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California cities rush to limit new law increasing density of single-family neighborhoods

San Francisco Chronicle logo San Francisco Chronicle 11/25/2021 By Alexei Koseff

Advocates of denser construction as a solution to California’s housing shortage scored a victory in September when Gov. Gavin Newsom signed a long-sought law that will make it easier to build out existing neighborhoods by splitting lots, adding second units to the properties and converting homes into duplexes.

But the battle over SB9 — which could ultimately help add hundreds of thousands of homes across the state by allowing up to four units on some properties that had just one before — is ramping up again before the the law takes effect in January, as cities that opposed the measure move to limit its impact on their communities.

Los Altos Hills, the affluent Silicon Valley town that maintains a standard of minimum one-acre lots to preserve a semi-rural character and where homes sell for millions of dollars, led the way last week when it adopted an urgency ordinance, likely the first in the state, restricting the type of housing that residents can build if they split their properties.

The design regulations are allowed under the law as long as they are applied objectively — flexibility that local officials contend is necessary to protect the safety and priorities of their communities and that critics charge has become a loophole for hostile cities to exploit.

Activists who support SB9 say they are aware of more than a dozen other cities across California, from Sonoma to Redondo Beach, in various stages of development on similar plans. They argue communities are rushing to undermine the law by creating obstacles to build housing that do not exist for other projects.

“We’re seeing once again an example where many local governments seem more interested in using their local control to exclude people,” said Aaron Eckhouse, regional policy manager for California YIMBY, a group that lobbies for policies to build more housing. “The Legislature did leave cities discretion under SB9 and they’re abusing it.”

It’s the latest front in a rapidly escalating showdown between state and local authorities over housing policy as California tries to dig itself out of its severe affordability crisis.

The state has passed dozens of laws in recent years to boost housing production, often by removing the ability of cities to block certain projects, and recently launched new administrative units to enforce those rules, frustrating local governments and homeowners who say they are being unfairly blamed for a problem caused by the harsh economic realities of development. A campaign is now collecting signatures for a state constitutional amendment that would wrest back local control over land use.

State Senate President Pro Tem Toni Atkins, a Democrat from San Diego, intended SB9 to be a compromise after several years of blistering legislative fights over denser housing laws. By fitting additional units into existing neighborhoods, rather than promoting massive new apartment buildings, she presented the measure as a more modest and equitable approach to density that could bring cheaper housing into communities without fundamentally changing their character.

Despite the olive branch, local governments and suburban homeowner groups raised fierce objections about losing control over how their communities develop. At least 150 cities formally opposed the bill as it moved through the legislative process.

Under the law, they will have to approve applications for lot splits and at least two units on each property if the projects meet size requirements and local design standards, fall outside historic and environmentally sensitive districts, and do not require the demolition of housing that is rent-restricted or has been occupied by tenants in the past three years.

Those design standards, which are up to cities, and other exceptions within the law have provided a last stand for local officials to push back on SB9 in the final weeks before it takes effect. A growing number are scheduled to vote on emergency ordinances at upcoming council meetings, temporary rules that would nevertheless be in place by Jan. 1 and give them more time to adopt permanent regulations next year.

Planning commissioners in Pasadena, for example, recently floated the idea of creating more historic districts so as to exempt virtually the entire city from the law, according to local news outlet Pasadena Now.

David Reyes, the city’s director of planning and community development, said in an email that Pasadena has adopted other “pro-housing policies” like high-density zoning near transit, but opposed SB9 “because it does not guarantee the construction of affordable housing nor will it spur additional housing development in a manner that supports local flexibility, decision-making and community input.”

At a meeting earlier this month, the Cupertino City Council discussed passing regulations that go to the limit of what is allowed so as to prevent developers from using the law to profiteer. Brian Babcock, a spokesperson for the city manager’s office, said in an email that staff is “committed to developing an ordinance that complies with SB9 while addressing community concerns about its implementation” and will “preserve local control over land use decisions to the extent allowed under state law.”

Homeowner groups that fought the passage of the law are amplifying the effort. Livable California, a statewide organization that advocates to preserve local control and single-family zoning, said it has held two informational meetings about what cities can do to set standards.

United Neighbors, a coalition of neighborhood groups largely based in Southern California, wrote a draft resolution with potential rules for SB9 development that it has presented to Los Angeles and other cities for consideration. Among its suggestions is that every project approved under the law should include a 30-year covenant for low- or middle-income residents or an affordable housing fee for the applicant.

“If we’re going to open up our communities, maybe we need to make sure we’re going to get affordable housing out of it,” founder Maria Pavlou Kalban said. “It’s not restricting it. It’s controlling it so it’s good for communities, not for someone who just decides they’re going to make a lot of money out of our communities.”

The Los Altos Hills ordinance, approved unanimously last week by the town council, caught the attention of SB9 supporters because of how wide-ranging it is.

In addition to capping new units at 800 square feet, the minimum required by the law, and one story, the regulations include design standards for exterior lighting and wall colors, prohibit basements and roof decks, and mandate an uncovered parking space and hedge of evergreen shrubs for each unit.

To discourage lot splits, which could allow one of the properties to be sold, the town would allow homeowners to build up to two additional secondary units if they change their parcel deed to prohibit subdivision. All units approved under SB9 would be restricted to low- and very low-income households, though they would not receive any discount on municipal development fees, which critics contend is a way to make the law altogether financially infeasible in Los Altos Hills.

“Let’s not try to kill the goose that’s laid the golden egg for all of us. Let’s not be the people who climb to the top and pull the ladder away,” resident Anand Ranganathan said during the meeting’s public comment period. “If we should go ahead with this plan, we will be ridiculed around the world as being elitist, out of touch, and you know what? We will deserve all of that ridicule.”

Mayor Kavita Tankha defended the rules as accommodating residents’ desires to maintain their privacy, preserve open space and reduce fire risk.

“I do believe that we have legitimate concerns as it pertains to protecting the things that we value in this town,” she said before the vote.

YIMBY Law, an organization that promotes the enforcement of state laws favoring housing development, is already weighing a lawsuit against Los Altos Hills over the ordinance.

Executive Director Sonja Trauss said the officials behind the policy — and those pushing similar proposals in other cities — are misusing their authority to craft objective design standards, placing stricter limits on SB9 projects than for single-family homes to subvert the law. She said a lawsuit could pertain to the emergency rule-making, which requires an imminent threat to public health and safety, as well as a belief that the restrictions illegally reduce the amount of new housing that can be built, in violation of another state law.

“It’s sort of obvious that if you allow cities to have special rules for projects,” Trauss said, “then they’re going to do exactly what you’re seeing here, which is try to make those programs unattractive.”

Peter Pirnejad, city manager for Los Altos Hills, said the town was not trying to limit the effectiveness of SB9 but to prevent any adverse impacts to its “very unique” semi-rural character. Dense development in a place with narrow streets and high fire hazard zones could put people in harm’s way, he said, and would not afford the privacy and separation from other homes that residents demand.

“The council is operating within the parameters established by SB9. It doesn’t need to defend its actions,” Pirnejad said. “That’s a fine balance. The council does not want to be seen as elitist. They do not want to be seen as prohibitive. What they are trying to do is operate within the auspices of the law.”

It seems almost inevitable that the future of SB9 will be decided in court. YIMBY Law has sent warning letters to several other cities also considering urgency ordinances. Representatives for the California Department of Housing and Community Development, which was recently given additional power to sanction cities that do not meet state-mandated housing goals, and Attorney General Rob Bonta, who launched a “strike force” this month to enforce state laws to boost production, said they are monitoring the situation.

“There’s always a bit of a game of cat and mouse when it comes to state housing laws,” said Sen. Scott Wiener, a San Francisco Democrat who has introduced some of the most aggressive bills in the Legislature to streamline development.

Some cities similarly pushed backed a few years ago as the state made it easier for homeowners to build backyard cottages and other secondary units on their properties, prompting several rounds of follow-up legislation, he said. Though that strategy may be necessary again, Wiener said California now has stronger housing laws on the books and he expected the conflict could be resolved through administrative or legal channels.

“Unless they are compelled to allow housing, they are not going to do it,” Wiener said. “I hope that these cities get sued.”

At least one city has already backed off the most stringent regulations it was considering.

Draft standards presented to the Campbell City Council last month included a prohibition on the creation of flag lots, where one property sits back from the street behind another, and limited units created under the law to two bedrooms, a kitchen and a family or living room. After receiving a letter from YIMBY Law, city Manager Brian Loventhal said staff has been talking to the group about a different approach and plans to put forth a revised ordinance next month.

Loventhal said Campbell, which unlike many other jurisdictions did not take a position on SB9, was merely trying to establish a clear process for residents who want to take advantage of the law come January.

“There is no model and there’s not a lot of guidance on this,” he said. “Our intent is to do this the right way.”

Alexei Koseff is a San Francisco Chronicle staff writer. Email: alexei.koseff@sfchronicle.com Twitter: @akoseff

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