Legalization for S.F. in-law units gets past 1st hurdle Controversy minimal in planners' decision

After a hearing surprisingly devoid of controversy, the City Planning Commission Thursday approved a plan that could bring tens of thousands of currently illegal in-law units into San Francisco's official stock of rental housing.

"This is not the first time this has been tried ... but finally all the city departments have come together," said Commissioner Kathrin Moore. "This is a fabulous moment."

The legislation, sponsored by Supervisor David Chiu, would ease a number of planning and building code restrictions to allow owners of secondary units built before Jan. 1, 2013, to apply for the permits needed to legalize the existing construction.

The proposal is designed to end the "don't ask, don't tell" mentality that has led city officials to almost ignore the estimated 30,000 to 50,000 illegal units that have been carved out of basements, garages and attics across the city since World War II, Chiu said.

The units "serve as a vital source of affordable housing in the city," with studies showing that many of the people living in those units are low-income families, seniors and immigrants, the supervisor told the commissioners.

For the past 10 months, Chiu and his staff have been talking about the legalization plan in meetings with property owners, tenant groups and neighborhood organizations about the city's housing affordability crunch, in which rising rents and a tight housing market have forced many low-income residents out of the city.

Rent-controlled

The legislation, which is expected to go to the Board of Supervisors' Land Use and Economic Development Committee in the next few weeks, reflects many of the concerns of those groups. The legalized units would be covered by the city's rent control rules, for example, and would not be allowed to be sold as individual units.

Property owners also could have their legalization plans "prescreened" by the city's Department of Building Inspection and drop their efforts without penalty if the required upgrades were either impossible to make or too expensive.

"The intention of the legislation is absolutely not to have someone who comes forward in a good-faith legalization effort face enforcement challenges," said Amy Chan, an aide to Chiu.

But since the city has historically done a poor job of policing illegal units, legislation without the teeth to force property owners to make health and safety improvements to their units could leave tenants at risk, said Planning Commissioner Michael Antonini, who was the lone dissenter in the 6-1 vote to approve Chiu's plan.

Antonini could find no support for his effort to delay a vote on the plan for a few weeks to allow more discussion by neighborhood groups.

There still are plenty of concerns that Chiu and his co-sponsor, Supervisor Scott Wiener, will have to deal with before the measure ends up on Mayor Ed Lee's desk. There are questions, for example, about just how eager many property owners will be to move their in-law units out of the shadows and into the very public legal light.

Aside from what could be thousands of dollars in permit fees and construction costs to legalize the units, listing those in-law apartments could increase property taxes and force owners to declare any rental income to the IRS. Even little things could cost money, such as the city's requirement that a sidewalk be repaved to eliminate a curb cut if a garage is turned into a legal rental unit.

Group's opposition

Neighborhood groups also have questions they want answered. Barbara Fugate, president of the Cayuga Improvement Association, wrote a letter to the commission, asking it to delay any decision on the legislation.

"If the city is going to allow a second unit in a (single-family home) neighborhood, is it the beginning of a slippery slope that's going to end up with apartment buildings on the corner?" she asked in an interview.

But other neighborhood groups are less worried.

Chiu's plan "does add affordable housing, but it comes with other problems," Ray Holland, president of the Planning Association of the Richmond, said in an interview. "But the whole density concern is a delusion. These people (in the in-law units) are already living here, and we need to recognize that."