Important Considerations to Avoid Planning and Environmental Review Challenges to Co-Living Developments
Pre-COVID 19, California's high cost of living and acute housing shortage made co-living developments particularly popular, especially with young professionals. In co-living developments, an occupant typically has his or her own bedroom, likely has an individual bathroom and shares a kitchen, a living room (if there is one) and other common spaces. Sharing common spaces can provide socialization and access to a wider variety of amenities and services, all with a more modest price tag than a traditional apartment. Developers around the state are eager to meet this need in high-demand areas like Los Angeles and the Bay Area.
Many cities and counties struggle with how to process co-living development applications because they have yet to update their general plans and/or zoning ordinances to address the unique aspects of co-living developments by categorizing them as a specific use. A notable exception is the City of San Jose, which updated its zoning ordinance in February 2019 to add co-living facilities as a new category of use permitted in its downtown. In the interim, many jurisdictions have applied ad hoc controls to applications for apartment building developments or conversions to three-, four- and five-bedroom units, including requiring living rooms in each dwelling unit, preventing exterior locks on the bedroom doors within a multi-bedroom dwelling unit and regulating the location of sinks. In addition to these seemingly arbitrary measures that do not find support in the local zoning ordinance or building code, local jurisdictions without clearly codified regulations for co-living units often treat these applications the same as for traditional apartments, which leads to potentially skewed occupancy/density assumptions in impact analysis during environmental review (for example, one co-living "unit" of six individual bedrooms is the equivalent of how many separate studio apartments), if review is conducted at all.
As if social distancing was not enough of a substantial hurdle for co-living today, fertile ground exists for administrative project appeals and other challenges. Project opponents have already raised arguments that co-living projects are inconsistent with zoning ordinances as well as the requirements of the California Environmental Quality Act (CEQA), which requires analysis of a project's environmental impacts, unless otherwise exempt from analysis. In particular, challengers argue that treating co-living units the same as traditional apartment units can lead to an underestimation of actual density when determining consistency with general plan land use designation and zoning ordinance maximums, as well as underestimation of environmental impacts, including analysis related to utility use, increased traffic, increased parking demand and increased use of public services such as parks.
We therefore encourage developers seeking approvals for co-living development to consult with land use counsel as well as city or county staff early in the process to avoid potential pitfalls with planning co-living projects.
DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the authors of this alert for timely advice.