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AMENDED IN COMMITTEE 6/4/2020 FILE NO. 200113 ORDINANCE NO. Supervisors Mar; Mandelman BOARD OF SUPERVISORS Page 1 [Planning, Building Codes - Reauthorization and Extension of Fee Waiver for Legalization of Unauthorized Dwelling Units] Ordinance amending the Planning and Building Codes to reauthorize the waiver of fees related to granting legal status to existing dwelling units constructed without required permits and extending the waiver through December 31, 2024; requiring annual reports on the fee waiver program; and making findings of consistency with the General Plan and the eight priority policies of Planning Code, Section 101.1, and findings of public necessity, convenience, and welfare under Planning Code, Section 302. NOTE: Unchanged Code text and uncodified text are in plain Arial font. Additions to Codes are in single-underline italics Times New Roman font. Deletions to Codes are in strikethrough italics Times New Roman font. Board amendment additions are in double-underlined Arial font. Board amendment deletions are in strikethrough Arial font. Asterisks (* * * *) indicate the omission of unchanged Code subsections or parts of tables. Be it ordained by the People of the City and County of San Francisco: Section 1. Findings. (a) The Board of Supervisors finds that the actions contemplated in this ordinance are consistent, on balance, with the City’s General Plan and the eight priority policies of Planning Code Section 101.1 because the fee waiver will encourage owners to maintain and legalize potential sources of affordable housing. (b) Pursuant to Planning Code Section 302, this Board finds that the actions contemplated in this ordinance will serve the public necessity, convenience, and welfare because the fee waiver will encourage owners to maintain and legalize potential sources of affordable housing and result in little fiscal impact to the City. 92-20

Supervisors Mar; Mandelman BOARD OF SUPERVISORS

Page 2 (c) In California Government Code Section 65852.150, the Legislature declares that accessory dwelling units are a valuable form of housing in California because they "provide housing for family members, students, the elderly, in-home health care providers, the disabled, and others, at below market prices within existing neighborhoods" and that "homeowners who create accessory dwelling units benefit from added income, and an increased sense of security." (d) San Francisco has long had a housing shortage, especially of affordable housing. The housing market continues to be tight and housing costs are beyond the reach of many households. Objective 3 in the General Plan’s 2014 Housing Element directs the City to protect the affordability of the existing housing stock, especially rental units. Policy 3.4 seeks to preserve “naturally” affordable housing types, such as smaller and older ownership units. (e) The City has no definitive information on the number of dwelling units that have been added to existing residential buildings without the benefit of a permit (currently defined in Planning Code Section 317(b)(13) and hereafter referred to as “unauthorized units”), but unofficial estimates indicate that as many as 30,000 to 40,000 such dwelling units existed as of 2013. Often these unauthorized units have been built in the basements, garages, and attics of existing buildings or in rear-yard structures. While many of these unauthorized units may not meet existing Planning and Building Code requirements, they constitute a major supply of San Francisco's affordable housing units, often meet life and safety standards, or could meet such standards with minor permitted alterations, and may require only exceptions from density, open space, and other Planning Code requirements in order to become legal units. (f) The City’s 2014 Housing Element notes that while 76 unauthorized units were granted legal status between 2004 and 2013, a much larger number (226 units) were removed during that same period. ///

Supervisors Mar; Mandelman BOARD OF SUPERVISORS

Page 3 (g) In 2014, the City enacted Ordinance No. 43-14, which amended the Planning Code, the Building Code, and the Administrative Code to establish a legalization process for dwelling units built without a building permit. (h) In 2015, to encourage the legalization of existing unauthorized units, the City enacted Ordinance No. 146-15, which waived the permit fees related to legalizing existing unauthorized units for permits issued prior to January 1, 2020. (i) This ordinance would re-authorize and extend the fee waiver enacted by Ordinance No. 146-15 for an additional five years commencing on January 1, 2020. By waiving such fees, the City would continue to create incentives for property owners to pursue legalization of the unauthorized units and would help achieve several public policy objectives. By encouraging the legalization of these units, the City would add units to the City's official supply of affordable housing, ensure that these units are safe and habitable, and properly include these units when calculating the City's existing housing supply.

Section 2. Fee Waivers. (a) Notwithstanding any provision of the Planning Code, including the fee schedule associated with Section 350, the permit fee related to reviewing permit applications seeking to legalize existing dwelling units that were constructed without the required permits is hereby waived for any permit issued for such activities between January 1, 2020 and December 31, 2024, inclusive. (b) Notwithstanding any provision of the Building Code, including the fee schedules of Tables 1A-A and 1A-E, the Plan Review Fee related to reviewing permit applications, or a portion of a permit application, seeking to legalize existing dwelling units that were constructed without the required permits is hereby waived for any permit issued for such activities between January 1, 2020 and December 31, 2024, inclusive; provided that other

Supervisors Mar; Mandelman BOARD OF SUPERVISORS

Page 4 fees, including but not limited to fees for applications to undertake structural work or excavation activities or any fees required by State law, shall not be waived. (c) Only the portion of the permit fees related to legalizing existing units may be waived. If the permit describes work beyond that required to legalize the unit, the fees related to any additional work beyond necessary improvements for legalization shall not be waived. (d) In the event the Director of Building Inspection or the Planning Director determines that the fee waivers provided in this ordinance are no longer feasible, they may provide information to the Board of Supervisors about said infeasibility and the Board may consider adopting an ordinance terminating this fee waiver prior to January 1, 2025.

Section 3. Report by Department of Building Inspection. Starting March 2021 and during each March annually thereafter, concluding with March 2025, the Department of Building Inspection shall submit a report to the Mayor, the Board of Supervisors, the Building Inspection Commission, and the Planning Commission on the fee waivers related to permits granting legal status for unauthorized units. The report shall include, but need not be limited to, the following information: (a) the total amount of fees waived during the prior calendar year and the amount of fees projected to be waived during the current calendar year, including those of the Planning Department, and any administrative costs for the prior calendar year and the current calendar year associated with the Departments’ processing of such waivers; (b) the number of projects that took advantage of the fee waiver program during the prior calendar year, and the districts or geographical areas of San Francisco in which the legalized units are located; (c) the number of units in single-family homes and the number in multi-family buildings, legalized during the prior calendar year;

Supervisors Mar; Mandelman BOARD OF SUPERVISORS

Page 5 (d) the length of time each fee waiver applicant (“applicant”) who submitted the application during the prior calendar year has owned the subject property, and if the applicant is an individual or a business; (e) for each fee waiver applicant who submitted the application during the prior calendar year, if the applicant owns, in whole or in part, other residential property in the City as an individual or part of a partnership or corporation; and (f) for each fee waiver applicant who submitted the application during the prior calendar year, if the applicant has, or had within the past 10 years, building permit applications for other residential properties in the City; (g) if there was a tenant in the unauthorized unit at the time the applicant submitted the application for a permit to legalize the unit; and (h) if there was a tenant in the unauthorized unit in the five years prior to submitting the permit application to legalize the unit. The Director of the Department of Building Inspection shall decide how best to obtain the information required by subsections (d), (e), (f), (g), and (h) above, which could include but is not limited to self-reporting by applicants.

Section 4. Effective Date; Retroactivity. (a) This ordinance shall become effective 30 days after enactment. Enactment occurs when the Mayor signs the ordinance, the Mayor returns the ordinance unsigned or does not sign the ordinance within ten days of receiving it, or the Board of Supervisors overrides the Mayor’s veto of the ordinance. (b) Upon its effective date, this ordinance shall be retroactive to January 1, 2020. It is the intent of the Board of Supervisors that the fee waivers originally provided in Ordinance No. 146-15 and provided in this ordinance be uninterrupted through December 31, 2024. Any

Supervisors Mar; Mandelman BOARD OF SUPERVISORS

Page 6 fees waived in this ordinance that are collected between January 1, 2020, and the effective date of this ordinance shall be promptly reimbursed by the City.

Section 5. A copy of this ordinance shall be placed in the file for Ordinance No. 146-15 (Board File No. 150571), and the listing of Ordinance No. 146-15 on the Board of Supervisors website shall include a reference to this ordinance.

APPROVED AS TO FORM: DENNIS J. HERRERA, City Attorney

/s/ Judith A. Boyajian By:

JUDITH A. BOYAJIAN

Deputy City Attorney

n:\legana\as2020\2000303\01448859.docx Tails City and County of San Francisco City Hall 1 Dr. Carlton B. Goodlett Place San Francisco, CA 94102-4689 Ordinance Ordinance amending the Planning and Building Codes to reauthorize the waiver of fees related to granting legal status to existing dwelling units constructed without required permits and extending the waiver through December 31, 2024; requiring annual reports on the fee waiver program; and making findings of consistency with the General Plan, and the eight priority policies of Planning Code, Section 101.1, and findings of public necessity, convenience, and welfare under Planning Code, Section 302. File Number: June 16, 2020 Date Passed: 200113 May 07, 2020 Government Audit and Oversight Committee - CONTINUED TO CALL OF THE CHAIR June 04, 2020 Government Audit and Oversight Committee - AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE June 04, 2020 Government Audit and Oversight Committee - RECOMMENDED AS AMENDED AS A COMMITTEE REPORT June 09, 2020 Board of Supervisors - PASSED ON FIRST READING Ayes: 11 - Fewer, Haney, Mandelman, Mar, Peskin, Preston, Ronen, Safai, Stefani, Walton and Yee June 16, 2020 Board of Supervisors - FINALLY PASSED Ayes: 11 - Fewer, Haney, Mandelman, Mar, Peskin, Preston, Ronen, Safai, Stefani, Walton and Yee Page 1 City and County of San Francisco Printed at 12:00 pm on 6/17/20 File No. 200113 London N. Breed Mayor City and County of San Francisco Page2 I hereby certify that the foregoing Ordinance was FINALLY PASSED on 6/16/2020 by the Board of Supervisors of the City and County of San Francisco. o Jte App ~oved Printed at 12:00 pm 011 6117120