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June, 2003

New Second Unit Law Eliminates Community Input, Local Discretion
by Louis Nuyens


   The latest in a succession of state legislation to create greater opportunities and incentives for infill housing is about to take effect in Marin County.
   AB 1866 (2002, Wright), sponsored by the California Association of Realtors (CAR), primarily amends rules related to second units and density bonuses for affordable housing, accomplishing its aims by rigidly limiting local government discretion and public input.
   Unfortunately, AB 1866 2nd unit provisions do not create a formal structure to guarantee that the units created are affordable, and its density bonus provisions are more of a gift to developers than to those needing affordable housing.
   The County of Marin says it will hold a hearing regarding its possible responses to this legislation at some point in June (date and time to be announced).

The most sweeping provisions of AB 1866:
   After 1 July 2003 any second unit application is to be considered through a ministerial process that also preempts local ordinance clauses for public review and hearing. Coastal Zone development applications are exempted, except that local governments are no longer required to hold public hearings on the application (but may do so if they so choose).
   Density bonus law is amended so that a local jurisdiction may only deny a request for a density bonus or other incentive/concession if it finds that the grant is not necessary to provide for affordable housing costs, or that it would have a specific adverse impact. Specific density bonus rules are set up for condominium projects.
   According to one court, "the [original] statute is a careful balancing of two competing interests," increased housing (and, perhaps, the rights of an individual homeowner) versus the desires and quality of life of a given community. AB 1866 tips the scales towards increased densities. In short, AB 1866 has removed options for a local government and residents to judiciously guide the course of that community's character over time.
   Imagine a neighbor wants to put a two-story 2nd unit in the middle of his backyard. This may affect your privacy, increase traffic in your neighborhood, change a sense of openness around your home, etc. However, if local zoning does not specifically preclude the addition, it will be approved - without question.
   Prior to enactment of AB 1866, you and others in your community would have an opportunity to comment on your neighbor's plan, and to ask local government to use its discretion in weighing the benefits to your neighbor to the interests of the community at large. Under new law, there is no place for community comment in the decision as to whether a particular project should be allowed; and local government has no ability to weigh competing concerns: it has no authority for case-by-case judgment whatsoever.
 
Options Exist, But Vigorous County Action is Needed
   In the presence of AB 1866, the only way a local government can prevent potentially undesirable placement of second units is to draft zoning ordinances that take into account nearly every possible eventuality.
   A cautious approach would be to adopt an ordinance that is fairly restrictive, and then to relax selected limitations as deemed appropriate. According to a Marin Community Development Agency representative, Marin's approach, thus far, seems to simply remove provisions for hearing and discretion from existing language. Marin does not seem to be proactively anticipating outcomes by designing ordinances to safeguard against them. And, where other counties have been fully prepared for AB 1866 for months, Marin is only just beginning to rework its ordinance(s).
   Under AB 1866, a city or county may have ordinance language to specify areas in which 2nd units are or are not allowed, but the law specifies that these ordinances may not be part of policies to limit growth. This may be construed to imply that local government must be prepared to demonstrate specific findings to justify the policy stated by the ordinance, possibly creating an avenue for legal action by applicants.
   Marin County has recently stated that it cannot scientifically justify certain zoning and use limitations currently in effect. Yet other counties-such as Sonoma, Napa and many others-routinely justify ordinances with well-documented research and decision-making.
   Marin currently lacks the preparation it should have in order to answer challenges to many of its policies, including any policies that would help minimize potential negative impacts from AB 1866, and should remedy this situation expeditiously. Without these preparations, the opportunities for litigation created by AB 1866 may intimidate many local governments into allowing undesired developments.

Effects On West Marin
   Will there be a mad rush to build or legalize 2nd units in west Marin? Possibly not immediately.
   For a second unit to be legally constructed, or legalized after the fact, it would still have to meet standards for parcel zoning, setbacks, septic system capacity, Streamside Conservation Area protection, floor-to-area ratios, and other criteria. Each of these, if left in place or strengthened, will limit 2nd unit opportunities.
   For example, the unincorporated areas of west Marin are on septic systems, most of which were not installed with capacity for much beyond the original structures. Any legal additional unit(s) would require analysis of septic system capacity and would probably require a system upgrade; in addition to this extra cost, the space required for increased system capacity might compete for space with the new unit, and potentially invoke new setback requirements applicable to a replaced or new system..
   Also, the prevalence of unpermitted work in west Marin may also decrease the number of 2nd units that will be built or legalized in the wake of AB 1866, as legal construction, or a legalization request, might trigger review of other work done on the same property.
   Unfortunately, years of lax oversight leave Marin County with little information on which to anticipate potential effects. However, anecdotally, the spread of 2nd units might be roughly gauged by the noticeable vanishing of on-street parking in many parts of west Marin.

Housing vs. Affordable Housing
   CAR advertised and promoted AB 1866 as much needed to provide "Housing Opportunities for California's Seniors, Disabled and Families." This insinuation that the legislation would result in affordable housing won the support of many advocacy organizations, in addition to construction interests and Realtor groups.
   But AB 1866 is not about affordable housing.
   AB 1866 does not require that 2nd units used as rentals be governed by any formal guidelines (e.g. deed restrictions) that would require them to be affordable.
   With regard to affordable ownership, it can be argued that a second unit would not generally make a property more affordable to buyers. Whether legal or illegal, once a second unit is installed, it increases the sale cost of the property in a way that approximates the rental income that the second unit might bring, in spite of the fact that the property has been 'degraded' by higher density. Therefore, in general, addition of a second unit would most likely help only the owner who builds it, and not subsequent owners.
   Rising costs of properties with 2nd units may indirectly inflate properties without, because besides having to spend more, buyers of properties with second units are forced to be landlords and accept the potentially undesirable aspect of sharing the property with a tenant.
   Finally, because it offers generous bonuses for relatively minimal contributions to affordable housing, AB 1866 may do as much to limit affordable housing as to promote it.
   In summary, AB 1866 does little, if anything, to create housing that is required to be affordable, while it inflates property prices, rewards development interests, and limits the control communities have over the qualities of their neighborhoods.

Big Picture-Populace, Population, Quality of Life
   AB 1866 was partly justified by CAR estimates that there is demand for 250,000 new housing units each year in California, but that only half that number are being approved.
   To what extent should housing demand be met? Nowhere in the central bay area is it possible to create affordable rental or ownership possibilities for everyone who would eventually like to live there. Marin could be paved from the bay to the ocean, utterly destroying the character enjoyed by most existing residents, and still more people would want to come. Is that really our goal? What about quality of life? When, if ever, can existing residents say, "Enough!"?

More on the Horizon
   In the current legislative session, AB 1160 (Steinberg, with CAR again a sponsor.) would further erode local control and the intent of original 2nd unit law. If passed, AB 1160 would lift the ceiling on the size of second units allowable, require the housing element of the general plan of a city or county to include a program with a 5-year schedule of actions to implement the goals and objectives of the housing element, allow more on-street parking for 2nd units, and further restrict local government discretionary options, among other things.

 

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