Jessica Cejnar Andrews / Thursday, July 13, 2023 @ 4:35 p.m. / Infrastructure, Local Government
Only Junior Accessory Dwelling Units Should Be Used As Vacation Rentals, Crescent City Councilors Say
Photo: Joiedevivre123321 via Wikimedia Commons. Creative Commons License.
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Crescent City councilors continued to grapple with a draft accessory dwelling unit ordinance on Monday by agreeing to restrict rental occupancy terms for most to 30-plus days.
Even Councilor Jason Greenough, who is normally against telling people what to do with their property, got behind this proposed stipulation. But, he said, those who want to build junior accessory dwelling units on their property should be allowed to Airbnb or VRBO those spaces.
Under the state's definition, junior ADUs, or JADUs, must be no more than 500 square feet, and must be carved off and converted from an existing dwelling, according to City Attorney Martha Rice.
For people who want to build ADUs and offer them as rentals as a potential source of income, this restriction could keep them from maximizing the amount of money their property could bring them, Mayor Pro Tem Blake Inscore acknowledged. But, he said, the city makes these kinds of restrictions all the time.
“We’re not saying the person can’t make money and profit off of their property,” Inscore said. “We’re just saying you need to do this kind of business in this location, which we do all the time with businesses.”
Inscore and his colleagues got another look at a draft ADU ordinance with more information on how they could regulate rental occupancy terms as well as water and sewer connection fees. These are two areas within the wider ADU ordinance that the city has discretion over, according to City Attorney Martha Rice.
In addition to requiring state exempt and non-state exempt ADUs be used for long-term rentals, Councilors directed Rice to include a deed restriction requirement in the final ADU ordinance pertaining to the rental occupancy terms.
“That gives notice to future purchasers that there is a significant restriction on the use of that property,” Rice said. “We would draft it (in the ordinance) and we would not issue the certificate of occupancy until it’s recorded.”
Councilors also asked Rice to include stipulations in the ADU ordinance to charge a proportional fee to connect water and sewer to the unit. Councilors didn’t want to mandate property owners install separate connections for their ADUs, though they are permissible.
Connection, or capacity fees, are not the same monthly charge the city’s water and sewer customers pay, according to Rice.
California puts ADUs into three categories — those that are state-exempt, those that are non-exempt and JADUs.
ADUs that are within a proposed single-family home, or in a converted space of an existing single-family home, or are new construction near a single-family home and 850 square feet in size or less, are state-exempt. These must be allowed without an ordinance and can only be offered as long-term rentals, or for more than 30 days, Rice said.
Non-exempt ADUs must go through the city’s permitting process, which includes submitting site plans, according to Inscore. The ADU can be larger than 850 square feet and the city has more say over setbacks from existing buildings, he said.
According to Rice, one of the reasons the city distinguished state-exempt from non-exempt ADUs was because the Planning Commission didn’t want to restrict rental terms.
“They wanted to leave it up to the property owner,” Rice said. “But because there was a class of ADUs where we didn’t have a choice, I had to find a way to differentiate between the two.”
Rice said she surveyed 25 cities in Northern, Central and Southern California. Of those communities, 23 had restricted all ADUs to long-term rentals. Only Orinda and Trinidad allowed short-term rentals and Trinidad hadn’t updated their ordinance since 2010, Rice said.
Eighteen of those 25 cities also restricted junior ADUs to long-term rentals, Rice said, and 50 percent required rental term restrictions to be included in a deed restriction.
Greenough said he’s generally against overly restricting what people can do with their property. But with the state-mandated exemptions, it allows homeowners to build an ADU without jumping through a lot of hoops. He also pointed out that the state approved its ADU ordinance to increase the long-term housing stock.
Greenough still had reservations about limiting non-exempt ADUs to long-term rentals only, especially when Mayor Isaiah Wright asked about nurses and other professionals in the community that are travelers.
Wright pointed out that many don’t stay longer than four-weeks and asked if an exemption could be made in the ordinance for them.
Councilor Raymond Altman said folks looking to rent a place for less than 31 days would just look for “a shorter-term product.”
Ultimately Greenough said he was OK with making non-exempt ADUs subject to long-term rentals “as long as JADUs can be utilized.”
“The JADUs not being with that restriction would allow for those people who (need) less than 30 days to still find a place,” he said.
As for utility connection fees, Rice said state law allows cities to impose a proportionate connection fee or require a separate fee for those who are constructing a new attached or detached ADU.
Proportionality is based on the square footage ratio of the ADU to primary dwelling, Rice said.
“If you have a 1600 square-foot primary dwelling and an 800 square-foot new construction detached ADU, the ADU connection fees will be 50 percent of those of the primary dwelling,” she said.
Currently, the city’s connection fees are $2,700 for water for a single-family equivalent dwelling and $9,682 for sewer for a single-family equivalent dwelling, according to Rice. For an 800 square foot ADU attached to a 1,600 square foot primary dwelling, the water connection fee would be $1,350 for water and $4,841 for sewer, she said.
“The city currently does have its own proportionality scale for certain types of residential development and those are apartments,” she said. “Also for mobile home park spaces, RV park spaces and motel rooms with kitchens and without kitchens.”
Inscore said based on the city’s current scale, the Council should impose proportional connection fees for ADUs. He also said that if property owners building an ADU that’s one or two bedrooms shouldn’t get preferential treatment over someone building a duplex on a vacant lot.
“They are going to have a material impact on the overall system by joining with the system ‘cause you’re going to have more people potentially using the water and sewer,” he said. “We have a responsibility to the rest of our ratepayers.”
Rice said she’d bring a revised version of the ordinance back before the City Council on Aug. 7.
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