TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS

FROM: ASSISTANT TO THE CITY MANAGER

DATE: JUNE 15, 2004

SUBJECT: CONSIDER LEGISLATIVE POSITION ON ASSEMBLY BILL 2702 (STEINBERG) LOCAL CONTROL OF SECOND HOUSING UNITS

RECOMMENDATION

Consider opposing Assembly Bill 2702 (Steinberg) and authorizing the Mayor to send letters of opposition to the appropriate parties.

BACKGROUND

In 2002, the State Legislature passed AB 1866 (Wright) which removed the authority of local governments to require conditional use permits and prohibited public hearings on second dwelling unit applications, and provided that a developer of a density bonus project could demand that the local government waive "any ordinance general plan element, specific plan, charter amendment, or other local law, policy of regulation" or face lawsuits. While many cities were faced with having to make changes to their Development Code to implement the new law, the City of Rancho Palos Verdes had already adopted an Ordinance permitting second dwelling units through ministerial action. Additionally, by adopting its own second unit ordinance, the City set its own development standards governing second units in lieu of those set by State Statute. However, Assembly Bill 2702 (Steinberg) proposes to limit development standards that local governments may apply to second dwelling units.

DISCUSSION

Mayor Pro Tem Larry Clark requested Assembly Bill 2702 (Steinberg) to be placed on the Council agenda for consideration of opposing this legislation. According to sponsors, AB 2702 is an effort to encourage the development of second housing units by addressing "unreasonable obstacles imposed by local governments". Assembly Bill 2702 would pre-empt local authority in several ways including imposing numerous restrictions on local second unit ordinances and reducing parking standards.

The following are some potential impacts of AB 2702 to the City’s development code:

1. Minimum Unit Size. AB 2702 requires a minimum of 550 livable square feet for attached and detached units. The City’s Municipal Code allows up to 1,200 square feet for detached units but restricts attached second units to 30% of the existing structure. As such, the Development Code would need to be modified to allow for the State minimum 550 livable square feet for attached units (example: currently the City's Development Code would permit an 1,800 square foot home to have a maximum 540 square foot attached second unit, which would be in conflict with the State's requirement of a minimum 550 square foot - the smaller the existing home the greater the conflict with the State's requirements). Although the State's requirement may allow for a slightly larger unit, the potential impact is relatively miniscule.

2. Parking. AB 2702 prohibits the City from requiring more than one parking space per unit or bedroom and prohibits covered parking. The City currently requires a minimum of one covered parking space. This would require a change to the Development Code. The potential impact resulting from this proposed change is most severe, as it would force the necessary parking for 2^nd units to an uncovered parking space or onto the street.

3. Absentee Landlords: AB 2702 prohibits local ordinance from requiring an owner-occupant to live on the property, where the City’s code currently requires the owner to occupy either the primary or secondary unit. This would require a change to the Development Code. By removing the City's current requirement, the City may find that more residential units in the City become rentals.

The following is an overview of proposed measures under AB 2702:

• Changes the definition of "by right" in the context of provision of sufficient sites for owner-occupied and rental residential use and farm worker housing to state that such use does not require a planned unit development or other discretionary permit.

• Prohibits a second-unit ordinance from being considered in the application of any local ordinance, policy, or program to limit residential growth.

• Authorizes a local agency to charge a reasonable fee to an applicant to reimburse the agency for the expenses of implementing the provisions of this bill, including the costs of adopting or amending any ordinance to do so.

• Prohibits a local government from requiring a variance or discretionary permit for the creation of a second unit and requires it to approve an application for a second unit that complies with all of the following: a) The unit is not intended for sale and may be rented; b) The lot is zoned for single-family or multifamily use; c) The lot contains an existing single-family dwelling; d) The second unit is either attached to the existing dwelling or detached from the existing dwelling and located on the same lot as the existing dwelling; e) Requirements relating to height, setback, lot coverage, architectural review, site plan review, fees, charges, and other zoning requirements generally applicable to the primary dwelling in which the property is located; f) Local building code requirements which apply to detached dwellings, as appropriate; g) Approval by the local health officer where a private sewage disposal system is being used, if required; and, h) The floor area of the second unit is not less than 550 square feet.

• Prohibits any other local ordinance, policy, or regulation from being the basis for the denial of a building permit or a use permit for a second unit.

• Establishes the maximum standards that local agencies may use to evaluate proposed second units on lots zoned for residential use that contain an existing single-family dwelling, and prohibits any additional standards, with specified exceptions, from being utilized or imposed.

• Requires local governments to apply appropriate standards, defined as "densities and requirements with respect to minimum floor areas, building setbacks, rear and side yards, parking, the percentage of a lot that may be occupied by a structure, amenities, and other requirements imposed on residential lots pursuant to the zoning authority which contribute significantly to the economic feasibility of producing housing at the lowest possible cost given economic and environmental factors, the public health and safety and the need to develop affordable housing," in making determinations pertaining to the location and restrictions for second units, and requires those standards to be objective, in writing, and formally adopted by the local governing body.

• Prohibits a local government from requiring an owner's dependent or caregiver to be the occupant of a second unit.

• Authorizes a local government to require that an applicant for a permit to create a second unit be an owner-occupant of either the primary or the second unit.

• Prohibits a local government from imposing a deed restriction or other limitation that requires that a property with a second unit be sold to an owner-occupant or restricts occupancy of either the primary or secondary unit if the applicant determines that he or she will not occupy either unit.

• Requires the total floor space of a second unit to be at least 550 square feet unless requested by the owner.

• Prohibits a local government from requiring more than one parking space per unit or bedroom or from requiring covered parking, but allows it to impose reasonable standards to limit on-street parking.

• States that nothing in this section shall be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act except that a local government shall not be required to hold public hearings for coastal development permit applications for second unit.

• Establishes the maximum standards that local agencies may use to evaluate proposed second units on lots zoned for residential use that contain an existing single-family dwelling, and prohibits any additional standards, with specified exceptions, from being utilized or imposed.

• Mandates that, when a school district agrees to allow multifamily or a single-family residential use on the school district's property and agrees to adequate security features, the residential density permitted on the parcel is the highest multifamily residential density permitted on any parcel within 300 feet plus any density bonus mandated by statute, or, if there is no multifamily residential use permitted within 300 feet, the highest multifamily residential density allowable in the community plan area.

The League of California Cities has taken the position to oppose AB 2702 and requests cities to oppose AB 2702 because the bill transfers local land use authority to the state and the bill’s one-size-fits-all approach that ignores jurisdictions doing a good job on housing.

AB 2702 has been read for the first time in the Senate and is pending committee assignment in the Senate.

REGISTERED SUPPORT (short list):

California Association of Realtors (co-sponsor)

California Rural Legal Assistance Foundation (co-sponsor)

Western Center on Law and Poverty (co-sponsor)

OPPOSITION (short list):

California Chapter of American Planning Association

California State Association of Counties

League of California Cities

Over 59 cities, including:

City of Palos Verdes Estates

City of Torrance

City of Santa Monica

City of Signal Hill

Should City Council move to oppose AB 2702, staff will prepare the attached draft letter for the Mayor’s signature.

FISCAL IMPACT

No fiscal impact is anticipated due to opposition of this legislation.

PREPARED BY

Gina Park

Assistant to the City Manager

APPROVED BY

Les Evans

City Manager

Attachment: Draft Letter

DRAFT

Honorable Betty Karnette/Edward Vincent

State Capitol, Room XX
Sacramento, CA 95814

RE: AB 2702 (Steinberg) Secondary Housing Unit--OPPOSE

Dear Senator XX:

On behalf of the City Council of Rancho Palos Verdes, I would like to express the City’s strong opposition to AB 2702 (Steinberg) which preempt local land use authority by imposing numerous restrictions on local second housing unit ordinances, such as limiting local ability to prohibit absentee-landlord duplexes to be created in single-family neighborhoods, reducing parking standards, dictating irrational minimum lot and unit sizes regardless of lot dimensions.

As you’re well aware, the City of Rancho Palos Verdes is a small bedroom community and became incorporated in response to the community’s strong will to control local land-use decisions. The "one-size-fits-all" approach of AB 2702 erroneously and unfairly proposes State mandates that are counterintuitive to local government efforts to address the special needs and circumstances impacting the community and the residents they serve. AB 2702 proposes to prohibit local ordinances from requiring an owner-occupant to live on the property in either unit. The City’s current Code requires the owner to occupy either the primary residence or second unit, so interest in the well being of the neighborhood is maintained. This change under AB 2702 sets up the opportunity to create absentee landlord rental situations in single-family neighborhoods. In addition, AB 2702 also proposes to reduce parking requirements to no more than one parking space for unit and prohibits local governments from requiring covered parking. The City’s Municipal Code currently requires one covered space. In some areas of the City, on-street parking will create public safety concerns and/or increase the public’s perception of unsafe right-of-ways as a result of this blanket State mandate.

Although the City of Rancho Palos Verdes is opposed to AB 2702 because its implementation will undermine the City's local planning authority and potentially pose substantial adverse impacts to the existing residential community, it is important to note that the City has a certified Housing Element and strives to provide for low to moderate income housing. In fact, the City has been very proactive in its efforts to encourage the construction of Second Dwelling Units. For example, prior to the passage of last year's AB 1866, the City had already adopted an Ordinance, which permitted Second Dwelling Units through ministerial action. Additionally, the City's General Plan Housing Element, adopted on August 21, 2001 and certified by the California Department of Housing and Community Development, includes a "Second Dwelling Unit" program to meet the City's moderate-income construction needs. This particular program is very successful in that 50% of the City's moderate housing construction need has already been met \through the construction of Second Dwelling Units in the City, and Staff expects that the remaining 50% will be met prior to the end of the planning period in 2005. Because of the existing program's success, the City does not see a need for the State to impose additional requirements as proposed through AB 2702.

Again, the City of Rancho Palos Verdes strongly urges you to oppose AB 2702 when it reaches the Senate floor. Your attention to this matter is much appreciated.

Sincerely,

Peter C. Gardiner

Mayor

Cc: League of California Cities