Chapter 17.76
CONVERSION REGULATIONS*

Sections:

17.76.010    Purpose.

17.76.020    Definitions.

17.76.030    General requirements.

17.76.040    Requirements for tentative map and use permit approval.

*    Editor’s Note: The provisions of this chapter supersede Sections 16.36.030, 16.36.070, 17.16.020, 17.56.010, and 17.62.010 of this code insofar as these sections apply to rental apartment conversions.

17.76.010 Purpose.

In order to provide for the housing needs of all economic segments of the community, and protect the health, safety, and welfare of its residents, the city council finds that the regulation of rental housing conversion is necessary to achieve the following purposes:

A.    To attempt to provide a reasonable balance of rental and ownership housing in Foster City;

B.    To ensure that apartment conversions do not conflict with the goals or policies of the general plan;

C.    To provide tenant and buyer protection relating to displacement and relocation of renters, ensuring purchasers are informed regarding the structural integrity of buildings and ensuring said buildings and utility systems reasonably comply with all current codes which may directly impact the health, safety, and welfare of future residents including codes related to noise and insulation standards;

D.    To reduce and avoid the impact of such conversions on existing and future low and moderate income residents of the community by attempting to maintain an adequate supply of rental housing which provides the majority of housing opportunity for lower and moderate income households. (Ord. 684 § 2 (Exh. H), 2024; Ord. 214 § 1 (part), 1981)

17.76.020 Definitions.

For the purposes of this chapter the words set out in this section shall have the following meanings:

A.    “Apartment” means a building designed for or occupied by two or more families living independently of each other as defined in the California Building Code as it shall be amended from time to time, except accessory dwelling units (ADUs) or junior accessory dwelling units (JADUs) on single-family properties.

B.    “Association” means the organization of persons who own a lot, parcel, area, condominium or right of exclusive occupancy in a community housing project.

C.    “Building official” means the chief building official of the city or the designee of the community development director.

D.    “Common area” means an entire project excepting all residential dwelling units therein.

E.    “Community apartment” means where an undivided interest in the land is coupled with the right of exclusive occupancy of any apartment located thereon.

F.    “Community housing project” means condominium project, as defined in California Civil Code Sections 685 and 686, or successor sections, containing two or more condominiums as defined in California Civil Code Section 783, or its successor section; a community apartment project, as defined in California Business and Professions Code Section 11004, or successor section, containing two or more rights of exclusive occupancy; a stock cooperative as defined in California Business and Professions Code Section 11003.2, or successor section, containing two or more separately owned lots, parcels, or areas; and a planned development as defined in California Business and Professions Code Section 11003, or successor section, containing two or more separately owned lots, parcels, or areas.

G.    “Condominium” means an estate in real property consisting of an undivided interest in common in a portion of a parcel of real property together with a separate interest in space in a residential, industrial, or commercial building on such real property, such as an apartment, office or store. A condominium may include in addition a separate interest in other portions of such real property. Such estate may, with respect to the duration of its enjoyment, be either an estate of inheritance or perpetual estate; an estate for life; or an estate for years, such as a leasehold or subleasehold.

H.    “Conversion” means a proposed change in the type of ownership of a parcel or parcels of land from a use that is not a community housing or community housing project use, together with the existing or added structures, to any types of ownership defined under community housing and community housing projects regardless of the present or prior use of such land and structures and whether substantial improvements have been made or are to be made to such structures.

I.    “Developer” means the owner or subdivider with a controlling proprietary interest in the community housing project, or the person or organization making application hereunder.

J.    “Director” means the community development director of the city of Foster City or the director’s designee.

K.    Disabled. A person is “disabled” who has a physical or mental impairment that substantially limits one or more major life activities, a person who has a history or record of such an impairment, or a person who is perceived by others as having such an impairment and has the following characteristics: an orthopedic disability impairing ability to obtain employment, a physical disability where the person requires special care facilities in the home, or a developmental disability or mental disorder which would render them eligible to participate in programs of rehabilitation or social services conducted by or on behalf of a public agency.

L.    “Housing market area” means the area that includes the cities of Foster City, San Mateo and Belmont.

M.    “Low income” means households with incomes no greater than the maximum income for low income households, as published annually by the California Department of Housing and Community Development (HCD) as the official state income limits pursuant to California Health and Safety Code Section 50093 for San Mateo County, adjusted for household size.

N.    “Moderate income” means households with incomes no greater than the maximum income for moderate income households, as published annually by the California Department of Housing and Community Development (HCD) as the official state income limits pursuant to California Health and Safety Code Section 50093 for San Mateo County, adjusted for household size.

O.    “Multiple family residential project” means a rental housing development consisting of five or more dwelling units attached to or within one structure.

P.    “Organizational documents” means the declaration of restrictions, articles of incorporation, bylaws, and any contracts for the maintenance, management or operation of all or any part of the community housing project.

Q.    “Planned development” means a real estate development other than a community apartment project as defined in California Business and Professions Code Section 11004, a project consisting of condominiums as defined in California Civil Code Section 783, or a stock cooperative as defined in California Business and Professions Code Section 11003.2, having either or both of the following features:

1.    Any contiguous or noncontiguous lots, parcels or areas owned in common by the owners of the separately owned lots, parcels or areas consist of areas or facilities the beneficial use and enjoyment of which is reserved to some or all of the owners of separately owned lots, parcels or areas;

2.    Any power existing to enforce any obligation in connection with membership in the owners association as described in Section 11003.1 of the California Business and Professions Code, or any obligation pertaining to the beneficial use and enjoyment of any portion of, or any interest in, either the separately or commonly owned lots, parcels or areas by means of a levy or assessment which may become a lien upon the separately owned lots, parcels, or areas of defaulting owners or members, which said lien may be foreclosed in any manner provided by law for the foreclosure of mortgages or deeds of trust, with or without a power of sale.

R.    “Stock cooperative” means a corporation which is formed or availed of primarily for the purpose of holding title to, either in fee simple or for a term of years, improved real property, if all or substantially all of the shareholders of such corporation receive a right of exclusive occupancy in a portion of the real property, title to which is held by the corporation, which right of occupancy is transferable only concurrently with the transfer of the share or shares of stock or membership certificate in the corporation held by the person having such right of occupancy. The term “stock cooperative” does not include a limited-equity housing cooperative, as defined in California Business and Professions Code Section 11003.4 or successor section.

S.    “Subdivision Map Act” means the subdivision law of the state of California commencing with California Government Code Section 66410, or its successor.

T.    “Subdivision ordinance” means an ordinance of the city of Foster City consisting of Title 16 and the Estero Municipal Improvement District Code as the same now exists or is hereafter amended.

U.    “Very low income” means households with incomes no greater than the maximum income for very low income households, as published annually by the California Department of Housing and Community Development (HCD), as the official state income limits, pursuant to California Health and Safety Code Section 50093, for San Mateo County, adjusted for household size. (Ord. 684 § 2 (Exh. H), 2024; Ord. 214 § 1 (part), 1981)

17.76.030 General requirements.

A.    Conversion Tied to New Rental Construction. In no case shall rental apartment units be converted to a community housing project unless an equal number of new rental apartment units are completed on or before January 1st of each calendar year. The director shall certify the total number of rental apartment units completed the previous year, commencing on January 1st and ending December 31st of each year. One hundred percent of the certified one year’s total for the previous year will be the allowed number of apartment units eligible for conversion into units of a community housing project in the current calendar year. In the event the maximum permitted number of units is not converted in a given year, the surplus shall be carried over once to the following year to count towards the number of apartment units eligible for conversion.

1.    Selection Procedure. Applicants may submit applications for conversions twice a year, due at the close of business on the last Friday of April, and the last Friday of October. The semiannual number of units approved for conversion shall not exceed one-half the total determined in this subsection A, unless, at the previous commission hearing on conversion, there were no applications approved, or those approved did not equal the amount allowed for conversion. These applications must contain all information required for a tentative map application pursuant to this chapter.

a.    If the applications for the number of units to be converted exceeds the amount allowed for conversion determined in this subsection (A)(1), the director shall conduct a lottery to rank each batch of applications.

2.    Acceptance and Ranking of Applications. The planning commission shall consider the applications in the order of their lottery ranking until the amount of units approved for conversion reaches the number of units allowed for conversion. An application will not be complete and accepted for processing until staff determines that the materials submitted are complete.

B.    Conformity with the General Plan. No conversion of multiple-family rental units to ownership units shall be permitted unless and until the planning commission finds that the proposed conversion will not conflict with the goals and policies of the general plan, especially the housing element.

C.    Prohibition of Discrimination Against Prospective Buyers with Children. In no case shall a project limit initial sales to households or individuals without children.

D.    Tenant Notification.

1.    Notification of Hearing on Use Permit and Tentative Map. Not less than two weeks prior to the public hearing for use permit and tentative map, the applicant shall send all tenants of the building(s) proposed for conversion a written notice. Such notice shall indicate: that the subdivider intends to convert the building to a community housing project; the date and location of the public hearing; the steps and actions the subdivider and others, including governmental agencies, will or must take in order for the building to be converted. Such notice shall further specify that:

a.    The tenant will be permitted to terminate any lease or rental agreement without penalty upon notifying the subdivider in writing thirty days in advance of such termination;

b.    No existing tenant’s rent will be increased from the level that existed three months prior to the date of application for a tentative map until tenant purchase of the unit, or tenant relocation takes place, or the tentative map application is denied, whichever is later. This period shall not exceed twelve months. The tenant may credit the amount of rent paid in excess of the allowable rent to the rental payment(s) immediately following the approval of the tentative map. Any rent increase following the twelve-month period shall not exceed one hundred percent of the increase in the Bay Area Consumer Price Index for the most recent twelve-month period;

c.    The provisions for relocation assistance and/or special group considerations are applicable as specified in Section 17.76.040(B); and

d.    No tenant will be evicted during a period beginning with the date of application for tentative map and ending thirty days after the issuance of the notification of termination of tenancy except for just cause.

2.    Lease Extension. The developer shall offer a ninety-day extension of tenancy after the expiration of a lease or rental agreement which would expire prior to or at the time of commencement of sales or issuance of the final public report by the real estate commissioner.

3.    Tenants’ Right to Purchase. The developer shall provide each tenant an irrevocable, nontransferable, preemptive right to purchase a unit or right of exclusive occupancy at a price no greater than the price offered to the general public for such unit. Such right shall be irrevocable for a period of ninety days after the commencement of sales or the issuance of the final public report by the real estate commissioner. Tenants shall have the right to the unit presently occupied and then to other units in the project only after they have been declined for purchase and vacated by the occupancy tenants. In no case shall an existing tenant have a preemptive right to more than one unit.

4.    Notification of Proposed Conversion Prior to Termination of Tenancy Due to Conversion (Notice of Intention to Convert). Each tenant of a conversion project shall be given one hundred eighty days’ notice of intention to convert prior to termination of the tenancy. The subdivider shall, at their discretion, establish the date of issuance of the notice of intention to convert. Such notices shall apply to existing and subsequent tenants of units to be converted. Each person who becomes a tenant of a unit for which either a one-hundred-eighty-day notice of intention to convert and/or any other notice required by this chapter has already been issued, shall be informed and given a copy of said notice before entering into any written or oral rental agreement. At that time, such tenant shall also receive, in writing, notification of the number of days remaining before the expiration of the notice of intention to convert previously issued. The ninety-day right-of-first-refusal shall terminate no earlier than the expiration date of the notice of intention to convert.

5.    Notice to Quit. A notice to quit as authorized by California Civil Code Section 1946 must be served by the developer after the expiration date of the notice of intention to convert if a tenant is required to move or if a unit is sold. (Ord. 684 § 2 (Exh. H), 2024; Ord. 214 § 1 (part), 1981)

17.76.040 Requirements for tentative map and use permit approval.

A.    General Requirements. Both a tentative map and use permit are required. A tentative map and use permit shall be disapproved if any of the following findings are made:

1.    That the tentative map and use permit are not consistent with applicable authorities as set forth in Section 17.76.030(B);

2.    That approval of the tentative map and use permit would be inconsistent with this chapter;

3.    That the design or proposed improvements of the subdivision is likely to cause or sustain substantial environmental damage as defined by California Public Resources Code Section 21000 et seq.;

4.    That there is an insufficient supply of affordable replacement units in the housing market area available to tenants who will be displaced as a result of the conversion; or

5.    The application does not comply with any other provision of this chapter.

B.    Specific Requirements. An application for the conversion of rental housing into a community housing project will require the submittal of the following information, which must be submitted by the developer to the community development department at the same time the tentative map and use permit application are submitted unless otherwise stated:

1.    Streets, Driveways and Parking Areas. All private streets, driveways and parking areas for said community apartment projects shall be improved and constructed with a structural section and site dimensions in accordance with the standards of the city and shall be designed to ensure that access for municipal services shall not be denied any dwelling unit therein by reason of deteriorated or impassable private streets, driveways, or parking areas, as determined by the public works director.

2.    Compliance with Codes. The design, improvement and/or construction of a community housing project shall conform to and be in full accordance with all requirements of all building, fire and housing codes, zoning provisions and other applicable local, state or federal laws or ordinances relating to protection of public health, safety, and welfare, in effect and deemed appropriate by the planning commission at the time of the filing of the tentative map and use permit. Also, any violations of the latest adopted edition of the California Building Code, or its successor, relating specifically to provisions protecting health and safety of residents shall be corrected and any equipment or facilities which the building official determines are deteriorated or hazardous shall be repaired or replaced. In particular, the developer shall repair or replace any damaged or infested areas in need of repair or replacement as shown in the structural pest report. The interpretation of what constitutes a hazard to public health and safety shall be made by the director.

If the proposed project does not comply with the provisions of the state of California Building Code, Foster City Code, and/or the building official identifies items to be corrected as provided in the above, any use permit issued pursuant to this subsection shall require the developer to furnish a bond in an amount equal to the building official’s estimated cost to bring the project into compliance with said codes, said fire regulations and/or such identified items to be corrected. Said bond shall run in favor of the individual purchasers and the homeowners’ association and shall provide for reasonable attorney’s fees in the event of default by the principal. The city shall hold said bond pending issuance of the certificate of completion.

3.    Separate Metering. The consumption of gas and electricity within each dwelling unit shall be separately metered in accordance with the local utility and PUC regulations. In all cases, a water shut-off valve shall be provided for each unit.

4.    Impact Sound Insulation. The applicant/owner shall demonstrate that wall and floor ceiling assemblies conform to the sound insulation performance criteria promulgated in Title 25, California Administrative Code, Section 1092, or its successor, and that any floor covering which is replaced similarly provides the same or greater insulation qualities.

5.    Storage Requirements. Private, enclosed, weather-proofed and lockable outdoor storage space shall be provided for each dwelling unit according to the following schedule:

No. of Bedrooms	Minimum Space in Cubic Feet
Studio or 1	150
2	200
3	250

The above space shall be provided in the garage or parking area or contiguous to each unit.

6.    Private and Common Area Open Space. Common open green area and private open green areas shall be provided in conformance with Section 17.96.040(D).

7.    Noise Mitigation. An acoustical engineer shall evaluate the noise impact of external sources on the proposed units for conversion and develop mitigation measures. The construction shall comply with the city general plan and the applicable ordinances and state codes relating to sound transmission control.

8.    Interim Maintenance Standards. The developer shall be responsible for improving and maintaining the structures and landscaping in accordance with the approved architectural and landscaping plans and good maintenance practices prior to turning them over to the homeowners’ association. The developer shall furnish a bond satisfactory to the public works director to ensure compliance with this requirement.

9.    Off-Street Parking. The amount and design of off-street parking shall comply with the requirements of Chapter 17.62, Off-Street Parking Regulations.

10.    Applicability of City Ordinance Regulating Parking of Trailers and Recreational Vehicles, Etc. Provisions for vehicle and recreation vehicle storage shall comply with Chapter 17.64, Vehicle and Recreational Vehicle Storage.

11.    Legal Description. A complete legal description of the property shall be provided.

12.    Boundary Map. A boundary map showing the existing topography of the site and the location of all existing easements, structures and other improvements, and trees over four inches in diameter shall be provided.

13.    Proposed Organizational Documents. In addition to such covenants, conditions and restrictions that may be required by the Department of Real Estate of the state of California pursuant to Title 6 (Condominiums) of the California Civil Code or other state laws or policies, the developer shall provide the following organizational documents or information related to:

a.    Conveyance of units;

b.    Assignment of parking and management of common area within the project;

c.    A proposed annual operating budget containing a sinking fund to accumulate reserve funds to pay for major anticipated maintenance, repair or replacement expenses;

d.    FHA regulatory agreement if the project is FHA financed;

e.    The most recent balance sheet of the association.

14.    Property and Structural Report. The property and structural report shall describe the physical condition and estimate remaining useful life of each of the following elements of each structure situated within the project proposed for conversion: roofs, foundations, exterior paint, paved surfaces, mechanical systems, sprinkler systems for landscaping, utility delivery systems, central or community heating and air conditioning systems, sound insulation, fire protection systems including any automatic sprinkler systems, alarm systems, or standpipe systems, and structural elements. Said report shall also identify any structural elements which are known to be structurally defective or unsafe so as to impose a hazard to the health and safety of the occupants and users of said improvements. Such report shall also include recommendations to ensure the continued useful life of such elements and systems, and be prepared by a registered civil or structural engineer, or a licensed general building contractor or general engineering contractor. The developer shall arrange for project inspections by the building department to verify the accuracy of the structural report. The building official shall prepare a report detailing building code deficiencies or other health or safety deficiencies which must be corrected prior to sale of units or occupancy.

15.    Structural Pest Report. The report shall be prepared within sixty days of the date of application by a licensed structural pest control operator pursuant to California Business and Professions Code Section 8516, or its successor section, relating to written reports on the absence or presence of wood-destroying pests or organisms.

16.    Building History Report. The building history report shall be prepared to include the following:

a.    The date of construction of all elements of the project;

b.    A statement of the major uses of said projects since construction;

c.    The date and description of each major repair of any element since the date of construction. For the purposes of this subsection, a “major repair” means any repair for which an expenditure of more than one thousand dollars was made;

d.    The date and description of each major renovation of any element since the date of construction. For the purposes of this subsection, “major renovation” means any renovation for which an expenditure of more than one thousand dollars was made;

e.    Statement regarding current ownership of all improvements and underlying land;

f.    The name, address, and age of present tenants, including children, in the project;

g.    Estimated market value of each unit;

h.    Failure to provide information required by subsections (B)(16)(a) through (B)(16)(g) of this section shall be accompanied by an affidavit, given under penalty of perjury, setting forth in detail all efforts undertaken to discover such information and all reasons why said information cannot be obtained.

17.    Rental History. The developer shall furnish a report detailing the size in square footage, the current or last rental rate, the monthly rental rate for the preceding two years, and the monthly vacancy over the preceding two years of each rental unit proposed to be converted.

18.    Project Organization. A written description shall be furnished regarding the proposed project organization including the use and control of the common elements and recreation facilities within the project. Said statement shall detail any proposed control of common facilities to be retained by the developer or to be owned or maintained by any organization other than the homeowners’ association or unit owners.

19.    Copy of Application and Supplemental Questionnaire. The developer shall furnish:

a.    A true copy of each application submitted for issuance of a final public report to the Department of Real Estate of the state of California for the project proposed for conversion including all attachments and exhibits thereto required by the Department pursuant to California Business and Professions Code Section 11011;

b.    A true copy of the statement of compliance (form 643 as amended) pursuant to 10 Cal. AD. Code, Section 2792.9, or its successor, relating to operating and maintenance funds during start-up;

c.    A statement whether the developer will provide any capital contribution to the association for deferred maintenance of the common areas, and if so, the sum and date on which the association will receive said sum; and

d.    A true copy of the supplemental questionnaire for apartments converted to condominiums, community apartments, or stock cooperative projects submitted to the Department of Real Estate of the state of California for the project proposed for conversion, and shall include all attachments and exhibits thereto.

Provided, however, that to the extent the information required to be furnished pursuant to this subsection (B)(19) is not available at the time of application, any conditional use permit issued under this section shall require the developer to furnish such information to the city within ten days of submission of the same to the Department of Real Estate; provided further, that the developer shall file with the city a true copy of the final public report within ten days of issuance by the Department of Real Estate.

20.    Relocation Displacement or Mitigation Plan. The developer shall submit a relocation displacement plan which shall include the following:

a.    The number of residents who will be displaced as a result of the proposed conversion, noting the number of disabled persons, elderly persons, and households with minor children to be displaced.

b.    Documentation of the availability of comparable replacement housing in the housing market area within a rental range equal to the range which the tenants have paid as detailed in a rental report or within a price range which is equal to or less than thirty percent of the income range of each household to be displaced as a result of the conversion, whichever is higher.

c.    Documentation that replacement housing will meet any special needs, which are presently available in the project, of displaced tenants such as facilities for disabled persons, elderly persons, households with children, and availability of public transportation for the disabled persons, elderly persons, or resident buyers who are temporarily displaced pending completion of improvements to the units being purchased. If the sufficient comparable replacement housing is unavailable, developer shall meet the above requirements through the provision of mitigating factors to diminish the number and/or aid relocation of displaced tenants within the project. Said mitigating measures may include but are not limited to discounting the project units to tenant buyers, offering a moving allowance, extending leases, or providing below market rate units in addition to the number required by Chapter 17.90. Said mitigating measures shall be equivalent to at least ten years multiplied by the difference between existing rent and rent for comparable replacement housing.

d.    Tenant protection provisions required by state law.

e.    Tenant protection provisions required by subsection (B)(21) of this section.

21.    Tenant Protection Provisions. The developer shall indicate they have provided the following:

a.    Families with School Age Children. Families with minor children shall be granted lease extensions until thirty days after the expiration of the current school session.

b.    Relocation Assistance. The developer shall provide monetary relocation assistance, equal to a minimum of three months’ rent, to nonpurchasing tenants, apportioned equally among the number of tenants in each unit.

c.    Non-monetary Relocation Assistance. The developer shall provide a free one-year subscription to a rental assistance services or relocation assistance services provider.

d.    Moderate Income Housing. Moderate income housing shall be provided as required by Chapter 17.90, Below Market Rate Inclusionary Housing Program, in the same quantity and the same standards as would be required for newly constructed dwelling units. Preferences for purchase of these units shall be based on the following preferences:

i.    Income-qualified existing tenants that have at least one member of the household who is disabled;

ii.    Income-qualified existing tenants age sixty-two or older;

iii.    Income-qualified existing tenants with minor children;

iv.    All other income-qualified existing tenants; and

v.    All others in the preference order as established by the city to be applied citywide to below market rate units.

22.    Further Necessary Information. The developer shall provide any other information which the planning commission or director determines is necessary to evaluate the proposed project.

C.    Waiver of Application Requirements. The director may waive the submission of certain factual items in this section if it is demonstrated that such information is not available and cannot be obtained.

D.    Public Hearings. Applications for the tentative map, use permit and other required city approvals, as well as detailed site improvements, should be submitted to the city. City staff will make a recommendation to the planning commission who will hold a public hearing on the project to approve or deny the application. The commission’s action on an application may be appealed to or is subject to being called up by the city council. The city council would then hold a public hearing on the application to make a final determination.

E.    Buyer Protection. The developer shall furnish each prospective purchaser of a unit a true copy of the conditional use permit issued under this section and a copy of each of the following documents:

1.    Property report;

2.    Structural pest control report;

3.    Property and structural report and building department report;

4.    Building history report;

5.    Statement of compliance (Form 643) pursuant to 10 Cal. AD. Code, Section 2792.9, or its successor, relating to operating and maintenance funds during start-up;

6.    Soils report as determined in each case by the director;

7.    The planning director’s letter certifying compliance.

F.    Letter Certifying Compliance. The director shall cause a final inspection of all buildings and structures to be made, upon request by the developer, to determine that the requirements of this section have been fulfilled. The building official shall then mark the inspection report to show the corrections, repairs and replacements which have been made. If complete, the planning director will cause to be issued a letter certifying compliance with all of the conditions and approvals and with this chapter and authorize sale and/or occupancy of said units. No building or unit applied for under this part shall be sold without said letter certifying compliance and approving occupancy. (Ord. 684 § 2 (Exh. H), 2024; Ord. 214 § 1 (part), 1981)