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DBI, Planning report low take-up for unit‑legalization program; barriers include cost and reassessment fears
Summary
Departments reported approximately 3,000 inquiries about the voluntary Unit Legalization Program but only 239 permit applications and nine fully legalized units to date; staff cited construction costs (avg. $50,000), reassessment fears, condo-lottery restrictions and tenant issues as barriers and noted fee waivers and process improvements underway.
Department of Building Inspection (DBI) and Planning staff told the Land Use and Transportation Committee that a voluntary program to legalize certain unpermitted dwelling units (Ordinance 43-14) has produced modest participation since adoption. DBI reported roughly 3,000 inquiries and 239 permit applications submitted over about 16 months; of those, 62 permits were under review or issued and staff said nine units have completed legalization.
DBI’s Bill Straub and Planning’s Kate Connor described the program as voluntary and explained eligibility criteria: units must generally have existed prior to a specified cutoff and applicants must document prior tenancy. Straub said staff have received many inquiries but that owners are often deterred by perceived risks: concerns that legalization could trigger reassessment and higher property taxes, uncertainty about permanent rent-control status (even if a unit was already effectively rent‑controlled), and the cost of construction work and permit fees. Connor said the average construction cost to legalize a unit is about $50,000; DBI and Planning noted that planning-review fees were recently waived (effective in early September) and that staffing and process improvements have reduced review times.
Committee members asked whether the city had incentives in place to increase participation. Supervisor Avalos noted a provision in the Housing Trust Fund language that could be used to provide assistance to households to help cover legalization costs; he said no funds had yet been used and asked staff to coordinate with the Mayor’s Office of Housing to develop a program. Committee members urged more outreach and suggested exploring loans or subsidies to encourage legalization, and they voted unanimously to file the report.
Staff also raised operational clarifications that deter owners: the ordinance permits legalizing only one unauthorized unit per lot (which can complicate buildings with multiple illegal units) and legalization may make it difficult to later remove an added unit if property owners wish to revert to a single-family use. Planning and DBI said they are available to meet with supervisors and that they will continue process improvements to increase participation.
