Chapter 23.29


23.29.010    Definitions.

23.29.020    Approval – Certificate of use and occupancy – Requirements.

23.29.025    Certificate of use and occupancy – Issuance – Expiration.

23.29.030    Certificate of use and occupancy – Conditions prerequisite to issuance.

23.29.040    Standards.

23.29.050    Application requirements.

23.29.055    Acceptance of reports.

23.29.060    Copy to buyers.

23.29.070    Hearing.

23.29.080    Tenant provisions.

23.29.090    Effect of proposed conversion on the city’s low and moderate income housing supply.

23.29.100    Findings.

23.29.110    Rental housing shortage – Maximum number of conversions.

23.29.010 Definitions.

For the purposes of this chapter, the words contained in this section shall be defined as follows:

“Community housing” shall have the meaning defined at in PGMC 24.72.010.

“Conversion” means a change in the form of ownership of any multiple-dwelling rental development to a community housing form. [Ord. 1176 N.S. § 1, 1980].

23.29.020 Approval – Certificate of use and occupancy – Requirements.

No person, firm, corporation, partnership or other entity shall convert existing dwelling units to a condominium subdivision, community apartment, stock cooperative or any other form of individual ownership without first having the conversion approved by the planning commission and having been issued a certificate of use and occupancy for community housing by the community development director. [Ord. 1176 N.S. § 1, 1980].

23.29.025 Certificate of use and occupancy – Issuance – Expiration.

The community development director shall issue a certificate of use and occupancy for community housing when he or she determines that:

(a) The applicant has complied with all the applicable city or state regulations then in effect;

(b) The applicant has complied with the conditions of approval. A permit shall expire at the time a tentative subdivision map approval would expire if not acted upon, or if the conditions of approval have not been complied with in such time. [Ord. 1176 N.S. § 1, 1980].

23.29.030 Certificate of use and occupancy – Conditions prerequisite to issuance.

No certificate of use and occupancy for community housing shall be issued for a building until it meets the following standards:

(a) The proposed density and design characteristics of the buildings and grounds are in conformance with the city’s general plan and comply with the zoning ordinance, codified in this title.

(b) All violations of the current codes described in PGMC 18.04.010 have been corrected and any equipment or facilities which the chief building inspector determines are deteriorated or hazardous are replaced.

(c) It shall comply with all provisions of the Subdivision Map Act and PGMC Title 24, if applicable, including PGMC 24.72.030(a) and (b) and PGMC 24.72.060(e).

(d) Stock cooperatives shall submit and secure approval of documents which comply with PGMC 24.72.030(a) and (b) and 24.72.060(e).

(e) Once a building permit has been issued, a building may not be converted unless the certificate of occupancy for the building was issued more than five years prior to the date the owner files with the city an application for the approval under this chapter. [Ord. 98-34 § 16, 1998; Ord. 1176 N.S. § 1, 1980].

23.29.040 Standards.

Community housing conversion shall conform to the following:

(a) Unit Size. The enclosed living or habitable area of each unit shall be not less than 600 square feet exclusive of storage space under subsection (e) of this section unless the planning commission finds at the time of approval that other project amenities compensate for the minimum required enclosed area. Compensating amenities may include, but are not limited to, the following:

(1) Private enclosed open space;

(2) Enclosed developed facilities within the common areas;

(3) Covenants, conditions and restrictions restricting density of the project to less than required for the project by the general plan;

(4) Compatibility of the density of the total project in relation to the project’s amenities, surrounding neighborhood and the general plan.

(b) Fire Prevention.

(1) Smoke Detectors. Each living unit shall be provided with approved detectors of products of combustion other than heat conforming to the latest Uniform Building Code standards, mounted on the ceiling or wall at a point centrally located in the corridor or area giving access to rooms used for sleeping purposes.

(2) Maintenance of Fire Protection Systems. All on-site fire hydrants, fire alarm systems, portable fire extinguishers, and other fire protective appliances shall be retained in an operable condition at all times maintained by the homeowners’ association and delineated in the covenants, conditions and restrictions.

(c) Sound Transmissions.

(1) Wall and floor-ceiling assemblies shall conform to Title 25, California Administrative Code, Section 1092, or its successor, or permanent mechanical equipment, including domestic appliances, which is determined by the chief building inspector to be a potential source of vibration or noise, shall be shock mounted, isolated from the floor and ceiling, or otherwise installed in a manner approved by the chief building inspector to lessen the transmission of vibration and noise. Floor covering may only be replaced by another floor covering that provides the same or greater insulation. The requirements of this subdivision shall not apply to a building containing only one dwelling unit.

(d) Utility Metering.

(1) The consumption of gas and electricity within each unit shall be separately metered so that the unit can be separately billed for each utility. A water shut-off valve shall be provided for each unit or for each plumbing fixture. Each unit shall have access to each meter and heater for the unit without entry through another unit.

(2) Each unit shall have its own panel, and access thereto, for all electrical circuits which serve the unit.

(e) Private Storage Space. Each unit shall have at least 200 cubic feet of enclosed weather-proofed and lockable private storage space, in addition to guest, linen, pantry, and clothes closets customarily provided. Such space shall be for the sole use of the unit owner. Such space may be provided in any location as approved by the planning commission at the time of approval, but shall not be divided into two or more locations. In such cases where the applicant can demonstrate that this standard is unreasonable, this standard may be modified by the planning commission.

(f) Laundry Facilities. A laundry area shall be conveniently accessible to each unit. If common laundry areas are provided, such facilities shall consist of not less than one automatic washer and dryer for each five units or fraction thereof. In such cases where the applicant can demonstrate that this standard is unreasonable, this standard may be modified by the planning commission.

(g) Condition of Equipment and Appliances. The applicant shall provide written certification to the buyer of each unit on the initial sale after conversion that any dishwashers, garbage disposals, stoves, refrigerators, hot water tanks, and air conditioners that are provided are in good and working condition as of the close of escrow. At such time as the homeowners’ association takes over management of the development, the applicant shall provide written certification to the association that any pool and pool equipment and any appliances and mechanical equipment to be owned in common by the association is in good and working condition.

(h) Public Easements. The applicant shall make provisions for the dedication of land or easements for street widening, public access or other public purpose in connection with the project where reasonably necessary as determined by the planning commission.

(i) Underground Utilities. The applicant shall waive the right, through deed restriction, to protest the formation of an underground utility district.

(j) Refurbishing and Restoration. All main buildings, structures, fences, patio enclosures, carports, accessory buildings, sidewalks, driveways, landscaped areas, irrigation systems, and additional elements as required by the community development director shall be refurbished and restored as necessary to achieve high quality appearance and safety.

(k) Parking Standards. The off-street parking requirements for a conversion project shall be one and one-half parking spaces per unit for one-bedroom or efficiency units and two parking spaces per unit for units containing two or more bedrooms.

(l) Physical Elements. Any physical element identified in the physical elements report (see PGMC 23.29.050(b)) as having a useful life of less than two years shall be replaced with new elements. [Ord. 98-34 § 9, 1998; Ord. 1176 N.S. § 1, 1980].

23.29.050 Application requirements.

In addition to such other application requirements as the planning commission may deem necessary and those requirements as set forth elsewhere in this chapter, no application for a condominium conversion project shall be accepted for any purpose unless the application includes the following:

(a) A development plan of the project including:

(1) The location, height, gross floor area, and proposed uses for each existing structure to remain and for each proposed new structure;

(2) The location, use and type of surfacing for all open storage areas;

(3) The location and type of surfacing for all driveways, pedestrian ways, vehicle parking areas, and curbcuts;

(4) The location, height, and type of materials for walls or fences;

(5) The location of all landscaped areas, the type of landscaping, and a statement specifying the method by which the landscaped areas shall be maintained;

(6) The location and description of all recreational facilities and a statement specifying the method of the maintenance thereof;

(7) The location and size of the parking facilities to be used in conjunction with each dwelling unit;

(8) The location, type and size of all drainage pipes and structures depicted or described to the nearest public drain or watercourse;

(9) The location and type of the nearest fire hydrants;

(10) The location, type and size of all on-site and adjacent street overhead utility lines;

(11) A lighting plan of the project;

(12) Existing and proposed exterior elevations;

(13) The location of and provisions for any unique natural or vegetative site features;

(b) A physical elements report which shall include but not be limited to:

(1) A report detailing the condition and estimating the remaining useful life of each element of the project proposed for conversion: roofs, foundations, exterior paint, paved surfaces, mechanical systems, electrical systems, plumbing systems, including sewage systems, swimming pools, sprinkler systems for landscaping, utility delivery systems, central or community heating and air conditioning systems, fire protection systems including automatic sprinkler systems, alarm systems, or standpipe systems, structural elements and the appliances or facilities referred to in PGMC 23.29.040(g). Such report shall be prepared by an appropriately disinterested licensed contractor or architect or by a registered civil or structural engineer other than the owner. For any element whose useful life is less than five years, a replacement cost estimate shall be provided;

(2) A structural pest control report. Such report shall be prepared by a licensed structural pest control operator pursuant to Section 8516 of the Business and Professions Code;

(3) A building history report including the following:

(A) The date of construction of all elements of the project;

(B) A statement of the major uses of said project since construction;

(C) The date and description of each major repair or renovation of any structure or structural element since the date of construction. For the purposes of this subsection a “major repair” shall mean any repair for which an expenditure of more than $1,000 was made;

(D) Statement regarding current ownership of all improvements and underlying land;

(E) Failure to provide information required by subsections (b)(3)(A) through (D) of this section, inclusive, shall be accompanied by an affidavit, given under penalty of perjury, setting forth reasonable efforts undertaken to discover such information and reasons why said information cannot be obtained;

(c) A statement of any unique provisions of the proposed covenants, conditions and restrictions which would be applied on behalf of any and all owners of condominium units within the project. With regard to stock cooperatives, this submission shall consist of a summary of proposed management, occupancy and maintenance policies on forms approved by the city attorney;

(d) Specific information concerning the characteristics of the project, including but not limited to the following:

(1) Square footage and number of rooms in each unit;

(2) Rental rate history for each type of unit for the previous five years;

(3) Monthly vacancy rate for each month during the preceding two years;

(4) Makeup of existing tenant households, including family size, length of residence, age of tenants, and whether receiving federal or state rent subsidies;

(5) Proposed sale price of unit;

(6) Proposed homeowners’ association fee; financing available; and

(7) Names and addresses of all tenants;

When the subdivider can demonstrate that such information is not available, this requirement may be modified by the community development director;

(e) The subdivider shall submit evidence that a certified letter of notification of intent to convert was sent to each tenant for whom a signed copy of said notice is not submitted;

(f) A fee sufficient to cover the cost of determining the existing apartment vacancy rate in the city of Pacific Grove. The vacancy rate shall be determined by means of a door-to-door survey of apartments within the city, as deemed necessary by the community development director, using persons hired for such a survey at a reasonable hourly rate for the work involved, or by such other means as may, in the opinion of the community development director, produce an equally adequate compilation of the vacancy rate within the city. The community development director shall have the authority to make rules and regulations determining the frequency, content and allocation of the costs of such surveys if necessary due to multiple applications;

(g) Any other information which, in the opinion of the community development director, will assist in determining whether the proposed project will be consistent with the purposes of this chapter;

(h) A title insurance report in the form employed by lending institutions;

(i) A certified surveyor’s report indicating the boundaries and all improvements;

(j) A processing fee as established by resolution of the council, in addition to any fees required by PGMC Title 24, Subdivisions, and subsection (f) of this section. [Ord. 09-005 § 33, 2009; Ord. 1765 N.S. § 16, 1991; Ord. 1176 N.S. § 1, 1980].

23.29.055 Acceptance of reports.

The final form of the physical elements report and other documents shall be as approved by the community development director. The report in its acceptable form shall remain on file with the community development department for review by any interested persons. The report shall be referenced in the subdivision report to the planning commission. [Ord. 1176 N.S. § 1, 1980].

23.29.060 Copy to buyers.

The original owner shall provide such purchaser with a copy of all reports (in their final, acceptable form), along with the department of real estate white report, prior to said purchaser completing an escrow agreement or other contract to purchase a unit in the project, and said developer shall give the purchaser sufficient time to review said reports. Copies of the reports shall be made available at all times at the sales office and shall be posted at various locations, as approved by the city, at the project site. [Ord. 1176 N.S. § 1, 1980].

23.29.070 Hearing.

Prior to the approval of conversion, the planning commission shall hold a public hearing. In addition to publication and posting of legal notice, notice of the hearing shall be mailed at least 10 days prior to the hearing date to tenants of the proposed conversion and posted on the property. [Ord. 1176 N.S. § 1, 1980].

23.29.080 Tenant provisions.

(a) Notice of Intent. A notice of intent to convert shall be delivered to each tenant’s dwelling unit. Evidence of delivery shall be submitted with the application for conversion. The form of the notice shall be as approved by the community development director and shall contain not less than the following:

(1) Name and address of current owner;

(2) Name and address of the proposed subdivider;

(3) Approximate date on which the tentative map is proposed to be filed;

(4) Approximate date on which the final map or parcel map is to be filed;

(5) Approximate date on which the unit is to be vacated by nonpurchasing tenants;

(6) Tenant’s right to purchase;

(7) Tenant’s right of notification to vacate;

(8) Tenant’s right of termination of lease;

(9) Statement of limitations on rent increase;

(10) Provision for special cases;

(11) Provision of moving expenses;

(12) Right of disabled and of senior citizens to five-year rental occupancy; and

(13) Other information as may be deemed necessary by the community development director.

(b) Tenant’s Right to Purchase. As provided in Government Code Section 66427.1(b) any present tenant or tenants of any unit shall be given a nontransferable right of first refusal to purchase the unit occupied at a price no greater than the price offered to the general public. The right of first refusal shall extend for at least 60 days from the date of issuance of the subdivision public report or commencement of sales, whichever date is later.

(c) Vacation of Units. Each nonpurchasing tenant, not in default under the obligations of the rental agreement or lease under which he or she occupies his or her unit, shall have not less than 365 days from the date of receipt of notification from the owner of his or her intent to convert, or from the filing date of the final subdivision map, whichever date is later, to find substitute housing and to relocate.

(d) Increase in Rents. From the date of submittal of application for conversion until the date of conversion, no tenant’s rent shall be increased more frequently than once every six months and at a rate greater than the rate of increase in the Consumer Price Index (all items, San Francisco-Oakland), on an annualized basis, for the same period. This limitation shall not apply if rent increases are provided for in leases or contracts in existence prior to the filing date of the application.

(e) Moving Expenses. The subdivider shall provide moving expenses of four times the monthly rent to any tenant who relocates from the building to be converted after approval of the conversion by the city, except when the tenant has given notice of his or her intent to move prior to receipt of notification from the subdivider of his or her intent to convert.

(f) Notice to New Tenants. After submittal of the application to convert, any prospective tenants shall be notified in writing of the intent to convert prior to leasing or renting any unit, and shall not be subject to the provisions of subsections (d) and (e) of this section.

(g) Permanently Disabled and Senior Citizen Tenants. Tenants who at the date of application are age 62, and their spouses, or who are permanently disabled to the extent of being unable to pursue full-time employment, as established by medical evidence, shall be entitled to continue to rent the premises each may occupy, for a period of five years from the date of the notice required under subsection (a) of this section, upon otherwise qualifying to continue as a tenant. It is unlawful for any developer or owner to evict or constructively evict any tenant for purposes of depriving the tenant of the benefits of this subsection. The benefits of this subsection shall not be assignable or subject to subletting in any way, nor shall its benefits accrue to any new tenant referred to in subsection (f) of this section. [Ord. 1176 N.S. § 1, 1980].

23.29.090 Effect of proposed conversion on the city’s low and moderate income housing supply.

In reviewing requests for conversion of existing apartments to condominiums, the planning commission shall consider the following:

(a) Whether or not the amount and impact of the displacement of tenants, if the conversion is approved, would be detrimental to the health, safety, or general welfare of the community;

(b) The role that the apartment structure plays in the existing housing market. Particular emphasis will be placed on the evaluation of rental structures to determine if the existing apartment complex is serving low and moderate income households. Criteria to determine low and moderate income households used by the federal and state governments will be used in the evaluation. Along with other factors, the city will consider the following:

(1) The number of families on current waiting lists for assisted rental housing programs that operate in Pacific Grove, such as the Section 8 Program;

(2) The probable income range of tenants living in existing apartments based on factual information supplied by the applicant which can be adequately documented, or the assumption that households pay between one-quarter and one-half of their income for housing. That income range will be compared with existing income limits for said Section 8 Program to determine whether potential displaced tenants can be categorized as low and moderate income;

(c) The need and demand and community benefits which are derived from the provision of lower-cost home ownership opportunities, which opportunities are increased by the conversion of apartments to condominiums;

(d) If the planning commission determines that vacancies in the project have been increased for the purpose of preparing the project for conversion, the conversion shall be disapproved. In evaluation of the current vacancy level under this subsection, the increase in rental rates for each unit over the preceding five years and the average monthly vacancy rate for the project over the preceding two years shall be considered. [Ord. 1176 N.S. § 1, 1980].

23.29.100 Findings.

The planning commission shall not approve an application for condominium conversion unless the planning commission finds that:

(a) All provisions of this chapter are met and the project will not be detrimental to the health, safety, and general welfare of the community.

(b) The proposed conversion is consistent with the general plan of the city of Pacific Grove.

(c) The proposed conversion will conform to the Pacific Grove Municipal Code in effect at the time of approval, except as otherwise provided in this chapter.

(d) The overall design and physical condition of the conversion will result in a project which is aesthetically attractive, safe and of quality construction.

(e) The proposed conversion will not displace a significant percentage of low and moderate income or senior citizen tenants, tenants with children, and delete a significant number of low and moderate income rental units from the city’s housing stock at a time when no equivalent housing is readily available in the Pacific Grove area.

(f) The applicant has not engaged in coercive retaliatory action regarding the tenants after the submittal of the first application for city review through the date of approval. In making this finding, consideration shall be given to:

(1) Rent increases at a rate greater than the rate of increase in the Consumer Price Index (all items, San Francisco-Oakland) unless provided for in leases or contracts in existence prior to the submittal of the first application for city review; or

(2) Any other action by applicant which is taken against tenants to coerce them to refrain from opposing the project. An agreement with tenants which provides for benefits to the tenants after the approval shall not be considered a coercive or retaliatory action.

(g) The requirements of PGMC 23.29.110 have been met. [Ord. 1176 N.S. § 1, 1980].

23.29.110 Rental housing shortage – Maximum number of conversions.

(a) Intent and Definition. It is the intent of this section to limit the number of units to be converted if a rental housing shortage exists. The existence of a rental housing shortage shall be determined by the planning commission, based upon reliable information verified by the community development department. A rental housing shortage exists if the vacancy factor for two-family and multiple-family dwellings is less than five percent for six months preceding the determination.

(b) Maximum Number of Conversions. In the event of a vacancy factor of less than five percent for a continuous period of six months for such two-family and multiple-family dwellings, no such dwellings shall be converted until the vacancy factor exceeds five percent.

(c) Processing of Applications. If a rental housing shortage exists, applications shall be processed in accordance with procedures established by resolution of the city council setting forth the manner and method or prioritizing applications for conversions.

(d) Exception. This section shall not be applicable to projects involving conversions to a non- or limited-equity cooperative for low-to-moderate income residents. For purposes of this section, “a non- or limited-equity cooperative for low-to-moderate income residents” shall be a stock cooperative which meets all of the following:

(1) Not less than 75 percent of the dwelling units will be occupied by persons of low and moderate income.

(2) The stock cooperative’s articles of incorporation and/or bylaws require the purchase and sale of the stock or membership interest on resident/owners who cease to be residents at no more than a transfer value determined as provided in the articles or bylaws and which shall not exceed the aggregate of the following:

(A) The consideration paid for the membership or shares by the first occupant of the unit involved as shown on the books of the corporation;

(B) The value as determined by the board of directors of the corporation of any improvements installed at the expense of the member with the prior approval of the board of directors;

(C) Accumulated interest or an inflation allowance at a rate which may be used on a cost of living index, an income index, or market interest index. Any increment pursuant to this subsection shall not exceed a 10 percent annual increase on the consideration paid for the membership or share by the first occupant of the unit involved.

(3) The articles of incorporation or bylaws require the board of directors to sell the stock or membership interest purchased as provided in subsection (a) of this section to new member occupant or resident shareholders at a price which does not exceed the “transfer value” paid for the unit.

(4) The “corporate equity” which is defined as the excess of the current fair market value of the corporation’s real property over the sum of the current transfer value of all shares or membership interests reduced by the principal balance of outstanding encumbrances upon the corporate real property as a whole paid shall be applied as follows:

(A) So long as any such encumbrance remains outstanding, the corporate equity shall not be used for distribution to members, but only for the following purposes and only to the extent authorized by the board subject to the provisions and limitations of the articles of incorporation and bylaws:

(i) For the benefit of the corporation or the improvement of the real property;

(ii) For the expansion of the corporation by acquisition of additional real property;

(iii) For public benefit or charitable purposes.

(B) Upon the sale of the property, dissolution of the corporation or occurrence of a condition requiring termination of the trust or reversion of title to the real property, the corporate equity is required by the articles, bylaws or trusts or title conditions to be paid out or title to the property transferred subject to outstanding encumbrances and liens for the transfer value of membership interest or shares for use for a public or charitable purpose subject to approval by the city council.

(5) Amendment of the bylaws and articles of incorporation requires the affirmative vote of at least two-thirds of the resident member shareholders. [Ord. 1176 N.S. § 1, 1980].