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HomeMy WebLinkAboutAgenda Statenent 1978/9/5 item 19, 19A 1 � '.� !. �,. - CITY OF CHl�LA VISTA Item No. 1_9, 19a COUNC I! AGENDA STATEMEiVT For meeting of 9/5/78 Report on the condominium conversion issue and recommendations related thereto ITEM TITLE Ordinance ' - Interim ordinance governing the occupancy of condominium units created by "Condominium Conversion," and approval of subdivision and parcel maps related thereto �� SUBMITTED BY Assistan t Director of Planning � ITEM EXPLANATION (4/5TH'S VOTE REQUIRED YES N��) A. BACKGROUND 1 . The City Council on August 10, 1978 considered the matter of condominium conversions, and after considerable discussion referred such to the Planning Department for evaluation and recorr�nendations. The Council also instructed staff to prepare and submit draft legis- lation which would protect the interests of the people of Chula Vista and the purchasers of condominium units. 2. The proposed legislation requested by peUartment,ainaconaunction withXthejDirector This legislation was prepared by the Plann�ng p of �Building and Housing, the Fire Chief, and the City Attorney. B. STATEMENT OF THE PROBLEM 1 . The cities of California are confronted by a surge of condominium conversions. While these conversions are not ordinarily a matter of concern, their coalescence with California' s increasing housing shortage has caused _some concern.l 2. Condominium conversions tend to be especially troublesome to renters on fixed or moderate incomes. These people are often unable to resentlCeoccule neThapaproblem�couad unable to purchase the condominium unit which they p Y PY• become most acute in Chula Vista, where the vacancy 2actor has plunged below 1%, and the price and rentals of new housing is steadily rising. 3. Another concern is founded upon the expectations and entitlements of condominium purchasers. While tenants of apartments have traditionally accepted their places of residency as temporary, this acceptance does not extend to condominium projec�s. Owners of condominium units understand that they hold fee title t� their air space, and an ph1!':hm IBITS �Continued on supplemental a e) EXN Agreement Resolution Ordinance X Plat_ Notification List_„ Other�xhibi _s A &_g ENVIRONMENTAL DOCUMENT: Attached Submitted on FINANCIAL IMPACT STAFF RECOMMENDATION 1 . Enact the attached draft interim ordinance. 2. Refer this report and the �andr ecommendation�onhthelenactmentmofsthenprovisions�of mental review, public hearing, the said ordinance as an amendment to the Chula Vista Municipal Code. BOARD/COMMISSION RECOMMENDATION COUNCIL ACTION Fo rm A-113 (Rev. 5/77) REFERRED TO STAFF AND PLANNING CODM�IISSION >�.f:��;r� ___ AGENDA IT.EM N0. 19, 19a . Meeting of a/�/78 Supplemental page No. 2 undivided interest in the underlying, overall fee. As homeowners, they expect the amenities, quality-of-life, privacy, and convenience which is usually associated with home ownership. These expectations, however, cannot be rea1ized by the mere conversion of a rental unit to an ownership unit. C. ANALYSIS 1 . Several California cities have undertaken the regulation of condominium conver- sions. Some cities have concentrated on the physical design and environmenta1 standards of the involved buildings and building sites, but others, following the direction of P7enlo Park and Palo Alto, have oriented their controls toward �he alleviation of the social predicament of tenants. Exhibit B embodies analytical precis of the "condominium conversion plans" of several cities throughout the state. 2. Exhibit B clearly indicates that some jurisdictions are attempting to ease the plight of renters caught 6etween the condominium conversion-low vacancy rate pincers. Unfortunately, these efforts could create greater problems in the process. They could preclude moderate and middle income people from the enjoyment of home awnership, and prevent property owners from partitioning their real estate for the purpose of sale. This preclusion of home ownership is certainly socially significant, 6ut the prevention of the sale of land could be worse--a refutation of the individual 's fundamental rights. Since the statute of Quia Emptores, enacted in 1290, the free alienation of land has been a cornerstone of individual liberty. To understand the issues at hand, it must be realized that a condominium conversion is neither a change in land use, nor a change in land occu- pancy. It does not even necessarily increase the number of involved parcels of land. A condominium conversion merely changes the nature, character, and extent of holding or owning real property, and is therefore a legal , not city planning, concept. Neither the increase nor the decrease of condominium conversion activity will directly increase or decrease the supply of housing. On the other hand, the said activity would correspondingly increase or decrease the number of units available for freehold tenure. 3. In light of the factors discussed in the above paragraphs, and the probability that Chula Vista' s low vacancy factor will endure for a long time, the Planning Department is of the opinion that the 6est interests of the people of Chula Vista would not be served by a long-term prohibition of condominium conversions. The shortage of housing weighs heavily upon the people of California, and certainly must be resolved. This problem, how- ever, cannot be resolv�d locally, and cannot be resolved by limiting the fundamental right to sell real property. 4. The State Legislature has not provided guidance for the solution of the problems discussed in this report. These problems, however, are statewide in significance and scope, and require state addressment.� 5. The Planning Department does feel that local government can effectively protect the interests of future condominium buyers. Under the draft interim ordinance, regula- tions which are designed to promote the privacy, convenience, and comfort of condominium owners are proposed. Since compliance with the requirements of this ordinance would entail substantial costs, the conversion of moderate-income apartment houses might be dissuaded. lAs a general rule, the profit picture with respect to residential rentals lacks luster and vitality. However, the potential gain available through the sale of apartment units, during Southern California's chronic housing shortage, is probably the primary impetus behind the condominium-conversion thrust. 2The City of Chula Vista, between 1972 and the present, processed the conversion of 226 rental units to condominium units. There is presently pending official proposals for the conversion of an additional 220 apartment units. By way of reference, there are 11,300 rental units within Chula Vista at this time. 3Section 66427.1(a) of the California Government Code, enacted in 1976, provides that tenants shall be given 120 days notice of their landlord's intent to terminate their tenancy for the purpose of condominiu.m conversion, and grants the said tenants a 60-day right of first refusal to purchase their dwelling units. However, the California Depart- ment of Housing and Community Development reports that few tenants exercise this right to purchase. �The condominium concept was spawned by the Roman Civil Law, but was traditionally regarded as being repugnant to the common law. The modern condominium concept was introduced into ;� California by statute in the early 1960's, and may be properly regarded as a State creation. . AGENDA ITEM �dU. 19; 19a Meeting of 9/5/78 Supplemental page No. 3 `IThe State has defined, authorized, and governed the platting of condominium projects. Certainly, for reasons of statewide uniformity and historical continuity, the State should provide the �uidelines for the creation of condominiums by conversion. The State, furthermore, could underwrite low interest loans to the existing tenants of condominium pro�jects created by conversion. These loans could follow the precedent established by the "Cal-Vet" and California Housing Finance Agency loans, and be financed by State revenue bonds. � % _ ..