Title
Report regarding consideration of a recommendation to the City Council to adopt an Ordinance to amend Title 20 (Zoning) of the South San Francisco Municipal Code (SSFMC) to allow for residential entitlements to be extended by up to two years, and determination that the proposed amendments are categorically exempt from the California Environmental Quality Act (CEQA) per Section 15378 of the CEQA Guidelines (Adena Friedman, Chief Planner)
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MOTION TO ADOPT STAFF RECOMMENDATIONS
1. Move to determine the proposed updates are exempt from CEQA.
2. Move to recommend that the City Council adopt an Ordinance amending Title 20 of the South San Francisco Municipal Code.
RECOMMENDATION
Recommendation
Staff recommends that the Planning Commission conduct a public hearing and adopt the attached Resolution:
1. Determining that the proposed Zoning Ordinance amendments do not require additional environmental review and is exempt from the California Environmental Quality Act (CEQA) per Section 15378 of the CEQA Guidelines, and
2. Recommending that the City Council adopt an Ordinance updating entitlement extensions in Title 20 (“Zoning”) of the South San Francisco Municipal Code.
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BACKGROUND
Planning entitlements in South San Francisco (such as design review, use permit, a variance, or any other discretionary approval) are valid for two years after project approval, per South San Francisco Municipal Code (SSFMC) Section 20.450.011 (Common Procedures, Expiration and Extension). The entitlement is considered expired if the project applicant has not obtained building permits (or a business license, if building permits are not required) within two years of project approval.
SSFMC Section 20.450.011(B) allows for a one-year extension, as follows:
A time extension not exceeding one year beyond the initial two-year period may be requested by applying to the Chief Planner prior to the expiration date of the permit. In no case shall the expiration period extend more than three years from the date of final approval. After that time, a new application shall be required.
In order to receive a one-year extension, the applicant submits a formal request in writing to the Planning Division, and includes evidence to support the following findings (SSFMC Section 20.450.011(D)):
1. That the permit holder has clearly documented that it has made a good faith effort to commence work upon the use;
2. That it is in the best interest of the City to extend the permit; and
3. That there are no substantial changes to the project, no substantial changes to the circumstances under which the project is undertaken, and no new information of substantial importance that would require any further environmental review pursuant to the California Environmental Quality Act.
The Entitlement and Expiration section also allows the Chief Planner to modify approved Conditions of Approval when granting a request for an entitlement extension, to fulfill the intent of this Zoning Code section.
In order to address the challenging financial and development market, and reduce a barrier to residential development projects in South San Francisco, staff is proposing a Zoning Ordinance Amendment to increase the entitlement extension period for residential projects, from one year to up to two years.
DISCUSSION
Within the post-entitlement period, an applicant must obtain financing, prepare construction plans for City review, and secure building permits. Larger projects require more complex construction plans with extensive lead times for drawings and permit reviews. In addition, affordable housing projects often need to secure various financing sources over multiple funding cycles, which may only occur once a year. Resubmitting an expired entitlement application can be extensive and costly for the applicant, particularly if local or state codes have been updated since the original entitlement.
While South San Francisco has experienced significant development over the past fifteen years, in recent years the development market and construction timeframes have slowed considerably. It has been more difficult and taken longer for projects to receive financing, and completed commercial buildings are having difficulty finding tenants. Large-scale commercial (office / R&D) projects have typically entered into a development agreement with the City, as a tool to extend entitlement timelines. A development agreement is a tool that is established by State law, for the purpose of providing certainty to both the developer and the City about a development timeline and terms. A development agreement can also be a method to negotiate favorable terms for both parties (such as an extended entitlement timeframe and vesting of regulations and fees for the developer, and a negotiated community benefits program for the City which can include pre-payment of fees, financial contributions, and infrastructure improvements). Development agreements typically have an extended entitlements timeframe, such as ten to fifteen years, and have proven to be effective tools for commercial projects in South San Francisco.
Residential projects typically do not enter into development agreements, as they do not have the same financial resources and expected investment returns as commercial development. It can be very challenging for residential projects to obtain building permits within the three-year post-entitlement timeframe. Since 2020, the State has provided several legislative entitlement extensions for residential projects, to address market conditions in the midst of the statewide housing shortage. The most recent State extension was provided through Assembly Bill (AB2729), and it extended the entitlement timeframe by 18 months to residential projects that were approved before January 2024, and were set to expire prior to December of 2025. The City applied AB2729 extensions to all eligible residential projects, in addition to the extension available through SSFMC (allowing up to four and a half years). The State currently does not have any entitlement extensions, and the maximum of three years permitted by the SSFMC is a limiting factor for constructing residential projects.
The proposed zoning text amendment would extend the entitlement extension period for residential projects by one year, allowing an extension of up to two years for residential projects, for a total of four years. The process for requesting and granting an extension would remain the same.
This extension would apply to:
• Recently approved residential projects with active entitlements that have not yet been issued building permits (approximately 850 units, including over 200 affordable units),
• Residential projects currently in the entitlement pipeline (approximately 450 units), and
• All residential entitlements going forward.
PROPOSED AMENDMENTS
The amendments proposed for SSFMC Section 20.450.011 (Expiration and Extension) are below, with additions double underlined and deletions in strike-out form. Staff has prepared a draft ordinance that is attached to the associated Resolution as Exhibit A.
A. Unless a time extension is approved pursuant to subsection B below, any use permit, design review approval, variance or other discretionary approval granted in accordance with the terms of this Ordinance shall automatically expire if building permits have not been issued within two years from the date of final approval.
B. A time extension not exceeding two years for residential projects and one year for non-residential projects beyond the initial two-year period may be requested by applying to the Chief Planner prior to the expiration date of the project approval permit. In no case shall the expiration period extend more than four years for residential projects, and three years for non-residential projects from the date of final approval. After that time, a new application shall be required.
C. The Chief Planner shall refer an extension request to the Chief Building Official, Fire Chief, Police Chief, and Public Works Director or other affected City Department for their review and recommendation prior to decision.
D. In order for the Chief Planner to grant an extension pursuant to subsection B C above, it shall find all of the following:
1. That the permit holder has clearly documented that it has made a good faith effort to commence work upon the use;
2. That it is in the best interest of the City to extend the permit; and
3. That there are no substantial changes to the project, no substantial changes to the circumstances under which the project is undertaken, and no new information of substantial importance that would require any further environmental review pursuant to the California Environmental Quality Act (CEQA). For projects exempt from CEQA review, the Chief Planner shall determine that there are no substantial changes to the project, no substantial changes to the circumstances under which the project is undertaken, and no new information of substantial importance that would require denial of the project under the law exempting the project from CEQA.
E. In granting an extension pursuant to subsection <https://ecode360.com/43454176> C B above, the Chief Planner may modify or add to the conditions of approval, as she/he deems necessary in order to fulfill the purposes of this chapter.
GENERAL PLAN CONSISTENCY
The proposed Zoning Text Amendment to extend the entitlement extension period for residential development is intended to make residential development more feasible in South San Francisco. This change is consistent with the overall General Plan vision of creating a livable community, with diverse types of housing affordable to different income levels and household compositions. This amendment helps to implement the following General Plan goals and policies:
GOAL LU-3: A diverse range of housing options that create equitable opportunity for people of all ages, races/ethnicities, abilities, socioeconomic status, genders, and family types to live in South San Francisco.
Policy LU-3.1: Create affordable and workforce housing.
Policy LU-3.3: Encourage diversity of housing types and sizes.
This policy change also helps to implement Housing Element goals and policies:
GOAL 2 CREATION/FACILITATION - Promote the provision and/or access of housing by both the private and public sectors for all income groups in the community.
GOAL 3 REMOVE CONSTRAINTS - Support housing development by eliminating unnecessary and/or costly barriers in the housing development process and facilitating collaboration with private and public partners to develop housing options affordable to everyone.
Policy CST-3: Continually update the Zoning Ordinance to comply with State housing law and best practices.
ENVIRONMENTAL REVIEW
The proposed amendments to regulations pertaining to extending the timeline for residential entitlements are exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15378 of the CEQA Guidelines, as the proposed amendments are minor in nature and are not considered a Project per the CEQA Guidelines, with no expansion in use or creating new uses, and has no potential for resulting in direct or indirect physical changes to the environment, and thus would not have any significant effects on the environment.
CONCLUSION
The proposed Zoning Text Amendment is intended to remove a barrier to residential development, by allowing an additional year to receive building permits after project entitlements have been approved.
Staff recommends that the Planning Commission conduct a public hearing, and adopt a resolution making findings determining that the proposed Zoning Ordinance amendment does not require further environmental review and is exempt from CEQA, and recommending that the City Council adopt an Ordinance updating regulations pertaining entitlement expiration and extension to Title 20 (“Zoning”) of the South San Francisco Municipal Code.
Exhibit to Associated Resolution (Legistar File 26-2014)
A. Draft Ordinance - Entitlement Extension