HomeMy WebLinkAboutSS3 - Condominium Conversion Regulationsr�L
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item: SS3
November 9, 2004
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Planning Department
James Campbell, 949 - 644 -3210, iampbell cDcity.newport- beach.ca.us
SUBJECT: Review of current condominium conversion regulations
RECOMMENDATION
Provide direction staff on whether changes to the condominium conversion regulations
are desired.
• Standards and permit procedures for the conversion of apartments to condominiums
were first adopted by the City in 1978. The minimum requirement at that time for the
conversion of an existing apartment project was that the buildings needed to be in
"basic compliance" with the current Building Code and only one parking space per unit
must be provided. The Planning Commission was empowered to waive or modify
requirements of the Building Code if that would be no more detrimental to adjacent
properties than would be if strict compliance were required.
In 1979, the City amended the conversion process by requiring a Use Permit and a
Tentative Map. Compliance with Building and Zoning regulations was also required
(including parking) and the standards were those applicable at the time of approval of
the conversion. Residential conversions were not permitted on lots smaller than 5,000
square feet and the modification or waiver of Building and Zoning standards was
changed to require a 4/5 vote of the Planning Commission. Conformance with the
General Plan was necessary and a vacancy rate standard was applied for all requests.
The parking standards at that time were 1 garage space per unit, except for projects
with more than 4 units where 2 spaces were required for each unit above 4. The parking
standard was changed in 1980 to require 1.5 spaces per unit. In 1989, the standard was
increased again where 2 spaces per unit were required for duplexes, 7 total spaces for
triplex and 2.5 spaces per unit for larger projects. As the standards were changed to
require more parking, conversions became less likely because the newer parking
• requirements were difficult to meet on developed properties.
Condominium Conversions
November 9, 2004
Page 2
The City substantially updated the conversion process in 1994. First, the requirement •
for a tentative map was eliminated and the Use Permit was replaced with a
Condominium Conversion permit. Second, the prohibition of conversions on lots less
than 5,000 square feet was eliminated. Third, the number of parking spaces required
was changed to the number of spaces required at the time of the rental project's original
construction, provided that a minimum of 1 space per unit was provided. Next, the
vacancy rate test was made applicable only to projects with 15 or more units. The City
also introduced the requirement to separate and underground utilities. The net effect of
these changes made it possible for the conversion of smaller projects, primarily
consisting of duplexes and triplexes.
The stated purpose of the 1994 changes to the process was "to facilitate the conversion
of smaller rental units to potential affordable units while maintaining a balance of rental
and ownership opportunities." Additionally, the Council desired "to remove unnecessary
and timely review procedures for condominium conversions, while at the same time
insuring that converted units maintain minimum standards of development which will
provide a safe and efficient living environment." Another goal was to improve home
ownership rates.
Of the conversion applications reviewed since 1995, the vast majority have been
duplexes with several triplexes and a handful of mixed use buildings. Only one project •
larger than a triplex- has been evaluated and is currently pending review by the City
Council and is scheduled for November 23, 2004. The goal to facilitate the conversion
of smaller projects has definitely been realized as none of the projects considered would
have been eligible prior to the 1994 amendment and all have been smaller in size.
Staff has also completed a review of conversions since 1995 and it is estimated that
60% of converted units are owner - occupied today. These 90 units are not necessarily
the net increase in owner - occupied units as it is not known how many owners occupied
the units prior to the conversions. The owner - occupied rate of all condominiums within
the City is approximately 68% by comparison. Given today's housing values, most of
the converted units would not be considered affordable in the traditional sense, but the
units are more affordable than other ownership opportunities within Newport Beach. It
can also be said that the process has led to some re- investment in older properties with
upgrades to utility connections, reconstruction of public improvements and interior
improvements voluntarily undertaken by project applicants.
Updated Subdivision Code
In 2001, the City adopted a comprehensive update of the Subdivision Code that
required the approval of tentative parcel or tract maps for condominium conversions.
The current standards are attached. The requirement for a tentative map allows the City
to require the construction or reconstruction of missing, damaged or nonconforming
public improvements (i.e. sidewalks, streets, curb and gutter, etc.) abutting the property •
Condominium Conversions
November 9, 2004
Page 3
is under consideration of a condominium conversion. No other substantive changes were
made. However, there is a recently discovered (and unintended) ambiguity in the
language added related to the applicability of current Zoning standards as opposed to
the Zoning standards in effect at the time of the original construction, which was clearly
the standard before the 2001 code amendments. Staff will be forwarding an amendment
to the Subdivision Code to clarify the issue along with several other minor "fixes" as is
typically necessary after most comprehensive updates.
Environmental Review
This is a discussion item and is not subject to environmental review.
Public Notice
Notice of this study session item appeared on the agenda for the meeting, which was
posted in accordance with applicable requirements.
Altematives
The City Council may take several actions:
• 1. Direct staff to prepare an ordinance amendment changing condominium
conversion standards.
2. Provide direction to the Planning Commission to guide further consideration of
the matter.
3. Direct staff to make no changes other than clarification of language in the
Subdivision Code.
Prepared by:
Submitted by:
GvC 9.. �e.�- - 9k:i=
James Campb II, Senick Planner Patricia Temple, Planning rector
Attachments
A. Chapter 19.64 — Conversion of Rental Units to Ownership
11
19.64.010
is Chapter 19.64
CONVERSION OF RENTAL UNITS TO
OWNERSHIP
Sections:
19.64.010
Purpose and Intent.
19.64.020
Definitions.
19.64.030
General Requirements.
19.64.040
Tenant Notification
(66427.1,66452.8, 66452.9).
19.64.050
Tenant Purchase Option
(66427.1).
19.64.060
Review Procedures (66427.1,
66427.2).
19.64.070
Standards for Condominium
Conversions.
19.64.080
Modification or Waiver of
Conversion Standards.
19.64.090
Condominium Conversion Fees.
19.64.100
Exemptions.
19.64.110
Agreement to Retain Rental
•
Housing (6645250).
19.64.010 Purpose and Intent.
A. Purpose. The purpose of this chapter is to:
1. Regulate Conversions. Provide standards and
criteria for regulating the conversion of rental units to
condominium, community apartment or stock
cooperative types of ownership and for determining
when such conversions are appropriate; and
2. Mitigate Hardships. Mitigate any hardships to
tenants caused by their displacement.
B. Intent. The intent of this chapter is as follows:
1. Residential Conversions. The City Council
finds that residential condominiums, community'
apartment and stock cooperative types of ownership,
as defined in Section 1351 of the Civil Code, differ
from rental apartments with respeetto design, type of
construction and maintenance controls, and therefore
that the development standards in this chapter are
necessary for the protection of the community,
existing rental tenants and the purchasers of the
converted units. It is also the intent of these
•regulations to maintain a balanced mix between
(Newport Beach 5-02)
ownership and rental housing in order to assure the
development of a variety of housing types to serve
the needs of the community.
2. Nonresidential Conversions. The City Council
also finds that nonresidential condominiums,
community apartment and stock cooperative types of
ownership, as defined in Section 1351 of the Civil
Code, differ from rental units with respect to design,
type of construction and maintenance controls, and
therefore that the development standards in this
chapter are necessary for the protection of the
community, existing rental tenants and the
purchasers of the converted units.
C. Applicability of Sections. All sections in this
chapter apply to the conversion of residential units.
All sections except 19.64.040, 19.64.050 and
19.64.1 10 apply to the conversion of nonresidential
units. (Ord. 2001 -18 § 2 (Exh. ZA -1) (part), 2001)
19.64.020 Definitions.
For purposes of this chapter and this title, the
following terms shall have the meanings indicated:
A. Condominium, Community Apartments and
Stock Cooperatives. The term "condominium" shall
encompass condominium projects, community
apartment projects and stock cooperatives, as defined
in Section 1351 of the California Civil Code.
B. Organizational Documents. The term
"organizational documents" means the declaration of
restrictions, articles of incorporation, by -laws and
any contracts for the maintenance, management or
operation of all or any part of a project.
C. Project. The term "project' means the entire
parcel of real property proposed to be used or
divided, as land or airspace, into two or more units as
a condominium.
D. Unit. The term "unit' means the particular
area of land or airspace that is designed, intended or
used forexclusive possession or control of individual
owners or occupier.
E. Vacancy Rate. The term `vacancy rate" means
the number of vacant multiple dwellings being
offered for rent or lease in the City of Newport Beach
shown as a percentage of the total number of
multiple dwellings offered for or under rental or lease
674 -6
s
agreement in the City. Said vacancy rate shall be as
established once each year, in April, by survey of
fifteen (15) percent of the City's rental units. (Ord.
2001 -18 § 2 (Exh. ZA -1) (part), 2001)
19.64.030 General Requirements.
A. Where Permitted. If approved under the
provisions of this chapter and Title 20 (Planning and
Zoning), residential condominium conversions may
be allowed in any district in which residential uses
are permitted, including planned communities,
except within the R -1.5 District (Balboa Island).
Nonresidential condominium conversions may be
allowed in any district in which such uses are
permitted.
B. Subdivision Required. All condominium
conversions subject to this chapter shall require
approval of tentative and final subdivision maps.
C. Review Responsibilities. Condominium
conversions containing five or more units shall be
approved by the Planning Commission via a tentative
tract map. Condominium projects or conversions
containing four or less units shall be approved by the
Modifications Committee via atentative parcel map.
D. Applicable Standards. Condominium
conversion projects shall conform to: (1) The
applicable standards and requirements of the zoning
district in which the project is located at the time of
approval Per Title 20 (Planning and Zoning); and (2)
the applicable provisions of this Subdivision Code.
(Ord. 2001 -18 § 2 (Exh. ZA -1) (part), 200 1)
19.64.040 Tenant Notification (66427.1,
66452.8, 66452.9).
Applicants for conversion projects shall be
responsible for notifying existing and prospective
rental tenants as follows:
A. Existing Tenants. At least sixty (60) days prior
to the filing of an application for conversion of rental
or lease property, the applicant or the applicant's
agent shall give notice of such filing in the form set
forth in Section 66452.9 of the Subdivision Map Act
to each tenant of the subject property. Further, if the
conversion project is approved, the applicant shall
give all tenants a minimum of one hundred eighty
19.64.020
(180) days advance notice of the termination of their
tenancy.
B. Prospective Tenants. At least sixty (60) days
prior to the filing of an application for conversion of
rental or lease property, the applicant or the
applicant's agent shall give notice of such filing in
the form set forth in Section 66452.8 of the
Subdivision Map Act to each person applying after
such date for rental or lease of a unit of the subject
property. Pursuant to the Subdivision Map Act,
failure of an applicant to provide such notice shall
not be grounds to deny the conversion but shall make
the applicant subject to the penalties specified in
Section 66452.8 of the SMA.
C. Evidence of Tenant Notification Each
application for conversion shall include evidence to
the satisfaction of the Planning Director that the
notification requirements specified in subsections (A)
and (B) of this Section have been or will be satisfied.
(Ord. 2001 -18 § 2 (Exh. ZA -1) (part), 200 1)
19.64.050 Tenant Purchase Option (66427.1).
The property owner shall provide tenants with an
exclusive right to purchase his or her respective unit•
upon the same or more favorable terms and
conditions than those on which such unit will be
initially offered to the general public. Such right shall
run for a period of not less than ninety (90) days
from the date of issuance of the subdivision public
report pursuant to Section 1 1018.2 of the Business
and Professions Code, unless the tenant gives prior
written notice of his or her intention not to exercise
the right. (Ord. 2001 -18 § 2 (Exh. ZA -1) (part),
2001)
19.64.060 Review Procedures (66427.1,
66427.2).
A. List of Tenants. In addition to the standard
application requirements for tentative maps, the
applicant shall submit a complete mailing list of all
tenants occupying the subject property and two
corresponding sets of stamped addressed envelopes.
The Director shall mail a public hearing notice for
the tentative map hearing to each tenant on the
674 -7
r
U
(Newport Beach 5 -02)
6
•
•
19.64.060
mailing list in accordance with the procedures of
Chapter 19.12.
B. Tentative Map Review. Tentative maps shall
be approved or denied by the tentative map decision
making body. Decisions on the conversion of
existing buildings into condominiums or stock
cooperatives shall be governed by the provisions and
limitations of Section 66427.2 of the Subdivision
Map Act.
C. Council Findings for Residential Conversions.
For residential conversions, no final map for a
condominium conversion shall be approved unless
the City Council makes all of the findings set forth in
Section 66427.1 of the Subdivision Map Act
regarding tenant notification, right to purchase and
other requirements.
D. Disapproval Based on Vacancy Rate. In
accordance with General Plan policies, where it is
proposed to convert an existing residential
development containing fifteen (15) or more units to
condominium units, the decision making body shall
disapprove, without prejudice, any application for
condominium conversion if the rental dwelling unit
vacancy rate in the City at the time of the public
hearing is equal to or less than five percent.
Notwithstanding the preceding, the decision making
body may approve a condominium conversion if it
determines that either of the following overriding
considerations exist:
1. The project will minimize the effect on
dwelling unit vacancy rate, and otherwise
substantially comply with the intent of this chapter,
or
2. Evidence has been submitted that at least two-
thirds of the existing tenants have voted to
recommend approval of the conversion. (Ord. 2001-
18 § 2 (Exh. ZA -1) (part), 2001)
19.64.070 Standards for Condominium
Conversions.
Condominium conversion projects shall conform
to the following requirements and the decision
making body shall make specific findings alto such
conformance in any action approving a condominium
• conversion:
(Newpon aexh 5 -02)
674 -8
A. The number of off -street parking spaces that
were required at the time of the original construction
shall be provided on the same property to be
converted to condominium purposes, and the design
and location of such parking shall be in conformance
with the provisions of Chapter 20.66 (Off -Street
Parking and Loading Regulations). Under no
circumstance shall there be less than one covered
parking space per dwelling unit.
B. Each dwelling unit within a building shall
have a separate sewer connection to the City sewer.
C. Each sewer lateral shall be retrofitted/fitted
with a cleanout at the property line.
D. Each unit shall maintain a separate water
meter and water meter connection.
E. The electrical sery ice connection shall comply
with the requirements of Chapter 15.32 of the
Municipal Code.
F: The applicant for a condominium conversion
shall request a special inspection from the Building
Department for the purpose of identifying any
building safety violations. The applicant shall correct
all identified safety violations prior to approval of a
final map for the condominium conversion.
G. Permanent lot stakes and tags shall be
installed at all lot corners by a licensed surveyor or
civil engineer unless otherwise required by the City
Engineer.
H. For residential conversions, the project shall
be consistent with the adopted goals and policies of
the General Plan, particularly with regard to the
balance and dispersion of housing types within the
City.
I. The establishment, maintenance or operation
of the use or building applied for shall not, underthe
circumstances of the particular case, be detrimental
to the health, safety, peace, comfort and general
welfare of persons residing or working in the
neighborhood of such proposed use or be detrimental
or injurious to property and improvements in the
neighborhood or the general welfare of the City.
(Ord. 2001 -18 § 2 (Exh. ZA -1) (part), 200 1)
7
19.64.080 Modification or Waiver of
Conversion Standards.
A. Parking. The decision making body may
modify or waive the parking requirements of
subsection 20.64.070(A) in accordance with the
waiver procedures of Chapter 20.66 of the Zoning
Code.
B. Sewer Connections. The decision making
body may modify or waive the requirement for
separate sewer connections per subsection
20.64.070(B) if it fmds that the modification or
waiver will not be materially detrimental to the
residents or tenants of the property or surrounding
properties, norto public health or safety. (Ord. 2001-
18 § 2 (Exh. ZA -1) (part), 2001)
19.64.090 Condominium Conversion Fees.
In addition to other required fees, condominium
conversion applications shall be accompanied by a
special Building Department inspection fee,
established by resolution of the City Council, for the
purpose of identifying building safety violations
within the project. (Ord. 2001 -18 § 2 (Exh. ZA -1)
(part), 2001)
19.64.100 Exemptions.
A. Park Fees. For residential developments, the
conversion of existing rental housing to a
condominium project shall be exempt from the
requirements of Chapter 19.52 (Park Dedications and
Fees) if, on the date of conversion, the rental units
are at least five years of age and no additional
dwelling units are to be added as part of the
conversion.
B. Traffic Phasing Ordinance. The conversion of
existing rental units to a condominium project shall
be exempt from the requirements of Chapter 15.40
(Traffic Phasing Ordinance) if the proposed
conversion will not add more than ten dwelling units
to a residential development or will not add more
than ten thousand (10,000) square feet of gross floor
area to a nonresidential development. (Ord. 2001 -18
§ 2 (Exh. ZA -1) (part), 2001)
674 -9
19.64.080
19.64.110 Agreement to Retain Rental •
Housing (6645250).
In addition to the provisions in this chapter
regarding condominium conversions, the City may,
in connection with theapproval of tentative or final
map for a new residential condominium project
requiring approval of a tentative or final map
pursuant to this Code, enter into a binding_ agreement
with the subdivider mandating that the units be first
made available for rental housing for a period of not
less than ten years from the date a certificate of
occupancy has been issued for the units within the
development subject to the provisions of Section
66452.50 of the Subdivision Map Act. (Ord. 2001 -18
§ 2 (Exh. ZA -1) (part), 2001)
(N,wpw a«n 1.02)
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