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File #: 2022-1587   
Type: Regular Agenda Item
Body: City Council
On agenda: 1/4/2022
Title: Public Hearing to Consider Introduction of an Ordinance Amending Alameda Municipal Code Chapter XXX to Implement Senate Bill 9 Regarding Two-Unit Housing Developments and Urban Lot Splits in Single-Family Residential Zones, as Recommended by the Planning Board; and Adoption of Urgency Ordinance Amending Alameda Municipal Code Chapter XXX to Implement Senate Bill 9 Regarding Two-Unit Housing Developments and Urban Lot Splits in Single-Family Residential Zones. [Requires four affirmative votes] (Planning, Building and Transportation 20962700)
Attachments: 1. Exhibit 1 - Senate Bill 9 Text, 2. Exhibit 2 - Map, R-1 Districts, 3. Exhibit 3 - Terner Center Report, 4. Draft Ordinance, 5. Draft Urgency Ordinance, 6. Correspondence from Councilmember Daysog, 7. Presentation, 8. Correspondence - Updated 1/5

Title

Public Hearing to Consider Introduction of an Ordinance Amending Alameda Municipal Code Chapter XXX to Implement Senate Bill 9 Regarding Two-Unit Housing Developments and Urban Lot Splits in Single-Family Residential Zones, as Recommended by the Planning Board; and

Adoption of Urgency Ordinance Amending Alameda Municipal Code Chapter XXX to Implement Senate Bill 9 Regarding Two-Unit Housing Developments and Urban Lot Splits in Single-Family Residential Zones. [Requires four affirmative votes] (Planning, Building and Transportation 20962700)

Body

To: Honorable Mayor and Members of the City Council

EXECUTIVE SUMMARY

On December 13, 2021, the Planning Board recommended the City Council adopt an ordinance to amend Section 30-4.1 of the Alameda Municipal Code (AMC) to implement Senate Bill 9 - the California Housing Opportunity and More Efficiency (HOME) Act.  Senate Bill 9 (SB 9) went into effect on January 1, 2022, and requires local jurisdictions to grant ministerial, by-right approval of two-unit developments and lot splits in single-family (R-1) residential zones that meet certain criteria. The intent of SB 9 is to increase density in single-family neighborhoods, allowing additional units to be built on a lot that is currently zoned for a single-family residence.

Staff has prepared two ordinances for City Council consideration: a regular ordinance for first reading and an urgency ordinance.  Substantively, the two ordinances are identical.  Both ordinances include the Planning Board’s recommended amendments to the R-1, One-Family Residence District (R-1 District) to implement SB 9.   The difference between the ordinances is the timing by which they would become effective.  The urgency ordinance would become effective immediately upon adoption, if adopted by a four-fifths vote of the City Council.   The regular ordinance requires a second reading and would become effective 30 days after final passage, approximately six weeks after the effective date of an urgency ordinance. 

 Staff has provided has provided the City Council the option of adopting the urgency ordinance, in the event that the City Council determines that an urgency ordinance is necessary for the immediate preservation of public peace, health or safety.  Staff has provided a potentially plausible rational to support such an ordinance for Council consideration, which is that establishment of local implementing regulations will provide greater clarity and certain to the program, leading to faster implementation and housing production, which serves critical local housing needs.

BACKGROUND

SB 9 is intended to ease the restrictions of traditional single-family zoning and allow small-scale infill development that helps address California’s housing shortage. SB 9 builds on previous State legislation for accessory dwelling units (ADUs) but provides greater opportunities for sale and ownership of the resulting units.

SB 9 requires local jurisdictions to grant ministerial, by-right approval of two-unit developments and lot splits in single-family residential zones if they meet certain criteria. While SB 9 mandates that two-unit developments and urban lot splits be allowed by-right in the R-1 District, if they meet stated criteria, local jurisdictions are allowed to apply objective subdivision and development standards, as well as objective design review standards. On December 13, 2021, the Planning Board adopted objective design review standards for development allowed under SB 9. 

Although the City of Alameda (City) is not required to adopt an ordinance to implement SB 9, the Planning Board and staff recommend that the City Council amend the R-1 District zoning regulations to establish clarity and certainty for staff, property owners, and the larger community. In this case, clarity and certainty are particularly important because the ministerial process required by SB 9 is implemented entirely by City staff without any public notice, public hearings, or Planning Board review or assistance.

The proposed amendments to the R-1 District zoning regulations are intended to serve two purposes for the City:

1.                     Establish clear and objective standards for the review of future applications by staff for lot splits and new housing in the R-1 District as required by SB 9.

2.                     Encourage well-designed infill housing in the R-1 District in support of the City’s Regional Housing Needs Allocation (RHNA).  

The Housing Element of the General Plan is currently being updated for the period 2023 - 2031. The Housing Element establishes the goals, policies and actions necessary to ensure an adequate supply of housing to meet Alameda’s RHNA, which is 5,353 units. In 2021, the R-1 District produced approximately 21 ADUs. Prior to changes in state law in 2018 to loosen restrictions on ADUs, Alameda’s R-1 district averaged less than one (1) ADU each year. Since 2018, any Alameda property owner in the R-1 zoning district is able to add one (1) ADU and one (1) Junior ADU for a total of three (3) units. As described in more detail below, the recommended amendments would allow up to five units for each lot in the R-1 District. 

While not expected to significantly increase housing production in the R-1 District, this easing of restrictions on two-unit developments and land divisions in the R-1 District can provide opportunities for infill development, as well as affordable rental and home ownership opportunities. SB 9 allows for the development of new, for-sale homes, either on a newly subdivided lot, with the addition of one residential unit where a single-family home already exists, or through the conversion of existing single-family homes into two family homes.  This ability to create duplexes and/or split a lot and convey new units with a distinct title would allow property owners to pursue a wider range of financing options than have typically been available for ADU construction.

A report by the Terner Center for Housing Innovation at UC Berkeley (Exhibit 3) projects that the impact of SB 9 on housing development in California will be moderate. The report states:

“Under our business-as-usual scenario, we estimate 1,800,000 new ADUS/JADUS are currently market-feasible and could be built under today’s zoning laws across California’s 7,500,000 existing single-family housing parcels. With SB 9, we estimate that approximately 700,000 additional new units would become market-feasible, representing a 40 percent increase in existing development potential across California’s single-family housing parcels.”

Staff anticipates that the increase in housing production in Alameda’s R-1 District as the result of the recommended amendments will be moderate. Similar to the Terner Center analysis, staff anticipates that the amendments will result in an approximately 40% increase in development potential, or an increase in annual production from 21 units per year to approximately 30 units per year in the R-1 District. Over eight years, new development in the R-1 District could potentially add 240 units toward the City’s 5,353-unit RHNA obligation.

DISCUSSION

The following discussion describes the Planning Board’s recommended amendments to the R-1 District provisions.  Each amendment is shown in strike-out/underline format. Strike-out means the words would be deleted. Underlined words are new words to be added. Explanatory notes in italics have been added below to explain the rationale for the changes.

Proposed Amendments to Alameda Municipal Code (AMC) Section 30-4.1 R-1, One-Family Residence District

30-4.1 R-1, One-Family and Two-Family Residence District.

a.                     General. The following specific regulations, and the general rules set forth in Section 30-5, shall apply in all R-1 Districts as delineated and described in the zoning maps. It is intended that this district classification be applied in areas subdivided and used or designed to be used for one-family and two-family residential development, and that the regulations established will promote and protect a proper residential character in such districts.

Note:  Under SB 9, the R-1 District cannot be limited to “one-family” residences. SB 9 requires that the R-1 District permit two-unit developments (i.e., one two-family dwelling or two one-family dwellings) on each lot. 

b.                     Uses Permitted.

1.                     One-family dwellings, including private garages, accessory buildings and uses; reconstruction of destroyed two-family dwellings, provided that all zoning requirements other than density shall be met and that any requirement that would reduce the number or size of the units shall not apply; private, noncommercial swimming pools, boat landings, docks, piers and similar structures; and home occupations in compliance with the standards as set forth in Section 30-2 <https://library.municode.com/ca/alameda/codes/code_of_ordinances?nodeId=CHXXXDERE_ARTIZODIRE_30-2DE> of this Code to the satisfaction of the Planning and Building Director. Upon the approval of the Planning and Building Director, a Registration of Home Occupation form shall be completed and filed with the Planning and Building Department. Any property owner aggrieved by the approval or non-approval of the Planning and Building Director shall have the right to appeal such action to the City Planning Board in the manner and within the time limits set forth in Section 30-25 <https://library.municode.com/ca/alameda/codes/code_of_ordinances?nodeId=CHXXXDERE_ARTIZODIRE_30-25APCARE> of this Code. Nothing contained herein shall be deemed to deny the right of appeal under Section 30-25 <https://library.municode.com/ca/alameda/codes/code_of_ordinances?nodeId=CHXXXDERE_ARTIZODIRE_30-25APCARE> following the determination of the City Planning Board.

2.                     Two-family dwellings or two one-family dwellings on the same lot provided that:    

Note:  SB 9 requires that the City allow one two-family dwelling or two one-family dwellings on every parcel in the R-1 District subject to certain criteria (subsections (a) through (g)):

(a)                     Any new unit added to the property with an existing single family home or any new unit added to a lot created pursuant to the provision of Lot Splits subsection d.2 below shall not exceed 1,600 square feet in size.

Note:  SB 9 allows the City to set size standards provided that those standards allow for at least two 800 square foot units.   The Planning Board recommends a 1,600 square foot maximum for two reasons: 1) smaller units are more affordable than larger units and the greatest need in Alameda is for smaller, more affordable units, and 2) SB 9 sets a standard that no city regulation should limit the ability to construct two (2) 800 square foot homes, so if the applicant wishes to construct only one home, the maximum size allowed for a single home should be 1,600 square feet.

(b)                     The proposed housing development shall not require or result in the demolition or alteration of an existing dwelling unit that (1) is subject to a recorded covenant, deed restriction, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low incomes; (2) is subject to any form of rent or price control through a public entity’s valid exercise of its police power;  or (3) has been occupied by a tenant within the last three (3) years;

Note:  The language in subsection (b) is directly from SB 9 and is intended to protect existing tenants and reduce displacement that may result from in-fill development.

(c)                     The proposed housing development will not require the demolition of a structure located within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code, or within a site designated as a City Historic Monument, historic property, or historic district pursuant to a City ordinance.  Notwithstanding the above, any demolition that is subject to the demolition controls of AMC Section 13-21 shall require approval of a Certificate of Approval prior to issuance of a demolition permit.

Note:  Under SB 9, the City could exclude any parcel that is a designated City monument or any parcel that is in a designated Historic District.  In the interest of providing housing, the Planning Board recommends allowing an applicant to add housing or apply for the lot split provided that the proposal does not result in the demolition of the historic building. Currently, two of the 9,442 parcels in the R-1 District are designated historic properties.   Many more properties are listed in the Study List or were constructed before 1942.  Under AMC Section 13-21, demolition of a Study List property or any property constructed before 1942 requires a Certificate of Approval, which is a discretionary permit.  This proposed amendment would not override the requirement for a Certificate of Approval to demolish those properties. 

(d)                     The subject property is not a parcel on which an owner of residential real property has exercised the owner’s rights under Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1 of the Government Code (“Ellis Act”) to withdraw accommodations from rent or lease within the last 15 years before the date of application for the proposed housing development. 

(e)                     The development is not within a special flood hazard area subject to inundation by the one-percent annual chance flood (100-year flood), as determined by the Federal Emergency Management Agency.

(f)                     No unit in the proposed housing development shall be rented for a period of less than 30 days.

(g)                     The total number of units shall be limited to two dwelling units and any accessory dwelling units permitted pursuant to AMC Section 30-5.18 Accessory Dwelling Units.

***

Note: Subsection b.2(g) clarifies that the total number of units allowed on a parcel in the R-1 District includes the two units allowed by SB 9 plus any accessory dwelling units allowed by the AMC for a total of five units.  As recommended by the Planning Board, this subsection could allow up to five (5) units on a parcel.  Staff had recommended a limit of two (2) units on a parcel in the R-1.

d.                     Minimum Height, Bulk and Space Requirements.

 

1.                     Minimum Lot Area:  Five thousand (5,000) square feet per dwelling unit. Lot area may be reduced through a lot split subject to subsection d.2.  

Note:  The existing minimum lot area requirement for a single-family dwelling in the R-1 District is 5,000 square feet.  The proposed amendments add language to allow a smaller minimum lot area for lots created by urban lot splits under SB 9.

2.                      Lot Splits:  Pursuant to Government Code Section 66411.7, the division of an existing lot into two lots is permitted provided in an R-1 Zoning District, provided that all of the following requirements are met: 

(a)                     The area of each lot is at least one thousand two hundred (1,200) square feet and at least forty (40%) percent of the area of the original lot prior to the lot split.

(b)                     Each lot provides frontage on a public street or a pedestrian or vehicular access easement to a public street.

(c)                     The land division will not require or result in the demolition or alteration of an existing dwelling unit that (i) is subject to a recorded covenant, deed restriction, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low incomes; (ii) is subject to any form of rent or price control through a public entity’s valid exercise of its police power; or (iii) has been occupied by a tenant within the last three (3) years;

(d)                     The land division will not require or result in the demolition of an existing dwelling located within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code, or within a site designated as a City Historic Monument, historic property, or historic district pursuant to a City ordinance.   Notwithstanding the above, any demolition that is subject to the demolition controls of AMC Section 13-21 shall require approval of a Certificate of Approval prior to issuance of a demolition permit.

(e)                     The existing lot has not been subject to the exercising of the owner’s rights under Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1 of the Government Code (“Ellis Act”) to withdraw accommodations from rent or lease within 15 years before the date of application for the land division.

(f)                     The existing lot is not within a special flood hazard area subject to inundation by the one-percent annual chance flood (100-year flood) as determined by the Federal Emergency Management Agency. 

(g)                     The existing lot has not previously been divided through exercise of this regulation and neither the owner of the existing lot nor any person acting in concert with the owner previously subdivided an adjacent parcel using an urban lot split through exercise of this regulation. 

(h)                     The total number of units on each lot shall be limited to two dwelling units and any accessory dwelling units permitted pursuant to AMC 30-5.18 Accessory Dwelling Units 

Note:   Staff anticipates that speakers at the January 4, 2022 City Council meeting may focus their comments on subsection d.2(h).  The Planning Board’s recommended subsection d.2(h) authorizes two (2) units pursuant to SB 9 and all the units allowed under the Accessory Dwelling Unit ordinance, which, together, could result in up to five (5) units on each parcel.   This differs from staff’s original draft proposal, which proposed to limit the total number of units on each parcel to two (2) units per parcel. 

(i)                     Each lot shall be subject to a deed restriction specifying that: (i) no housing unit on the property may be rented for a term shorter than 30 days; (ii) the uses allowed on a lot created by this section shall be limited to residential uses; and (iii) the lots resulting from the land division may not be further subdivided using the provisions of this subsection.

 

(j)                     The applicant has provided a signed affidavit on a form provided by the City Attorney stating that the applicant intends to occupy a dwelling unit on one of the resulting lots as their principal residence for a minimum of three (3) years from the date of the approval of the land division. This requirement shall not apply to an applicant that is a “community land trust” or a “qualified nonprofit corporation” as defined the Revenue and Taxation Code.

Note:   The language in subsections (i) and (j) are directly from SB 9.

3.                     Minimum Lot Width: Fifty (50′) feet. Lot width may be reduced any amount if the project meets the requirements of subsection d.2, Lot Splits.

 

4.                     Maximum Main Building Coverage: Forty (40%) percent of lot area; provided, however, that where the garage is attached to the main building, the permitted lot coverage may be increased to forty-eight (48%) percent.

5.                     Maximum Building Height Limit: Not to exceed thirty (30′) feet.

6.                     Minimum Front Yard: Twenty (20′) feet. In any full block frontage of lots in a new residential development the Planning Board may approve front yards which vary from fifteen (15′) [feet] to thirty (30′) feet, provided that the average of all front yards in the block shall not be less than twenty (20′) feet.

7.                     Minimum Interior Side Yard: Five (5’) feet for one-family dwellings; four (4’) feet for dwellings constructed pursuant Government Code Section 65852.21. Side yards shall not be less than twenty (20%) percent of the lot width (as defined in Section 30-2-Definitions), and no side yard may either be less than five (5′) feet or be required to be more than ten (10′) feet.

 

8.                     Minimum Street Side Yard. The side yard on the street side of a corner lot shall not be less than ten (10′) feet.

Note:  Typical lots in the R-1 are 40 to 50 feet wide. In practice, a 5-foot setback has been enforced for additions and new buildings on existing R-1 lots in Alameda. Under SB 9, the City cannot require more than four (4’) feet for an SB 9 application.  Staff maintained the 5-foot setback for additions to existing single family homes to discourage single family “mcMansions.” 

9.                     Minimum Rear Yard: Twenty (20′) feet; four (4’) feet for dwellings constructed pursuant Government Code Section 65852.21. Not more than forty (40%) percent of the rear yard, as defined in Section 30-2, may be occupied by accessory buildings or structures (swimming pools excepted).

10.                     Yards for Corner Lot Adjacent to Key Lot: The side-yard setback on the street side of the corner lot, within twenty feet (20′) of the side property line of the key lot, shall be equal to the front yard of the key lot, as defined in Section 30-2, "yard, front," and no structure, excluding barriers, may be permitted within five (5′) feet of the rear property line on the corner lot.

11.                     Off-Street Parking Space: As regulated in Section 30-7 <https://library.municode.com/ca/alameda/codes/code_of_ordinances?nodeId=CHXXXDERE_ARTIZODIRE_30-7OREPALOSPRE> of this Code.

12.                     Government Code Section 65852.21 and 66411.7 Exemptions.

(a)                     If a proposed housing development is being provided pursuant to Government Section 65852.21 or 66411.7 entirely within the footprint of an existing building or constructed in the same location and to the same dimensions as an existing building, no additional interior side or rear setback is required.

 

(b)                     No objective zoning standards, objective subdivision standards, or objective design standards, including but not limited to minimum lot width, maximum building coverage,  minimum setback or other bulk and space requirement, shall apply if that standard would physically preclude a land division resulting in two lots consistent with the requirements of Subsection d.2, Lot Splits, or the development of a two-family dwelling, or two one-family dwellings on the same lot, each unit of which has at least eight hundred (800) square feet of floor area, or a one-family dwelling with at least one thousand six hundred (1,600) square feet of floor area, provided that such dwellings are set back at least four (4’) feet from interior side and rear lot lines.

ALTERNATIVES

The City Council may:

                     Approve the first reading of the regular ordinance as recommended by the Planning Board,

                     Approve the first reading of the Ordinance with adjustments necessary by the City Council,

                     Remand the Ordinance back to the Planning Board to address any specific issues of concern to the City Council, Or

                     Adopt the urgency ordinance and approve the first reading of the regular ordinance.

If the City Council wishes to adopt the regular ordinance as recommended or with specific amendments, the provisions of the ordinance could become effective on February 17, 2022, 30 days after the second reading on January 18, 2022. 

If a supermajority of the City Council believes an urgency ordinance is required to allow the proposed amendments to become effective immediately, the City Council may also adopt the Urgency Ordinance.   To do so requires that the City Council make findings that the ordinance must become effective immediately to avoid impacts to public health and safety. 

A summary of some of the key findings that the Council could identify to adopt an Urgency Ordinance are listed below:

1.                     The State of California and the City of Alameda is experiencing a housing supply crisis, with housing demand far outstripping supply. In 2018, California ranked 49th out of the 50 states in housing units per capita.

 

2.                     California is also experiencing rapid year-over-year rent growth with three cities in the state having had overall rent growth of 10 percent or more year-over-year, and of the 50 United States cities with the highest United States rents, 33 are cities in California.

 

3.                     California needs an estimated 180,000 additional homes annually to keep up with population growth, and the Governor has called for 3.5 million new homes to be built over the next 7 years.   

 

4.                     The housing crisis has particularly exacerbated the need for affordable homes at prices below market rates.

 

5.                     The housing crisis harms families across California and has resulted in Increased poverty and homelessness, especially first-time homelessness; Forced lower income residents into crowded and unsafe housing in urban areas; forced families into lower cost new housing in Greenfields at the urban-rural interface with longer commute times and a higher exposure to fire hazard; forced public employees, health care providers, teachers, and others, including critical safety personnel, into more affordable housing farther from the communities they serve, which will exacerbate future disaster response challenges in high-cost, high-congestion areas and increase risk to life; driven families out of the city or into communities away from services, disrupting family life, and increasing health problems due to long commutes that may exceed three hours per day.

 

6.                     Senate Bill 9 of 2021 is designed to specially target and address the ongoing housing and homelessness crisis as described above, its promptly and effective implementation at the local level is essential to the immediate preservation of the public peace, health or safety.

 

7.                     The proposed zoning amendments and standards established in this urgency ordinance is necessary for the immediate and effective local implementation of SB9; it is a critically necessary tool to combat the state’s and the city’s housing and homelessness crisis.

 

If the City Council does not adopt the urgency ordinance, and if an application is received before the regular ordinance becomes effective, staff will be required to process the application in compliance with State Law.   The recommended ordinance is consistent with State Law, but the recommended ordinance does include the 1,600 square foot limitation on new units.  Therefore, the main impact of the delay in adoption would be related to the need to approve a housing unit that is larger than 1,600 square feet in size, because SB 9 does not include a requirement that all units be 1,600 square feet or less.  That limitation can only take effect when the local ordinance takes effect.  Staff does not believe that approving a home that is bigger than 1,600 square feet is an impact to public health or safety.

Staff has prepared a regular ordinance for first reading and an urgency ordinance in response to members of the public and a recent Council referral requesting the urgency ordinance. Staff recommends adoption of the regular ordinance.   If the City Council wishes to adopt an urgency ordinance, staff recommends that the super majority adopt both the urgency ordinance and the regular ordinance; the immediate effective date of the urgency ordinance would result in the application of the proposed amendments to any SB 9 applications that are submitted between the date of adoption and the effective date of the regular ordinance.

FINANCIAL IMPACT

Adoption of the regular ordinance and/or urgency ordinance will have no impact on the General Fund.

MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE

The proposed amendments to Chapter 30 (Zoning Ordinance) are intended to bring the R-1 District regulations into conformance with State law.

ENVIRONMENTAL REVIEW

Pursuant to Government Code sections 65852.21(j) and 66411.7(n), adoption of an ordinance to implement SB 9 is not considered a project under Division 13 (commencing with Section 21000) of the Public Resources Code.  Therefore, the proposed amendments to the AMC implementing SB 9 are not subject to review under CEQA.  

CLIMATE IMPACT

The Ordinance is consistent with the Climate Action and Resiliency Plan. The proposed text amendments would allow for the development of in-fill housing and the creation of small infill lots within an urban area to help meet the demand for more housing while minimizing new construction and land consumption. The ordinance facilitates compact development in existing residential neighborhoods served by utilities and transit. 

RECOMMENDATION

Introduce an Ordinance amending Alameda Municipal Code Chapter XXX to implement Senate Bill 9 as recommended by the Planning Board.

CITY MANAGER RECOMMENDATION

The City Manager recommends introduction of the Ordinance.  To pass the Ordinance as an Urgency Ordinance it would require 4 votes.

Respectfully submitted,

Andrew Thomas, Planning Building and Transportation Director

By:

Allen Tai, City Planner

Henry Dong, Planner III

David Sablan, Planner II

Brian McGuire, Planner I, and

Heather Coleman, Planning Consultant

 

Financial Impact section reviewed,

Gerry Beaudin, Assistant City Manager/Interim Finance Director

 

Exhibits:

1.                     Senate Bill 9 Text

2.                     Map, R-1 Districts

3.                     Terner Center Report

 

cc:                     Eric Levitt, City Manager