Think ‘Housing Metamorphosis’

housing

I signed up as a faithful community member, to do the right thing, to speak up, to brain-storm and to find answers to what government calls the Housing Elements of our local jurisdictions. I’ve signed up for years and watched the same game, from the same playbook.

Government seeks to meet numbers which are created and derived from regional associations such as AMBAG, i.e., Association of Monterey Bay Area Governments and many with similar handles throughout the State of California that do a numbers crunch and announce that each city and county meet specific numbers and guidelines, all of this done with the ‘best of intentions.’

Those numbers are sometimes astonishingly and seemingly huge and the public outcry often scrubs the numbers down, but not too much because money would be withheld by the State if cities and counties do not comply with those numbers.

Yet, very little housing gets built, so the supply continues to be sparse, especially to those who need it most.

In fact, sometimes the numbers are ‘met’ by using existing housing that is transformed by simply changing the zoning from other uses only to bear a new zoning for housing.

Borrowing from Peter to pay Paul? Double speak? It happens all the time.

We really need to concentrate on building homes/housing that meet all sizes and incomes as a result of careful planning for balanced supply/demand.

Somehow we have created a term called ‘Affordable Housing.’   For years, that term has bothered me because ‘affordable’ is really ‘subsidized’. It is housing that government or developers pay for, with stringent regulations tied to income and price controls—those regulations oft so complex that the rules that govern theiraffordability are like secret, unsolvable cypher.  In my opinion,  we should no longer call these types of programs affordable because they are NOT.

Let’s get real and call it Subsidized Housing, once and for all.

The Housing Elements I signed up, again—to brain-storm about/with, always contain the same critical path, with Associations of Government, and State Housing and Community Development and nothing will change.   It will not change until we recognize the need to alter the old paradigm of using bureaucracies to govern supply. There’s the word: Supply!   That’s what we don’t have.

It will not change until we recognize the need to alter the old paradigm of using bureaucracies to govern supply.

Our zoning refers to multi-residential, but our high density zoning is really very low, compared to other States and (I know I will not be very popular saying this), but some places have created lovely ‘density’ that works! We are terrified of any structure that exceeds three stories. Supply+Density needs to be part of our vocabulary.

What about water? Or, the other argument: We don’t have enough land! I know the arguments, but other places in the world seem to figure it out. We have some of the most brilliant minds in the world living in our area, but somehow it doesn’t matter. Over and over, we keep doing the same thing. We all must be willing to look at other ways of fixing this issue. I’m suggesting that we embrace the idea of creating supply+density, taking into consideration our so-called lack of land, and drought. How long do we continue to ignore saving the rainwater that races to the ocean and considering a better use of the land that helps a community live and thrive? Let’s stop being very much like the famed ostrich whose head is in the sand. Let’s think outside the same, restrictive box! Let’s not keep doing the same things over and over and expecting a different result—oh yes, we know that definition.

 

Rose Marie McNair is a licensed real estate broker in northern California with over 35 years experience in residential/commercial sales as well as Government Affairs and land use oversight. She has held numerous leadership and legislative roles during her career for local and state organizations including theSanta Cruz Association of Realtors, Pajaro Valley Association of Realtors and the California Association of Realtors (CAR).

Investment property too complex? No, just Duplex.

Don’t get in hot water with your ‘duplex’.

LOCAL laws are created with the stroke of a pen and they impact the property you own or property you might want to purchase in the County of Santa Cruz, the City of Santa Cruz, and the City of Capitola. (City of Scotts Valley does not have this law, and I need to check on the City of Watsonville).

Did you know that a house in the County of Santa Cruz, the City of Santa Cruz, or the City of Capitola which includes what is called an Accessory Dwelling Unit (ADU), aka Second Unit or Granny Unit, is not a duplex? A further complication: An ADU should not be confused with a guest house or guest accommodation and cannot be rented for periodic tenancies—it’s only for short guest visits, and must not include cooking facilities, etc. (I am not going to muddy the waters and talk about vacation rentals in this discussion—I’ll leave that for another time!)

So…if you understand these jurisdictions; a parcel with a home MAY allow an ADU, Second Unit, or Granny unit, but with explicit criteria on size of lot, setbacks, floor area ratio, etc. with an approved permit. The most recent properties that have a home and an ADU also have deed restrictions that say:

Subject property owner MUST reside in the main house, or the ADU.

Investors don’t want to move into their investments—they want income on both, but because of the law, they cannot. Also, just because somebody else is doing it, i.e., renting both units does not mean they might not be caught and face red tags, fines and a lot of grief.

Simply put, it means that NO investor can purchase a property with a home and an ADU and rent both units.   They must reside in one or the other. And that means, it is not a duplex! And what if an owner has to leave for a year and go back East to care for a family member and would like to rent out their home? The City of Santa Cruz will allow a 2 year dispensation to an owner who provides this hardship. After that time, they may need to move back in, discontinue the use of the ADU or sell. Santa Cruz County is continuing the Owner Occupancy, as is Capitola for now.

Finally, what if the investor thinks it’s a duplex, because that’s how it’s being used now, or how it was listed for sale. How will the investor know when they buy it?  If they don’t know, I hope they read this blog! Because, what can happen, if discovered, is a jurisdiction may require the investor to do one of the following:

  1. Move in and be an owner-occupant, and rent out only one of the units
  2. Evict a tenant from one of the units and leave said unit vacant, or remove it all together
  3. Sell the property.   That would NOT be a happy investor.

 How can you tell the difference between a home with an ADU?

  1. Call the jurisdiction responsible for the property
  2. Check the zoning! Home and ADU=Residential zoning, which is NOT multi-residential. Make sure you check, because, as I say, with the stroke of the pen, in the ordinance, what use you think you have may be entirely different. Check with the jurisdiction for answers.

I spoke to the City of Capitola about the owner occupancy issue, and they are considering removing this owner occupant mandate, because of the difficulties that arise, and with the shortage of housing, we don’t want to lose units because of the stroke of the pen.

 

Rose Marie McNair is a licensed real estate broker in northern California with over 35 years experience in residential/commercial sales as well as Government Affairs and land use oversight. She has held numerous leadership and legislative roles during her career for local and state organizations including theSanta Cruz Association of Realtors, Pajaro Valley Association of Realtors and the California Association of Realtors (CAR).

SANTA CRUZ ASSOCIATION OF REALTORS HOUSING AFFORDABILITY COLLABORATION CONTINUES

THE LEGISLATIVE WATCH
Santa Cruz Association of REALTORS®
NOVEMBER 2001

On October 2, the Board of Supervisors hosted a Housing workshop and invited the City of Capitola, City of Santa Cruz, and City of Watsonville, to discuss their input on the current housing shortage. The staff report reiterated the deficit in supply as compared to demand, the housing affordability gap and the fact that fewer and fewer can afford property in Santa Cruz County. The goal of the meeting was to make the presentation a “study session” so that each entity could gather information to take back to their communities. Members of the community spoke regarding the housing crisis, as well. After the presentations, the Board of Supervisors directed staff to return on November 6, 2001 with a report that includes, but is not limited to, a report on the ramifications of raising the percentage of redevelopment funds available for affordable housing, the issue of linkage with the City of Watsonville, providing information on the possibilities of second units on agricultural land, a report from County Counsel on University of California status in relation to local ordinances, analysis of “in lieu fee” recommendations from the Housing Advisory Commission, re-zoning of multi-residential parcels and history and potential of Planned Unit Developments, impact of changing floor area ratios from 50% to 40%, legal information on how many may reside in a unit, statistical information about the number and needs of renters, identification of high density parcels and provide information on numbers of vacation rentals versus permanent housing units.

Meanwhile, the Clusters/Creative Solutions Team, which is a collaboration of community members who are meeting to develop a Housing Criteria to endorse housing projects that match these same criteria. Frank Morris, our Association President, Trevor Thorpe and Michael Lussier, Co-Chairs of the Local Governmental Relations Committee and the Legislative Monitor, Rose Marie McNair have been attending these “stakeholder” meetings and have been providing a REALTOR®’s perspective to the housing needs of Santa Cruz County. One of the speakers on October 26, was Chris Block, Executive Director of the Housing Trust of Santa Clara County. The development of the $20 million trust fund in remarkably short order during last years fantastic economy is now becoming a model for other housing collaborative efforts throughout the state. Mr. Block pointed out that because they designed the fund, they are not under the same constraints as Federal and State housing funds. Another speaker was Janet Falk, Executive Director of the California Housing Partnership . She informed us that the State is looking for ways to preserve existing affordable affordable units and currently 600 of them are at risk of losing affordable status. Many subsidized housing projects sunset after a period of years. Section 8 units are done on 20-year contracts and owners can choose NOT to renew. These started in the late ’70s and once expired, they are subject to renewal by congress and can be renewed year to year. “Watch” for the report on the Housing Options Feasibility Study at the City of Santa Cruz Council Chambers, November 8 at 7:00 p.m. The Technical Advisory Committee (TAC) of the City of Santa Cruz has been studying a lot of creative ideas for affordable housing, as well. Tapes of a very fascinating TAC workshop are available for check-out from the Association Library. The speakers were experts in various affordable housing venues and came from all parts of the state. The workshop will also be shown on local Cable TV-dates not known yet! Meanwhile, our Association Housing Task Force will be meeting to begin developing further studies for collaboration with the community on housing Creative Solutions. “Watch”!

COUNTY OF SANTA CRUZ

Changes coming in Code Violations Ordinance. In response to the County Grand Jury report in June, Planning Director Alvin James, presented a report regarding the County’s Code Compliance system and the areas that would best meet the County’s goals of making illegal units legal and safe. Over 51 % of the investigations opened resulted in resolution of the violation in less than the time frame goal of 120 days. However, obtaining compliance for the remaining 49% required longer than the 120-day goal. Compliance is a process in which the status of an investigation progresses from a complaint received through investigation, administrative actions, and ultimately referral for legal action through administrative or legal action. The first category entitled “Investigations in Progress” includes those investigations in which the property has been inspected, but a Notice of Violation has not been issued. The reason no violation is posted is to provide time for the property owner to complete repairs/corrections or to provide time for other inspectors such as county geologists or building inspectors. A Notice of Violation (Red Tag) moves the investigation into the next category. It is important to distinguish between minor violations and more serious land use violations. The enforcement clock should not start until the violation has been confirmed and posted by code compliance staff. Once confirmed, the violation is posted and recorded. Recordation automatically follows posting after a 20-day appeal period has ended. Recording violations notices protect future purchasers from unknowingly acquiring a property on which a violation exists. Supervisor Almquist raised the issue of complaints that come from hostile neighbors for a relatively minor infraction. Once on site, the inspectors tend to look for additional violations and the property owner is often stuck with a long list of code violations that are relatively minor, but continue to drag on and on. Almquist pointed out that unless the violations are so severe as to create a health and safety hazard, the inspector should look only at the violation they are called to inspect, and should try to look for a timely resolution. He was actually looking for enforcement of the 120-day maximum time frame for resolution. Mr. James said that sometimes it is not possible to resolve the complaints that quickly. Supervisor Pirie was concerned about allowing “any code violations”, regardless of how minor they might be, to be overlooked. Perhaps, mediation and conflict resolution between neighbors may resolve some of the issues. “Watch” as the code compliance procedures are redesigned to streamline and make the process more effective. This is expected on the agenda in early 2002, perhaps by February.

Revised Rural Road Standards Proposed

A Public Hearing will be held before the Board of Supervisors on November 6, 2001, at 9:30 a.m. to consider amendments to the Grading Ordinance regarding revised design standards for private roads, driveways and bridges to ensure that firefighting trucks/equipment can safely and effectively use the County’s rural private roads, and to make the standards consistent with the County General Plan/Local Coastal Program. The changes to Section 16.20.180 would include the following:

  1. standard allweather surface increases
  2. road dimensions-width would increase
  3. Bridges width increases from 16 to 20 feet,

but may be reduced by the · Fire Chief and other changes include standards for bridge construction and a requirement for permanent maintenance of the roadways and bridges under the Grading Permit. For more information, contact the Planning Department at 555-5555 or the Clerk for the Board of Supervisors at 555-5555.
“Watch”!

CITY OF SANTA CRUZ

Sewer Connection Fees to be Increased. When a building connects to the sewer system a fee is paid to the City for the right to connect. That fee is considered the cost to buy-in to the sewer system that has been built and maintained through monthly user fees over the last 80 years. In a report prepared by Steve Wolfinan, Associate City Engineer, the existing connection fees were adopted by resolution in 1986 and have not been adjusted for inflation. Since that time the City has made major investments in the Wastewater Treatment Facility and sewer collection system. The following proposed· fees were calculated using the equity the City has in the sewer system and the required capacity associated with a new connection. For a Single Family connection water meter, 5/8 inch or 3/4 inch, the existing fee is $720. The proposed fee of $1200 is a 67% increase. For a MultiFamily connection (per unit), the existing fee is $720. The proposed $900 fee is a 25% increase. For a NonResidential connection the fees vary according to the size of the water meter in a range of 5/8 inch to 6 inches. Existing fees range from $720 to $20,000. Proposed fees range from $1200 to $31,800. The percentages of increases are not the same for all connections because the existing rate may not have been based on the required capacity associated with each connection. The existing rates also used the same rate for all residential units whether it was a multi-family or single-family unit. The proposed rates recognize that on the average, one multifamily unit produces less sewage than one single-family unit. Therefore, the percentage of increase for multiresidential units is lower than other connections. To compare costs for Single Family connections in other areas, the City of Santa Cruz’s existing fee is $720 and proposed fee will be $1200. The City of Watsonville currently charges $1250, Santa Cruz County Urban charges $3000 and the City of Scotts Valley charges $4,801.
The Public Works Commission recommended approval of the proposed rates at its July 16, 2001 meeting. The revenue generated through connection fees can change dramatically every year based on the amount of new construction. On the average the increased fees should increase revenue for the Wastewater Fund by $30,000 to $70,000 annually. Check with the various localities for increased sewer fees for new connections.

Zoning Ordinance Update Regulating Single Room Occupancy (SRO) Units and Other Related Issues.

The City Planning and Community Development Department will present revisions to the high density SRO ordinance as the City of Santa Cruz continues to face a severe housing shortage which the report indicates is exacerbated by increasing enrollments at UCSC and continuing pentup housing demand throughout the Santa Cruz area. Although SRO developments can represent a viable and less expensive housing option for the City, the Department believes these units should be developed in areas that provide appropriate amenities and should not be encouraged over other forms of multi-family housing. In the last five years, 102 SRO units were built in Santa Cruz versus 73 units of other types of multi-family housing. Currently four more projects, representing 226 SRO units, are being proposed, and one project with 11 SRO units is under construction. SRO units are attractive to developers  because of reduced parking requirements and lack of density restrictions. Existing zoning standards and guidelines do not appear to fully address impacts such as density, neighborhood compatibility and project livability. At the request of the City Council, the Planning Commission has reviewed the ordinance and is recommending that the minimum SRO development standards and guidelines be revised. Some of the proposed revisions include amending the definition of SRO units to indicate that SRO units are smaller size units without going into unnecessary detail of actual unit sizes, increasing the maximum size allowed from the current maximum of 325 square feet up to 400 square feet, changing the optional use of kitchens under 220 square feet and addressing common bathrooms. Also, common facilities would clarify outdoor and indoor open space, laundry facilities would be required, additional storage space and bike storage would be added, on-site management would begin with 12 rather than 16 units with a recommended management plan, parking requirements for units under 220 square feet would require .75 space per unit and units over 220 square feet would require I space per unit and SROs would continue to be allowed with a Use or Special Use Permit in the downtown and along major arterials that have significant commercial development in the Community Commercial (C-C), Central Business (CBD), and R-T(C) Beach Commercial Districts. The Planning Commission recommends that SROs not be allowed in the General Industrial Districts (I-G, Multi-Residence-High Density (R-H), Motel Residential R-T(B) or in Beach Commercial Districts (B-C) . These areas do not provide easy access to a core shopping area such as a full service grocery store that normally has associated ancillary uses such as coffee shops, pharmacies and other smaller shops. “Watch” as this ordinance will be on the agenda as we go to press!

CITY OF SCOTTS VALLEY

Mt. Hermon June Beetle and Joint Habitat Conservation Plan (HCP) with the County of Santa Cruz. The City of Scotts Valley has been notified by the US Fish and Wildlife Service (USFWS), that certain projects being contemplated by private property owners are located in areas where the Mt. Hermon June Beetle has been found to be present. The Mt. Hermon June Beetle is a listed species protected by the Endangered Species Act (ESA) . Since the issues have been identified, several property owners, real estate agents and developers have contacted staff with concerns about permit processing for future room additions, swimming pools, subdivisions, etc. In January 1997, the Mt. Hermon June Beetle and the Zayante Bandwinged Grasshopper were listed as endangered species protected by the ESA. In 1998, a Recovery Plan was published by the USFWS. This plan includes information on the life cycle of the beetle. The city requested a map from USFWS to depict the habitat areas so that it could be used to assist in development project review. A map showing the “Zayante Soils” was provided by USFWS earlier this year showing the Zayante Soil type generally thought to be the primary habitat indicator of the species. Additional factors such as the Ponderosa Pine and Manzanita brush are also known habitat characteristics . The locations of the Zayante Soils within Scotts Valley are predominantly developed and located in the southern portions of the City. According to the County of Santa Cruz, approximately 1,000 parcels contain Zayante Soils. These properties range from commercial land, streets and roads, residences and city owned parcels. To date, only a limited number of new developments have occurred in this area. From May through July this year, several private property owners who were proposing or considering future development in the City and the County area conducted Mt. Hermon June beetle surveys. These surveys were finding that the beetle is present in several parcels both within and near the mapped Zayante Soil zone. Therefore development or grading would disturb the beetle’s habitat and any ground disturbance activities could result in a “take” of an endangered species. Unauthorized “take” is a violation of the Endangered Species Act. In order to allow ground disturbance act1V1tles, a Habitat Conservation Plan (HCP) is required. USFWS has been discussing and encouraging the City of Scotts Valley and the County to do a regional HCP to allow individual property owners to proceed with their projects as well as address any City or County project which may be affected. The City evaluates development applications as being either “ministerial” or “discretionary”. For example, building permits for homes on existing lots, swimming pools, room additions and permits for previously approved development projects are “ministerial”. If a project requires a public hearing with review to the Planning Commission and/or City Council, it is considered “discretionary” and is subject to the California Environmental Quality Act (CEQA), which requires review of endangered species impacts. The City Council authorized staff to continue working with the County and the USFWS on the preliminary stages of an HCP. Meanwhile, private property owners (and the City who owns property in the Zayante Soil zone) must await completion of the Habitat Conservation Plan . Please contact Laura Kuhn Community Development Director at (831) 555-5555 for a copy of the map or any questions you may have. “Watch”!

PLEASE NOTE : The Real Estate Watch is prepared by Rose Marie McNair, Legislative Monitor, and is only a summary not intended to provide legal advice, and should always be verified for accuracy.

NOVEMBER 2001