Apr012014

Would permitting in-law units destroy good neighborhoods?

Population pressure and high home prices prompt homeowners to rent rooms and illegally convert garages to rental units, changing neighborhood character.

rented_roomThere goes the neighborhood. What happens when your neighbors start renting out rooms and converting their garages into makeshift apartments? How do these new neighbors behave? Do they park their cars in front of your house? Block your driveway? Do they party at all hours of the night? Do they behave like those degenerates and loser renters you were trying to escape?

If developers were allowed to buy up properties in an existing neighborhood of single-family homes, demolish them, then put up a factory, it would turn the neighborhood into something other than what the remaining homeowners bought into. In short, it would ruin everything. In order to prevent problems like that from occurring, society developed legal mechanisms to control land use. One of the purposes of planning and zoning and neighborhood covenants and restrictions is to preserve the character of the community, and thereby preserve property values.

Allowing additional residents into a neighborhood isn’t as drastic as permitting a factory to start belching smoke, but when more people move into a community, it creates problems with traffic and parking, infrastructure is strained beyond its design capacity, and it lowers the standard of life for existing residents. psycho_homeownerIf the existing residents don’t benefit in some way, and renting out rooms or converting garages to rental units only benefits a single homeowner at the expense of his neighbors, then the neighbors who pay the price get rightfully upset.

Pavilion Park in Irvine

The new Pavilion Park development in Irvine has several floor plans with in-law units with separate exterior doors leading to the street. These were ostensibly designed for extended families, but in the real world, homeowners who overextended themselves to buy in Irvine will rent these units to strangers to help pay the bills. These are ideal rental units because unlike renting out a room in the house, these units have independent kitchens and separate entry ways; the homeowners and the renters never need cross paths.

Even though new residents in Pavilion Park know about these units, I doubt most of them thought through the implications of so many potential rental units in their neighborhood. Since these units don’t come with garages, and since most homeowners won’t want the tenants parking in the driveway and blocking their garage access, most of these renters will park their cars on the street. Guest parking will be hard to come by, and the streetscape will not be very attractive will all those cars. Further, as the homeowners teenagers get cars, these will be added to the mix further straining side-street parking capacity.lowly_renter

This issue is not confined to Irvine. The Beach communities have long had serious traffic and parking problems, often because so many accessory units were added over the years. Due to high demand for housing and almost no new supply available to meet this demand, San Francisco residents are increasingly turning to in-law units to rent out to help pay the mortgage, and they are facing the problems these new residents bring with them.

S.F. urged to legalize thousands of in-law units in bid to tackle housing crisis

Mar 10, 2014, 1:36pm PDT Updated: Mar 10, 2014, 2:31pm PDT

San Francisco should establish a process to legalize thousands of illegally-constructed housing units and bring them under rent control laws, according to a staff recommendation ahead of a Planning Commission review this week.

The Commission is set to hear on Thursday the legislation sponsored by Supervisor David Chiu that would apply to the approximately 50,000 illegal units built in garages, attics and attached to the rear of homes all across the city. Many of those units, often called granny flats or in-law units, are occupied by renters.

That’s a lot of illegal units. The problem for officials is that this kind of tenancy is difficult to restrict. If someone is letting their aging parent live with them in a true in-law situation, the municipality has no business telling people who they can and can’t live with. The city can regulate the quality of the living space and enforce building codes, but if the homeowner wants to let a family member live there, the municipality is powerless to stop them — and they shouldn’t want to.I_rented_housing_bubble

Where it becomes gray is when these units are rented out to strangers. People have the right to rent out rooms in their house to strangers, so renting out a garage or accessory unit is difficult to enforce. Staff from the municipality could start going through Craigslist ads and attempt to curb the behavior, but this isn’t the best use of staff time, and it isn’t popular with the many residents who do rent out these units.

San Francisco has had illegal units for decades. If city inspectors find illegal units, property owners are required to either bring them up to code or ordered to tear them down.

Destruction of illegal units does not happen often. Between 2000 and 2011, about 250 illegal units were demolished.

These units were not habitable. The City will crack down on slumlords.

Finding a way to permit illegal units, and not punish property owners in the process, has come into vogue as a way to maintain a significant portion of the city’s rental stock amid surging demand for housing, supporters of the ordinance said.

Creating a path to legalize the unauthorized dwelling units would allow the city to maintain a large source of affordable rental housing, while ensuring such units are habitable and meet the minimum life and safety standards,” reads a portion of the proposed ordinance.

Legalizing these units would have that effect, but as I pointed out above, that may not be desirable to other residents in the neighborhood.

Extending rent control to those illegal units, however, is a controversial element of the proposal because it could serve as a disincentive for property owners to seek legal status.

Yes, extending rent control to these units will stop anyone from seeking legal status. How would you put rent control on someone renting out a room in their house?

Under Chiu’s plan, the city’s Department of Building Inspection would approve an illegal unit if it complies with city ordinances for health, fire and building codes.

Property owners would have to bear the cost of bringing a unit up to code if it falls short. The cost to do so can easily reach tens of thousands of dollars. None of the cost can be passed on to tenants, if the illegal unit is being rented.

If a significant number of these units don’t meet code, then this should be passed to make these units safe and habitable. Proponents should drop the provision about rent control to get it passed because they can always go back and try to get rent control added later.capricious_landlord

DBI officials said they suspect three likely, and costly, code violations will be found in many illegal units: not providing minimum floor-to-ceiling height of seven feet, six inches; only one way in or out of a unit and nonexistent or subpar sprinkler installations for buildings with three or more units.

Why not pass an exemption to grandfather in these units for the existing owner. It becomes a problem for the new owner at time of future sale, but the existing owner can avoid the cost of renovation.

Granting legal status to illegal units not only would maintain a critical swath of the city’s housing stock, it would allow the city to start applying property tax on those units, city officials said.

The proposed ordinance would not allow property owners to seek legal status for their illegal units if they had evicted a tenant from one through the Ellis Act within the last 10 years.

An association for the city’s small property owners has a number of concerns with the Chiu proposal. Among them:

  • Homeowners should be able to apply rent increases to amortize the costs of capital improvements related to legalizing an in-law unit, said the Small Property Owners of San Francisco Institute.
  • The proposed ordinance does not provide amnesty from lawsuits from previous or current tenants. Without such protections, the group said, “homeowners will refuse to apply for the program, afraid of reprisals from previous tenants.”
  • The ordinance does not allow property owners to merge in-law units to an original home. Such flexibility encourages homeowners to open up their homes as in-law dwelling. Preventing units from being re-merged will affect the affordability of the in-law unit and remove the financial incentive of legalization, SPOSFI said.
  • Homeowners should be exempted from providing relocation costs to renters if the owner needs to upgrade an in-law unit.

The proposed Chiu ordinance will go before the city’s Planning Commission on Thursday. The commission may recommend adoption, rejection or propose changes before sending it to the Board of Supervisors for consideration.

I am biased on this issue

[dfads params=’groups=4&limit=1&orderby=random’]I openly admit I am biased on this issue. I am in favor of allowing in-law suites and other rental units in most circumstances, mostly for family reasons. As many of you know, I have a special needs child, and he will likely never live independently. Like any parent, I would like to see him develop the greatest degree of independence he can, but I also recognize he will always need some help. My son will likely live with us for the rest of his life, which I consider a blessing because he is a good friend and playmate. As my son gets older, my family will probably seek out a house with an in-law suite to provide my son as much independence as he can handle. Since I want the freedom to live where I chose, I would like to see these in-law suites permitted in more locations.

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