Chapter 17.153 — DEMOLITION, CONVERSION AND REHABILITATION REGULATIONS FOR RESIDENTIAL

A.

Title. The provisions of this Chapter shall be known as the Demolition, Conversion and Rehabilitation Regulations for Residential Hotels.

B.

Purpose. The purpose of this Chapter is to benefit the general public by minimizing the adverse impact on the housing supply and on displaced very low and extremely low income, elderly, and disabled persons, which results from the loss of Residential Hotel Units as a naturally occurring affordable housing option. This is to be accomplished by establishing a process for identifying and preparing a registry of known existing Residential Hotel Units, and by regulating the demolition, conversion and rehabilitation of Residential Hotel Units.

C.

Findings. The City Council finds that:

The City of Oakland is experiencing a severe housing affordability crisis that requires immediate emergency action by the City government.

Residential Hotels are often housing of last resort for the poor, especially in areas with extremely high costs of housing such as Oakland.

The housing affordability crisis continues to overwhelm Oakland residents and threatens the public health, safety and/or welfare of our citizenry.

A number of economic forces, including the dearth of hotels and the high cost of new construction in Oakland, create incentives for developers to purchase Residential Hotels and repurpose them for non- residential uses, such as boutique hotels, or reconfigure them for other residential uses that result in the displacement of existing tenants or the removal of rental units from the market.

The loss of Residential Hotels in Oakland would exacerbate the already overwhelming burden on public and non-profit agencies that provide protective, social, health, psychological, nutritional, and other important and necessary services to the tenant population of such hotels.

The City Council has determined that Residential Hotels are an essential component of the City's supply of Naturally Occurring Affordable Housing (NOAH) as they are a flexible and easily accessible form of housing that provides very low, and extremely low-income residents the ability to remain in Oakland and to avoid homelessness.

The City of Oakland Housing and Community Development Department prepared a report in September of 2015 which states that from 1985 through 2015, the City lost approximately seven hundred ninety-nine

(799) Residential Hotel units in Downtown Oakland, and many more units are at-risk of being lost or are already lost to the supply of NOAH units.

The California State Legislature has recognized the need for retaining Residential Hotels to provide housing for low, very low, and extremely low-income individuals in legislation, and in justifying such legislation:

The Legislature finds and declares that the need for decent housing among individuals of very low and low income is great, and that residential hotels are often the only form of housing affordable to these individuals. Many residential hotels are in poor condition and in need of rehabilitation, and many are being demolished or converted to other uses. California Health and Safety Code § 50519(a).

The unrestricted demolition, conversion or rehabilitation of Residential Hotels exacerbates the housing crisis by making such units unaffordable to low, very low, and extremely low-income Oakland residents, and may result in the displacement of Oakland residents from their homes and communities.

Based on the previous findings, the City finds that there is a current and immediate threat to the public health, safety, and/or welfare associated with the Demolition, Conversion and Rehabilitation of Residential Hotels.

It is in the public interest that the conversion, demolition and amenity rehabilitation of residential hotel units be regulated and mitigated. Furthermore, in order to protect the resident tenants and to conserve limited housing resources, remedies must be provided where conversion or demolition occurs.

Projects that transform an existing Residential Hotel or rebuild Residential Hotel Units as new deed- restricted affordable housing would provide stable housing for the populations most severely impacted by the loss of Residential Hotel units, and serve an over-riding public benefit, as long as they minimize unit loss and are deed-restricted to extremely low and very low income households.

Residential Hotel buildings that have been continuously vacant for ten (10) years or more may constitute a public health and safety hazard; and may require additional amenities in order to bring those Residential Hotel units back into the housing stock.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

The following terms, whenever used in this Chapter, shall be construed as defined herein. Words and phrases not defined herein shall be construed as defined in Chapter 17.09 of the Oakland Planning Code or

in the Oakland Municipal Code.

"Affordable Housing Organization" means a religious, hospital, scientific, or charitable fund, foundation, limited liability company, or corporation, including a limited partnership in which the managing general partner is an eligible nonprofit corporation or eligible limited liability company, or a veterans' organization, as described by California Revenue and Taxation Code Section 214, subsection (g).

"Affordable Housing Project" means a property used primarily for housing and related facilities, owned or operated by an affordable housing organization where, pursuant to legally binding restrictions, all of the units, except for resident manager units, are restricted as affordable housing at an affordable rent or affordable housing cost, as those terms are defined in California Health and Safety Code Sections 50053 and 50052.5, to occupancy by extremely low, very low, low, and/or moderate-income households, as those terms are defined California Health and Safety Code Sections 50079.5, 50093, 50105 and 50106.

"Commercial Hotel" means a hotel that operates as a Commercial Activity, as defined in Section 17.10.260, which provides lodging to guests that is not used or is not intended to be used as a primary residence.

"Commercial Hotel Unit" means a Rooming Unit or Efficiency Unit, as defined in Section 17.09.040 of the Oakland Planning Code, that operates within a Commercial Hotel or has been granted a Conditional Use Permit for Conversion, as set forth in Section 17.153.050.

"Conversion" means any action that converts one (1) or more existing Residential Hotel Units to a Commercial Hotel Unit, or converts the Residential Hotel to a Commercial Activity or another Residential Activity, as those terms are defined in Chapter 17.10 of the Oakland Planning Code, regardless of whether substantial improvements have been made to such units.

"Demolition" means any action that eliminates an existing Residential Hotel Unit, including but not limited to complete or partial demolition of a Residential Hotel unit, combining two (2) or more existing Residential Hotel Units to make a larger new unit, or any other action that eliminates one (1) or more existing Residential Hotel Unit.

"Director" means the Director of the Planning and Building Department, or the designee of the Director of the Planning and Building Department, or the designee of the City Administrator.

"Owner" means an owner of record of a Residential Hotel, or an entity or individual with a long-term lease or some form of equitable interest in a Residential Hotel.

"Rehabilitation, Amenity" means any action that reduces the size of Residential Hotel Units or eliminates or reduces the size of private or communal amenities in a Residential Hotel or Residential Hotel unit, such as bathrooms, kitchens, elevators or laundry through complete or partial removal of those facilities, including reduction in the number of toilets or sinks in a bathroom. It also means any action that adds a kitchen or kitchenette to a Rooming Unit within an existing Residential Hotel.

"Residential Hotel" is defined in accordance with California Health and Safety Code Section 50519, and means any building built before 1960 containing six (6) or more Rooming Units, as defined in Section 17.09.040, intended or designed to be used, or which are used, rented, or hired out, to be occupied, or which are occupied, for sleeping purposes by guests, which is also the primary residence of those guests, and where the entrances to the individual units are generally accessed via a shared lobby area. See also

the process for Status Determination in Section 17.153.030. Any building or units that are constructed to satisfy the requirements of Section 17.153.050(A) shall be subject to the provisions of this Chapter.

"Residential Hotel Unit" means a Rooming Unit or Efficiency Dwelling Unit, as those terms are defined in Section 17.09.040 of the Oakland Planning Code, intended or designed to be used, or which are used, rented, or hired out, to be occupied, or which are occupied, for sleeping purposes by guests, which is also the primary residence of those guests, and are located within a Residential Hotel. Any unit that is constructed to satisfy the requirements of Section 17.153.050(A) shall be subject to the provisions of this Chapter.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

This Section sets forth the process to establish the status of facilities preliminarily determined by the city to be Residential Hotels and Residential Hotel Units, and therefore subject to the regulations in this Chapter.

A.

Notification by City. Within thirty (30) days of the adoption of this ordinance, the Planning and Building Department shall notify by mail the property owners preliminarily determined by the City to be operating a Residential Hotel subject to the provisions of this Chapter. The City shall include in its notification a summary of this Chapter and instructions regarding the required filing of an Initial Usage Report or Statement of Exemption, as described in Section 17.153.030(B) below. All filings shall be accompanied by supporting evidence. Buildings that do not meet the definition of a Residential Hotel as set forth in Section 17.153.020 may be considered for an Exemption, as stated in Section 17.153.030(B)(2) below. If the owner or operator intends to file a Statement of Exemption, they must file it with the Planning and Building Department within ninety (90) calendar days of the mailing date of the notice; otherwise, the owner or operator shall file an Initial Usage Report within one hundred eighty (180) calendar days. All filings shall be accompanied by supporting evidence. However, upon application by an owner or operator and upon showing a good cause, the Director may grant an extension of time not to exceed thirty (30) days for filing either the Statement of Exemption or the Initial Usage Report.

B.

Filing for Status Determination. All properties notified by the Planning and Building Department of their preliminary Residential Hotel status must file an Initial Usage Report or a Statement of Exemption to determine the legal status of the subject property as of December 13, 2016.

Initial Usage Report. The Initial Usage Report shall be filed by the owner or operators within one hundred eighty (180) calendar days after the City mails notification pursuant to Section 17.153.030(A). Upon application by an owner or operator and upon showing a good cause, the Director may grant an extension of time not to exceed thirty (30) days for filing the Initial Usage Report. The Initial Usage Report shall be accompanied by evidence, such as a certified copy of the Residential Hotel's tax returns, transient occupancy tax records, residential landlord tax records, Planning and Building Permit records, Alameda County Assessor records, to confirm the following required information:

a.

Floor plans showing all the legal units, communal facilities such as bathrooms, kitchens, laundry facilities or other shared amenities, as well as any ground floor commercial space and lobby area, as of December 13, 2016.

b.

The floor plans shall also indicate the legal number and location of private bathrooms, and the number and location of communal bathrooms, including shower, toilet and sink facilities, as of December 13, 2016.

Statement of Exemption. If the owner or operation intends to file a Statement of Exemption, the owner must file with the Planning and Building Department within ninety (90) calendar days of the mailing date of the notice. Upon application by an owner or operator and upon showing a good cause, the Director may grant an extension of time not to exceed thirty (30) days for filing the Statement of Exemption. The Statement of Exemption shall be accompanied by evidence, such as a certified copy of the property's tax returns, transient occupancy tax records, residential landlord tax records, Planning and Building Permit records, Alameda County Assessor records, floor plans, or any other evidence necessary to prove the property does not meet the afore-mentioned definition of Residential Hotel or that individual units do not meet the definition of a Residential Hotel Unit, as set forth in Section 17.153.020. The owner has the burden of proving by a preponderance of the evidence that the Residential Hotel is exempt from the provisions of this article.

C.

Insufficient Filing. If the Director determines that additional information is needed to make a determination, the Director shall request the additional information in writing. The owner shall furnish the requested information within thirty (30) calendar days upon receipt of the written request. If the requested information is not furnished, the Director will issue the Certificate of Status confirming that the building is a Residential Hotel that is composed entirely of individual Residential Hotel Units.

D.

Failure to File Statement of Exemption or Initial Usage Report. If a presumed Residential Hotel that is sent notice of their preliminary Residential Hotel status and of a requirement to file a Statement of Exemption or Initial Usage Report, does not submit one (1) within the time set forth in Section 17.153.030(B), the Director shall mail a second notice to the owner of record by registered or certified mail stating that the owner has ten (10) calendar days to submit the Initial Usage Report or Statement of Exemption. If these are not filed within ten (10) calendar days, the Director will issue the Certificate of Status, confirming that the building is a Residential Hotel that is composed entirely of individual Residential Hotel Units.

E.

Certificate of Status. The Director shall review the Initial Usage Report or Statement of Exemption and evidence submitted. Within one hundred twenty (120) days of receipt of a complete Statement of Exemption or Initial Usage Report, supported by evidence, the Director shall certify the information

provided in the Initial Usage Report or certify an Exemption. If the property is deemed a Residential Hotel, the Certificate of Status, including a graphic floor plan, shall be posted permanently in the lobby or entranceway of the Residential Hotel.

F.

Appeal of Certificate of Status or Exemption. An owner or operator, or any interested party, may appeal the Certificate of Status or Exemption issued by the Director within ten (10) calendar days of the mailing of the Certificate of Status or Statement of Exemption, provided that there was no challenge pursuant to the provisions of Section 17.153.070 below, pursuant to the administrative appeal procedures set forth in Chapter 17.132. The Director's determination on the Certificate of Status or Exemption shall be final if a timely appeal is not filed.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

Except as set forth in Section 17.153.060, and notwithstanding Section 17.153.050, the following actions shall be prohibited:

A.

Any Amenity Rehabilitation of Residential Hotel Units or a Residential Hotel; or

B.

Conversion or Demolition of a Residential Hotel Unit or a Residential Hotel, if there have been any adjudicated cases evidencing tenant harassment or illegal evictions during the immediately preceding five (5) years.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

Except as set forth in Section 17.153.060 and notwithstanding whether the requirements of Section 17.153.030 have been met, any Demolition or Conversion of Residential Hotel Units or a Residential Hotel, shall only be permitted upon the granting of a Conditional Use Permit pursuant to the Conditional Use Permit procedure in Chapter 17.134. The City shall not approve a Demolition or Conversion of Residential Hotel Units or a Residential Hotel unless the application conforms to the general use permit criteria described in Chapter 17.134 and, prior to the Demolition or Conversion, the Residential Hotel owner satisfies the following additional conditions:

A.

Add to the City's housing supply replacement Residential Hotel rental units that are affordable to extremely low or very low income households, as those terms are defined in California Health and Safety Code Sections 50079.5, 50093, 50105 and 50106, although in the event of either a deed in lieu of foreclosure or foreclosure by a Project lender, or a termination, non-renewal or material reduction of project-based Section 8 or other project-based rental assistance for Assisted Units, the maximum tenant household

income and maximum rent limitations for Assisted Units may be increased to amounts necessary to make operation of the Project financially feasible, including the payment of all required operating costs and debt service, but in no event may (a) the maximum tenant household income limitation exceed sixty percent (60%) of AMI, or (b) the maximum annual rent limitation exceed thirty percent (30%) of sixty percent (60%) of AMI; and equivalent in number, size, services and facilities offered to each unit proposed for Demolition or Conversion, and within two (2) miles of the subject facility, that must obtain a certificate of occupancy for such new Residential Hotel units prior to the proposed Demolition or Conversion taking place; and

B.

Whenever a Residential Hotel Unit is to be converted or demolished, and will result in tenant displacement, the Residential Hotel Owner shall:

Provide the tenant(s) a one hundred twenty (120) day written notice of the Conversion or Demolition. All such written notices shall comply with the legal requirements for service by mail; and

Submit a list of the names of any tenants residing in the Residential Hotel, and any tenants who have moved, been removed, or evicted during the preceding one hundred eighty (180) calendar days and the reasons for the move, removal, or eviction.

Refer the tenant(s) to an equivalent unit if available; and if an equivalent unit is not available or if the tenant(s) chooses not to live in the equivalent unit, then provide the tenant(s) with a relocation allowance, as specified for studio units in Sections 8.22.450 and 8.22.820 of the Oakland Municipal Code, including any additional payments for tenant households that contain members who qualify as lower income, elderly, disabled and/or minor children, as set forth in Oakland Municipal Code Sections 8.22.450(B) and 8.22.820; and

Satisfy the requirements of any other tenant relocation programs, such as those set forth in Oakland Municipal Code Chapter 15.60 related to code enforcement cases; and

Offer any displaced tenant a first right of refusal to rent the replacement units built to satisfy requirements in Section 17.153.050(A).

C.

Provide the Director with proof that the above actions have been taken.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

Upon the granting of a written determination by the Director, the following are not subject to the restrictions set forth in Section 17.153.040 nor do they require the granting of a Conditional Use Permit as set forth in Section 17.153.050; all other local, state, federal requirements set forth in other Chapters of Title 17 shall still apply; and the requirements shall still apply:

A.

Any rehabilitation of an existing Residential Hotel that is or will become an Affordable Housing Project as defined in Section 17.153.020, and complies with the following additional criteria below. An Affordable Housing Project that is exempt from the provisions of this Chapter shall lose its exempt status and become subject to the provisions of this Chapter when it ceases to be an Affordable Housing Project or meet the additional criteria below:

The units are restricted to occupancy by extremely low and/or very low-income households, as those terms are defined California Health and Safety Code Sections 50079.5, 50093, 50105 and 50106. However, in the event of either a deed in lieu of foreclosure or foreclosure by a Project lender, or a termination, non-renewal or material reduction of project-based Section 8 or other project-based rental assistance for Assisted Units, the maximum tenant household income and maximum rent limitations for Assisted Units may be increased to amounts necessary to make operation of the Project financially feasible, including the payment of all required operating costs and debt service, but in no event may (a) the maximum tenant household income limitation exceed sixty percent (60%) of AMI, or (b) the maximum annual rent limitation exceed thirty percent (30%) of sixty percent (60%) of AMI; and

The Project shall have an executed written agreement with the City or other public agency setting forth the number, type, location, approximate size and construction schedule of all units, restricting the occupancy and rent or sale price of such units, and setting forth other terms and conditions as required for ensuring compliance with the requirements of this Section. Said agreement shall be recorded against the Affordable Housing units as covenants running with land, senior in priority to any private liens or encumbrances except as provided below, and shall be enforceable by the City against the Project for the full affordability term. Additional restrictions, deeds of trust, rights of first refusal, or other instruments may be required by the City Administrator as reasonably needed to enforce these restrictions. The City Administrator shall have the authority to subordinate such restrictions to other liens and encumbrances if he or she determines that the financing of the Affordable Housing units would be infeasible without said subordination; and

The executed written agreement with the City or other public agency shall extend for at least another twenty-five (25) years beyond the date of application for an Exception; and

The proposed actions minimize the reduction in number of units by only allowing new unit types to be Rooming Units, Efficiency Units or one-bedroom units; and

For a Residential Hotel that will be subject to new restrictions on occupancy and affordability, the executed written agreement with the City or other public agency shall require that the new rental units remain affordable for at least fifty-five (55) years.

B.

Any Residential Hotel that is converted to a Transitional Housing Activity, as defined in Oakland Municipal Code 17.10.116 and per State of California Government Code 65582.

C.

Any Residential Hotel that has been completely vacant and unoccupied continuously for more than ten (10) years, as demonstrated by the applicant, is not subject to restrictions on Amenity Rehabilitation; but these properties remain subject to restrictions on Conversion and Demolition; or

D.

Any Amenity Rehabilitation, which:

(1)

Is determined by the Chief Building Official to be necessary to address imminent health and safety threats, as long as that imminent health and safety threat was not caused by any voluntary action of the owner of said facility; and

(2)

Does not result in temporary displacement of any tenant for more than sixty (60) days or permanent displacement of any tenant; or

E.

Any Demolition, which is determined by the Chief Building Official to be necessary to meet life safety standards, provided that:

(1)

It involves the minimum amount of Demolition necessary to meet life safety standards; and

(2)

The condition of the Residential Hotel or Residential Hotel Unit, which necessitates the life safety upgrades, was not caused by any voluntary action of the owner of said facility; or

F.

A proposed project that will involve Demolition or Conversion of existing Residential Hotel Units and create or retain at the property a number of units equal to the number of Residential Hotel units in the existing property as Affordable Housing and complies with the following additional criteria below. A project that has

Affordable Housing units that is exempt from the provisions of this Chapter shall lose its exempt status and become subject to the provisions of this Chapter when it ceases to have Affordable Housing units or meet the additional criteria below.

The affordable units are restricted to occupancy by extremely low and/or very low-income households, as those terms are defined California Health and Safety Code Sections 50079.5, 50093, 50105 and 50106. However, in the event of either a deed in lieu of foreclosure or foreclosure by a Project lender, or a termination, non-renewal or material reduction of project-based Section 8 or other project-based rental assistance for Assisted Units, the maximum tenant household income and maximum rent limitations for Assisted Units may be increased to amounts necessary to make operation of the Project financially feasible, including the payment of all required operating costs and debt service, but in no event may (a) the maximum tenant household income limitation exceed sixty percent (60%) of AMI, or (b) the maximum annual rent limitation exceed thirty percent (30%) of sixty percent (60%) of AMI; and

The Project shall have an executed written agreement with the City or other public agency setting forth the number, type, location, approximate size and construction schedule of all units, restricting the occupancy and rent or sale price of such units, and setting forth other terms and conditions as required for ensuring compliance with the requirements of this Section. Said agreement shall be recorded against the Affordable Housing units as covenants running with land, senior in priority to any private liens or encumbrances except as provided below, and shall be enforceable by the City against the Project for the full affordability term. Additional restrictions, deeds of trust, rights of first refusal, or other instruments may be required by the City Administrator as reasonably needed to enforce these restrictions. The City Administrator shall have the authority to subordinate such restrictions to other liens and encumbrances if he or she determines that the financing of the Affordable Housing units would be infeasible without said subordination; and

The executed written agreement with the City or other public agency shall require that the new rental units remain affordable for at least fifty-five (55) years.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

A.

Waiver determinations may be granted by the Director to the restrictions set forth in Section 17.153.040 or the Conditional Use Permit requirements set forth in Section 17.153.050 on the following grounds:

The requirements of this Chapter have been incorrectly applied; or

Application of the requirements of this Chapter is unlawful under and/or conflict with federal, state, or local law and/or regulation, including constituting an unlawful taking of property without just compensation.

B.

Applications for Waiver Determinations. Applications for waiver determinations must be made no later than the date of application for a building or planning permit on a form provided by the City, and shall include payment of fees as established in the Master Fee Schedule. The Applicant has the burden of proving by a preponderance of the evidence the applicability and elements of this Section. The Applicant must submit full information in support of their submittal as requested by the Director. Failure to raise each and every issue that is contested in the application and provide appropriate supporting evidence will be grounds to deny the application and will also preclude the Applicant from raising such issues in court. Failure to submit such an application shall preclude such person from challenging the Residential Hotel regulations in court. The Director may require, at the expense of the Applicant, review of the submitted materials by a third party.

C.

The Director shall mail the Applicant a written determination on the application for a waiver.

D.

If an applicant for a waiver determination set forth in Section 17.153.070(A) that has been denied seeks to challenge the written determination of the Director, the Appellant must appeal to the City Planning Commission, and such appeal must be filed within ten (10) calendar days of the date from which the Director's written determination was issued and by 4:00 p.m. Appeals must be on the form provided by the City of Oakland and must state specifically wherein it is claimed there was error or abuse of discretion by the Director or wherein the decision is not supported by substantial evidence, and must include payment in accordance with the City of Oakland Master Fee Schedule. Failure to make a timely appeal will preclude an Appellant from challenging the City's decision in court. The appeal itself must raise each and every issue that is contested, along with all arguments and evidence in the record which supports the basis for the appeal. Failure to do so will preclude an Appellant from raising such issues during the appeal and/or in court.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

Before selling or otherwise transferring ownership of a Residential Hotel, the owner shall meet the following requirements:

A.

Provide to the Director by first class mail at least ninety (90) days' notice of the proposed offering for sale or transfer of the property; and

B.

Allow the City or its authorized representative or representatives ninety (90) days following the date of notice to tender an offer to purchase the property: and

C.

Upon receiving any such offer, engage in good-faith negotiations, during the remaining portion of the ninety-day period towards a purchase and sale agreement with the City or a non-profit or affordable housing organization identified by the City.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

The Director is hereby authorized to adopt administrative regulations consistent with this Chapter as needed to implement this Chapter, subject to the review and approval of the Office of the City Attorney, and to develop all related forms and/or other materials and take other steps as needed to implement this Chapter, and make such interpretations of this Chapter as he or she may consider necessary to achieve the purposes of this Chapter.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)

Where a conflict exists between the requirements in this Chapter and applicable requirements contained in other Chapters of this Code, the applicable requirements of this Chapter shall prevail.

(Ord. No. 13509, § 2(Exh. A), 12-4-2018)