San Francisco Establishes Mandatory Seismic Retrofit Program For “Soft Story Buildings”

Residential building owners must seismically retrofit their buildings, under a new law adopted by the City and County of San Francisco.

The law applies to wood frame buildings of three or more stories, or two stories over a basement or underfloor area that has any portion extending above grade.  Each building must also contain five or more dwelling units.  Finally, the focus is on older buildings where the permit to construct was applied for prior to January 1, 1978 and the building as not been previously seismically strengthened.

Why focus on these buildings?  Wood-frame, multi-unit residential buildings can have a soft, weak or open front wall line (a so-called “soft story condition”).  When the first story has perimeter walls that have large openings for garage doors or windows, few interior partitions, or is constructed of materials that have deteriorated over time, then the building is at a greater risk of damage in an earthquake.

Some buildings are exempt from the new law.  For example, a building that has been seismically strengthened within 15 years prior to the operative date of the legislation — June 18, 2013 — is exempt, but only upon the City’s approval of documentation showing that such work was properly permitted, completed and maintained as required.  (One has to question what standards the City will apply to determine whether the work was “properly . . . maintained.”)  Other buildings that have participated in City-approved, voluntary seismic strengthening programs are also exempt.

The legislation seeks compliance from building owners through a few mechanisms.  If the owner of a building is notified that its building is within the scope of the new law, the owner must engage an architect or engineer to submit to the City a “Screening Form.”  The form will require information on the compliance status of the property and a declaration from the owner stating whether the building is exempt from the law or the building’s applicable “Compliance Tier.”   As of this writing, there is no fee payable for submittal or review of the “Screening Form.”

Alternatively, a building owner may submit an optional “Evaluation Form” to determine whether an existing building already meets the requirements of the new law.  It is also completed by an architect or a licensed civil or structural engineer.  The “Evalution Form” must describe the dates and scope of any seismic retrofit work as well as plans and other information that the City may require that are sufficient to support a declaration that the building satisfies the law.  The City will charge a fee for review of the optional Evaluation Form.

The City plans on sending a notice to each applicable building owner that it should comply with the seismic retrofit law.  However, some buildings may “slip through the cracks.”  In that case, the deadlines for compliance may be extended for property owners that do not have actual knowledge that their properties must be brought into compliance with the new law.

Each building that must comply is placed in a “Compliance Tier.”  All buildings, regardless of Compliance Tier, must submit a screening form or optional evaluation form within one year of the effective date of the law.

Tier 1 buildings are those that contain a Group A (assembly), E (education), R-2.1, R-3.1 or R-4 (various residential) occupancy on any story.  Permit applications for the seismic retrofit work must be submitted to the City within two years and the work must be completed within four years of the effective date of the new law.

Tier 2 buildings contain 15 or more dwelling units, with some exceptions.  Permit applications for the seismic retrofit work must be submitted for Tier 2 buildings to the City within three years and the work must be completed within five years of the effective date of the new law.

Tier 3 buildings are those that do not fall within the definition of another tier. Permit applications for the seismic retrofit work must be submitted for Tier 3 buildings to the City within four years and the work must be completed within six years of the effective date of the new law.

Tier 4 buildings contain a B (business) or M (mercantile) occupancy on the first story or in a basement or underfloor area that has any portion extending above grade, and buildings that are in mapped liquefaction zones, except for buildings in Tier 1. Permit applications for the seismic retrofit work must be submitted for Tier 4 buildings to the City within five years and the work must be completed within seven years of the effective date of the law.

For each non-exempt or non-complying building, the owner shall submit an application for a building permit for the proposed seismic retrofit.  A permit for the seismic retrofit work may include minor ancillary work, but generally shall be separate from any other permits for building alterations or repairs unless such work is triggered by or integral to the seismic retrofit work.  After the work is completed, the building will obtain a “Certificate of Final Completion and Occupancy.”  Any building that has been retrofitted under the law shall not be required to do another seismic retrofit for 15 years after June 18, 2013, unless damaged or further altered so it doesn’t meet the engineering criteria.  (Why wasn’t the safe harbor extended to 15 years after the property owner completes improvements complying with the law?)

If property owners do not comply, the City may post on the building, and record against the property, a notice that states:  “Earthquake Warning:  This building is in violation of the requirements of the San Francisco Building Code regarding Earthquake Safety.”  Other penalties may also apply.

Damaged buildings must be brought up to the new standards more quickly.  If a building suffers damage from an earthquake or fire caused by the earthquake that renders the building uninhabitable, results in structural damages that triggers the City’s retrofit regulations, or results in “disproportionate damage” as defined in the City’s code, the building must comply with the chapter within one year of the damage.

Special rules apply to historic buildings, if any portion of the seismic retrofit work will be visible from the exterior of the subject property.

How will property owners pay for this?  The costs have both building owners and tenants’ advocacy groups concerned.  (The costs of retrofit will be passed through to tenants through higher rents.)   The City announced that it has worked with real estate finance lenders and banks to make available seismic retrofit financing.  In addition, the City is considering the creation of a special tax mechanism to help finance the costs of the seismic improvements.  (In other words, the City may allow you to tax your own property to pay for the improvements, establishing an income stream for payment of up front costs.)  Of course, there is some relief for financially strapped landlords —  eligible landlords may file a hardship application with the City to seek temporary relief from compliance.

Achieving earthquake readiness is a laudable goal; however, it remains to be seen how property owners (and tenants) will respond when the economic costs of this new legislation impact their bottom line over the next few years.

Chick-Fil-A, Land Use Permitting and the Constitution

This week, elected officials in San Francisco, Boston, Chicago and New York made statements that Chick-Fil-A restaurants would not be welcome in their jurisdictions because of the personal opinions expressed by the company’s CEO Dan Cathy.  What was surprising in all of this was not the conflict of political opinions over same-sex marriage.  The bigger issue — from the perspective of land use law — was the willingness of those same public officials to suggest a course of action that would violate state and federal Constitutional law if taken to its logical conclusion.

For example, according to press reports, a Chicago alderman said that he would personally “deny a land use permit [to Chick-Fil-A] to open a restaurant in my ward.” His refusal to grant a land use permit on the basis of the personal views of the property owner would almost certainly be a violation of the federal Constitution — specifically the Fourteenth Amendment’s equal protection clause.   (By the way, the California Constitution also guarantees equal protection of the laws.  Cal. Const. art. I, section 7(a).) 

For an equal protection violation to occur, a property owner does not need to be a member of an identifiable class.  The equal protection guarantee protects not only groups, but individuals who would constitute a “class of one.”  “A plaintiff can establish a ‘class of one’ equal protection claim by demonstrating that it has been intentionally treated differently from others similarly situated and that there is no basis for the difference in treatment.”  Squaw Valley Dev. Co. v. Goldberg (9th Cir. 2004) 375 F.3d 936. 

“Class of one” equal protection cases often involve claims that a government action was “arbitrary and irrational,” usually on the basis of vindictive action, illegitimate animus or ill will.  The textbook case is the U.S. Supreme Court’s decision in Village of Willowbrook v. Olech (2000) 528 U.S. 562.  In that case, the court held that a village unfairly required one property owner to grant a larger water connection easement than that required by neighboring property owners.  Why? Because the local government held animosity toward the property owner from a previous, successful lawsuit the property owner had filed against the village. 

In the Ninth Circuit, federal courts have also found a cause of action when government action in the land use context is based on “arbitrary or malicious conduct.”  See Lockary v. Kayfetz (9th Cir. 1990) 917 F.2d 1150; Valley Outdoor, Inc. v. City of Riverside (9th Cir. 2006) 446 F.3d 948.  Ninth Circuit courts have also established a test whereby an equal protection plaintiff may show pretext by creating a triable issue of fact that either: “(1) the proffered rational basis was objectively false; or (2) the defendant actually acted based on an improper motive.”  Squaw Valley Dev. Co. v. Goldberg (9th Cir. 2004) 375 F.3d 936. So, in the present case, even if the proposed Chick-Fil-A restaurant might cause increased traffic, noise, or air pollution from cooking all that chicken, a project applicant could argue that the real reason that the city rejected the permit was the CEO’s personal views. 

Regardless of your beliefs on the political question (and this blog is not taking a position one way or the other, as this blog only deals with real estate and land use law), you can see why the legal issues have caused several public officials to backtrack on their comments against the land use permitting of Chick-Fil-A in their jurisdictions. 

Again, even those backtracking statements may not be enough if Chick-Fil-A wants to take legal advantage.  On his Land Use Prof Blog, Ken Stahl, an associate professor of law at Chapman University, astutely observed “because of what the various officials in Chicago, San Francisco, Boston, etc. have said, it will only be harder to exclude Chick-Fil-A even if the city has a legitimate concerns about traffic, noise, etc. because the inference of discriminatory animus will be so hard to shake.” 

Only time will tell if the owners/franchisees of Chick-Fil-A in the aforementioned cities pursue their expansion plans and, if they do, whether land use litigation will ensue.