ADUs, SB 1069, and SB 13 With Senator Bob Wieckowski #642

This week, Aaron Norris is joined by Senator Bob Wieckowski, who he interviewed back in November. He’s been a representative since 2014 for the 10th Senate District in California, which stretches from Southern Alameda County into Santa Clara County. Mr. Wieckowski chairs the Environmental Quality Committee and budget Sub-Committee 2 on resources, environmental protection, energy, and transportation. He is also a member of the Senate committees on judiciary, budget, and fiscal review, transportation, and housing and ethics. He’s been one of the leaders in the accessory dwelling units space. Today they will discuss ADUs.

Episode Highlights

  • What is the latest development on ADUs?
  • What changes have been made to SB 1069?
  • How do the rules apply to transit?
  • How many cities have passed ordinances in conjunction with 1069?
  • Why was Huntington Beach sued, and does this put their CBDG funds at risk?
  • What is SB 13?
  • How does 1069 apply to attached or detached garages?

Episode Notes

Aaron is going to be moderating a panel in San Diego on June 11th. The audience there is really going to be owner occupants. San Diego Creative Investors Association decided to do some community outreach., and they might have a large number of first-time landlords on our hands if they decide to move forward with the ADUs. The radio show is really focused on the investor voice, and there are some exciting things happening.

There are nine bills right now on accessory dwelling units in the Senate and in the assembly. Apparently there’s a lot of interest, and Bob Wieckowski has been on the forefront of this. Aaron asked what has changed. Bob said some of his colleagues recognized the important role that ADUs will play in helping the state build more affordable housing.

He has often said on panels or in testimony that the ADUs are not a panacea for solving our housing crisis. It’s a quick, efficient, and less expensive way to build structures and build housing without public subsidies. Being from the Bay Area, he definitely has some issues up there. Aaron had a friend that just moved up there from Southern California, and he lives outside public transit two hours from where he works in downtown San Francisco. Bob said many moons ago, he was living in San Francisco and his bankruptcy firm gave him a reassignment to San Jose. This meant he had to reverse commute. He had two buses, the train, and then the trolley up to the office. It was two and a half hours, five hours back and forth.

Aaron said that’s not easy, and down here in Southern California the prices have gotten a little nuts. Aaron asked what year the conversation on accessory dwelling units started. The first bill went into effect in 2017. Bob comes from local government and was on the Fremont Recreation Commission, the Planning Commission, and then the city council for six years. In 2002, assembly member Rod Wright passed a bill that required all cities to come up with a granny unit second unit ordinance. They wanted cities to encourage more granny units and secondary units. They said they would give them free reign, but they had to develop these ordinances. This was a nightmare. Using their city planners, city managers, city attorneys, they created ordinances that made it impossible for anybody to build a second unit.

When he was on the the city council a few years later and doing the General Plan update, he was asking how many secondary units had been built. Fremont has a population of 230,000, and they were building 1 or 2 and it was all rich doctors up in the hills who didn’t want their mother-in-law living there and didn’t care what the cost was. They said she was not going to be under their roof. It was ridiculous, and it was pretty much statewide.

Even as an assembly member, this was one of these issues where he would sit there and talk about what they wanted to do with the package in the winter. As far as the assembly was concerned, he could have done this earlier but had other priorities. When it finally got to the Senate, he said they were doing it this year and he was going for the full monty. 1069 was the process at that. The frustration was where cities had manipulated the intention of the legislature and the homeowners. People were stifling them from developing their houses the way that they wanted to. This was the genesis of it.

Aaron asked if it is unusual for the state to come in and basically dictate to the municipalities. In 2017, if you had an ordinance in place that’s, nice and cute., but this was the new thing that goes into effect you have to have a new one on file that allows for accessory dwelling units to be built. It’s by right as a landowner. Bob said it could be unusual, but the key with accessory dwelling units is they are not bullying states, cities, and counties and telling them what to do. They were saying they wanted to return the authority back to the homeowner. Under certain conditions, the homeowner has a ministerial right to have their plans approved. Ministerial normally means you’re standing at the counter paying your fee and they’re approving your plans. It’s a 10 minute gig, not a 60 day, 120 day, or a six year odyssey that one goes through.

The difference was that they were giving the homeowner that authority to develop their lot. They set some guidelines. With 1069, for all the benefits i thas, still limits this right to a half a mile from transit. It wasn’t just large transit or active transit; it was any transit. If you got one bus stop in your town when you’re within a half mile, you’re protected or you come under the 1069. Cities have been clever about having bus traveling every 15 minutes. If one bus comes into town, is at this stop, comes in once a day, and is within a half mile, you’re protected by 1069.

The state has responsibilities, and they enable cities to function. Sometimes they have to come in and say what they can’t do and can’t limit. This is a tug of war with all the local control and state governments. Aaron asked what the respons has been from the different municipalities on the counties and cities, whether they are annoyed or anything.

Bob thinks some of them are happy, but some of them are frustrated and upset. They fall into all three categories. In San Jose, for instance, they want to do a stronger law than SB 1069. In Los Angeles, they haven’t approved their their new ordinance. They’re operating under 1069 and aggressively ministeraly granting permits for people that want a deal. There’s a different temperature and a different atmosphere in Los Angeles.

When it comes to other cities, we have 482 cities and about 200 have passed ordinances. Some of them are in compliance with 1069, and some of them are not. One of the new elements that SB 13 does is that it gives the housing community development the authority to go over these bills and say what is not in compliance. Some cities taking it slow, and they’re working within the confines of 1069. And others are just some of the bad actors. They can say that they’re upset, but 1069 is pretty clear. Bob did this on purpose and said if the local ordinance does not comply with 1069, it is completely void. It’s not voidable, and it’s not that Section 16 is out. The whole local law is done, and then you are bound by 1069 until you pass a new one that is in compliance with state law. You have almost 300 cities that haven’t done that, and this is going on three years now.

Greg Nicholas with the Housing and Community Development Department for the state is going to be part of the panel on June 11th in San Diego. Aaron has been talking to him since August of last year. When he went to the state web site, he thought he didn’t see all the ordinances for all these cities. Turned out it defaults to the state. Aaron has heard different contractors tell him they show up with the plans to the local city with no ordinances and they basically just have to stamp it because they don’t have anything up against it. There’s a lot of cities that just don’t get it.

What’s helpful about what Bob is doing is it standardizes it. A lot of real estate investors have properties in a lot of different municipalities, and it is an absolute nightmare to know that the most updated ordinances aren’t necessarily on the state. It may not even be on the city’s web site. You almost have to call your local council member and ask where we stand with this politically and if they will be passing anything anytime soon. If you’re not a resident of that city, it makes it really onerous and sometimes dangerous because investors are putting up their own money. These are real estate investors with the talent and the access to the laborers that know how to build and know the process. They have access to private capital like the Norris Group, who can help them fund it. Aaron said he can see investors helping fill this gap faster if it’s more clear.

Aaron would like to see the cities get into the pre-approved process. Some cities have done so, but he wants to have the conversation with them affirming what they will approve and what they would like for design guidelines. Encinitas has some pictures and sent some pre-approved plans showing what they would like to have done. LA is playing around with them, and Santa Cruz has had some things for a long time. If it’s the country inn look that you like, let the builders know and the homeowners. For some, this is just a one and done for a lot of individual homeowners and investors.

Senate bill 1069 was very flexible.  Here is a link to the radio show that he and Aaron had back in November. since manufactured housing is included in this. It’s really broad, and in Aaron’s mind it was a mistake for cities not to come out with an ordinance because it was very generous. Bob said those are the consequences. People would ask him if they could make it voidable, and he would tell them it’s already void. What this does, at least on the commercial side, is spurred all these prefab units and something that looks a little bit edgier than the cottage. It’s what different cities, different age groups, and different people want to live in that city. It’s a smaller unit that we’re talking about, sometimes 500-600 feet.

The state recently sued the city of Huntington Beach for not meeting affordable housing goals. If they’re not in compliance, Aaron thought catching up on affordable housing would seem like a slow process. Aaron asked if its true that their CBDG funds are at risk. Bob said they are. There were two things that Huntington Beach did. They’re a charter city, and he ran a bill because he found out about a couple dozen cities and their charter cities how they passed a general plan that said what they were going to allow. Once they get approved and get their numbers to build, they go back in as a charter city, do a specific plan, and wipe out all that stuff. They thought they could do what the wanted as a charter city. Bob is not their city attorney, city council, or city manager, but they passed the legislature and governor signed last year a bill that said that you cannot do that. Your specific plan and general plan have to be compatible.

That was one of the elements of the complaint with the attorney general that they had, and they were running out of time. This was why Huntington Beach was sued. Their time period was running out, and the state had to move. So it focuses attention on bad practices in the name of local control. They’re switching out their numbers so that they can they can have it both ways. We’re in a different era right now. Play fairly.

There was a little bit of politics behind the scenes. Aaron was curious because he knew that the affordability goals is looked at depending on the city, every three, five, or eight years. He wasn’t sure if we should expect to see more of these lawsuits. The CVG funds are no joke either. Aaron has been serving on nonprofit boards for over a decade, and he sees that as a major funding piece for a lot of what the nonprofits do. If the cities don’t have access to that, it’s a big deal.

A lot of people will talk about the loss of redevelopment and affordable housing fund. The number of tickets floated around is $1 billion, and he reminds his colleagues on what seems like a daily basis that the cap and trade program, which has got three billion dollars in revenue, provides 20% of that, which is $600 million for affordable housing per year. In Atkin’s bill SB 2, which is the seventy-five dollar transaction fee that you pay on real property transactions except for sales, even though it didn’t go forward that’s still a quarter of a billion dollars. We are at $850 million that has been replenished for an affordable housing fund that people don’t talk about.

Now, since cities are not paying into the RDA, they have that money. They have the money that they would normally be paying in because they had to chip in the money too. So it’s more or less awash of where we were nine years ago with redevelopment. A lot of people don’t look at it that way because it’s not a good talking point for that. It’s a bigger problem, but everybody agrees on the three point five million homes that were short. What we can do in the meantime to meet those schools, and ADUs is a way to get there. We need to get the law in place and at least streamline it some so that we’re nudging cities into being a partner with this.

One of the things that the SB 13 does is it has an amnesty program that allows the cities to count the RENA goals, those unpermmitted units that exist in their cities, and it gives them 10 years to bring them up to code. So you get to count them towards your RENA numbers. You get to fiddle with whether the door meets the code or whether needs to be done. Bob said as long as it’s safe and not a hazard, his preference is that the cities approve these things and permit them. If the homeowner wants to improve it, let them. They have ten years to do it.

Aaron next asked about the changes to SB 13 and why they happened. Some of them are pretty juicy, so a lot of the people he has spoken to do not understand that ADUs are possible on multi-family. That’s 1 to 4. If you have a fourplex, you are able to add an ADU unit for technically a fifth. These small fourplexes look like little apartment complexes. A lot of times, in some areas there’s the garage in the basement. They can do something outside, but they also could do something within the structure. Get rid of everybody’s storage and put an ADU back there. It depends on what the physical structure looks like.

Aaron thinks in 1069 there’s language that it carries over into agricultural sites to whereas a lot of times there may be one structure on AG and then you can add an ADU. Aaron wondered if this still applies. Bob said he is silent on it with SB 13. He is not extending it because he has some people in the rural communities who say they are unique and that the ADU shouldn’t apply. Going back to his track home built in 1959 in the suburbs of Fremont, there could be another tract home in the inner city of Los Angeles that is the exact same model, and another tract home in California “4000 people,” but it’s the same house. It’s on the same five thousand square foot lot. If there’s a bus stop within a half a mile, 1069 applies.

Bob is trying to clean up what he thinks are the biggest barriers to doing it. There is some enthusiasm to do the adjustments as we learn of the clever things that cities do to create new barriers. Aaron wanted to go through the list to see why certain things were phrased a certain way compared to 1069. A change on the parking would prohibit cities from requiring replacement parking if an ADU was placed within an existing garage structure. Aaron asked if this is because of a driveway or street parking typically being there. Bob said 1069 did two things. It said that you can slice and dice your house any way you want it to, including the conversion of your garage. It was a ministerial activity. It didn’t matter where you were if you were within a half mile of transit. If you were going to build a stand alone ADU unit, the city could allow it. However, the city could not require you to replace the garage that you had or build another garage.

Some people had a detached garage.  If you’re just going in the garage and just doing a conversion, that counts towards the existing structures. You’re not building anything new. You didn’t have to have parking. There’s no parking required for any of the ADUs. The cities are clever and are coming up with these ordinance to say that if it’s detached, then you had to replace it. That was never the intention of 1069. Bob had to do cleanup legislation in 2017 on SB 229. In this bill, he had to define what tandem parking was. His favorite was the special districts, the water districts, that negotiated this proportional fee in 1069. As soon as the governor signed it, they said Section 1 doesn’t specifically mention special districts, so they thought they were not bound by this.

The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go and click the Hard Money tab.

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