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SR-8-A (18) · \\\)\ M\ 1-14 JAN 2 4 1989 Santa Monica, California . CA:RMM:11483jhpc City Council Meeting 1-24-89 STAFF REPORT TO: Mayor and City council FROM: City Attorney SUBJECT: Ordinance Amending Municipal Code sections 9304, 9311, 9312, and 9346 Relating to city Subdivision Requirements and Adding section 4812a Relating to Local Land Use Requirements Applicable to Rental Units Withdrawn from the Rental Housing Market Pursuant to the Ellis Act At its meeting on January 10, 1989, the City council held a public hearing on a proposed ordinance regulating the use of properties from which tenants have been evicted pursuant to the Ellis Act. Following the public hearing, the City Council voted unanimously to continue the public hearing for two weeks in order to allow for further public input. In addition, the city Council directed the City Attorney to mail notice of the public hearing to interested organizations in the City. In response to this direction, the ordinance was mailed to a number of tenant and landlord groups as well as to a number of interested individuals. The notice indicated that revisions of the ordinance might occur prior to the January 24, 1989 City Council meeting, but that the concept of the ordinance would remain the same. In response to comments made by the public and the city Council at the January 10, 1989 meeting, various revisions were made to the ordinance as described in more detail below. Copies of this staff Report and the accompanying ordinance were also mailed on January 19, 1989, 7-~ - 1 - JAN 2 4 1989 . . to the same interested organizations and individuals who received the previous ordinance. RESPONSE TO PUBLIC AND CITY COUNCILMEMBER COMMENTS 1. Lack of Conflict Between State and Local Law. In Adler v. Elphick, 184 Cal. App. 3d 642 (1986), when three co-owners acquired a two-unit residential property with the intent of having two co-owners occupy one unit and the other co-owner occupy the second unit, the Court held that a community apartment was not created because the right to exclusive occupancy of a particular unit was not specified on the face of the deed. In Bakananauskas v. Urdan, 88 Daily Journal D.A.R. 15645 (Opinion filed December 14, 1988), two co-owners executed a written agreement pursuant to which one owner was entitled to exclusive occupancy of one unit, and a second owner was entitled to exclusive occupancy of a second unit. The Court held that this arrangement did not create a "community apartment II for purposes of state law, reaffirming the earlier holding in Adler. The ordinance which was initially prepared was intended to respond to these two cases. The courts have determined that an arrangement involving co-ownership of real property coupled with the right to exclusive occupancy of a particular unit does not constitute a "community apartment II unless such right appears on the face of the deed for purposes of state law. The Adler and Bakananauskas decisions do not limit local regulation of the types of situations addressed therein. The City clearly has the authority to regulate subdivisions that are not regulated by the Subdivision Map Act. Government Code Section 66411 states: - 2 - . . 66411. Regulation and control of the design and improvement of subdivisions are vested in the legislative bodies of local agencies. Each local agency shall by ordinance regulate and control subdivisions for which this division requires a tentative and final or parcel map. In the development, adoption, revision, and application of such ordinance, the local agency shall comply with the provisions of section 65913.2. Such ordinance shall specifically provide for proper grading and erosion control, including the prevention of sedimentation or damage to offsite property. Each local agency may by ordinance regulate and control other subdivisions, provided that such regulations are not more restrictive than the regulations for those subdivisions for which a tentative and final or parcel map are required by this division, and provided further that such regulations shall not be applied to short-term leases (terminable by either party on not more than 30 days' notice in writing) of a portion of the operating right-of-way of a railroad corporation defined as such by section 230 of the - 3 - . . Public utilities Code unless a showing is made in individual cases, under substantial evidence, that public policy necessitates the application of such regulations to such short-term leases in such individual cases. Since significant confusion has arisen because of the use of the term "community apartment II to refer to situations in which an undivided interest in land is coupled with the right of occupancy of an apartment thereon, where such right is contained in the form. of a written or oral agreement separate from the deed itself, the proposed revised ordinance refers to such situations as "cooperative apartments II instead of "community apartments. II Therefore, there is no longer any appearance of conflict between the interests regulated by the state Subdivision Map Act and the city's Subdivision Ordinance. 2. Incremental Leqislation. Several members of the public have asserted that the proposed ordinance unfairly discriminates against those owners of properties who have opted to withdraw their properties from the rental housing market pursuant to the Ellis Act. This claim is without merit. The City is currently experiencing an abuse of its land use regulations by owners who have wi thdrawn properties from the rental housing market pursuant to the Ellis Act. In connection with properties which are vacated by means other than the Ellis Act, other City laws, including the Rent Control removal permit - 4 - . . requirement, already exist to regulate the conversion of those properties to other uses. For these reasons, the proposed ordinance principally addresses properties withdrawn pursuant to the Ellis Act. It is well-established that legislative reform need only proceed one step at a time: it need not address all similar problems at one time. In addition, the accompanying revisions to the City's subdivision requirements relating to cooperative apartments apply to all units. 3. Rights of Family Members of OWners of Properties Withdrawn Pursuant to the Ellis Act. Confusion was expressed about the ability of family members to occupy properties withdrawn pursuant to the Ellis Act. The language of the ordinance has been re-drafted to clarify the rights of family members to occupy former rental units so long as such family members are neither renters nor owners. 4. Occupancy Permit as Alternative to Conditional Use Permit. The Ordinance has been revised to require that an occupancy permit be obtained from the Planning Department instead of a conditional use permit. This means that the Planning Director can grant the permit in all cases except those requiring a subdivision or parcel map. SECTION-BY-SECTION ANALYSIS Section 9304(c). This section retains the current Municipal Code definition of "community apartment" which corresponds with - 5 - . . the definition of this term under the Subdivision Map Act, as interpreted by the courts. Section 9304(e). This Section amends the Currer.t Municipal Code definition of "conversion" to include "cooperative apartments.tt Section 9304(f). This Section creates a new definition for a "cooperative apartment." This section defines a cooperative apartment as an undivided interest in land coupled with the right of occupancy of any apartment, where the occupancy right is contained in a written or oral agreement other than on the face of the deed. Section 9304(u). Code definition of This Section amends the current Municipal "subdivision" to include "cooperative apartments." Section 9311. This Section has been amended to include cooperative apartments containing five or more units as a category for which tentative subdivision maps and final subdivision maps shall be required. This requirement currently exists for condominiums, community apartments, and stock cooperatives. Section 9312. This Section has been amended to include cooperative apartments containing four or less units as a category for which tentative parcel maps and final parcels maps shall be required. This requirement currently exists for condominiums, community apartments, and stock cooperatives. Section 9346. This section has been amended to provide that the Planning commission may not waive the requirements for a tentative and final parcel map for cooperative apartments. This - 6 - . . restriction currently applies to condominiums, community apartments, and stock cooperatives. Section 4812(a). This Section requires that an occupancy permit be obtained where property owners seek to occupy a property which has been withdrawn from the rental housing market pursuant to the Ellis Act. An occupancy permit is required whether the owners seek authorization to occupy the property for a commercial use or a residential use. section 4812(b). An occupancy permit for commercial occupancy of a property withdrawn pursuant to the Ellis Act shall be granted by the Planning Director if the findings are made that the occupancy is in conformity with the General Plan and with the Zoning Ordinance. section 4812(c). An occupancy permit for residential occupancy may be granted in anyone of three situations. First, the Planning Director may grant a permit if he or she finds that no more than one unit on the property will be occupied by owners of the property. (This subsection would not preclude owners from making alterations to the property to enlarge that unit if desired.) This subsection clarifies that family members may occupy other units on the property so long as they are not owners and no rent is being paid. (If family members who are also owners wish to occupy more than one unit on the property, section 4812(c) (3) applies. If family members pay rent to live in units on the property, Section 4812(c) (2) applies.) A deed restriction is required as a condition of approval of such an occupancy. - 7 - . . Second, an occupancy permit may be granted by the Planning Director for use of the property as multifamily rental housing so long as the owner has obtained certification from the Rent Control Board of compliance with the requirements set forth in the Ellis Act and Rent Control Board regulations regarding re-entry into the rental housing market. Finally, an occupancy permit for occupancy of the property as mUltifamily housing by more than one owner of the property may be granted, but only if a subdivision or parcel map has been obtained pursuant to applicable sections of the Municipal Code and a conditional use permit is obtained in accordance with certain provisions in Section 9061.1. Section 4812(d). This subsection establishes a process whereby the Planning Director's decision on an occupancy permit may be appealed to the Planning Commission. A Planning Commission decision on an occupancy permit may be appealed to the City Council. Section 4812(e). This subsection provides that this Section does not apply to any occupancy following a lawful demolition of units withdrawn pursuant to the Ellis Act. This subsection exists because in conjunction with a demolition permit, compliance with other applicable City laws will have been obtained. RECOMMENDATION It is respectfully recommended that the accompanying ordinance be introduced for first reading. PREPARED BY: Robert M. Myers, City Attorney Laurie Lieberman, Deputy city Attorney - 8 - . . CA:RMM:LL:ll472/hpc city Council Meeting 1-24-89 Santa Monica, California ORDINANCE NUMBER (city council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE SECTIONS 9304, 9311, 9312, AND 9346 RELATING TO SUBDIVISION REQUIREMENTS AND ADDING SECTION 4812a TO CLARIFY LOCAL LAND USE REQUIREMENTS APPLICABLE TO RENTAL UNITS WITHDRAWN FROM THE RENTAL HOUSING MARKET PURSUANT TO THE ELLIS ACT WHEREAS, the Subdivision Map Act, Government Code Section 66410 et seq. and the Subdivision Ordinance of the city of Santa Monica, Santa Monica Municipal Code section 9300 et seq., serve ~ to regulate and control the division of land within the City of Santa Monica; and WHEREAS, the provisions of state and local subdivision laws have as their purposes the protection of purchasers of property as well as the promotion of orderly growth, development, and land use; and WHEREAS, the attributes, uses, ownership structure, and occupancy of a residential building differ depending upon whether the building is tenant-occupied or owner-occupied; and WHEREAS, the conversion of residential rental buildings to owner-occupied residential buildings has historically required City approval; and WHEREAS, a property which has been utilized for residential rental housing that is being converted to owner-occupancy has - 1 - . . virtually identical attributes to those of a condominium conversion or subdivision for which state and local law require a subdivision or parcel map, a change of use permit, and a conditional use permit; and WHEREAS, several property owners have already evicted tenants from residential rental properties pursuant to the Ellis Act and subsequently occupied those properties without obtaining necessary permits from the City and it is likely that others will follow the same course; and WHEREAS, occupancy by mUltiple owners of residential buildings which were formerly operated as rental housing constitutes the creation of a community apartment or some other like interest which couples an ownership interest in property with the right to occupy such property; and WHEREAS, the creation of ownership interests and use patterns which resemble community apartments , cooperatives, or condominiums without obtaining city approvals circumvents the purpose of the state Subdivision Map Act and of the City'S Subdivision Ordinance; and WHEREAS, the regulations set forth in this Ordinance are necessary for the preservation of the pUblic health, safety and general welfare, to promote orderly growth and development and to promote and implement the General Plan, to protect unwary purchasers of residential property, and to otherwise further the purposes of the State Subdivision Map Act and the city's Subdivision Ordinance and condominium regulations, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS: - 2 - . . SECTION 1. section 9304 of the Santa Monica Municipal Code is amended to read as follows: SECTION 9304. Definitions. The following words or phrases as used in this Chapter shall have the following meanings: (a) Advisory Agency. A designated official or an official body charged with the duty of making investigations and reports on the design and improvements of proposed divisions of real property. (b) Block. The area of land within a subdivision which area is entirely bounded by streets, highways or ways, except alleys, or the exterior boundary or boundaries of the subdivision. (c) community Apartment. A project as defined in Business and Professions Code section 11004 in which an undivided interest in the land is coupled with the right of exclusive occupancy of any apartment. (d) Condominium. An estate in real property consisting of an undivided interest in common in a portion of a parcel of real property together with a separate interest in space in a residential, industrial or commercial building on such real property, such as an - 3 - . . apartment, office, or store. A condominium may include, in addition, a separate interest in other portions of such real property. (e) conversion. The creation of separate ownership of existing improved real property together with a separate interest in space of residential, industrial or commercial buildings thereon. A conversion may be accomplished by condom.inium., stock cooperative, community apartment, or cooperative apartment. (f) cooperative Apartment. Pursuant to the city's authority to regulate subdivisions not regulated by the Subdivision Map Act as authorized by Government Code Section 66411, a proj ect in which an undivided interest in land is coupled with the right of occupancy of any apartment located thereon, whether such right is contained in the form of a written or oral agreement, when such right does not appear on the face of the deed. (g) Design. street alignments, grades and width; drainage and sanitary facilities and utilities, including - 4 - . . alignments and grades thereof; location and size of all required easements and rights-of-way; fire roads and fire breaks; lot size and configuration; traffic access; grading; land to be dedicated for park or recreational purposes; and such other specific requirements in the plan and configuration of the entire subdivision as may be necessary or convenient to insure conformity to or implementation of the General Plan or any adopted specific plan. (h) Final Map. A map showing a subdivision for which a tentative and final map is required by this Chapter, prepared in accordance with the provisions of this Chapter and the Subdivision Map Act and designed to be recorded in the office of the County Recorder. (i) Final Parcel Map. A final map for a parcel. (j) Final Subdivision Map. A final map for a subdivision. (k) General Plan. The General Plan of the City of Santa Monica. (1) Improvement. street work, storm drainage, utilities and landscaping to be installed, or agreed to be - 5 - . . installed, by the subdivider on the land to be used for public or private streets, highways, and easements, as are necessary for the general use of the lot owners in the subdivision and local neighborhood traffic and drainage needs as a condition precedent to the approval and acceptance of the final map thereof; or to such other speci f ic improvements or type of improvements, the installation of which, either by the subdivider, by public agencies, by private utilities, by any other entity approved by the local agency or by a combination thereof, is necessary to convenient to insure conformity to or implementation of the General Plan or any adopted specific plan. (m) Lot. A parcel or portion of land separated from other parcels or portions by description, as on a subdivision or record of survey map, or by metes and bounds, for purpose of sale, lease, or separate use. (n) Lot Line Adjustment. A minor shift or rotation of an existing lot line or other adjustments where a greater number of parcels than originally existed is not created. - 6 - . . (0) Merger. The joining of two (2) or more contiguous parcels of land under one ownership into one parcel. (p) SUbdivision Map Act. The Subdivision Map Act of the state of California. (q) Parcel Hap. A map showing a division of land of four (4) or less parcels as required by this Chapter, prepared in accordance with the provisions of this Chapter and the Subdivision Map Act. (r) peripheral Street. An existing street whose right-of-way is contiguous to the exterior boundary of the subdivision. (s) Remainder. That portion of an existing parcel which is not included as part of the subdivided land. The remainder is not considered as part of the subdivision but must be shown on the required maps as part of the area surrounding subdivision development. (t) stock Cooperative. A corporation as defined in Business and Professions Code section 11003.2 which is primarily for the purpose of holding title to property if shareholders receive the right to exclusive occupancy in a portion - 7 - . . of property and whose right to occupancy transfers concurrently with the transfer of an interest in the corporation. (u) Subdivider. A person who proposes to divide, divides, or causes to be divided real property into a subdivision for the subdivider or for others; except employees and consul tants of such persons or entities, acting in such capacity, are not "subdividers." (v) Subdivision~ The division, by any subdivider, of any units or unit of improved or unimproved contiguous land shown on the latest equalized County assessment roll as a unit or as contiguous units for the purpose of sale, lease or financing, whether immediate or future. Property shall be considered as contiguous units, even if it is separated by roads, streets, utility easements or railroad rights-of-way. Subdivision includes a condominium project, as defined herein or in California civil Code section 1350, a community apartment project, as defined herein or in California civil Code Section 1351 (d), a stock cooperative, as defined herein or in California Business & Professions Code section 1103.2, or a - 8 - . . cooperative apartment as defined herein. Any conveyance of land to a governmental agency, publ ic entity I or publ ic util i ty shall not be considered a division of land for purposes of computing the number of parcels. "Subdivision" does not include anything excluded from the definition of subdivision in the Subdivision Map Act unless otherwise provided for herein. (w) Subdivision Map. A map showing a division of land of five (5) or more parcels as required by this Chapter, prepared in accordance with the provisions of this Chapter and the Subdivision Map Act. (x) Tentative Map. A map made for the purpose of showing the design and improvements of a proposed subdivision and the existing conditions in and around it. (y) Tentative Parcel Hap. A tentative map for a parcel. (z) Tent.ative Subdivision Hap. A tentative map for a subdivision. (aa) Zoning ordinance. Article IX of the Municipal Code. SECTION 2. Section 9311 of the Santa Monica Municipal Code is amended to read as follows: - 9 - . . SECTION 9311. Five or More Parcels. A tentative subdivision map and final subdivision map shall be required for all divisions of land into five (5) or more parcels, five (5) or more condominiums as defined in civil Code section 783, a community apartment project containing five (5) or more units, a stock cooperative containing five (5) or more units, or a cooperative apartment containing five (5) or more units. SECTION 3. section 9312 of the Santa Monica Municipal Code is amended to read as follows: SECTION 9312. Four or Less Parcels. A tentative parcel map and final parcel map shall be required for all divisions of land which create four (4) or less parcels, four (4) or less condominiums as defined in civil Code Section 783, a community apartment project containing four (4) or less units, a stock cooperative containing four (4) or less units, or a cooperative apartment containing four (4) or less units. SECTION 4. Section 9346 of the Santa Monica Municipal Code is amended to read as follows: - 10 - . . SECTION 9346. Waiver of Parcel Map. The Planning Commission may waive the requirements for a tentative and final parcel map when it is demonstrated that the waiver is consistent with the purpose of this Chapter and the General Plan. No parcel map may be waived for a condominium, stock cooperative, community apartment project, or cooperative apartment, whether created by new construction or conversion. The decision of the Planning Commission shall not be appealable. SECTION 5. Section 48l2a is added to the Santa Monica Municipal Code to read as follows: SECTION 4812a. Permits Necessary for occupancy of property Following Withdrawal Pursuant to the Ellis Act. (a) No property or rental units therein which have been withdrawn pursuant to the Ellis Act, Government Code sections 7060 et seg., shall be subsequently occupied unless an occupancy permit is obtained in accordance with the provisions of this section. (b) An occupancy permit for commercial occupancy of a property or any - 11 - . . rental unit therein shall be granted by the Planning Director if the following findings are made: (1) The occupancy is in conformity with the General Plan. (2) The occupancy is in conformity with the Comprehensive Land Use and Zoning Ordinance. (c) An occupancy permit for residential occupancy of a property or any rental unit therein may be granted: (1) By the Planning Director I if the Planning Director finds that no more than one unit on the property will be occupied by owners of the property. Other units on the property may be occupied by family members of the owners, provided such family members do not have any ownership interest in the property and do not pay rent as defined in Section 1aD1(f) of the city Charter. An agreement restricting use of the property to such purposes shall be executed by the owner and the City as a condition of approval. (2) By the Planning Director, if the Planning Director finds that the property or rental unit therein - 12 - . . is to be used for multifamily rental housing, and the Rent Control Board has certified that the owner has complied with the requirements set forth in Government Code Sections 7060.2 and 7060.4 and with applicable regulations promulgated by the Rent Control Board. (3) If the property is to be used as a cooperative apartment as defined in section 9304, a subdi vision or parcel map is obtained in accordance with Chapter 3 of Article IX of this Code, and a conditional use permit is obtained in accordance with the requirements of Section 9061.1, except that subsections (a), (b), ee), (h), and (i) (2) shall not apply, and except that the requirements regarding a Tenants' Notice of Intent to Convert and Tenant Relocation Assistance Plan contained in subsection (c) shall not apply. (d) Any decision of the Planning Director approving, conditionally approving, or denying an occupancy permit may be appealed to the Planning Commission in accordance with the provisions in Subchapter 10L of Article IX of this Code. Any decision of the Planning commission - 13 - . . may be further appealed to Council in accordance with provisions. (e) This Section shall not apply to occupancy of any portion of a property withdrawn pursuant to the Ellis Act fOllowing lawful demolition of that portion of the property, nor shall it apply to an entire property withdrawn pursuant to the Ellis Act following lawful demolition of the entire property. the the City same SECTION 6. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this ordinance. SECTION 7. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid or unconsti tutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the ordinance. The City council hereby declares that it would have passed this ordinance and each and every section, subsection, sentence, clause, or phrase not declared inval id or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. - 14 - . . SECTION 8. The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The city Clerk shall cause the same to be publ ished once in the official newspaper within 15 days after its adoption. The ordinance shall be effective 30 days from its adoption. APPROVED AS TO FORM: (l.r{n-A \..1"'. ~ ROBERT M. MYERS U City Attorney - 15 -