Planning Ahead

Dot Your (ADU) I’s

written by Thomas P. Tunny & Mark Loper

Everything you need to know about Prop. H and planning for ADUs in the new year.

Proposition H Adopted by Voters
Proposition H was adopted by the voters at this November’s election. Titled the “Save Our Small Businesses Initiative,” the ordinance gives existing businesses more flexibility in their operations, and speeds approvals for new businesses in the City’s Neighborhood Commercial (NC) Zoning Districts. The initiative reduces the approval requirement for many uses from a conditional use authorization from the Planning Commission to an over-the-counter administrative approval. Restrictions on office uses are relaxed. The initiative eliminates neighborhood notification for changes to a principally permitted use and provides existing businesses with greater flexibility to adapt their operations in response to the COVID-19 pandemic and shifting retail landscape. The initiative calls upon the city to streamline the approval for small businesses to 30 days.

In particular, the initiative provides as follows:

Neighborhood Notification
Neighborhood notifications has been eliminated for new principally permitted uses in Neighborhood Commercial Districts, for Limited Commercial Uses, and for Limited Corner Commercial Uses. These change of use permits can now be approved over the counter.

Permitted Uses
In all NC Districts except for the 

Mission Street NC, 24th Street-Mission NC, and SOMA NC, more principally permitted and conditionally permitted uses are now allowed:

Non-Retail Sales and Services
(e.g., office uses) are principally permitted on upper floors and permitted with a conditional use authorization on the ground floor.

General Entertainment, Movie
Theaters, Community Facilities, Restaurants, Limited Restaurants, Animal Hospitals, and Retail Professional Services (e.g., realtors, accountants, insurance agents) are now principally permitted where currently permitted with a conditional use authorization, and conditionally permitted where currently not permitted. Restaurant controls were not changed in the North Beach Special Use District, where
a conditional use authorization is required and any new restaurant may only occupy a space where
the last use was a restaurant.

Arts Activities and Social Service or Philanthropic Facilities are now principally permitted on all floors.

Formula retail controls (conditional use authorization required) were not changed by the initiative.

Approval Process
Requires the creation of a streamlined review and inspection process for principally permitted storefront uses in NC Districts with a target approval in 30 days or less. The City is in the process of implementing these new procedures:

Requires that in cases of City error, permits to remedy that error be prioritized and have fees waived.

Establishes policy to allow restaurant table service within parklets in addition to the existing use of parklets by any member of the public; and

Locks-in the initiative’s provisions for 3 years from passage, except to further relax restrictions.

Processing ADU Applications Moves to Planning
In an effort to ease the administrative burden on The Department of Building Inspection (DBI) and hasten the approval of ADUs, the city has shifted the intake and processing of ADU applications from DBI to the Planning Department. This includes new applications for ADUs and work related to ADU construction, such as expansions required for an ADU, excavations required for an ADU, new construction for a detached ADU, and interior remodel work to create independent access to the ADU.

Applications consist of the standard Planning Department Project Application, the ADU checklist form, the ADU screening form, a fixture count form for the PUC, and a PDF of the project plans. Applications are submitted online at a new, easy-to-use website just for ADUs. The application can be a full building permit or a site permit with addenda.

Once the application is submitted, Planning will send the applicant a confirmation email with the planning application number. Planning’s Property Information Map (PIM) will provide updates about the application. It will take one day for the record to appear in the PIM. A planner will email the applicant about next steps within 14 business days. The application still will be routed as before to other city agencies having jurisdiction over the proposed work for review, including DBI.

Once the permit is approved, Planning will coordinate with the applicant to verify their licensed contractor information and for payment of fees. Planning will email the job card to start construction.

Starting in 2021, residential projects in California with on-site affordable housing can get a density bonus of up to 50%. Currently, under Government Code Section 65915—commonly known as the Density Bonus Law—the maximum bonus is 35%. The bonus is available for projects that include 11% very low income below market rate (BMR) units, 20% low income BMRs, or 40% moderate income BMRs. Under a new law that flew somewhat under the radar during the last legislative session in Sacramento, a 50% bonus is available with increased affordability. Specifically, 15% very low income, 24% low income, or 44% moderate income allow the full 50% bonus.

The new state law, AB 2345, requires cities and counties to comply even if they have not yet updated local implementing ordinances. This means starting January 1, 2021, all jurisdictions in California are required to process projects proposing up to 50% additional density as long as those projects provide the additional BMRs in the “base” portion of the project, unless the locality already allows a bonus above 35%.

AB 2345 also lowered the BMR thresholds for concessions and incentives for projects with low income BMRs. For background, in addition to waivers from development controls that preclude a project from achieving the density bonus it is guaranteed (with some narrow exceptions) in exchange for on-site BMRs, the Density Bonus Law allows sponsors to ask for “concessions and incentives” from zoning and development regulations that would make the project more expensive to construct. Starting in 2021, projects with 17% low income BMRs can qualify for two concessions or incentives, and projects with 24% low income BMRs can qualify for three.

Finally, density bonus projects within one-half mile of a major transit stop and with direct access to the stop may be able to avoid minimum parking requirements.

All-Electric New Construction in San Francisco Starting in June 2021
The San Francisco Board of Supervisors passed a law mandating new construction projects be all-electric. The building or project will need to use a permanent supply of electricity as the source of energy for all space conditioning including heating and cooling, water heating, pools, and spas, cooking appliances, and clothes drying appliances. Gas or propane piping systems are not permitted from the point of delivery at the gas meter.

The all-electric requirement takes effect on June 1, 2021. Starting then, all new building or site permit applications will need to comply. Sponsors should keep in mind there is currently a multi-month delay to file permits at DBI and should not wait until the last minute to get their building or site permits on file.

There are two minor exceptions. If it would be physically or technically infeasible to construct an all-electric building, DBI can grant modifications, but only to those portions of the building where infeasibility can be demonstrated, and the alternative design must provide equivalent health, safety, and fire protection. Importantly, financial considerations cannot be used to show infeasibility.

Also, a restaurant is allowed to have gas facilities used exclusively for cooking equipment. For permits filed through December 31, 2021, permits identifying a restaurant use will be allowed to have gas facilities. After 2021, the exception is narrowed and DBI has to determine that the gas system is necessary for the specific restaurant using the space. Identifying a specific restaurant tenant that early in the process will likely be a challenge for many new construction projects.

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.

Authored by Reuben, Junius & Rose, LLP Attorneys Thomas P. Tunny and Mark Loper. They can be reached at 415-567-9000 or [email protected].