Issue Are some San Mateo County communities misusing Accessory Dwelling Units (ADUs) to avoid the

Recommendations 6

• R1

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  San Mateo County and each City should immediately stop using ADUs to meet their State-mandated very low-, low-, and moderate-income housing targets in their Housing Element submissions until they have also proposed an effective monitoring system that verifies how newly developed ADU’s will be used. Response: The City of Foster City’s RHNA for cycle 6 is 1,896 units, and only 24 ADUs are projected in the sites inventory, including seven (7) ADUs projected in very-low-, low- and moderate-income categories and three (3) ADU in the above-moderate category. Also, there is a buffer of 72 units in extremely low, 90 units in very low, and 15 units in moderate income categories included in the sites inventory of the Housing Element. The City of Foster City shares the Civil Grand Jury’s goal to increase ADU affordability monitoring; however, given that the Housing Element does not rely on ADUs (only 2% of the overall number of affordable units and includes a 16% buffer) to meet affordable housing goals, removing ADUs in the Housing Element does not impact the overall affordable housing goals. Additionally, the Housing Element was developed through a rigorous process of multiple years of public input and revisions, and it is simply not reasonable to expect the City to make a major change to our housing policy this late in the process and delaying the certification process. However, the City of Foster City is committed to following state housing law. Foster City has included a program in its Housing Element, H-D-4-h: ADU Monitoring, “The City shall track new ADUs (at single-family and multifamily sites) and collect information on the use and affordability of these units in each Annual Progress Report. Biannually through the projection period (beginning in 2025), if determined that at least 50% units are not meeting a lower-income housing need, the City shall adopt additional incentives to facilitate ADUs.” Foster City will support the development of an effective regional ADU monitoring program which will be operated by 21 Elements or ABAG. In addition, the City has included numerous programs in its Housing Element for the planning period 2023-31 to support the production of ADUs, including an ADU/JADU financial incentive program, preapproved ADU/JADU designs and expedited review, and an amnesty program for existing unapproved ADUs. Thus, the recommendation will not be implemented because it is not warranted or reasonable as discussed above, Foster City has only projected 24 ADUs in its sites inventory of 1,896 units which is very minimal and will be able to demonstrate meeting its RHNA- 6 obligation for very-low-, low-, and moderate-income housing units through housing production reflected in the future APRs. Also, there is a buffer of 72 units in extremely low, 90 units in very low, and 15 units in moderate income categories included in the sites inventory of the Housing Element. Theoretically, Foster City can still fully meet its RHNA obligations for every affordability category without a low-income ADU being provided. DocuSign Envelope ID: B9F958C2-E09A-4626-9294-A738C1988BD2
• R2

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  By February 1, 2024, San Mateo County and each City should develop, adopt, and implement a verification system capable of monitoring and verifying how newly developed ADU’s are being used. Response: Part of the recommendation has not yet been implemented but will be implemented in the future. The City of Foster City agrees that it is important to have information regarding the affordability of ADUs. As stated above in R1, Foster City has included a program in its Housing Element, H-D-4-h: ADU Monitoring. The City will participate in the ABAG or 21 Elements ADU monitoring system. The monitoring is projected to launch in January 2025 and will likely survey people about their plans for their ADU at the time permits are issued. In addition, the City has another program in the Housing Element that will help in monitoring and verifying ADU production is H-G-2-e, Rental Registry: “Unless a requirement for a State rental registry is adopted, explore a rental registry that tracks information such as rents, utilities, accessibility for disabled persons, tenant occupancy dates, and landlord contact information in order to improve the information available to landlords, tenants, and decision makers.” The Rental Registry would be for all rental units (including ADUs) to track occupancy, rents etc. The timeline for exploring rental registry options is December 2024. The recommendation regarding developing, adopting and implementing a verification system capable of verifying how newly developed ADUs are being used will not be implemented because it is not warranted or reasonable. There are a number of Housing Programs, Goals and Policies that the City has to implement over the course of the next 1-2 years. Timely implementation of these programs is important to achieve housing goals, RHNA targets and affordable housing. As noted above, the City will be participating in the ABAG or 21 Elements ADU monitoring system in addition to exploring a Rental Registry. To develop, adopt, and implement a verification system capable of monitoring and verifying how newly developed ADU’s are being used by February 1, 2024 with limited staff resources is not feasible and will impact the implementation of other important Housing Element Goals, Policies and Programs that will be more impactful in meeting affordable housing in Foster City.
• R3

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  By February 1, 2024, San Mateo County and each City should develop and adopt incentives for ADU owners which could be offered in exchange for deed restrictions that would include requirements for ADU tenants to participate in independent monitoring. Response: This recommendation has yet to be implemented but will be implemented in the future. As discussed above, the City has included a program included in its Housing Element, H-D-4-b, ADU/JADU financial incentive program. Under this program, the City of Foster City will “Provide or partner with another organization to provide a financial incentive program for single-family homeowners to construct an ADU/JADU that is restricted for lower-income households for 10-15 years, with an additional incentive amount for units subject to a preference for identified categories of special needs people who would benefit from coordinated onsite services, including but not limited to people with developmental disabilities.” The timeframe for implementation of the program is December 2024. DocuSign Envelope ID: B9F958C2-E09A-4626-9294-A738C1988BD2
• R4

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  By February 1, 2024, San Mateo County and each City should track the intended use of ADUs – rented or non-rented – during the permitting process and offer incentives in exchange for deed restrictions that require ADUs to be used as rentals. Response: This recommendation has yet to be implemented but will be implemented in the future. As part of the monitoring program referenced in response to R2, the City of Foster City will track the intended use of ADUs. Foster City has included a program in its Housing Element to provide a financial incentive program for single-family homeowners to construct an ADU/JADU that is restricted for lower-income households for 10-15 years. The timeframe for implementation of the program is December 2024.
• R5

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  By April 1, 2024, San Mateo County and each City should develop and adopt a new ADU affordability distribution formula specific to each jurisdiction to the extent they are used for meeting the very low-, low-, and moderate-income housing requirements in their RHNA housing elements. Response: The recommendation will not be implemented because it is not warranted or is not reasonable. The City of Foster City agrees with the importance of an accurate distribution formula, given the relatively small size of the City of Foster City, a more meaningful distribution formula can be attained by collecting data on ADUs constructed across all San Mateo County jurisdictions. The City of Foster City is supporting the creation of an ADU monitoring program through 21 Elements or ABAG which will collect data that can be used to revise the distribution formula based on actual observed income levels. The UC Berkeley study surveyed thousands of homeowners statewide and aggregated the data to reduce the margin of errors. The margin of error would be too large if the City were to survey only a dozen or couple of dozen households. There is also no evidence in the data to suggest significant variation from city to city based on the UC Berkeley study. The recommendation of a percentage distribution of 30/30/30/10 had a significant cushion built in to ensure cities did not accidentally underproduce the amount of housing needed. Additionally, given the historically low production of ADUs (average of 3 ADUs per year) in Foster City, there isn’t significant data to help inform the affordability distribution formula. Thus, the recommendation will not be implemented because it is not warranted or reasonable.
• R6

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  San Mateo County and each City should consider working together to address Recommendations 2 and 3. Response: The recommendation has yet to be implemented but will be implemented in the future. Foster City has included two programs in its Housing Element, including ADU monitoring, and an ADU/JADU financial incentive program as stated above. Timeframe for implementing these programs is by December 2024. DocuSign Envelope ID: B9F958C2-E09A-4626-9294-A738C1988BD2 Foster City actively participates in 21 Elements, a collaboration amongst 21 San Mateo County jurisdictions to develop, adopt, and implement housing policies and programs in the County. The City will continue to work on efforts and solutions that boost the production and affordability of ADUs. This response was approved by the City Council of Foster City at its regular meeting on August 7, 2023. Respectfully submitted, Jon Froomin Mayor, City of Foster City Cc: grandjury@sanmateocourt.org