Commission upholds PND for hotel-conversion ordinance amendments after appeal arguing displacement risk

The Planning Commission on Jan. 26 rejected an appeal and upheld the Planning Department's preliminary negative declaration (PND) for proposed 2022 amendments to the hotel conversion ordinance, voting 7-0 to accept staff's finding that an environmental impact report (EIR) was not required under CEQA.

Staff described the 2022 legislation as the department's response to a court order that had found the 2017 ordinance amendment should have been studied under CEQA. The current draft would add a definition of "tourist or transient use," set an initial amortization period that would allow stays of less than seven days for the first two years after the ordinance becomes effective and then limit tourist stays to less than 30 days, and provide a process for owners to apply for an extension of the amortization period.

The appellant's counsel, Brian O'Neil, argued the PND failed to account for displacement of Single-Room-Occupancy (SRO) residents, the need for security deposits and monthly rent conversions, and the potential for homelessness and urban decay. Appellants said the department's conclusion (that relatively few units would convert) relied on limited DBI usage-report responses and incomplete underlying data.

Staff and the deputy city attorney replied that the PND analyzed the CEQA checklist items required and that prior court guidance distinguishes socioeconomic displacement from CEQA's required environmental analysis. Deputy City Attorney Kristen Jensen told the commission that the city produced public-record documents as quickly as possible in response to a public-records request and that the batch included material already in earlier litigation records.

Commissioners balanced competing concerns about SRO housing with CEQA standards and accepted staff's conclusion that the department had no substantial evidence requiring an EIR. Commissioner Moore moved to uphold the PND with staff-submitted amendments; the motion passed unanimously.

Noted procedural point: Appellants said they received some responsive documents very near the hearing date; city counsel explained the records request was received during the holidays and production followed internal vetting and privilege review.

Next steps: Staff will incorporate minor clarifying language into the final PND and proceed consistent with the CEQA process; the ordinance itself must still follow the Board of Supervisors' legislative process.