Secondary Unit Housing Reform

One of Livable City's objectives is to increase housing opportunities in the transit-rich areas of the city. More housing, especially relatively affordable housing, in areas where the residents do not need to own a car to get around, is an important element of a more socially just and livable city. Creating a mix of housing sizes and types in a neighborhood contributes to neighborhood diversity by accomodating a greater range of household sizes, household incomes, and lifestyles.

One way to do that is to carefully allow the addition of new secondary units, also known as accessory or in-law units, in existing houses. Cities like Seattle, Vancouver, and Santa Cruz have embraced secondary units as a great way to add new housing units at a reasonable cost in extisting neighborhoods while preserving the built character of these neighborhoods. Unfortunately, San Francisco still prohibits secondary units in most neighborhoods, and the requirement that these units provide an off-street parking space practically prohibits secondary units in virtually all neighborhoods. These policies exacerbate our chronic housing shortages, and create housing insecurity for residents of San Francisco's existing "illegal" units.

Supervisor Aaron Peskin Introduced legislation in 2003 to allow for a limited number of new secondary units to be built in the city's transit-rich neighborhoods, with provisions to address increased demand on neighborhood parking. This legislation stalled in the face of determined opposition from the city's conservative neighborhood activists. Livable City is working to revive this proposal, possibly as a pilot in a single neighborhood to test the practicability of the idea.

Read San Francisco Supervisor Aaron Peskin's article, Secondary Dwelling Units: Workable Housing for San Francisco, in SF Apartment Magazine

Frequently Asked Questions on Secondary Unit Legislation

What is a "secondary unit?"

A secondary unit, as defined in this legislation, is an additional, self-contained dwelling unit in an existing residential building. Secondary units are commonly referred to as "in-law" units because they allow extended family members to live together in separate but attached units.

Why are secondary units needed in the City?

The City clearly needs housing. The Association of Bay Area Governments (ABAG) says that our City must add over 2,500 housing units per year to meet current housing needs, 62% of which should be low and moderate income. San Francisco is far from that goal. While our need for housing is clear, new housing must be sensitive to the existing physical fabric of local neighborhoods. Secondary units meet the obligation to create new housing while maintaining the character of neighborhoods.

Why are secondary units advantageous for San Francisco?

The advantages of secondary unit legislation are numerous:

Secondary units require no additional land and require no governmental funding.
They have the least neighborhood visual impact of all housing sources.
Because they use existing structures and infrastructure (e.g., water, sewer, utilities), they are less expensive to build than ordinary housing.
Secondary units disperse new housing throughout the city, with very modest housing supply increases in many areas rather than concentration of new housing in just a few areas.
Extra income from secondary units helps homeowners make mortgage payments. This extra income also provides stability for homeowners during economic shifts resulting from unexpected life events such as divorce or an untimely death or illness.
Secondary units offer safe and inexpensive housing for elderly, the disabled, students and whoever is interested in living in a smaller, more modest apartment unit.
The creation of these units translate to jobs and business for small, locally-based contractors.

Under this legislation, under what circumstances are secondary unit allowed?

This legislation allows for the creation of secondary units under any of three conditions:

within a quarter-mile of a well-utilized transportation corridor (as already defined by the Planning Department);
if a unit is specifically designed and constructed for the elderly and physically disabled (and meets State Building Code regarding disabled access); and
if the unit is on a lot containing a qualified historic building and meets certain preservation criteria.

Does this legislation legalize currently illegal secondary units?

This legislation expressly forbids the legalization of current illegal secondary units. While some recognize the benefits of addressing the legalization of currently illegal units, this ordinance does not attempt that policy change. Several safeguards exist in the legislation to ensure that owners of currently illegal units do not "flip" their units to legal status — including a provision that no permits will be granted to create a legal secondary if binding evidence exists of the illegal operation of an in-law unit in the prior ten years.

Would this legislation results in the physical expansion of houses?

No. This legislation only allows the creation of secondary units within existing building envelopes. As a result, no visual or physical impact result to a neighborhood from the creation of these units.

How does Rent Control apply to these newly created secondary units?

The City Attorney has determined conclusively that the City's Rent Control Ordinance does not apply to secondary units created under this legislation, hence no rent control applies. This finding, which is expressly stated in the legislation, is based on the State of California's Costa-Hawkins Act. It should be noted that the addition of a secondary unit to a building does not alter the rental status of existing unit(s) in the building: If an existing unit is currently under rent control, it stays under rent control. If an existing unit is exempt from rent control, it remains exempt.

Considering that these secondary units will not be rent-controlled, how does their development advance affordable housing goals in San Francisco?

Many of these units will naturally be affordable considering their small size and likely location on the ground floor of existing buildings. Furthermore, if a secondary unit is added to a multi-unit building, an the city's inclusionary housing provision will apply. The developer of the unit can choose between keeping the unit's rent below market or pay an in-lieu affordable housing fee of $5,000. (Legally, inclusionary housing provisions cannot be applied to the creation of secondary units in single family homes due to State law restrictions.)

Secondary units mean more residents parking on neighborhood streets. Does the legislation do anything to mitigate increased demand for parking?

Yes. In neighborhoods that participate in the City's residential parking program – where parking demands are most acute – occupants of secondary units are prohibited from securing Residential Parking Permits. This restriction is appropriate considering most of the secondary units would likely be created within close proximity to transit corridors.

Who was consulted in crafting this legislation?

Our office spent several months consulting with various stakeholders in local government and the community. Within city government, numerous divisions of the Planning Department and the Department of Building Inspection were consulted. A range of community stakeholders were also consulted: Apartment Association, Realtor's Association, Tenants' Union, Asian Law Caucus, Small Property Owners' Group, Residential Builders' Association, Coalition for San Francisco Neighborhoods.

Several neighborhoods maintain CC&R's (Convenants, Conditions & Restrictions), which homeowners must sign before they purchase their homes. Several CC&R's restrict the addition of secondary units to existing homes. Does this legislation override these agreements?

No. In neighborhoods where homeowners have signed CC&R's or other legally binding agreements that forbid the creation of secondary units, such units cannot be permitted or built.