-family homes. It was also noted that the developer must still go before the Planning Commission to get permission to demolish it.

“I think this is a huge incentive,” Richards responded. “When you give a person the right to build an ADU on a single-family house lot, they’re going to stand up here and invoke the Housing Accountability Act and say, ‘you cannot, not allow me to demolish and build a new house with an ADU.’ We sit up here every week hearing this. I can’t support that. This is a demolition bomb.”

Commissioner Myrna Melgar agreed with Richards’ point.

“The demolition has nothing to do with the new construction, is what you’re saying,” Melgar told staff. “I think that the economics don’t actually work that way. I think it’s the combination of the Housing Accountability Act, which is a fairly new thing, how it’s being applied to what we’re seeing on the commission.

I think that we haven’t really thought through the economics of this enough to make me feel good about voting for it.”

The legislation was eventually continued to a June 21, meeting, where Tang announced that she was withdrawing the section of the proposed ordinance dealing with new construction.

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