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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
San Mateo County Grand Jury
• 2022-2023
Issue Are some San Mateo County communities misusing Accessory Dwelling Units (ADUs) to avoid the
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 7 findings
F1
Page 82
Due to recent changes in California ADU-related laws, local governments cannot condition ADU permits in San Mateo County on complying with affordability monitoring and verification. City Response: The City agrees with finding F1.
F2
Page 82
San Mateo County and most of its municipalities rely on ADUs to meet their affordable housing commitments in their RHNA-6 plans. City Response: The City of Menlo Park disagrees with finding F2. The use of ADUs is one way to help meet a jurisdiction’s affordable housing requirements. The City of Menlo Park’s Housing Element for the 6th cycle (2023-2031) meets its RHNA requirement plus a 30% buffer through different strategies to provide a variety of housing types at all income levels, primarily focused in high resources areas of the City. The use of ADUs is just one strategy for meeting the City’s RHNA. The Housing Element identifies 85 ADUs, including 51 affordable to lower income households, and accounts for less than three percent of the overall number of units and less than five percent of affordable units to lower income households. If no ADUs are built during this planning period, the City could still meets its required housing allocation. DocuSign Envelope ID: FCB6FF84-FA8F-4B95-95CB-99B87AC6ABA7
F3
Page 83
Atherton, Hillsborough, Portola Valley, and Woodside rely on ADUs to meet as much as 80 percent of their affordable housing commitments in their RHNA-6 plans. City Response: The City of Menlo Park is not the subject of finding F3 and therefore cannot respond to this finding.
F4
Page 83
HCD has instructed San Mateo County jurisdictions to monitor and verify future ADU production and affordability every two years but has yet to specify how to verify whether very low-, low- or moderate-income households occupying the ADUs as planned. City Response: The City of Menlo Park disagrees partially with finding F4. As part of the City’s Annual Progress Report on housing submitted to HCD, the City documents all housing production, including ADUs, and their affordability level, for the prior calendar year. The City does not believe HCD has instructed the City to monitor and verify future ADU production and affordability every two years. However, the City of Menlo Park is exploring a regional ADU monitoring effort through ABAG or 21 Elements, a long-standing collaboration amongst the County of San Mateo and the 20 jurisdictions in the County. The City does not expect HCD to specify how to verify income levels of ADU occupants.
F5
Page 83
Other than Brisbane and Redwood City, San Mateo County and its jurisdiction have yet to articulate how they will monitor and verify ADU production or affordability. City Response: The City of Menlo Park disagrees partially with finding F5. The City of Menlo Park monitors annual ADU production through building permit data and assesses affordability generally using the recommended distribution of 30/30/30/10 (30% very low income/30% low income/30 % moderate income/10% above moderate income) based on a UC Berkeley study. The City cannot respond to this finding for San Mateo County and its other jurisdictions. San Mateo County jurisdictions met on June 20, 2023 to discuss potential strategies for monitoring ADU affordability levels. The City of Menlo Park is committed to providing reasonable ADU monitoring and reporting, and is exploring a regional ADU monitoring effort through ABAG or 21 Elements. This monitoring effort is expected to begin no later than January 2025.
F6
Page 83
Without effective ADU monitoring and verification, it will be impossible to evaluate whether the jurisdictions are meeting their RHNA-6 obligations for low-, very low, and moderate- income housing units. City Response: The City of Menlo Park disagrees partially with finding F6. As noted in response to finding F2, the City of Menlo Park does not rely solely on ADUs to meet the City’s RHNA obligation for lower income households, and theoretically could still fully meet its RHNA obligation in the absence of any ADU production during the planning period. The City of Menlo Park agrees that effective monitoring and verification can help evaluate compliance in meeting a jurisdiction’s RHNA.
F7
Page 83
ADU affordability and occupancy could be monitored by agencies such as HIP Housing which has proven systems and processes to verify occupancy of deed-restricted rental properties in San Mateo County. DocuSign Envelope ID: FCB6FF84-FA8F-4B95-95CB-99B87AC6ABA7 City Response: The City of Menlo Park disagrees partially with finding F7. The City of Menlo Park does not have direct experience with HIP Housing providing ADU affordability and occupancy monitoring and therefore, cannot respond to the finding in F7. Theoretically, ADU affordability and occupancy could be monitored by an outside agency, but this has not been verified by the City. Response to Grand Jury Recommendations
Recommendations 6
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R1Page 84San 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 ADUs will be used. City Response: The recommendation will not be implemented because it is not warranted or is not reasonable. The City of Menlo Park’s Housing Element was adopted by the City Council on January 31, 2023 and developed through a multi-year process. It is unreasonable to revise the City’s adopted Housing Element to eliminate the use of ADUs to meet the City’s affordable housing goals. Per HCD’s Accessory Dwelling Unit Handbook (updated July 2022), ADUs and junior accessory dwelling units (JADUs) may be utilized towards meeting a jurisdiction’s RHNA and included in the Annual Progress Report (APR). As mentioned in response to finding F2, however, the City of Menlo Park could still meet its RHNA without ADU production. The City of Menlo Park is committed to following state housing law and to providing a variety of housing types for all income levels in the City.
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R2Page 84By 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 ADUs are being used. City Response: The recommendation will not be fully implemented because it is not warranted or reasonable. The City will continue to explore with 21 Elements on its or ABAG’s ADU monitoring program. The monitoring program is projected to launch in January 2025 and will likely survey applicants about their ADU plans at the time building permits are issued. Due to homeowner privacy concerns and the cost of engaging with potentially thousands of applicants every year, it would not be practical to have an ongoing system that verifies the income of every ADU resident in the County.
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R3Page 84By 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. City Response: The recommendation has not yet been implemented, but may be implemented in the future. The City of Menlo Park’s Housing Element contains programs to support the production and affordability of ADUs. Program H3.I of the City’s Housing Element directs the City to evaluate and adopt incentives to encourage accessible ADUs and rent restricted units. The timeline to implement the program is within two years of Housing Element adoption. The City is also involved with 21 Elements, who is evaluating on behalf of the jurisdictions in San Mateo County the creation of an ADU nonprofit to serve San Mateo County jurisdictions. DocuSign Envelope ID: FCB6FF84-FA8F-4B95-95CB-99B87AC6ABA7 The draft work plan for the nonprofit includes programs to incentivize the production of affordable ADUs and support homeowners in constructing ADUs in exchange for agreement to rent at affordable levels. The nonprofit is projected to launch in July 2024 and would be financially supported by San Mateo County jurisdictions and private philanthropy, if possible.
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R4Page 85By 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. City Response: The recommendation has not yet been implemented, but may be implemented in the future. As part of Program H4.F of the Housing Element, the City is planning to request information on projected ADU rents as part of the development application As part of Program H3.I, the City will be exploring potential incentives for ADUs in exchange for renting the units at affordable levels within two years of Housing Element adoption.
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R5Page 85By 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. City Response: The recommendation will not be implemented because it is not warranted or is not reasonable. The City of Menlo Park’s ADU affordability distribution is based on a UC Berkeley study, which surveyed thousands of homeowners statewide. The collected data was aggregated to reduce the margin of error, which could be large if only surveying a small sample size. There is also no evidence in the data to suggest significant variation from city to city. The recommendation for an affordability distribution of 30/30/30/10 (30% very low income/30% low income/30 % moderate income/10% above moderate income) has a significant cushion built in to minimize underproduction of housing. HCD did not question the City’s use of this methodology for determining the affordability levels of the anticipated ADU production to meet the City’s RHNA for the planning period. Since ADUs are a relative small portion of the City’s total units for meeting its RHNA, the development of a new distribution formula is not warranted or reasonable to implement. As more data becomes available for ADUs in San Mateo County through work with ABAG or 21 Elements, the distribution formula could be modified for future use.
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R6Page 85San Mateo County and each jurisdiction should consider working together to address Recommendations 2 and 3. City Response: This recommendation has been implemented. San Mateo County jurisdictions work collaboratively through 21 Elements to develop, adopt, and implement a range of policies and programs in the County. The City of Menlo Park has partnered with 21 Elements on number of items and will continue to work with 21 Elements to explore collaborative efforts to address issues raised in the Grand Jury’s Recommendations 2 and 3. DocuSign Envelope ID: FCB6FF84-FA8F-4B95-95CB-99B87AC6ABA7 If you have further questions, please contact Deanna Chow, Assistant Community Development Director, at dmchow@menlopark.gov or 650-330-6733. Sincerely, Jen Wolosin Mayor Mayor Jeff Gee 1017 MIDDLEFIELD ROAD Vice Mayor Lissette Espinoza-Garnica Redwood City, California 94063 Telephone (650) 780-7220 Council Members www.redwoodcity.org Alicia C. Aguirre Kaia Eakin Diane Howard Elmer Martinez Saballos Chris Sturken August 29, 2023 Honorable Nancy L. Fineman Judge of the Superior Court c/o Bianca Fasuescu Hall of Justice 400 County Center; 2nd Floor Redwood City, CA 94063-1655 RE: 2022-2023 Civil Grand Jury Dear Judge Fineman and Members of the Grand Jury, On behalf of the City of Redwood City, I would like to thank you for the opportunity to respond to the Grand Jury Report titled “Accessory Dwelling Units: Affordable Housing’s Panacea or Prevarication?”. The following response was approved by the City Council at its meeting on August 28, 2023. Analysis of the Report’s Findings and Recommendations The Grand Jury made seven findings and six recommendations in its report. The City’s responses follow each finding and each recommendation.