Report Prepared by: Kim Espinosa, Planning Manager, Development Services Department
Title
SUBJECT: Second Reading and Final Adoption of an Ordinance to Amend Merced Municipal Code Section 20.42 Regarding Accessory Dwelling Units (ADU’s) to Meet the Modified Requirements of State Law in Regards to Minimum Lot Sizes, Owner-Occupancy Requirements, Maximum Size of an ADU, Application Review Times, Parking Requirements, the Charging of Impact Fees, the Sale of ADU’s, “Junior ADU’s,” and Other Requirements of State Law
REPORT IN BRIEF
Second reading and final adoption of an ordinance that would modify the City’s zoning requirements for “accessory dwelling units” (ADU’s) to meet the modified requirements of State Law in regards to minimum lot sizes, owner-occupancy requirements, maximum size of an ADU, application review times, parking requirements, the charging of impact fees, the sale of ADU’s, “junior ADU’s,” and other requirements of State Law.
RECOMMENDATION
City Council - Adopt a motion adopting Ordinance No. 2521, An Ordinance of the City Council of the City of Merced, California, Amending Sections 20.42 "Accessory Dwelling Units" of the Merced Municipal Code.
Body
ALTERNATIVES
1. Adopt the Ordinance, as recommended by the Planning Commission and staff; or,
2. Adopt the Ordinance, subject to modifications by City Council (identify specific items to be amended in the motion); or,
3. Deny; or,
4. Refer to staff for reconsideration of specific items (to be addressed in the motion); or,
5. Continue to a future City Council meeting (date and time to be specified in motion).
AUTHORITY
Merced Municipal Code Section 20.80, “Zoning Ordinance Amendments,” spells out procedures for amending the Zoning Ordinance. Sections 65852.2 and 65852.22 of the California Government Code address accessory dwelling units.
CITY COUNCIL PRIORITIES
“Housing” and “Infill Development” are both listed in the FY 2020-21 City Council Goals and Priorities.
DISCUSSION
Summary
This Zoning Ordinance Amendment would modify the City’s requirements for “accessory dwelling units” (ADUs) to meet the modified requirements of State Law in regards to minimum lot sizes, owner -occupancy requirements, maximum size of an ADU, application review times, parking requirements, the charging of impact fees, the sale of ADUs, “junior ADUs,” and other requirements of State Law, which have gone into effect in 2020 and 2021. Planning Commission and Staff are recommending approval.
Background
State of California
The California Legislature has declared that allowing accessory dwelling units (ADUs) in single-family and multi-family zones is an essential component in addressing housing needs in California. In 1982, the State enacted Government Code Section 65852.2 establishing a mandate that every local agency adopt provisions for permitting accessory dwelling units (then known as “secondary dwelling units” or “second units”). The intent of the legislation was to encourage housing for extended family members and to increase the availability of rental housing. In 2003, AB 1866 was adopted, requiring all local governments to allow ADUs within single-family residential zones.
In 2016, Senate Bill 1069 and Assembly Bill 2299 were adopted which made specific amendments to State law to promote the production of ADUs. Also in 2016, AB 2406 added provisions for the creation of “junior accessory dwelling units.” These bills amended various sections of the State Government Code (§ 65852.2.) related to ADU regulations and were intended to reduce barriers and streamline approval. Among other things, the new laws permit ADUs in all residential zoning districts, create two classes of ADUs for which different regulations apply (interior vs. new structure), eliminate off-street parking requirements in certain circumstances, regulate the unit size, and establish the review process and approval timelines.
In 2019, the State adopted SB 13, AB 68, AB 881, AB 587, AB 670, and AB 671, which all made additional changes to State Law regarding ADUs. In 2020, further revisions were adopted through AB 3182.
City of Merced
The City’s Zoning Ordinance has allowed for accessory dwelling units with certain restrictions since at least the early 1980’s. Accessory dwelling units (ADUs) have been called “in-law units,” “granny flats,” “casitas,” “second units,” and “secondary dwelling units,” but whatever you call them, they are basically separate dwelling units on single-family lots. Some are converted garages or other living space completely within the primary dwelling unit, and some are separate structures in the back or side yard. Most have cooking facilities and bathrooms, separate entrances, and their own address. Most have separate electrical utilities/meters, but not separate water or sewer utility connections or meters. (The City only allows one such water or sewer connection per lot.)
For many years, the City of Merced allowed these units for family members, but they were not allowed to be rented out separately. In the late 1990’s, the City began to let the units be rented, but either the primary unit or the accessory unit had to be owner occupied. In 2016, the City’s “Second Unit” zoning standards in Chapter 20.42 of the Merced Municipal Code were adopted as part of the comprehensive Zoning Ordinance Update and were in conformance with State Law at that time.
In late 2018, the City Council directed staff to review the City’s Zoning Ordinance to determine what changes were needed in order to comply with the new State laws regarding Accessory Dwelling Units (ADUs), and to consider alternative approaches to facilitate the development of ADUs in the City of Merced. In January 2019, City staff presented the City Council with the information regarding parking and owner occupancy requirements and the City Council gave direction to prepare options for Planning Commission and City Council consideration. Proposed changes to the Ordinance included changing all references to “second units” to “accessory dwelling units,” an increased maximum size, clarified the setback requirements and the zones in which ADUs were allowed, reduced the parking requirements and allowed for more flexibility in the location of parking, and added provisions regarding fees and utility connections.
On May 18, 2019, the Planning Commission held a public hearing on the proposed changes to the Ordinance and recommended approval to the City Council with revisions. On July 12 and August 5, 2019, the City Council held public hearings on proposed Ordinance #2502, which became effective on September 19, 2019.
In October 2019, the State passed several bills that again amended the laws regarding ADUs and made even more changes in 2020. Therefore, the City must again amend its ADU Ordinance to conform with State Law.
State Laws Regarding Accessory Dwelling Units
A complete summary of the changes in State Law in 2019 and 2020 regarding accessory dwelling units are contained in Attachment 1. Some of these changes do not apply to local agencies, but to common interest developments or to private covenants, codes, and restrictions (CC&R’s) not enforced by the City. In general, the changes that affected the City’s Ordinance included:
1) States that applications for ADUs are deemed approved if not acted on within 60 days;
2) Requires ministerial approval of one ADU and one JADU (Junior ADU) per lot if certain conditions are met;
3) Prohibits standards for minimum lot sizes;
4) Clarifies areas for ADUs can be based on the adequacy of water and sewer services as well as impacts on traffic flow and public safety;
5) Eliminates all owner-occupancy requirements by local agencies for ADUs approved between January 1, 2020, and January 1, 2025;
6) Prohibits the establishment of a maximum size of an ADU of less than 850 square feet, or 1,000 square feet if the ADU contains more than one bedroom, and requires approval of a permit to build an ADU of up to 800 square feet;
7) Clarifies that when ADUs are created through the conversion of a garage, carport or covered parking structure, replacement of off-street parking spaces cannot be required;
8) Reduces the maximum application review time from 120 days to 60 days;
9) Clarifies the definition of “public transit” and “accessory structure;”
10) Establishes impact fee exemptions and limitations based on the size of the ADU. ADUs up to 750 square feet are exempt from impact fees; ADUs that are 750 square feet or larger may be charged impact fees but only such fees that are proportional in size (by square foot) to those for the primary dwelling unit;
11) Clarifies that a local agency may identify an ADU or JADU as an adequate site to satisfy Regional Housing Needs Allocation (RHNA) housing needs;
12) Permits JADUs even where a local agency has not adopted an ordinance expressly authorizing them;
13) Allows a permitted JADU to be constructed within the walls of the proposed or existing single-family residence and eliminates the required inclusion of an existing bedroom or an interior entry into the single-family residence;
14) Requires a local agency to delay enforcement against a qualifying substandard ADU for five (5) years to allow the owner to correct the violation, so long as the violation is not a health and safety issue; and,
15) AB 587 creates a narrow exemption to the prohibition for ADUs to be sold or otherwise conveyed separately from the primary dwelling by allowing deed-restricted sales to occur if the local agency adopts an ordinance. To qualify, the primary dwelling and the ADU are to be built by a qualified nonprofit corporation whose mission is to provide units to low-income households.
Proposed Changes to MMC 20.42 (Accessory Dwelling Units)
As noted above, the City’s ADU ordinance must be revised again to be in conformance with the State Law changes. The Draft Ordinance can be seen at Attachment 6 (with a “redlined” version at Attachment 2 showing the changes from the current ordinance) and those same modifications to Chapter 20.42 are illustrated in Attachment 3. In general, these modifications include the following:
1) Modifies Section 20.42.010 (“Purpose and Applicability”) to reference the current State Law provisions, add references to Junior ADUs, and clarify that this chapter is applicable to all parcels in the City that are zoned residential or allow residential uses;
2) Modifies Section 20.42.020 (now entitled “Application Process and Review and Nonconforming Conditions”) by removing the requirement for a Minor Use Permit for an ADU and spelling out the ministerial application process required, “deemed approved” stipulations, processing times, and the enforcement of non-conforming conditions;
3) Modifies Section 20.42.030 (now entitled “Type and Number of ADUs and Site and Design Standards”) as follows:
a) Adds the types and number of ADUs allowed per parcel with single and multi-family dwellings;
b) Modifies the Site Requirements to clarify that there is no minimum parcel size and spells out provisions for a “statewide exemption ADU;”
c) Clarifies the maximum size/floor area for ADUs;
d) Deletes the previous requirements regarding relationship to the primary dwelling;
e) Spells out the exemptions to development standards for ADUs, defines ADUs as an accessory use, clarifies subdivision restrictions, and clarifies the need for the parcel to have public water and sewer service;
f) Spells out design requirements in regard to height, finish materials, roof form, setbacks, addresses, fire sprinklers, and passageways; and,
g) Clarifies the parking requirements and parking exemptions for ADUs
4) Modifies Section 20.42.040 (“Occupancy Standards and Fee Requirements”) as follows:
a) Adds that no owner occupancy requirement shall be enforced for ADUs built between January 1, 2020, and January 1, 2025;
b) Adds that ADUs may be rented, but not for less than a 30-day term;
c) Outlines the narrow circumstances for allowing separate conveyance or sale of an ADU; and,
d) Clarifies fee requirements and exemptions for ADUs.
5) Adds new Section 20.42.050 [“Standards for Junior Accessory Dwelling Units (JADUs)”], which spells out provisions for Junior Accessory Dwelling Units.
Environmental Clearance
The Planning staff has conducted an environmental review of the project in accordance with the requirements of the California Environmental Quality Act (CEQA), and a Categorical Exemption (Environmental Review #20-34) is being recommended (see Attachment 4).
Planning Commission Action
On January 20, 2021, the Planning Commission held a public hearing on the proposed revisions. No one from the public testified or sent any written correspondence on the subject. After the public hearing, the Planning Commission voted 6-0 (1 vacancy) to recommend approval of the Zoning Ordinance Amendment to the City Council. The Planning Commission Resolution is at Attachment 5.
City Council Action
Introduced at the March 1, 2021, meeting, the second reading and adoption would be on March 15, 2021, and the Ordinance would be effective 30 days later on April 15, 2021.
IMPACT ON CITY RESOURCES
There are no impacts on City resources associated with this request.
ATTACHMENTS
1. Draft Ordinance (“Redlined” showing changes from current ordinance)
2. Draft Ordinance