San Francisco Imposes Additional Requirements on Property Owners Looking to Build ADUs; Increases Consequences of Removing Tenant Housing Services

Beginning December 12, 2021, property owners must meet additional requirements to add Additional Dwelling Units, or ADUs, under the San Francisco local program. In San Francisco, there are several different ADU programs available to property owners. The state program provides the most flexibility by exempting properties from some Planning Code requirements and units can be built outside the buildable area of the lot. The application is subject to a streamlined, faster review, but owners can only add one ADU. The hybrid program allows an owner to build one ADU and one Junior ADU (“JADU”). Hybrid ADUs need to comply with Planning Code requirements, except for density, and must be built in the buildable area of the lot. A JADU converts up to 500 square feet of space in a single-family structure and requires owner-occupancy in either the remaining portion of the single-family home or the newly created JADU.

The local program allows property owners to add one ADU if there are four or fewer legal dwelling units on the lot, or unlimited ADUs if there are five or more legal dwelling units. There is no limit on the number of ADUs allowed for projects undergoing Mandatory or Voluntary Seismic upgrades under AB-094. The local program requires compliance with Planning Code requirements and may require property owners to “voluntarily” subject the unit to rent control limitations through a Costa Hawkins waiver, which is an agreement recorded on title to the property where the property owner agrees to forever subject the unit to the rent limitations and other provisions of the San Francisco Rent Ordinance.

Now, property owners must meet additional requirements under the local program. At least 15 days prior to submitting an ADU Application, property owners must file a written declaration with the Rent Board and post and mail a Notice of Addition of ADU(s) to their tenants. Applicants will be required to submit proof of these notices to the Planning Department as part of the ADU application. Within 30 days after the notice is provided, Tenants may contest the information in the declaration by petitioning for a written determination from the Rent Board to verify the presence or defining characteristic of the housing service and whether it will be severed, substantially reduced, or removed by the project as proposed. If a tenant contests the information, the Rent Board will make a determination within 90 days. These additional requirements make it important for property owners to choose wisely when deciding which ADU program is the best fit.

Property owners who plan to build ADUs under any program and rent part of the property to tenants must ensure that they are not removing any tenant housing services. Housing services are garage facilities, parking facilities, driveways, storage spaces, laundry rooms, decks, patios, or gardens on the same lot, or kitchen facilities or lobbies in single-room occupancy (SRO) hotels, supplied in connection with the use or occupancy of a unit. New changes to the San Francisco Rent Ordinance impose harsh consequences on a landlord that wrongfully endeavors to sever, substantially reduce, or remove, or actually severs, substantially reduces, or removes a housing service without just cause. Note that building an ADU is not considered just cause. Tenants can seek treble money damages, emotional distress damages, and attorneys fees – potentially creating a large liability for landlords looking to add more housing units.

The attorneys at Zacks & Freedman, PC can advise you on navigating the ADU process or any other real estate matters. Contact us at your convenience to request a consultation.