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KEY ELEMENTS OF STATE LAW AND PROPOSED PMC AMENDMENTS The full text of the state law is attached to this report as Attachment 3. Selected highlights include: • Statewide Exemption ADU: A key concept in the new state law is that of a "Statewide Exemption ADU," which defines the size (800 square feet), height (16 feet) and setbacks (4 feet from side and rear property lines) for an ADU that local ordinances must allow for. ADUs that exceed any one of these requirements would be required to comply with applicable development regulations established by the PMC as well as the zoning district or planned unit development in which the property is located (e.g. floor area ratio maximums, minimum open space requirements, setbacks, etc.), provided that they would not preclude or unreasonably restrict an ADU. • ADUs in Multifamily Developments: The new state law permits ADUs in multifamily developments, either by new construction of up to two detached ADUs; or created by converting existing space into one or more ADUs. For units created by conversion of existing space, a minimum of one such unit, and up to 25% of the existing units within a multifamily building, is allowed.' • Review Authority and Process: Property owners of single-family homes sometimes propose to construct a second-story addition that would contain an ADU, or propose to construct a two-story accessory structure such as a detached garage with an ADU above. Currently, additions and alterations to single-family homes and accessory structures greater than 10 feet in height (e.g., second story additions) require approval via Administrative Design Review (ADR), which entails a notice to surrounding neighbors and allows for their comment and review, and, if requested by a neighbor or appealed, involve a public hearing. In the design review process, the City will consider the overriding objectives of state law to facilitate (not preclude) ADUs, and will seek design solutions to address neighbor concerns, which are often focused around privacy issues. However, the process nonetheless involves discretion on the part of the City, and can, in rare circumstances become lengthy if a project is subject to multiple appeals. The new state law, requires ministerial approval of ADUs, meaning that no form of discretionary review, such as an ADR process, is allowed. Consistent with the intent of state law to encourage ADUs, and given that the City to date has permitted ADUs within two-story additions to a principal structure or above a detached garage, the PMC as drafted continues to permit two-story ADUs. However, since design review would not be permitted, the draft amendments include a number of objective design standards to which such units must conform, intended to ensure these units are as compatible as possible with neighboring uses, described in the Discussion section below. Staff also proposes that a courtesy notice be provided to surrounding neighbors, informing ' For example, a three-unit building would be allowed to add one ADU created from conversion of existing space; an eight unit building could add up to two such units. Page 3 of 10