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Housing Break

San Rafael turns a blind eye to illegal dwellings

By Joy Lanzendorfer

Imagine you've got a big problem that involves many people with different agendas. You come up with a solution that, while not completely solving the problem, manages to alleviate it somewhat while still being efficient, using existing resources, and appealing to all the different groups. With your solution, everyone wins.

Well, almost everyone. Maybe your solution isn't 100 percent fair to everybody involved. In fact, some might say that your solution is actually unfair--ignoring people who did the right thing and rewarding people who did the wrong thing. Given that the benefits of your solution outweigh this sticky little moral issue, would you still go through with it?

For the city of San Rafael, the answer to that question seems to be yes. The city voted earlier this month for a year-long amnesty for owners of illegal second units (additional dwellings that were built without the proper permits). For the next year, people who want to make their illegal units legal will not have to pay the $500 fine for not getting a permit in the first place. After the amnesty period passes, the fine will double to $1,000.

The program helps the affordable-housing problem while benefiting most groups involved. People with illegal dwellings can set things right for a nominal cost (they still have to pay a permit fee of $500). Low-income single people will have cheaper and safer options when looking for a place to live. The neighborhoods will benefit from more affordable housing without the traffic and congestion that new construction brings. And the city will get to count the now-legal units toward affordable housing. The state is requiring San Rafael to come up with 2,060 affordable-housing units, about 700 of which have to be built by 2006.

But while many will benefit, the amnesty program still rewards people who did the wrong thing, believes Cyr Miller, the only San Rafael City Council member to vote against the program.

"The measure isn't fair to people who got permits for their second units in the first place," he says. "The people who build without a permit go against the community norms, and all of a sudden they get to legalize their property with no recompense? We're just supposed to give them a break?"

People who build units without a permit put their tenants in jeopardy by not meeting safety codes. In addition, they are cheating on their taxes because they are improving their property value and not reporting the improvements to the state, believes Miller.

But others say the program allows people to do the right thing.

"It isn't unfair to those people who got permits in the first place," says Dave Fahrner, a real estate agent with Frank Howard Allen Realtors and president of the Marin Association of Realtors. "Those people did what they were supposed to do and were not penalized. This program just allows people who didn't do the right thing to correct a wrong."

Some people who have illegal second units may be unaware that there's something wrong. The illegal unit may have been there when the owners bought the property, or they might have built the second unit and not realized they were supposed to get a permit, explains Fahrner. He admits, though, that that group must only be a small percentage of those who own illegal units.

The amnesty program is on top of another law change saying that second units no longer have to get a use permit, a process that cost an average of $2,000 and included a public hearing.

"With the use permits, the city was only seeing four or five people a year report illegal units," says Councilmember Paul Cohen. "With the two things coming together--the waiving of the use permit and the fines--we expect to see significant changes."

It's impossible to know how many new units the program will bring in, though some estimate around 35 or so. Other cities like Novato have had success with amnesty programs in the past. In addition to San Rafael, 10 cities in Marin County are considering similar amnesty programs.

Even if only a few units are legalized, this program can only help the affordable-housing program. San Rafael is looking into other ways of adding affordable housing, from rezoning for mixed use to scaling back new commercial development.

"The fees were real barriers to the second units, so this is part of the solution to the problem, but only part," says Betty Pagett of the Marin Housing Council, an affordable-housing advocacy group. "San Rafael is far behind in affordable housing. To start with, we've been pushing our workforce into Sonoma County for years now. There are lots of little pieces that need to come together for affordable housing."

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From the July 17-23, 2003 issue of the North Bay Bohemian.

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