SUBJECT
Title
ORDINANCE REVISION EXTENDING THE COUNTY’S ACCESSORY DWELLING UNIT (ADU) FEE WAIVER PROGRAM (DISTRICTS: ALL)
Body
OVERVIEW
Although the housing crisis continues to severely impact our region, there have been recent positive examples of steps the County took to make a dent to address the region’s need for more housing. One such example is the County’s fee waiver program for Accessory Dwelling Units (ADUs). On October 10, 2018 (2), the Board of Supervisors (Board) received the report Options to Improve Housing Affordability in the Unincorporated Area and directed staff to develop a trial program to waive plan check fees, permit fees, and County development impact fees for Accessory Dwelling Units (ADU) projects located on a lot with an existing single-family dwelling. ADUs are structures that are accessory to a primary residence, constructed with independent living facilities for one or more persons. Broadly speaking, they are allowed up to 1,200 square feet in size, can be attached or detached from the primary residence, and are an incredibly important tool to increase the availability of housing that can be built within our existing communities.
On January 30, 2019 (1), the Board adopted ordinances to create a five-year trial fee waiver program that would waive plan check fees (staff review of submitted materials), permit fees (such as building and septic system fees) and County development impact fees (such as transportation, park, and drainage fees) for newly constructed ADUs located on a lot with an existing single-family dwelling in the unincorporated County. This program has been running successfully and expires (or “sunsets”) on January 9, 2024. By its sunset date, the program is expected to have waived fees for roughly 1,500 ADU projects and will result in an estimated cumulative savings to applicants of nearly $15 million - a definite success.
Beyond the fee waiver program, the County has other processes in place to streamline the production of ADUs. For example, staff developed six sets of unique building plans (“Pre-Approved Plans”) that applicants can use to construct an ADU. These range in size from 600 to 1,200 square feet and there are no costs to use them. For applicants proposing privately designed ADUs (not using the Pre-Approved Plans), County staff offer an expedited plan check at no additional cost, which provides a first-round review in half the time of a review for a new single-family residential unit. Neither the Pre-Approved Plans nor the expedited review process for ADUs are sunsetting on January 9, 2024 - only the fee waiver program. Although the Pre-Approved Plans and expedited review efforts are beneficial on their own, the fee waiver program can increase the cumulative positive impacts, especially when taken as part of the broader suite of efforts to streamline ADU production. The housing crisis is a perilous situation that impacts all communities in our region, and we need every tool available to us to address the severe lack of housing. At this time, it would be misguided to let the program expire. It’s important we continue to offer a multifaceted approach to incentivizing and streamlining homebuilding in the unincorporated county, and waiving fees for relatively affordable ADUs has proven to help do exactly that.
Today’s action is for the Board to adopt ordinances authorizing the extension of the County’s Fee Waiver Programs for development impact fees (Transportation Impact, Park Lands Dedication Ordinance, and Drainage) and permit fees (building and onsite wastewater system) for ADUs located on lots with existing single-family dwellings for another five-year trial period commencing January 9, 2024 until January 9, 2029. Initial funding of $16M dollars will be provided to support these efforts. Once this funding has been used, the fees will need to be paid by the applicant. Today’s request would also establish appropriations through revising revise the American Rescue Plan Act (ARPA) Framework to reallocate $16.0 million of amounts anticipated to be allocated to the Evergreen element of the ARPA Framework to make the necessary funding available to extend the program.
RECOMMENDATION(S)
SUPERVISOR JIM DESMOND
Acting as the San Diego County Board of Supervisors:
On January 9, 2024:
1. Find that the proposed project is exempt from the California Environmental Quality Act (CEQA) as specified in Section 15061(b)(3) of the State CEQA Guidelines for the reasons detailed in the Notice of Exemption dated December 21, 2023, on file with the Department of Planning & Development Services (PDS), and approve the findings in Attachment A (on file with the Clerk of the Board) pursuant to the CEQA Guidelines Section 15061(b)(3).
2. Waive Board Policy B-29, Fees, Grants, Revenue Contracts - Department Responsibility for Cost Recovery, for the waiver of plan check and building permit fees, onsite wastewater system permit fees, special drainage area fees, Park Lands Dedication Ordinance (PLDO) fees and Transportation Impact fees (TIF) for Accessory Dwelling Units (ADU) for a five-year trial period commencing January 9, 2024 until January 9, 2029. During this five-year trial, fees would be waived provided there is sufficient funding remaining to cover the fees charged. Once funding has been used the fees would no longer be waived.
3. Revise the American Rescue Plan Act (ARPA) Framework to reallocate $16.0 million of amounts anticipated to be allocated to the Evergreen element of the ARPA Framework to make funding available to extend the County’s ADU Fee Waiver Program for an additional 5 years. During this five-year trial, fees would be waived provided there is sufficient funding remaining to cover the fees charged. Once funding has been used the fees would no longer be waived.
4. Direct the CAO to utilize a lost revenue strategy under the final ARPA guidance, as necessary for Recommendation #3, based on previously allocated General Purpose Revenue, and make the appropriate budget adjustments in future operational plan status letter updates. in the Land Use and Environmental Group (LUEG) General Relief Program and transfer revenue of $16.0 million from Finance Other, Intergovernmental Revenue to LUEG, based on ARPA revenue to replace previously allocated General Purpose Revenue for the General Relief Program and transfer appropriations of $16.0 million from Finance Other, Other Charges, to LUEG to fund extending the County’s Fee Waiver Program by an additional 5 years. During this five-year trial, fees would be waived provided there is sufficient funding remaining to cover the fees charged. Once funding has been used the fees would no longer be waived.
5. Establish appropriations of $13.6M in the Department of Planning & Development Services, Services & Supplies for plan check review, building permit, PLDO, TIF and drainage fees for ADUs utilizing the funds provided from the reallocation of the ARPA funding. (4 VOTES)
6. Establish appropriations of $2.4M in the Department of Environmental Health, Salaries & Benefits, for new construction layout/percolation tests and onsite wastewater system inspections permit fee waivers for ADUs utilizing the funds provided from the reallocation of the ARPA funding. (4 VOTES)
7. Approve the introduction of the Ordinance, (first reading), read title and waive further reading of the Ordinance (Attachment B, on file with the Clerk of the Board):
ORDINANCE REVISION EXTENDING THE COUNTY’S ACCESSORY DWELLING UNIT (ADU) FEE WAIVER PROGRAM
If, on January 9, 2024, the Board takes action as recommended, then on January 23, 2024:
1. Consider and adopt the Ordinance (second reading):
ORDINANCE REVISION EXTENDING THE COUNTY’S ACCESSORY DWELLING UNIT (ADU) FEE WAIVER PROGRAM
Acting as the Board of Directors of the San Diego County Flood Control District:
On January 9, 2024:
1. Find that the proposed project is exempt from CEQA as specified in Section 15061(b)(3) of the State CEQA Guidelines for the reasons detailed in the Notice of Exemption dated December 21, 2023, on file with PDS, and approve the findings in Attachment A (on file with the Clerk of the Board) pursuant to the CEQA Guidelines Section 15061(b)(3).
2. Approve the introduction of the Ordinance (first reading), read title and waive further reading of the Ordinance (Attachment C, on file with the Clerk of the Board): ORDINANCE REVISION EXTENDING THE COUNTY’S ACCESSORY DWELLING UNIT (ADU) FEE WAIVER PROGRAM
If, on January 9, 2024, the Board takes action as recommended, then on January 23, 2024:
1. Consider and adopt the Ordinance (second reading):
ORDINANCE REVISION EXTENDING THE COUNTY’S ACCESSORY DWELLING UNIT (ADU) FEE WAIVER PROGRAM
EQUITY IMPACT STATEMENT
Both low and middle-income families, as well as other vulnerable communities such as those currently experiencing homelessness, by far bear the brunt of the negative impacts associated with the lack of housing and severely inflated home prices. By extending the County’s Fee Waiver Program for ADUs, we have an opportunity to reduce development barriers and streamline housing production for the unincorporated communities.
FISCAL IMPACT
Extending the ADU Fee Waiver Program is expected to result in $3.2 million per year in uncollected County fees that the County would be subsidizing. Today’s action would fund $16 million in subsidized fees to be used over the next five years. Available American Rescue Plan Act (ARPA) funds of $16 million will be recognized as lost revenue and redirected to the ADU Fee Waiver Program. There will be no change in net General Fund cost and no additional staff years.
BUSINESS IMPACT STATEMENT
The waiver of impact and permit fees for Accessory Dwelling Units (ADUs) supports the local economy by creating new incentives for increasing the supply of housing in the unincorporated area. These types of programs remove financial barriers and create incentives for improved affordability of smaller housing types available to households that may include young people, couples, students, professionals, and seniors. New development of ADUs will also create local job growth and support the local economy.
Details
ADVISORY BOARD STATEMENT
N/A
BACKGROUND
Five years of ADU fee waivers have produced positive results for affordable housing production in the unincorporated County. Importantly - especially for one of America’s most expensive regions to live in - the program resulted in significantly reduced processing costs for much needed housing projects. Although the fees waived vary by project and are based on the associated fees for development in each individual community, the program saved applicants approximately $12,000 to $18,000 per ADU in County fees. As of August 1, 2023, the program has resulted in the County waiving fees for 1,197 ADUs with a cumulative savings to project applicants of over $12.8 million. By the program sunset date of January 9, 2024, it’s projected the County will have waived fees for roughly 1,500 ADUs with an estimated cumulative savings of nearly $15 million to applicants.
By effectively eliminating one the many financial barriers applicants must overcome in the pursuit to build an ADU, waving County fees allowed more property owners to enter the homebuilding process, which contributed to an increase in the availability and affordability of housing options in the County. For example, ADU production in the County has more than tripled since the County adopted the fee waiver program in 2019. During this time the State of California (State) also made several legislative changes that removed barriers to ADU production throughout the state, such as relaxing permitting and zoning requirements. Overall, changes made at the State level have allowed for more ADUs in more areas, while local efforts - like the County’s fee waiver program - reduced financial barriers for applicants. Taken together, the result has been a significant increase in the number of ADU projects being pursued and permitted in unincorporated communities over the past five years. These numbers translate directly into very real benefits for residents of San Diego County. For example, ADUs are unique in that they offer multi-generational housing options to families living together on a single property, while still providing independent living facilities for the different family members. ADUs increase options for first-time home buyers, young adults looking to start a family, and older adults looking to age in place, and may even provide a source of income (rent) to the primary resident, which can help offset the high cost of living in San Diego County.
Altogether, ADUs have proven to be an effective tool in our effort to combat the region’s housing crisis. The Fee Waiver Program has had a positive impact, especially when taken as part of the broader suite of state and local efforts to streamline ADU production. The housing crisis is a perilous situation that impacts all communities in our region, and we need every tool available to us to address the severe lack of housing. At this time, it would be misguided to let the program expire.
Today’s action is for the Board to adopt ordinances authorizing the extension of the County’s Fee Waiver Programs for development impact fees (Transportation Impact, Park Lands Dedication Ordinance, and Drainage) and permit fees (building and onsite wastewater system) for ADUs located on lots with existing single-family dwellings for another five-year trial period commencing January 9, 2024 until January 9, 2029. Additionally, the request is to establish appropriations through revising revise the American Rescue Plan Act (ARPA) Framework to reallocate $16.0 million of amounts anticipated to be allocated to the Evergreen element of the ARPA Framework to make the necessary funding available to extend the program.
SUSTAINABILITY IMPACT STATEMENT
The County’s commitment to sustainability requires us to consider the long-term consequences of our actions on the environment, economy, and social well-being of the communities we serve. Currently, our communities are suffering from a severe lack of housing and skyrocketing home prices. It is the County’s responsibility to ensure our residents are thriving in all aspects of life, which must include access to available and affordable housing.
ENVIRONMENTAL STATEMENT
The proposed action waives and refunds certain impact fees and charges collected in conjunction with the review and approval of projects for accessory dwelling units. The action does not approve any proposed projects or otherwise waive or release mitigation requirements that may be imposed as a condition of approval of projects. CEQA Guidelines section 15061(b)(3) exempts projects from CEQA review where it can be seen with certainty that there is no possibility the proposed action could have a significant effect on the environment. Since the proposed action merely reduces project costs by refunding or reducing government fees, but does not otherwise result in the approval of a project and is not being undertaken in conjunction with the approval of any proposed project, it can be seen with certainty that there is no possibility the proposed action may have an impact on the environment. A Notice of Exemption will be filed.
.
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s proposed action supports the Equity: Housing and Community: Quality of Life and Economic Opportunity Strategic Initiatives in the County of San Diego’s 2023-2028 Strategic Plan.
Respectfully submitted,
Jim DESMOND
Supervisor, District 5
Attachment A - Environmental Documentation
Attachment B - Ordinance Revisions Extending the County’s Accessory Dwelling Unit Fee Waiver Program (Clean Copy)
Attachment B-1 − Ordinance Revisions Extending the County’s Accessory Dwelling Unit Fee Waiver Program (Strike-out Information Copy)
Attachment C - An Ordinance Amending Flood Control District Ordinance Numbers 6 and 7 to
Waive the Payment of Special Drainage Area Fees (Clean Copy)
Attachment C-1 − An Ordinance Amending Flood Control District Ordinance Numbers 6 and 7
to Waive the Payment of Special Drainage Area Fees (Strike-out Information Copy)