HomeMy WebLinkAboutPC_2007-02-20_AgendaPacketNOTICE OF A SPECIAL JOINT MEETING
Atascadero City Council
Atascadero Planning Commission
AGENDA
Tuesday, February 20, 2007
7:00 P.M.
City Hall, Council Chambers
6907 EI Camino Real
Atascadero, California
ROLL CALL:
JOINT STUDY SESSION:
1. PLN 2006-1111: Condominium Conversions
2. PLN 2006-1140: Site Condominium Moratorium
ADJOURNMENT: The City Council & Planning Commission will adjourn to their next
regularly scheduled meetings.
STATE OF CALIFORNIA
COUNTY OF SAN LUIS OBISPO
CITY OF ATASCADERO
MARCIA MCCLURE TORGERSON, C.M.C., being fully sworn, deposes, and says: That she is the duly
elected City Clerk of the City of Atascadero and that on Wednesday, February 14, 2007, she caused the
above Notice to be posted on the doors of City Hall, 6907 EI Camino Real, Atascadero, California.
MARCIA MCCLURE TORGERSON, C.M.C.
City Clerk
ITEM NUMBER: 1
DATE: 2-20-07
Joint Meeting - Atascadero City Council and
Planning Commission
Management Report — Community Development Department
Condominium Conversion Ordinance
PLN 2006-1111
RECOMMENDATION:
Staff recommends the Council and Commission:
Review the attached report and accompanying documentation and direct staff in the
policy direction for review and recommendation of condominium conversion projects.
BACKGROUND:
The City Council held a strategic planning meeting on September 9, 2005 to review the
City's General Plan policies in regards to condominium conversions and the potential
loss of the City's rental inventory. The Council directed staff to further investigate
options for condominium conversion that would be consistent with the General Plan
policies of preserving rental housing stock and encouraging the development of
affordable homeownership.
Staff brought the Condominium Conversion issue to the Council on March 14, 2006, at
which time the Council directed staff to enact an emergency moratorium for 45 days
until the item could be brought back to the Council for further discussion. Due to
difficulty agendizing the issue, the moratorium was extended until May 2007.
DISCUSSION:
Staff has contracted with the firm of Goldfarb Lipmam LLP to assist in the process of
developing the Condominium Conversion Ordinance. Ms. Barbara Kautz and Ms. Polly
Marshall are experts in the fields of condominium conversions, inclusionary housing and
redevelopment and have worked with agencies throughout California to tailor similar
programs. In order to address the Council's goals for condominium conversion projects
Ms. Kautz and Ms. Marshall have developed an Issues and Options Report. The
purpose of the Issues and Options Report is to provide the Council with a process to
1
ITEM NUMBER: 1
DATE: 2-20-07
make a number of policy decisions that will be incorporated into the condominium
conversion ordinance that will provide guidance to staff and the public for review and
recommendation of condominium conversion projects. The Issues and Options Report
is included in Attachment 1 to this staff report.
FISCAL IMPACT:
Fiscal impact will vary depending upon the options implemented and the methods of
implementation. Staff time and resources are currently used to process project
requests, however, additional staff time may be required to administer new conversion
requirements and policies.
ALTERNATIVES:
1. The Council may direct staff to proceed with implementation of selected options
for updating and implementing the Condominium Conversion Ordinance.
2. The Council may direct staff not to proceed with updating the Condominium
Conversion Ordinance. In this case, Council should provide staff with direction
on how to proceed under the current Ordinance and the General Plan policies.
3. The Council may choose to refer the item back to staff for additional analysis.
Clear direction to staff should be provided on additional information or policies
that are desired.
CONCLUSION:
Over the last few years, staff has been receiving more and more condominium
conversion inquiries. Staff has processed two condominium conversion requests which
were submitted prior to the moratorium. These two applications resulted in the approval
of conversion of a four unit complex to condominiums and a denial for the conversion of
forty-six units. Currently, an additional application, submitted after enactment of the
moratorium, for 96 units is waiting to be processed. There have been serious inquiries
for additional projects that could potentially result in the conversion of approximately 80-
100 units if the property owners decide to move forward with applications. The attached
Issues and Options Report will provide information on methods available for processing
condominium conversion projects and retaining rental housing inventory.
ATTACHMENTS:
Attachment 1: Issues and Options for Atascadero Condominium
Conversion, Goldfarb Lipman LLP
i5l
ITEM NUMBER
DATE: 2-20-07
Comdev/—affordable housing/Condominium Conversion/CC-SR-Condo Conversion 02-20-07.doc
Attachment 1
Issues and Options for Condominium Conversions
Goldfarb Lipman, Attorneys
ISSUES AND OPTIONS FOR ATASCADERO
CONDOMINIUM CONVERSION ORDINANCE
Issue:
Over the last two years, the City of Atascadero has received an increasing number of
applications and inquiries from apartment owners interested in converting their rental
units into for -sale condominiums. The issue was presented to the City Council on
September 9, 2005, and the Council expressed interest in exploring ways to control the
rate of condominium conversions. The purpose of this meeting is for the Council and the
Commission to review and consider possible modifications to the City's existing
Subdivision Ordinance relating to condominium conversions.
Background:
Typically during times when housing prices have been disproportionately high in relation
to rents, there has been an interest by individual property owners in converting existing
rental units to ownership housing. This appears to be the current situation in
Atascadero and throughout San Luis Obispo County -- median sales prices in the
County have increased dramatically and are now close to $600,000, while rental rates
have remained relatively stable. Consequently, apartment owners may be able to
maximize their properties' value by converting apartment buildings to condominiums.
The present economic situation is reflected in an increased number of condominium
conversion applications in Atascadero. Applications have already been made for the
conversion of 96 rentals to condominiums, and inquiries have been made about the
conversion of an additional 80-100 units. If all of these apartments were to be converted
to condominiums, this would represent the loss of nearly 10 percent of the 2,100 rental
units in the City. Other San Luis Obispo County communities have experienced the
same increase in applications for conversions.
As one response, the Board of Supervisors adopted new condominium conversion
policies for the County in December of 2006.
The City's primary concern with the loss of rental housing is the loss of an affordable
housing stock. A stable supply of reasonably priced rental housing is essential to many
service-oriented sectors of the local economy. Apartments converted to condominiums
usually offer some of the lowest cost ownership housing. Nonetheless, total ownership
costs are nearly always significantly higher than rental costs, and even tenants who can
afford increased monthly payments may not have sufficient savings for a down payment
and closing costs. Hence, condominium conversions usually result in decreased
housing affordability.
CI
The California courts have given cities a great deal of discretion to control condominium
conversions, especially through a use permit process. In 1985, the California Supreme
Court upheld the ability of cities to require use permits for condominium conversions
(Griffin Devel. Co. v. City of Oxnard, 39 Cal. 3d 256 (1985)). More recently, the
California Court of Appeal agreed that a city could require a use permit for a conversion
even after the owner had recorded a final subdivision map unless the owner had also
maintained a valid "public report" from the Department of Real Estate at all times (City
of West Hollywood v. 1112 Investment Co., 105 Cal. App. 4th 1134 (2003)). The effect
of these decisions is to enable the City to adopt reasonable policies to limit
condominium conversions.
Existing City Policies and Subdivision Map Act Requirements
The City's Housing Element recognizes the importance of rental housing to the City and
provides:
"Goal HOS 3: Ensure that an adequate amount of rental housing exists."
"Policy 3.1: Ensure that the proportion of low and moderate housing is not
significantly reduced."
The City's Subdivision Ordinance was amended in 2000 to include certain controls on
condominium conversions. These provide primarily for notification to tenants, public
hearings, and property improvement standards for buildings to be converted. However,
the Subdivision Ordinance does not control the rate of conversions nor include
provisions to preserve affordable rental housing.
Policy Options
Below is a brief discussion of policy options for review by the Council and Commission.
The attached "Issues and Options Table" provides more detail regarding provisions in
other condominium conversion ordinances. It also provides more detail about the
advantages and disadvantages of each approach.
A. Reduction in the Rate or Number of Condominium Conversions
At the Council's March 14, 2006 meeting, Council Members expressed interest in
controlling the rate of condominium conversions in Atascadero. The primary
mechanisms used by cities are these:
1. Placing an annual limit on the number of apartment units that may convert
to condominiums.
Given the relatively small number of rental units in Atascadero, the City
would need to establish a fairly low annual quota if it did not want to risk
losing its entire stock of rental units. For instance, a quota of 100 units/year
would enable the entire rental stock to convert to condominiums over a 20-
-0
year period. Even with a low quota, this approach has the disadvantage of
permitting a continuing loss of rental housing in the City.
2. Allowing conversions only when the vacancy rate reaches a certain
percentage, usually 5%. At the Council's March 2006 study session, several
members of the public expressed particular interest in this approach
because it is the most market-based.
A potential difficulty with this option is that, should the vacancy rate increase
to 5%, a large percentage of the rental properties in the City could convert in
a small amount of time. The Council and Commission might therefore want
to combine this approach with an annual limit on the number of conversions.
The City would also want to ensure that accurate vacancy information is
available. In June 2006, City staff called several management companies,
who reported a vacancy rate of approximately 2 — 3%.
3. Requiring that multifamily rentals constitute a fixed percentage of the
housing supply, or allowing conversions only when new multifamily rental
housing is constructed. This is the approach now used by the City of San
Luis Obispo and by the County of San Luis Obispo. The City allows
conversions for half the number of new multifamily units constructed. The
County permits conversions for one-fourth the number of new rental
multifamily units constructed.
This approach ensures that the number of rental units in the City steadily
increases. It could somewhat increase rents because conversions typically
occur in older buildings with lower rents, while newly constructed
apartments normally have higher rents.
4. Permitting conversions in only certain types of buildings. For example, the
City of Dublin allows only buildings with fewer than 21 units to convert to
condominiums.
To decide if this might be an appropriate approach, the City would need to
inventory its rental housing stock to determine a reasonable cutoff point.
B. Inclusionary Requirement or Retention of Existing Affordability
At the March 14, 2006 study session, the Council was also interested in
examining ways to preserve the existing affordable housing stock even in the
event that conversions were permitted. Some options are:
1. Require converted units to conform to current inclusionary ordinances or
policies established for new construction, or require an even higher
percentage of affordable units in converted buildings.
Al
Atascadero requires that 20 percent of all new housing be affordable. In
multifamily buildings, of the affordable units, 20% must be affordable to very
low income households, 37% to low income households, and 43% to
moderate income households. In converted buildings, for instance, the City
could instead require that 50% of the affordable units be designated for very
low income households and 50% for low income households. The City could
also increase the proportion of affordable units to 25% or more.
The County's newly adopted ordinance requires that 25% be affordable to
low or moderate income households, with at least half affordable to low-
income households.
2. Require that the proportion of affordable units remain the same before and
after the conversion, or allow existing lower or moderate income tenants to
purchase their unit at an affordable price.
This approach has been taken by the City of Santa Barbara.
If the City chooses to require affordable units as part of condominium
conversions, the City should limit the resale price of very low and low-income
condominiums to ensure that they always remain affordable.
C. Protections for Existing Tenants
Some of the most common additional protections include these:
1. Tenant Relocation Plans/Moving Expenses. It is relatively common for
ordinances to require the payment of two to three months rent as a
relocation payment. San Luis Obispo County, for instance, requires a
payment of three months' rent plus additional payments if the tenant is
unable to find a comparable unit.
Ordinances may also require the subdivider to prepare a tenant relocation
plan for existing tenants. The plans are similar to those required when a
public agency relocates a tenant.
2. Protections for the Elderly and Disabled and Children Attending School.
Some jurisdictions require lifetime leases or otherwise extend leases for
existing tenants who are disabled or elderly (over the age of 62).
Households with school age children are often allowed to remain as tenants
until the end of the school year so that children are not forced to change
schools during the middle of a school year.
3. Additional Limits on Rent Increases Pending Conversion. Atascadero now
does not permit the subdivider to raise rents for 180 days after the tenant is
7
given notice of the conversion. Some communities extend this period to 12
months.
4. Additional Notices to Tenants. Cities commonly require converters to
provide existing tenants with staff reports, summaries of tenant benefits, and
additional notice of public hearings. Atascadero's existing ordinance
contains similar provisions, although it may want to consolidate these
requirements. The San Luis Obispo County ordinance, for example,
requires a detailed "Tenant Information Package" explaining not only the
conversion process, but also the condition of the building and the impact of
the conversion on existing tenants.
D. Development Standards
Atascadero's current ordinance imposes physical conditions on condominium
conversions and requires a detailed Property Condition Report. The ordinance
already includes the physical requirements most commonly imposed in other
cities' conversion ordinances.
Some additional physical requirements that the City may want to consider
include:
• Common open space.
• Common recreation facilities.
• On-site lighting systems.
• One-hour fire protection.
• Disabled accessibility.
• Compliance with current building codes.
E. CC & R Reauirements
Atascadero's ordinance already imposes certain standards on CC & Rs for
condominium conversions and requires a copy of the CC & Rs as part of the
tentative map application. The attached table lists several additional provisions
included in other cities' ordinances.
F. Process
We would recommend that the City require a use permit for condominium
conversions and consolidation of the requirements in the City's zoning ordinance.
Under the court decisions referenced earlier, requiring a use permit will give the
City the maximum ability to regulate condominium conversions.
�'3
(-nnrh minn
Of these policy options, those that would be most likely to retain affordable rental
housing are limitations on the rate of conversions and inclusionary requirements. The
Council and Commission should review the options and indicate which should be
included in an amended condominium conversion ordinance.
9
ISSUES AND OPTIONS: CONDOMINIUM CONVERSION ORDINANCES
Issue
Al.
Reduction in
Rate of
Conversion
(quota or
vacancy rate
trigger)
Proposed Policy or Policy Options
1. Allow an annual quota of units to
convert per year (for example, 50 units
in Santa Barbara, 100 units in Berkeley,
and 200 units per year in SF). A lottery
or point system may be used to
determine which apartments will be
allowed to convert.
2. Deny conversions when the amount
of multifamily rental units is at or below
a certain percentage (eg, 15%) of the
total number of housing units (Folsom).
3. Limit conversions to half (San Luis
Obispo City) or one-fourth (San Luis
Obispo County) of the multifamily rental
units added to the city's housing stock
during the preceding year.
4. Conversions approved only when
the vacancy rate for the city (usually
pursuant to the postal vacancy rate) is
at a certain percentage (5% in Gilroy
and 6% in Fairfield) or more.
Issues to Consider
Unless additional rental housing is
built, will allow slow reduction in
amount of rental housing.
Ensures that a rental housing stock
is maintained. May be difficult to
measure. Could result in conversion
of lower priced rentals when newer,
more expensive rental housing is
built. Also, need to ensure that
condominium maps have not been
recorded for units that are rented.
Ensures that the number of rental
housing units continues to increase.
Relatively easy to measure. Same
disadvantages as #2.
Measure is market-based and
related to demand for rental units.
Vacancy rate may be difficult to
measure if postal survey is not
available. If units are converted
10
Atascadero
Condominium
Conversion Ordinance
No specific policy in
Atascadero Ordinance.
Issue Proposed Policy or Policy Options Issues to Consider Atascadero
Condominium
Conversion Ordinance
5. Limitations on the type of building
that may be converted based on
building size (maximum 21 -unit
buildings in Dublin or 50 -unit buildings
in Gilroy or 10 -unit buildings in S. Lake
Tahoe).
6. Deny conversion unless finding is
made that every rental unit lost will be
replaced or the subdivider will contract
to create units to replace lost rental
units (Oakland).
when vacancy rates are high,
difficult to replace when rates are
low. May want to combine with an
annual quota to prevent massive
loss of rentals.
Information would be needed on the
size of rental complexes in
Atascadero to determine if this is a
desirable approach.
The most legally aggressive option.
Potential conflict with the state's Ellis
Act.
11
Condominium ConversionI • • Options
"Mr—
Issue
Proposed Policy or Policy Options
Issues to Consider
Atascadero
Condominium
Conversion Ordinance
A2.
1. Require that all units classified as an
Ensures that existing inclusionary
To approve a
Inclusionary
"affordable rental unit" for at least 24 of
units continue to be affordable at the
conversion, City must
Requirement
the past 48 months prior to the
same income level.
find that, "The proposed
or Retention
conversion be sold to households at the
conversion will not
of Existing
same affordability level. Deed
displace at significant
Affordability
restrictions imposed to ensure that
number of low-income or
units remain affordable after resale.
moderate -income
(Santa Barbara)
households or senior
citizens at a time when
2. Require that any inclusionary units in
no equivalent housing is
the building being converted be made
readily available in the
available for purchase at the same
City."
affordability level (eg, low-income
inclusionary units must be sold at a
price affordable to low-income
households). If tenant is income -
ineligible, then subdivider must restrict
another unit in the building at that
affordability level. (San Diego -San Luis
Obispo City)
3. Require 20% (S. Lake Tahoe) or
Not related to existing affordability
25% (SLO County) of the converted
level of units but relatively easy to
units to be sold to low or moderate
administer.
income households.
4. Converted units required to comply
with the current city Inclusionary Zoning
Regulations (San Diego)
12
Condominium • • • • • Options
Issue
Proposed Policy or Policy Options
Issues to Consider
Atascadero
Condominium
Conversion Ordinance
5. Pay an in -lieu housing fee equal to
In lieu fees are often set too low to
the cost of creating another affordable
create another affordable unit at the
unit at that income level (San Luis
same income level.
Obispo and Berkeley)
13
Condominium ConversionI • • Options
"Mr—
Issue
Proposed Policy or Policy Options
Issues to Consider
Atascadero
Condominium
Conversion Ordinance
A3.
1. Tenant Relocation Plans/Moving
These are typical relocation
None at present.
Additional
Expenses
payments. SLO County also has
Protections
A. Require a Tenant Relocation Plan
additional protections for tenants
for Existing
to encourage tenants to purchase units
who cannot find comparable
Tenants
and provide relocation or moving
housing.
assistance (Oakland)
B. Pay moving expenses of one and
one-half times the rent or $2000
whichever is greater. (Santa Barbara).
C. Make relocation payment of three
months' rent (San Mateo and SLO
County).
D. Make relocation payments of
$4,500 per tenant plus additional for
elderly/disabled (San Francisco).
2. Protections for the Elderly and
Under Municipal Code
Disabled, Children Attending School,
Potential (but not actual) challenge
Section 11-12.07(c)
and Lower Income Households
under the Ellis Act.
Tenants who are not in
A. Lifetime lease for tenants over 62
default of their rental
(Oakland, San Francisco, Berkeley,
agreement are allowed
and Concord)
to stay in their unit up to
B. Allow additional time for a move
180 days from the date
for households with individuals over 62,
of receipt of notification
that are disabled, low income, single
of intent to convert.
parent or otherwise likely to have
difficulty finding a housing (Santa
Barbara)
C Allow households with children
Under Municipal Code
attending school to remain until end of
Section 11-12.07(d) No
14
Condominium • • • • • Options
Issue
Proposed Policy or Policy Options
Issues to Consider
Atascadero
Condominium
Conversion Ordinance
school year (Santa Barbara)
rent increases shall
occur during 180 days
from date of notice to
convert.
3. Limits on Rent Increases Pending
Conversion
Atascadero requires
No rent increases for 12 months
most, but not all, of these
after filing of tentative map (Oakland) or
notices.
180 days from date of conversion (San
Luis Obispo)
4. Additional Notice to Tenants
(General provisions in most cities)
A. Additional copies of staff reports to
tenants.
B. Summary of tenant benefits (SLO
County)
C. Additional notice to tenants prior to
the public hearing
15
Condominium ConversionI • • Options
"Mr—
Issue
Proposed Policy or Policy Options
Issues to Consider
Atascadero
Condominium
Conversion Ordinance
A4.
(Please Note: Items listed are only
Atascadero's existing
Development
those not already included in
ordinance now
Standards
Atascadero's ordinance.)
incorporates the most
commonly adopted
1. Additional common open space.
development standards.
2. Common recreation facilities.
3. Installation of on-site lighting
systems in parking areas and major
walkways.
4. One hour fire protection of the
walls of each unit.
5. Dedication of public easements if
necessary for public access or other
public purpose.
6. Disabled accessibility. (Folsom)
This provision would
7. Meet current building and
make many conversions
planning codes.
infeasible.
8. Inspection by building inspector
and fire marshal.
A5.
(Please Note: Items listed are only
Includes specific
CC&R
those not already included in
requirements for CC&Rs.
Requirements
Atascadero's ordinance.)
Copies of CC&Rs must
16
Condominium • • • • • Options
Issue
Proposed Policy or Policy Options
Issues to Consider
Atascadero
Condominium
Conversion Ordinance
be submitted with
1. Prohibit parking of trailers and
tentative map
boats. (Fairfield)
application.
2. Restrict parking on non -approved
parking areas of subdivision. (Fairfield)
3. Limit storage of private property
outside of storage units.(Folsom)
4. Professional property management
company must be used to rent unit; or
HOA could manage the unit. (Folsom)
5. No amendments to CC&R's without
City approval. Fairfield
17
ITEM NUMBER
DATE: 2-20-07
Joint Meeting - Atascadero City Council and
Planning Commission
Management Report — Community Development Department
Site Condominium Ordinance
PLN 2006-1140
RECOMMENDATION:
Staff recommends the Council and Commission:
Review the attached report and accompanying documentation and direct staff in the
policy direction for development of site condominium regulations.
BACKGROUND:
During the summer of 2006, staff was presented with a final condominium map project
showing condominium units as individual small "lots", as opposed to an "airspace unit"
within a building. This type of plan is generally referred to as a "site condominium." The
only difference between the site condo units and a subdivision tract was that the condo
map identified the parcels as "units" rather than "lots" (see following page). In addition,
condo plans must create a three dimensional volume of ownership with a common area.
Site condos create an ownership area that extends from the center of the earth into
space to infinity and the common area is an unusable and imaginary area that floats in
the air hundreds or feet above the project.
Staff referred this site condo project to the City Attorney for a determination regarding
the legality of the approach. The City Attorney determined that the site condo approach
was consistent with State and local subdivision regulations and the City must accept the
final map. After further discussion and review the City Council enacted an urgency
ordinance that established a moratorium on the approval or recordation of any future
site condominium plans. The urgency ordinance is effective until September 29, 2007.
ITEM NUMBER: 2
DATE: 2-20-07
SHEET 14 OF 17
CONDOMINIUM PLAN
THE VILLAS AT DOVE CREEK
PHASE 1
TRACT No. 2626
LOT HOA -1
IN THE CITY OF ATASCADERO
COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA
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Site Condo Plan
The primary
difference
between a site
condo plan and a
regular tract map
is the
terminology:
Tracts Maps
create lots.
Condo Plans
create units
(ri
ITEM NUMBER: 2
DATE: 2-20-07
SHEET 17 OF 17
EXTENDS EXTENDS
UPWARDS UPWARDS
INFINITELY INFINITELY
- UNIT A
2400 FEET ABOVE MEAN SEA LEVEL
COMMON AREA
UNIT—
BOUNDARY
+1 1
EXTENDS DOWNWARD
TO THE CENTER
OF THE EARTH
RIM
EXTENDS DOWNWAF :.
TO THE CENTER
OF THE EARTH
Condo Plans must
create a three
dimensional
volume of
ownership with a
common area.
Site condos
create an
ownership area
that extends from
the center of the
earth into space
to infinity.
The common area
floats in the air
hundreds or feet
N. T. S.
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TRACT NO. 15880
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PHASE 1 CONDOMINIUM PLAN
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Rorrlo Spoto Norgm1a, G 9266
COMMON AREA ELEVATION
Site Condo Plan Typical Three Dimensional Elevation
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ITEM NUMBER: 2
DATE: 2-20-07
DISCUSSION:
Staff is seeking direction from the City Council and Planning Commission on issues
relating to "site condominiums" (site condos).
Conventional or Typical Condominium Project - A typical condominium (condo) project
consists of an ownership interest in an airspace bounded by a building's walls, ceilings
and floors. All yard spaces, parking areas, driveways and outdoor open spaces are
then owned in common by the project tenants. In an attached condo project, common
areas of the interior of the buildings are also owned in common.
Conventional condominiums also have Home Owner Associations or other forms of
management to ensure maintenance, upkeep and cleanliness of the property which
includes maintaining landscaping, building roofing, exterior building maintenance and
parking/driveway areas.
Conventional condominiums possess airspace within the confines of a building, with
property owners enjoying a property right in a common area located on the ground.
See Figure 1.
Privately owned
condo unit inside a
building '
Typical Exclusive
Use Areas
i' Common Open Space
Maintained by Home Owner's
Association
Figure 1 — Conventional Condominium Project
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ITEM NUMBER: 2
DATE: 2-20-07
Site Condominium Project - A site condo project is characterized by an ownership
interest in land with a common ownership interest in an airspace outside of the lot
dimensions and which generally is located in the air above the buildings and not on the
ground.
Site condominiums may have less stringent management associations since there is
nothing in common to maintain. The individual homeowner "owns" the building and
surrounding yard space and is responsible for all individual landscaping and exterior
building maintenance. The common open space for the development is generally
located in the air, above the condo units and there are no maintenance requirements
because the space is unusable and is maintained by the "wind".
Additionally, site condominiums have the potential to create unregulated piecemeal
development. Since the condo units are not technically subdivision lots they do not
adhere to the subdivision process outlined in the Subdivision Map Act or City
ordinances. In essence, a site condominium project results in an unregulated small lot
subdivision without benefit of a master plan of development or adherence to subdivision
rules.
Common Area
Typically in ai
above units ai
usable.
Figure 2 — Site Condominium
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Figure 2 — Site Condominium
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ITEM NUMBER: 2
DATE: 2-20-07
CONCLUSION:
Over the last few years, staff has been processing more and more condominium
applications. To date, and due to the moratorium, Staff has processed one site
condominium request for approximately 100 units in the Dove Creek project. The result
is that the future homeowners will share a common interest in a piece of the sky.
Staff is significantly concerned about the potential for piecemeal, unregulated
"subdivisions" to occur under the site condo loophole. Currently the City has no
mechanism to prevent site condo plans from occurring throughout the multi -family
residential districts. The site condo process could be an appealing way for land
speculators to create numerous sellable "parcels" of any size in the multi -family zone
and avoid the City's planned development process. The attached Issues and Options
Statement (Attachment 1) provides options that the City could utilize to regulate site
condos.
FISCAL IMPACT:
Fiscal impact will vary depending upon the options implemented and the methods of
implementation. Staff time and resources are currently used to process project
requests, additional staff time may be required to administer new requirements and
policies.
ALTERNATIVES:
1. The Council may direct staff to proceed with development of an ordinance to
regulate site condominium projects.
2. The Council may direct staff not to proceed with development of an ordinance to
regulate site condominium projects. In this case, Council should provide staff
with direction on how to proceed under the current ordinance and the General
Plan policies.
3. The Council may choose to refer the item back to staff for additional analysis.
Clear direction to staff should be provided on additional information or policies
that are desired.
ATTACHMENTS:
Attachment 1: Issues and Options Statement
ComdevZCH 06-0126/Site Condominium/02-20-07 Jnt Mtg Site Condominiums.doc
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Attachment 1
Issues and Options for Site Condominium Regulation
ISSUES AND OPTIONS FOR ATASCADERO
SITE CONDOMINIUM ORDINANCE
Issue:
The City of Atascadero was compelled to accept a condominium project with "site
condominiums." Since the City did not have standards and regulations to address this
type of development, the project proceeded as a site condominium without review of the
implications of a "small lot subdivision." Members of the development community are
showing an increased interest in this "hybrid" process which is a cross between a
condominium project and a small lot subdivision and circumvents the subdivision
process.
Background:
The City is seeing more and more applications for condominium projects and small lot
subdivisions (PD 7's). The condominium application may be a preferred method of
processing a project because it does not typically require City Council review and if the
request is for one to eleven units, it would not require Planning Commission review or a
master plan of development. Often, developers will begin a condominium project as an
apartment project and once construction is underway or near completion, the developer
will then apply for a condominium subdivision. The standards for staff review on
apartment projects are not as stringent as those on a planned development or
condominium project however, staff does try to inform the developer that if they are
planning to do a condominium project later, the apartment design must meet the
necessary requirements.
Most apartment/condominium projects are designed to be administered by a
management company or home owners association. There are common areas which
are to be shared and landscaping, building exteriors and pavement that must be
maintained. If the developer then requests a "site condominium" project, individual
homeowners become responsible for much of the maintenance and what was planned
to be common space may become private. The required common open space may be
come a strip of air, defined as ten feet above the roof, twenty feet wide and extending
upward to infinity.
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Existina Citv Policies and Subdivision MaD Act Reauirements
The City's Housing Element recognizes the importance of a variety of housing options to
serve the requirements of residents. The General Plan provides:
"Policy 1.2: Encourage a variety of high quality housing types in multi-
family areas by allowing planned developments with detached units on
individual lots or airspace condominiums on commonly owned lots."
"Policy 2.1: Ensure that new development is compatible with existing and
surrounding neighborhoods."
Staff's research shows that site condominiums are used fairly frequently back
East for row house type developments. These types of developments generally
fill a housing need that falls somewhere between a conventional condominium
project and a small lot subdivision. While the units are fairly close together or, in
some cases, attached, there is more autonomy with ownership of a site condo.
Policy Options
Below is a brief discussion of policy options for review by the Council.
1. Regulation in Site Condominium Design
Regulation of Site Condominium design would ensure that the development was
designed with useable common open space and the necessary conditions,
covenants and restrictions to provide for adequate management and maintenance of
the units.
This could be accomplished by enacting an ordinance that would regulate site
condominium projects with staff applied standards. There would be no requirement
for public hearings and review.
2. Requirement for a Master Plan of Development for Site Condos
Require a use permit to establish a master plan of development for all site
condominium projects. The master plan of development would be required in
addition to a subdivision application to allow for adequate review of the development
project. This would help to insure that all common open space is useable and would
be adequately maintained. The master plan of development process would be
similar to a conditional use permit process and would require a Planning
Commission public hearing and appearance review of the project.
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3. Site Condo Develoament Standards and Guidelines
Establish development standards that are consistent with the design review
guidelines for multi -family housing. There would be no requirement for public
hearings and review.
Physical requirements that the City may want to consider include:
• Common open space.
• Common recreation facilities.
• On-site lighting systems.
• One-hour fire protection.
• Disabled accessibility.
• Compliance with current building codes.
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