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°Aj CITY OF HUNTINGTON BEACH
PLANNING DEPARTMENT COMMUNICATION
TO:Ron Davis, Chairperson
Planning Commission Members
FROM: Howard Zelefsky, Director of Planning
SUBJECT: CONDOMINIUM CONVERSION ORDINANCE AMENDMENT
DATE: January 27, 2004
In 1980, the City adopted requirements for a conditional use permit for stock
cooperatives and condominium developments . The Subdivision Map Act was amended
in 1981 to require a tentative map for conversion of rental housing to stock
cooperatives, and conversion of stock cooperatives to condominiums.
In 1984 , the City established specific conversion standards as part of the Condominium
Conversion Ordinance. In 1994, there were minor changes to the ordinance. The
Director of Building & Safety recently reviewed the ordinance and is recommending
changes relative to Building Code requirements referenced in the ordinance.
References to the Building Code in the Condominium Conversion Ordinance have not
changed in twenty (20) years ; however, building codes have . As a result, the current
construction requirements would make it very difficult, if not impossible to comply.
Therefore, it is recommended that the Condominium Conversion Ordinance be revised
to represent reasonable construction code standards.
Attached is a legislative draft of the proposed changes.
c: Ray Silver, City Administrator
Ross Cranmer, Director of Building & Safety
Scott Hess, Planning Manager
Herb Fauland, Principal Planner
Attachment
(PC\SS Condo Conv. 12704)
Legislative Draft (Jan. 20, 2004)
Chapter 235
Residential Condominium Conversions
Sections:
235.02 Definitions
235.04 Permit Required
235.05 Fees Required
235.06 Required Reports and Information
235.08 Condominium Conversion Standards
235.10 Tenant Benefits and Notification
235.12 Effect of Proposed Conversions on the City's Low- and Moderate-Income
Housing Supply
235.14 Bonus for Including Low- and Moderate-Income Housing
235.16 Findings
235.02 Definitions
The following definitions shall apply to the provisions of this chapter except
where the context indicates otherwise. General definitions are contained in
Chapter 203.
A. Applicant: The owner, developer, subdivider or authorized agent of a project.
B. Date of a royal: The date the Planning Commission, or City Council on
appeal, approves the conditional use permit and tentative subdivision or parcel
map applications. However, if the project is located in appealable area of the
coastal zone and includes action on a coastal development permit, Section
248.30 shall apply. (3334)
1
C. Date of conversion: The date a final map for a project was approved by the
City Council or parcel map for a project was approved by the City Engineer.
D. Project: An existing apartment house, apartment complex, apartment hotel,
hotel, multiple dwelling or group dwelling proposed for conversion to a
condominium, community apartment, or stock cooperative.
E. Affordable unit: A residential unit, sold to or occupied by a tenant earning up to
120 percent of Orange County's gross median income, as determined by the
County of Orange, and shall include any subsequent change in such income
range, adopted by the Housing Agency of Orange County.
F. Tenant: One or more persons.
235.04 Permits Required
In addition to the applicable requirements and procedures set forth in Title 25,
Subdivisions, conversions of existing rental housing to condominiums,
community apartments, stock cooperatives and any other subdivision which is a
conversion of existing rental housing shall be subject to the additional
requirements of this chapter. Conversions of 10 or more units shall be subject to
conditional use permit approval by the Planning Commission and conversions of
nine or fewer units shall be subject to conditional use permit approval by the
Zoning Administrator pursuant to Chapter 241. Within the coastal zone, a coastal
development permit shall also be required. (3334)
Conversion of lower or moderate-income rental housing developed with federal,
state or local assistance shall not be permitted. Within the coastal zone no visitor
serving use, including hotel use, shall be converted to condominium, community
apartment, stock cooperative, or time share. (3334)
Appropriate permits for building, electrical, mechanical and
plumbing systems shall be obtained to verify conformance with
the conversion standards of Section 235.08.
235.05 Fees Required
Review fees by departments shall be charged on an hourly basis
for services that are outside established permit or application
processes. Other applicable permit or application fees shall be
charged as established by resolution.
2
235.06 Required Reports and Information
In addition to the conditional use permit, coastal development permit (where
applicable), and tentative map applications, the applicant shall submit the reports
and/or information required by this section. The cost of all reports shall be paid
by the applicant. The reports shall include information on what improvements, if
any, shall be accomplished by the developer and when such improvements shall
be completed. All improvements cited in the reports, whether required or
voluntary, shall be considered conditions of approval. (3334)
A. Ph sical Elements Re ort: A report on the physical elements of all structures
and facilities shall be submitted, containing ,he following:
1. A report by a California-lice ed struct ral engineer , of civil engineer or
architect , detailing the structural condition, code violations, useful life, and
any apparent deferred maintenance of all elements of the property, including, but
not limited to, foundations, electricity, plumbing, utilities, walls, ceilings, windows,
frames, recreational facilities, sound transmissions of each building, mechanical
equipment, parking facilities, and drainage facilities. Such report also shall
describe the condition of refuse disposal facilities; swimming pools, saunas, and
fountains; stone and brickwork; fireplaces; and exterior lighting. The level of
compliance with the standards lists,( in Section 235.08 A. - E.
shall be addfessed. V
2. A report by a California-licensed ' mechanical contractor
detailing the age, condition, expo size, and the cost of replacement for each
appliance and mechanical equipment for heating and cooling. The report shall
identify any defective or unsafe appliances and set forth the proposed corrective
measures to be employed.
3. A report by a California-licensed structural termite and pest control specialist
certifying whether or not all attached or detached structures are free of infestation
and structural damage caused by pests and dry rot. The report shall describe
what procedures would be necessary to eliminate infestation or damage, if
present. .
and Any infestation shall be remedied prior to sale.
4. A report by a California-licensed civil or geotechnical engineer
identifying site soil conditions and ' '
any known evidence of soils
problems relating to the structures.
3
5. A report by a California-licensed painting contractor verifying the condition of
the painting throughout the project, including building interior and exterior
surfaces and an estimate of the remaining physical life of the paint. A statement
that new paint will be applied on all building interior and exterio
take the place of such report. Such statement shall include e brand name of t
paint and the exterior colors to be used.
6. A report by a California-licensed roofing contractor ve ir`"fying the condition of
the roofs of all structures and an estimate of the remaining physical life of the
roofs and the cost of replacement. A statement that new roof material will be
applied may take the place of such report. Such statement shall include the
specifications , of the proposed roofing material.
B. Covenants conditions and restrictions: A declaration of the covenants,
conditions, restrictions, and rules and regulations which would be applied on
behalf of any and all owners of condominium units within the project shall be
submitted. The declaration shall include, but not be limited to: the conveyance of
units; the assignment of parking and storage areas; and an agreement for
common area maintenance, together with an estimate of any initial assessment
fees anticipated for such maintenance, and an indication of appropriate
responsibilities for the maintenance of all utility lines and services for each unit.
The CCR's shall be approved as to form by the City Attorney and recorded in the
office of the County Recorder..
C. Conversion Plan: Specific information concerning the demographic and
financial characteristics of the project shall be submitted, including, but not
limited to, the following:
1. The date of construction of all elements of the project, and the date and
description of each major repair or renovation of any structure or structural
element, since the date of construction. For purposes of this subsection, "major
repair" shall mean any repair for which an expenditure of more than $5,000 was
made;
2. A statement of a major use of said project since construction;
3. A statement regarding current ownership of all improvements and the
underlying land;
4. The square footage and number of rooms in each unit;
5. The rental rate history for each type of unit for the previous two years;
6. The monthly vacancy rate for each month during the preceding two years;
4
7. A complete list of the number of tenants and tenant households in the project,
including the following information:
a. Households with persons 62 years or older;
b. The family size of households, including a breakdown of households with
children 5 years and younger; and between 5 and 18 years;
c. Households with handicapped persons;
d. The length of residence;
e. The designation of low- and moderate-income households and whether any
are receiving federal or state rent subsidies.
When the subdivider can demonstrate that demographic information is not
available, this requirement may be modified by the Director.
8. The proposed price of each of the units;
9. The proposed homeowners' association budget, detailed to include fixed costs,
operating costs, reserves, administration, and contingencies; and
10. A statement of intent as to the types of financing programs to be made
available, including any incentive programs for existing residents.
11. The method to be implemented to assure availability of affordable units to
tenants.
12. Signed copies from each tenant of the notice of intent to convert, as specified
in this chapter. The applicant shall submit evidence that a certified letter of
notification was sent to each tenant for whom a signed copy of such notice is not
submitted.4 L t, A -4
Vacanc Rate Anal sis: A va ncy rate analysis shall be submitted.
E. Acce tance of Re orts: The final form of the physical structured elements
report, Conversion Plan, and other documents shall be approved by the Planning
Commission. The reports in their acceptable form shall remain on file with the
Department for review by any interested person.
5
235.08 Condominium Conversion Standards
A. Com liance with Cit Ado ted Uniform Codes and National Electrical
Code: The project shall be brought into compliance with the minimum
construction standards as
listed below. In addition, all code violations shall be corrected
to current standards unless an alternate method of construction
is approved by the Building Official.
All issues identified in this section shall
be permitted, constructed and finaled prior to recordation of the final
map or parcel map.
1. Wall and floor assemblies separating individual units shall
be a minimum of 1-hour fire resistive construction.
2. Draft stops shall be installed in attics above and in line
with the walls separating individual units. Draft stops shall
be constructed with materials approved in the currently
adopted building code.
3. Wall and floor assemblies separating the individual units
shall meet the current sound attenuation code standards.
In lieu of constructing a new assembly, an acoustical field
test of the assembly as prescribed by current code may be
performed to justify the existing construction.
4. Building security shall meet the requirements of Title 17 of
the Municipal Code.
5. Units shall be separately metered for both gas and electric
services.
6. Smoke detectors shall be installed and operating. All
existing hard-wired units shall be in working order and the
remaining detectors shall be located in compliance with
current code requirements and may be battery or hard-
wired operated.
7. GFCI protection shall be provided where required by the
currently adopted electrical code unless otherwise
approved by the Building Official.
B. Com liance with Zonin Provisions: The project shall comply with the parking
requirements of Chapter 231, and landscape improvements shall comply with
Chapter 232.
6
C. Refurbishin and Restoration: All main buildings, structures, fences, patio
enclosures, carports, accessory buildings, sidewalks, driveways, landscaped
areas, and additional elements as required by the Planning Commission shall be
refurbished and restored as appropriate for a high standard of appearance,fz_,c
-wContin enc Fees: The intent of the City in requi th reation of a hh0
contingency or reserve fund for condominium conversions is to provide a surety J
quality, and safety.
homeowners' association's contingency fund inimum fee of $200 per welling'Cunit. When 50 percent or more of the total un is in t .e sold, the
applicant, within 30 days, shall convey such fe ach of the unsold units.
Such funds shall be used solely and exclusively as a contingency fund for
emergencies which may arise relating to open space areas, exterior portions of
dwelling units, and such other restoration or repairs as may be ssumed Oy the
ho eowners' association. 7 0 5 r'ST`°,.
E. Affordable Housin : Where a project consis s of 5 units or more, the applicant
shall agree to sell or rent at affordable prices 25 percent of the units to low- and
moderate-income households, with a minimum of 20 percent of the units
affordable to low-income households. If the units are to be made available for
purchase, the maximum sales price of units intended for low- or moderate-
income households shall not exceed 2.5 times the annual median income for
such ho s as e i by the California Health and Safety Code, Section
500 Resale controls II be included as a deed restriction. If the units are to
be r ent, e maximum rent allowed shall keep the units within the low- or
Upon the close of escrow for each unit, the applican e
as to protect the general welfare, public health, and safety of the community,
for unexpected or emergency repairs to common areas in the interest of the
economic, aesthetic, and environmental maintenance of the community, as well • p
moder =ncoousg StOCK.
235.10T enant Benefits and Not bation'
A. Notices of Intent: Applicants for condominium conversions shall give notice of
intent to convert to existing tenants and prospective tenants as required by
Sections 66452.8 and 66452.9 of the California Government Code. The notice of
intent shall be posted on-site in at least one location readily visible to tenants.
B. Notices of Public Hearin and Decisions.
1. The Department shall notify the residents of the public hearing not less than 10
days prior to the proposed hearing date on the application. The notice shall
include notification of the tenant's right to appear and be heard. The Department
shall notify the residents of the decision of the Planning Commission within ten
days and shall include a copy of all conditions imposed on the project. The list of
names and addresses of the residents of each unit in the conversion project shall
7
be current as of the day of submittal and shall be certified as such by the
applicant. Service shall be by mail at the expense of the applicant.
2. Final Ma or Parcel Ma A royal: The applicant shall give written notification
to each tenant with 10 days of approval of the final map or parcel map. The
applicant shall also provide notice of application for public report, as issued by
the California State Department of Real Estate, which shall be available on
request. 7
C. Tenants' Discounts: Any present tenant of any unit at the time of an G,t1 tS
application for conversion-shall be given a nontransferable right of first refusal to
purchase the unit occupied at a discount of the price offered to the general
public. The amount of the discount shall be based on the longevity of each
tenant, and shall be ratified by the applicant at the time of conversion.
D. Vacation of Units: Each non-purchasing tenant, not in default under the
obligations of the rental agreement or lease under which the subject unit is
occupied, shall have not less than 120 days after the date of the tentative map
approval by the City or until the expiration of the tenant's lease to find substitute
housing and to relocate. Tenants shall be permitted to terminate leases or
tenancy with one month's notice at any time after a conversion application.
E. No Increase in Rent: tenant's rent shall not be increased within two months 7
prior to a project application, nor shall the rent be increased for two years from
the time of the filing of the project application or until relocation takes place. In
addition, all non-purchasing tenants 62 years old or older and all non-purchasing
medically-proven permanently disabled tenants shall receive a lifetime lease.
Rents for such tenants shall not be increased for 2 years after the filing of the
project application.
d5
F. Movin Ex enses: The subdivider shall provide moving expenses equal to
three times the monthly rent to any tenant, in compliance with all the terms of the
subject lease and/or financing, who relocates from the building to be converted
after City approval of the use permit authorizing conversion of the units. When
the tenant has given notice of his intent to move prior to City approval of the use
permit, eligibility to receive moving expenses shall be forfeited.
G. Relocation Assistance: Relocation assistance shall be provided by the
subdivider to non-purchasing tenants for a minimum period of four months
following the tentative map approval. Information on available rental units in the
same general area with costs comparable to the preconverted apartments shall
be provided by the subdivider on a calendar quarterly basis. Copies of the list
shall be posted on-site, dated, and provided to the Department. The following
non-purchasing tenants shall receive a minimum of 12 months' relocation time,
measured from the tentative map approval, to find replacement housing:
8
a. Tenants with low or moderate incomes; and
b. Tenants with minor children in school.
IaZAH. Discrimination"iQo discrimination in the sale of any unit shall be based on
race, color, creed, national origin, sex, or age, and a statement to this effect shall
be included in the covenants, conditions, and restrictions. Projects created
exclusively for the purpose of providing senior citizen housing shall be exempted
from this requirement.
235.12 Effect of Proposed Conversions on the City's Low-and Moderate-
Inco a Housing SupplyL firLSlJzf-o/',eviewing requests for the conversion of existing apartments to condominiums,
the Planning Commission shall consider the following:
A. Whether displacement of tenants, if the conversion is approved, would be
detrimental to the health, safety, or general welfare of the community;
B. The role the rental units play in the existing housing rental market and whether
they serve low- and moderate-income households; and
C. The need and demand for lower-cost home ownership opportunities which are
increased by the conversion of apartments to condominiums.
235.14 Bonus for Including Low- and Moderate-Income Housing
Consistent with the requirements of Section 65915.5 of the California
Government Code, the City shall offer a density bonus or other incentives of
equivalent financial value to condominium conversions including low- or
moderate-income housing units or lower-income household units. When an
applicant for approval to convert apartments to a condominium project agrees to
provide at least 33 percent of the total units of the proposed condominium project
to persons of low or moderate income, as defined in Section 50093 of the
California Health and Safety Code, or 15 percent of the total units to lower-
income households, as defined in Section 50079.5 of the California Health and
Safety Code, the Planning Commission shall either (1) grant a 25 percent density
bonus or (2) provide other incentives of equivalent financial value. Any density
bonus or other incentives of equivalent financial value provided under this section
shall be governed by the requirements of Section 235.08.
A. For purposes of this section, "density bonus" means an increase in units of 25
percent over the number of apartments permitted and provided within the existing
structure or structures proposed for conversion. "Other incentives of equivalent
financial value" shall not be construed to require the City to make any cash
transfer payments or other monetary compensation to the subdivider, but may
9
include the reduction or waiver of any required fees or the condominium
conversion standards prescribed in Section 235.08.
B. No applications for a density bonus shall be accepted if the apartments
proposed for conversion constitute a housing development for which a density
bonus was provided under the provisions of Section 230.14.
235.16 Findings
The Planning Commission may approve an application for a condominium
conversion if it finds that the proposed conversion meets the following
requirements:
A. That all the provisions of the Subdivision Map Act, this chapter, and other
applicable provisions of this ordinance are met; and
B. That the proposed conversion is consistent with the General Plan and any
applicable specific plan; and
C. That the proposed conversion will conform to the provisions of this ordinance
in effect at the time of the project approval, except as otherwise provided in this
chapter; and
D. That the overall design and physical condition of the condominium conversion
achieves a high standard of appearance, quality, and safety; and
E. That the proposed conversion will not displace a significant percentage of low-
or moderate-income, permanently or totally disabled, or senior citizen tenants or
delete a significant number of low- and moderate-income rental units from the
City's housing stock at a time when no equivalent housing is readily available in
the Huntington Beach area; and --
F. That the dwelli units o onverted have been constructed and used ash
rental units for at east 5 years pr or to the application for conversion; and
G. That the applicant has not engaged in coercive, retaliatory action regarding
tenants after the submittal of the first application for city review through the date
of approval.
H. That either (1) the project is not located within the coastal zone, or (2) the
project is located within the coastal zone and the existing use to be converted is
not a visitor serving use (including hotels). (3334)
10
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BOOK'' 023 PAGE 1,6
COUNTY OF ORANGE,