Title
Report regarding establishing a conversion process including noticing and relocation benefits in the event of single room occupancy hotel and mobile home park closures, redevelopments, or changes of use. (Katie Lan, Management Analyst II)
Body
RECOMMENDATION
Staff recommends the Joint Housing Standing Committee of the City Council and Planning Commission consider and provide guidance on establishing a permit process for single room occupancy hotels and mobile home parks proposed to be converted, demolished, and/or redeveloped. The intention of the policies is to establish streamlined administrative processes for the City to enforce noticing and relocation benefit requirements for residents displaced from these housing types.
BACKGROUND
South San Francisco is home to two unique types of naturally occurring affordable housing - mobile homes and single room occupancy (SRO) hotels. When a mobile home park closes or is converted to another use, its residents are displaced. Due to the complicated rental and ownership nature of these parks, displaced mobile home owners often face the difficult choice of whether to abandon their home or move their home to another mobile home park, often an expensive and onerous process. Likewise, when an SRO hotel closes due to conversion or redevelopment, its residents are also displaced. (SRO hotels are residential properties where individual tenants rent small, single rooms with shared bathrooms and often shared kitchens, often providing naturally occurring affordable housing for lower-income households.) Both of these types of housing are vulnerable to closure and redevelopment due to changing market conditions. SRO hotels, particularly in South San Francisco, are aging developments. As SRO owners seek to sell these properties, residents are increasingly faced with the challenge of finding limited affordable housing options.
SROs and Mobile Homes in South San Francisco
The city is home to at least seven currently occupied SRO hotels, comprising of over 220 naturally occurring affordable SRO units.
|
Known SRO Inventory List - Updated July 30, 2024 |
|
Property Name |
Property Address |
Number of Units |
Status |
|
Metropolitan Hotel |
220 Linden Ave |
68 |
Active; deed restricted affordable housing w/ City loan |
|
Industrial Hotel |
505 Cypress Ave |
29 |
Active; operated by County BHRS contractor as PSH |
|
S & L Hotel |
400 Miller Ave |
29 |
Active; listed for sale |
|
146 Gardiner Ave |
146-150 Gardiner Ave |
21 |
Sold in 2022; code enforcement actions in 2023/2024 |
|
The Grand Hotel |
731 Airport Blvd |
Approx. 57 |
Active |
|
Alphonse Hotel |
108 Grand Ave |
19 |
Active, but all units are currently vacant |
|
Atlas Hotel |
322 Grand Ave |
Unknown |
Converted to tourist hotel, but still allows long term stays |
Treasure Island Mobile Home and RV Park located at 1700 El Camino Real is the only mobile home park in South San Francisco and houses over 100 permanent mobile homes. San Mateo Housing Leadership Council recently canvassed Treasure Island Mobile Home Park residents to assess their housing needs and shared an overview of survey responses with City staff. The survey revealed that many residents are low-income seniors on fixed incomes, with a primary concern being long-term housing security. It also highlighted the diverse rental and ownership structures among mobile home residents, including those who own their homes but rent the space where it is located, and those who rent both the space and the home.
General Plan & Housing Element Policies
The City adopted a comprehensive update to the General Plan (GP) in 2022 and recently received State certification for its 2023-2031 Housing Element. As stated in the General Plan, the City’s housing priorities include new housing production while preserving affordable housing and protecting vulnerable residents from housing instability and displacement. The proposed policies addressing SRO and mobile home park displacement help achieve the goals outlined in the Housing Element and General Plan. Specifically, the proposed ordinances contribute to the following policy goals identified in implementing the Fair Housing Plan in the City’s certified Housing Element:
• Policy EQ-3: Support residents who are at-risk of being displaced. Reduce the rate of evictions and support low-income residents who are at risk of being displaced. (GP)
• Policy EQ-8: Protect existing residents from displacement in areas of lower or moderate opportunity and concentrated poverty and preserve housing choices and affordability. (FHAP)
• Program PRSV-5.2 Assist Tenants as risk of Displacement: The City shall assist tenants displaced by the conversion of at-risk units by providing information about tenants’ rights, providing referrals to relevant social service providers, endeavoring to establish a funding source to assist nonprofit organizations that support tenants, and facilitating other support as appropriate.
While the intention of developing a permit process to secure noticing and relocation benefits for residents being displaced from SROs and mobile homes is not to prevent redevelopment or conversion of those properties, this sort of policy can be viewed as an anti-displacement effort. The goal is to lessen the financial, emotional, and familial impact of an eviction from naturally affordable housing unit into, most-likely, a market rate housing environment. In this way, the proposed policies are an anti-displacement measure, aimed at addressing the causes and impacts of residential displacement.
Relationship to Anti-Displacement Roadmap
While the City is working toward the preparation of a Commercial and Residential Anti-Displacement Roadmap, Council has directed staff to bring forward more urgent policies and not to wait for the conclusion of the multi-year Roadmap preparation if the policies are warranted in the immediate term. Due to recent code enforcement action at an SRO, the listing of an SRO hotel for sale on the open market, and the City’s monitoring efforts at a deed restricted SRO hotel, it is evident that a policy to address SRO conversion may be necessary in the near term, and not at the conclusion of the Roadmap process. Additionally, mobile home park acquisitions and redevelopments have been covered by the media nationally and while staff is unaware of any short- or medium-term plans for the mobile home park in South San Francisco to redevelop, the type of policies that address SRO conversion are similar to those that would protect mobile home residents and so staff is proposing these policies in tandem.
Benchmarking Research
Staff conducted extensive research on existing policies in the region. In developing policies to address SRO and mobile home conversion or redevelopment in South San Francisco, staff consulted with jurisdictions that have implemented similar measures and engaged with community-based organizations familiar with these housing types. Insights from these discussions were instrumental in crafting policies to address mobile home park and SRO hotel conversion.
Mobile Home Parks
State Law
Existing State law (California Government Code sections 65863.7, 66427.4(a)) establishes a minimum standard for local regulation of the conversion of mobile home parks to other uses and mobile home park closures. Specifically, the State law requires the entity proposing the conversion or redevelopment to file a report on the impact of the conversion, closure, or redevelopment of the mobile home park. The report must include a replacement and relocation plan that adequately mitigates the impact on the displaced residents of the mobile home park. This legislation does not prevent a local agency from enacting more stringent measures.
San Mateo County Ordinances
The County of San Mateo has adopted more stringent regulatory measures, as allowed by State law. This Chapter 5.156 of the San Mateo County Ordinance Code addresses mobile home parks located in unincorporated San Mateo County. The County legislation requires mobile home park owners to submit a relocation impact report to the County prior to converting or closing the mobile home park. This also creates a process for park owners to notify park tenants. Adopting similar legislation would help streamline regional alignment of mobile home park regulations.
The County also took these regulations a step further, enshrining a mobile home park zoning district that is overlayed on mobile home park properties throughout unincorporated County. Since the implementation of these ordinances, no mobile home park conversions have been proposed. While these ordinances do not preclude redevelopment or conversion if pursued by park owners, they discourage conversion by increasing the time and costs.
City of San Jose Ordinances
Staff also examined San Jose’s Mobile Home Ordinances. San Jose has enacted both a Mobile Home Rent Ordinance and a Mobile Home Conversion Ordinance, which together provide rent stabilization and tenant protections. The conversion ordinance, an expansion of a 1986 measure, aims to prevent the permanent displacement of residents and mitigate homelessness among lower-income mobile home residents. San Jose’s measures include relocation assistance and advance notice requirements and were updated to provide more specificity in definitions and implementation following a notable 2021 mobile home park closure.
In 2021, Winchester Ranch Mobile Home Park closed. It housed over 145 seniors. Most of the mobile home park’s residents benefited from buyouts or condominiums in the new development on the site; however, some newer residents only received buyouts and were not able to stay in place through the right of first refusal. City Staff faced criticism for vague definitions and expectations of who is entitled to relocation benefits. Updates to this policy have been effective in ensuring all permanent residents receive tenant protections and illustrate the effectiveness of a well-structured conversion policy in balancing development with tenant protections, but additionally highlight the importance of who is included within protections.
Single Room Occupancy Hotels
San Diego Housing Commission
A notable example of SRO regulation is by the San Diego Housing Commission (SDHC), which emphasizes tenant rights and the preservation of SRO units. The SDHC policy mandates the replacement of SRO hotel rooms that are demolished, converted, or rehabilitated, unless specific exemptions apply. The SDHC ensures compliance with these regulations and provides relocation benefits to displaced tenants. SDHC staff shared that this ordinance has effectively brought SROs into compliance, preventing their conversion into transient or tourist hotels and preserving affordable housing for vulnerable residents. One specific hotel, the Occidental Hotel, was sold to a developer in 2022. The developer intended to convert it into a tourist hotel. Under the SDHC policy, displaced residents received advance notice and relocation assistance, maintaining their access to affordable housing.
San Francisco
Staff also reviewed the Residential Hotel Conversion and Demolition Ordinance in San Francisco, designed to protect SRO units from conversion or demolition. This ordinance requires SRO hotel owners to log occupancy information daily and submit annual usage reports, alongside applying for permits for any property conversion or demolition. Additionally, it mandates a one-for-one replacement of units through new construction or in-lieu payments to the San Francisco Residential Hotel Preservation Fund. Although the notice and relocation requirements in San Francisco are not very strong, the larger stock of SRO units (over 19,000 units) facilitates easier relocation within the city.
In the process of conducting benchmarking research, staff created a matrix of existing SRO and mobile home regulations to provide the Housing Standing Committee a greater understanding of the landscape of both mobile home park and SRO regulations in the area.
DISCUSSION
At this time, staff recommends preparing two ordinances - one addressing mobile homes and one addressing SRO hotels - that amend the City’s Zoning Ordinance, Chapter 20 of the South San Francisco Municipal Code. These ordinances would:
1. Define triggering events;
2. Define qualifying tenants;
3. Mandate substantial noticing before a mobile home park or SRO hotel is closed, demolished, and/or converted;
4. Establish relocation benefits for tenants of mobile home parks and SRO hotels; and
5. Develop a ministerial approval process for mobile home park and SRO hotel conversions. This would not include a ministerial approval of any new use, simply that the property is permitted to convert after having met the noticing and relocation requirements of the ordinances.
Staff does not recommend requiring permanently preserving mobile home parks or SRO hotels, as the policies in San Francisco and San Diego do by requiring unit for unit replacement or payment in-lieu fees. What staff recommends is formalizing a process that maximizes protection for displaced tenants, the primary objective of which is to ensure vulnerable residents can remain in South San Francisco (if they would like to) and avoid displacement from the community at large.
Triggering Events
Staff recommends that the need for a conversion permit is triggered when the following happen: 1) conversion from long term housing to short term; 2) conversion of current housing units to another use; 3) conversion through vacancy; and 4) closure. For both SRO hotels and mobile home parks, the use of a unit for tourist and/or short-term use is also considered a conversion. Even though a housing unit may still serve a residential purpose, if a unit transforms from serving residents with long term leases (leases over 30 days) to a day-to-day basis, this is considered a conversion to short term use. Additionally, to prevent mobile home park or SRO hotel owners from coercing residents to vacate and deliberately keeping spaces empty to evade paying relocation benefits prior to closure, staff recommends defining vacancy for the purposes of triggering the conversion permit process. Specifically, if 25% or more of the rooms in an SRO hotel or units in a mobile home park remain uninhabited for over ninety consecutive days, without being due to a natural or physical disaster, this condition should be considered a conversion under the ordinance.
Qualifying Tenants
Staff proposes that a qualifying tenant be defined as a resident residing in the SRO hotel or mobile home park for a period of longer than thirty consecutive days in the one-hundred-eighty-day period prior to the issuance of a notice of intent to apply for a Conversion permit. This does not include short-term hotel guests or short-term mobile home park space rentals who are individuals staying for a period of less than thirty consecutive days. This definition may be expanded to include the spouse, parents, children, and grandchildren of the legal resident when those persons legally resided in the unit on the date of the application. For mobile home park residents, staff recommends residents who rent the space but own their mobile home and residents who rent the space and rent their mobile home are both eligible to receive relocation benefits.
Noticing Requirements
Staff recommends SRO hotel and mobile home park owners be required to provide notices to tenants throughout the conversion permit process. Specifically, an effective noticing strategy would include the Owners notifying eligible residents of:
• The intent to apply for a Conversion Permit;
• No sooner than 12 months after the intent to apply for a Conversion Permit, the approval of the Conversion Permit Application;
• The approval of a relocation impact report; and
• No sooner than nine months after the approval of the Conversion Permit Application, the termination of residency would be given.
Relocation Benefits
While it does not permanently preserve mobile home parks or SRO hotels, a requirement to pay relocation benefits seeks to formalize a process that maximizes protections for displaced tenants. The primary objective of relocation benefits is to ensure that vulnerable residents can remain in South San Francisco and avoid displacement from the community at large.
Core relocation benefits - best practices from benchmarking research - include the following.
• Noticing (as described above).
• Mandating a relocation impact report to identify adequate replacement housing in nearby mobile home parks or other housing options for displaced residents and identify relocation costs.
• Use of a "relocation counselor" to aid residents who are in search of alternative housing, particularly subsidized housing.
• Payment of moving costs for personal belongings and first and last month's rent and security deposit at the identified alternative housing for all eligible residents.
• Payment of temporary lodging of up to six months, if necessary.
The table below outlines the projected costs for relocation benefits for displaced households seeking rental units. However, the costs for relocating mobile homes or providing buyouts will vary based on the condition and structure of each mobile home.
Example of Relocation Costs for Households Seeking to Be Relocated to a 1-Bedroom
|
|
AMOUNT |
|
6 months rent cash benefit |
$16,908 |
|
Security deposit |
$ 2,500 |
|
First and last month rent |
$ 5,636 |
|
Moving costs |
$ 1,850 |
|
Subscription to relocation counselor |
$ 500 |
|
TOTAL |
$27,394 |
Mobile home park owners may request a waiver of the relocation benefits specified in the relocation impact report in cases of bankruptcy or if the required relocation assistance exceeds reasonable costs for displaced residents.
For mobile home residents who own their mobile home but are renting a space in a mobile home park, staff recommends including the following relocation benefits.
• Payment of costs to move the mobile home to a new park, if feasible, or payment of in-place value of the mobile home that cannot be moved (based on the appraised value).
• Buy outs for mobile homes that cannot be relocated to ensure that residents who have equity in their mobile homes can get the value in place.
Approval Process for Conversions
Staff proposes to create Conversion Permit process to monitor and enforce noticing requirements and relocation benefits for residents at risk of displacement. To receive an approved Conversion Permit, owners would have to provide a notice of intent to apply for a permit to all residents at their SRO hotel or mobile home park at least twelve months prior to the approval date of the permit.
During this 12-month period, the owner would work diligently to complete the following steps.
1) Complete a Conversion Permit application form and pay a fee (to be established and incorporated into the Master Fee Schedule).
a) Prepare a relocation impact report.
b) Compile a list of all qualifying tenants.
Staff proposes that nine months after the Conversion Permit has been granted, the owner could terminate the residential leases on the property.
This Conversion Permit process could happen in parallel to an entitlement process for a new use, should that be the owner’s intent. However, staff recommends no permit for a new use, change of use, or demolition would be granted until all requirements of the Conversion Permit have been met.
FISCAL IMPACT
The implementation of the new permit requirement will lead to minor increased costs for the Planning and Housing Divisions. These additional expenses can be offset by new fees collected from permit applications once a corresponding amendment is made to the City’s Master Fee Schedule.
CONCLUSION
Staff recommends the Joint Housing Standing Committee of the City Council and Planning Commission consider and provide guidance on establishing a permit process for single-room occupancy hotels and mobile home parks proposed to be converted, demolished, and/or redeveloped. The intention of the policies is to establish streamlined administrative processes for the City to enforce noticing and relocation benefit requirements for residents displaced from these housing types.