Many San Francisco residents live in homes that do not conform to existing Building, Planning, or Fire Code requirements, and, as a result, are relatively affordable to rent. Many of these units are also subject to rent-stabilization. Legalizing these homes helps increase housing security and improve safety for existing residents.
Background
What are Unauthorized Units?
Unauthorized units (UDUs) are defined in Planning Code as one or more rooms within a building that have been used, without the benefit of a permit, as a separate and distinct living or sleeping space independent from other residential units on the property. According to research conducted for the dwelling unit legalization program passed by the Board of Supervisors in 2014, approximately 30,000 to 50,000 illegal or non-conforming dwelling units exist in the City.
Why is Preserving UDUs Important?
City policy prioritizes the preservation of existing rent-stabilized housing as a cost-effective means of providing housing that is relatively affordable. These units were created without building permits and created homes out of flexible spaces in existing single-family dwellings or multi-family buildings. Since these units tend to be small and may not always be current to building or planning code, most tend to be relatively affordable or exist in older housing stock that is subject to rent stabilization regulations. However, the removal of Unauthorized Units (UDUs) from buildings removes housing stock that is relatively affordable from the market. The following summary reviews the existing UDU review process to find potential gaps in policy that can be addressed to prevent the further loss of housing.
Key Trends
An estimated 30,000-50,000 UDUs exist in San Francisco today.
About 140 UDUs have been legalized through the legalization program in 2017 and 20188
According to DBI permit data, it costs an average of $60,000 to bring a unit up to code.
4 Removed Annually
Approximately 4 UDUs are estimated to be removed each year through the City’s condominium conversion program. Additional information on this can be found in Condominium Conversion summary.
What’s Happening Now to Prevent the Loss of UDUs?
Since May 2014, building owners have been able to legalize unauthorized units that exist on their properties.1 This voluntary program applies to unauthorized units that existed prior to 2013 and have not had any no-fault (construction/demolition) eviction within past ten years. Past Ellis Act evictions do not impact the legalization of a unit. While applying for legalization any related building violations are suspended and penalties are waived if the legalization process is completed within a year.
The Planning Department and Department of Building Inspection (DBI) implemented a UDU Checklist which allows a homeowner to evaluate the cost to legalize anonymously. Planning implemented a UDU Screening form for staff to use when encountering an application that seems like it might be removing a potentially unauthorized unit.
Issues with Defining a UDU
To be considered a UDU, the space must be independent from other residential units on the property, which means that the space has independent access from the public way, and there is no open visual connection to another unit (such as an interior staircase without a door). A UDU must also be an independent dwelling space that is used as a separate and distinct living or sleeping space, though it does not necessarily need to have a kitchen. DBI’s definition of a UDU is different in that it is dependent on the existence of cooking facilities and does not rely on occupancy. Planning determines that a space is a “separate and distinct living or sleeping space” if staff can find evidence of occupancy in the past. Both DBI and Planning use different methods of confirming occupancy. Planning usually uses resources including, but not limited to, San Francisco voter records and Rent Board records. The methods by which a UDU is confirmed as a separate dwelling unit are inconsistent across departments and lead to the potential loss of affordable units.
Issues with Legalizing a UDU
To legalize a UDU, a property owner must pay for the cost of bringing the unit up to code. The cost of bringing a UDU up to code may be quite expensive, especially when legalizing the unit requires raising the ceiling height to minimum height requirements. In addition to paying this cost, property owners also must get an updated assessed value of the property in order to include the newly legalized unit’s square footage. This may increase property taxes paid by the property owner as well.
For Future Consideration
The ideas for future consideration that have the potential to increase community stability in San Francisco are described below. They provide a starting point for agencies, decision-makers, and community members to explore stabilization efforts and identify critical pathways forward. Based on preliminary information, staff is qualifying these ideas according to the type of task, scale of resources and level of complexity to underscore that any of these ideas would require time and additional resources not currently identified. These are not City commitments or recommendations, rather informed ideas that will require careful vetting and analysis as to their reach, resource needs, feasibility, unintended consequences, legal implications, and racial and social equity considerations.
New data sources to confirm UDU occupancy
Given the difficulty of confirming occupancy to formally identify a UDU, Planning could consider using other data sources such as tax records from local, state or federal sources; driver’s licenses and address change data from the California Department of Motor Vehicles; school enrollment data; and, mailing address from the U.S. Postal Service.
| Type of Response | Mitigation, Prevention |
|---|---|
| Type of Task | Data
|
| Resource | Generally only staff time and some program funding would be required
|
| Complexity | Medium – generally some legislation and/or some change of and existing program, and two to three agencies involved
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Planning |
| Key Priority | Yes - Enhancements to Existing City Programs and Policies |
| Benefit | Better sources to confirm occupancy can lead to the stabilization of additional units. |
| Challenge | Not all data sources are comprehensive or easily accessible as the State or Federal government agencies own and manage this data. This would require resources and funding to purchase data and/or to clean up data. |
Regulation amendments and fees for UDU legalization
The City could consider additional amendments to certain building, planning, and fire codes and fees in instances that do not compromise health or safety to reduce the cost of legalizing an existing UDU. Plan-check fees are already waived for unit legalization to encourage legalization, others can be considered. For example, explore reducing minimum height requirements to accommodate unauthorized units with low ceiling heights.
| Type of Response | Mitigation, Early Intervention |
|---|---|
| Type of Task | Regulation
|
| Resource | Generally only staff time would be required
|
| Complexity | Medium – generally some legislation and/or some change of and existing program, and two to three agencies involved
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Department of Building and Inspection (DBI), Planning, Fire |
| Benefit | Making legalization of units more affordable for property owners can help reduce the chances of removing an illegal unit due to financial constraints. |
| Challenge | This could introduce gray areas as to what makes a space safe for habitability impacting fire and building review of legalizations. |
Process of changing use for illegal units improvements
If an illegal residential unit is discovered in a commercial or non-residential space, the City could implement a quicker process to change the use to residential and prevent the potential eviction of a tenant or loss of a housing unit.
| Type of Response | Mitigation, Prevention |
|---|---|
| Type of Task | Regulation
|
| Resource | Generally only staff time would be required
|
| Complexity | Less Complex – generally no or limited legislation and/or an existing program, and one agency involved
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Department of Building and Inspection (DBI), Planning |
| Benefit | Reduce the loss of converted housing, especially in areas where vacancy rates are high for commercial spaces. |
| Challenge | This would remove spaces for potential small business owners, and potentially create the need for more resources at Planning and DBI to process such permits or applications for land use changes. |
Small low-interest loan and grant program to legalize UDUs
Technical and financial assistance to low- and moderate-income owners looking to legalize a UDU (or looking to convert to a condominium with a UDU) would be an equitable way to subsidize an important source of housing for low and moderate-income San Franciscans.
| Type of Response | Mitigation, Prevention, Early Intervention |
|---|---|
| Type of Task | Funding
|
| Resource | Extensive funding (the kind typically required for capital investments) and staff time would be required
|
| Complexity | Medium – generally some legislation and/or some change of and existing program, and two to three agencies involved
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Planning, Mayor's Office of Housing and Community Development (MOHCD), community partners |
| Key Priority | Yes - Enhancements to Existing City Programs and Policies |
| Benefit | This would help reduce overall costs to low- and moderate-income homeowners looking to legalize a unit. |
| Challenge | Additional resources (funding potential new program) required. |
Permits leading to eviction investigation
The City could explore creating a city enforcement mechanism to monitor and enforce compliance with eviction ordinances and temporary relocation due to repair, construction or fire, as defined in the SF Rent Ordinance.
Additional information on this can be found in the Rent Stabilization and Eviction Protection Policy summary.
Tenancy of unit confirmation during permitting process
The City could confirm tenancy of a unit that is requesting a permit for a level of work that may result in displacement of the tenant. This would rely on a registry of rental housing in order to confirm tenancy.
Additional information on this can be found in the Rent Stabilization and Eviction Protection Policy summary.
Planning Legalization Program Resources
Read More »Illegal Unit Legalization Resources
Visit Site »FOOTNOTES:
1. San Francisco Department of Building Inspection." Legalize Your Illegal Units Today | Department of Building Inspection. Accessed April 05, 2019.
