HomeMy WebLinkAbout2021-06-30 Planning & transportation commission Agenda Packet_______________________
1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the
time of the spokesperson’s presentation will be allowed up to ten (10) minutes at the discretion of the Chair, provided that
the non-speaking members agree not to speak individually.
2. The Chair may limit Oral Communications to 30 minutes for all combined speakers.
3. The Chair may reduce the allowed time to speak to three (3) minutes to accommodate a larger number of speakers.
Planning & Transportation Commission
Regular Meeting Agenda: June 30, 2021
Virtual Meeting
6:00 PM
https://zoom.us/join Meeting ID: 916 4155 9499 Phone number: 1 669 900 6833
****BY VIRTUAL TELECONFERENCE ONLY***
Pursuant to the provisions of California Governor’s Executive Order N-29-20,
issued on March 17, 2020, to prevent the spread of COVID-19, this meeting will be
held by virtual teleconference only, with no physical location. The meeting will be
broadcast live on Cable TV and through Channel 26 of the Midpen Media Center
at https://midpenmedia.org/local-tv/watch-now/.
Members of the public may comment by sending an email to
planning.commission@cityofpaloalto.org or by attending the Zoom virtual
meeting to give live comments. Instructions for the Zoom meeting can be found
on the last page of this agenda.
TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the
meeting is in progress. The Commission reserves the right to use more or less time on any item,
to change the order of items and/or to continue items to another meeting. Particular items may
be heard before or after the time estimated on the agenda. This may occur in order to best
manage the time at a meeting or to adapt to the participation of the public
Call to Order / Roll Call
Oral Communications
The public may speak to any item not on the agenda. Three (3) minutes per speaker.1,2
Agenda Changes, Additions, and Deletions
The Chair or Commission majority may modify the agenda order to improve meeting management.
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1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the
time of the spokesperson’s presentation will be allowed up to ten (10) minutes at the discretion of the Chair, provided that
the non-speaking members agree not to speak individually.
2. The Chair may limit Oral Communications to 30 minutes for all combined speakers.
3. The Chair may reduce the allowed time to speak to three (3) minutes to accommodate a larger number of speakers.
City Official Reports 6:00 PM-6:15 PM
1. Directors Report, Meeting Schedule and Assignments
Action Items
Public Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal.
All others: Five (5) minutes per speaker.1,3
6:15 PM-8:45 PM
2. PUBLIC HEARING/LEGISLATIVE: Review and Discuss Potential Ordinance Changes to
Palo Alto Municipal Code Chapter 18.09 to Consider Regulations to Encourage
Affordability for Accessory Dwelling Units (ADUs). Environmental Assessment:
Exempt from the CEQA pursuant to Public Resources Code Section 21080.17 and
CEQA Guidelines sections 15061(b)(3), and 15305.
Approval of Minutes
Public Comment is Permitted. Three (3) minutes per speaker.1,3
8:45 PM-8:50 PM
3. May 26, 2021 Draft PTC Meeting Minutes
Committee Items
Commissioner Questions, Comments, Announcements or Future Agenda Items
Adjournment
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1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the
time of the spokesperson’s presentation will be allowed up to ten (10) minutes at the discretion of the Chair, provided that
the non-speaking members agree not to speak individually.
2. The Chair may limit Oral Communications to 30 minutes for all combined speakers.
3. The Chair may reduce the allowed time to speak to three (3) minutes to accommodate a larger number of speakers.
Informational Report
2020 Reach Code Cost-Effectiveness Analysis for New Detached Accessory Dwelling
Units (ADUs)
_______________________
1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the
time of the spokesperson’s presentation will be allowed up to ten (10) minutes at the discretion of the Chair, provided that
the non-speaking members agree not to speak individually.
2. The Chair may limit Oral Communications to 30 minutes for all combined speakers.
3. The Chair may reduce the allowed time to speak to three (3) minutes to accommodate a larger number of speakers.
Palo Alto Planning & Transportation Commission
Commissioner Biographies, Present and Archived Agendas and Reports are available online:
http://www.cityofpaloalto.org/gov/boards/ptc/default.asp. The PTC Commission members are:
Chair Bart Hechtman
Vice Chair Giselle Roohparvar
Commissioner Michael Alcheck
Commissioner Bryna Chang
Commissioner Ed Lauing
Commissioner Doria Summa
Commissioner Carolyn Templeton
Get Informed and Be Engaged!
View online: http://midpenmedia.org/category/government/city-of-palo-alto/ or on Channel
26.
Public comment is encouraged. Email the PTC at: Planning.Commission@CityofPaloAlto.org.
Material related to an item on this agenda submitted to the PTC after distribution of the
agenda packet is available for public inspection at the address above.
Americans with Disability Act (ADA)
It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a
manner that is readily accessible to all. Persons with disabilities who require materials in an
appropriate alternative format or who require auxiliary aids to access City meetings, programs,
or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing
ada@cityofpaloalto.org. Requests for assistance or accommodations must be submitted at least
24 hours in advance of the meeting, program, or service.
_______________________
1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the
time of the spokesperson’s presentation will be allowed up to ten (10) minutes at the discretion of the Chair, provided that
the non-speaking members agree not to speak individually.
2. The Chair may limit Oral Communications to 30 minutes for all combined speakers.
3. The Chair may reduce the allowed time to speak to three (3) minutes to accommodate a larger number of speakers.
Public Comment Instructions
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. Written public comments may be submitted by email to
planning.commission@CityofPaloAlto.org
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Board, click on the link below for the
appropriate meeting to access a Zoom-based meeting. Please read the following
instructions carefully.
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identify yourself by name as this will be visible online and will be used to notify
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C. When you wish to speak on an agenda item, click on “raise hand”. The
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D. When called, please limit your remarks to the time limit allotted.
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4. Spoken public comments using a phone use the telephone number listed below. When
you wish to speak on an agenda item hit *9 on your phone so we know that you wish to
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remarks to the agenda item and time limit allotted.
https://zoom.us/join
Meeting ID: 916 4155 9499 Phone number: 1 669 900 6833 (you may need to exclude the
initial “1” depending on your phone service)
Planning & Transportation Commission
Staff Report (ID # 12402)
Report Type: City Official Reports Meeting Date: 6/30/2021
City of Palo Alto
Planning & Development Services
250 Hamilton Avenue
Palo Alto, CA 94301
(650) 329-2442
Summary Title: City Official Report
Title: Directors Report, Meeting Schedule and Assignments
From: Jonathan Lait
Recommendation
Staff recommends that the Planning and Transportation Commission (PTC) review and
comment as appropriate.
Background
This document includes the following items:
• PTC Meeting Schedule
• PTC Representative to City Council (Rotational Assignments)
• Tentative Future Agenda
Commissioners are encouraged to contact Vinh Nguyen (Vinhloc.Nguyen@CityofPaloAlto.org)
of any planned absences one month in advance, if possible, to ensure availability of a PTC
quorum.
PTC Representative to City Council is a rotational assignment where the designated
commissioner represents the PTC’s affirmative and dissenting perspectives to Council for quasi-
judicial and legislative matters. Representatives are encouraged to review the City Council
agendas (http://www.cityofpaloalto.org/gov/agendas/council.asp) for the months of their
respective assignments to verify if attendance is needed or contact staff. Prior PTC meetings are
available online at http://midpenmedia.org/category/government/city-of-palo-alto/boards-
and-commissions/planning-and-transportation-commission.
The Tentative Future Agenda provides a summary of upcoming projects or discussion items.
Attachments:
• Attachment A: June 30, 2021 PTC Meeting Schedule and Assignments (DOCX)
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Planning & Transportation Commission
2021 Meeting Schedule & Assignments
2021 Schedule
Meeting Dates Time Location Status Absences/Notes
1/13/2021 6:00 PM Virtual Meeting Regular
1/27/2021 6:00 PM Virtual Meeting Regular
2/10/2021 6:00 PM Virtual Meeting Regular Roohparvar
2/24/2021 6:00 PM Virtual Meeting Regular Roohparvar
3/10/2021 6:00 PM Virtual Meeting Regular
3/31/2021 6:00 PM Virtual Meeting Regular
4/14/2021 6:00 PM Virtual Meeting Regular
4/28/2021 6:00 PM Virtual Meeting Regular
5/12/2021 6:00 PM Virtual Meeting Regular
5/26/2021 6:00 PM Virtual Meeting Regular Roohparvar
6/9/2021 6:00 PM Virtual Meeting Regular Chang
6/30/2021 6:00 PM Virtual Meeting Regular Alcheck
7/14/2021 6:00 PM Virtual Meeting Regular
7/28/2021 6:00 PM Cancelled Cancelled
8/11/2021 6:00 PM Cancelled Cancelled
8/25/2021 6:00 PM TBD Regular
9/8/2021 6:00 PM TBD Regular
9/29/2021 6:00 PM TBD Regular
10/13/2021 6:00 PM TBD Regular
10/27/2021 6:00 PM TBD Regular
11/10/2021 6:00 PM TBD Regular
11/24/2021 6:00 PM Cancelled Cancelled Day Before Thanksgiving
12/8/2021 6:00 PM TBD Regular
12/29/2021 6:00 PM Cancelled Cancelled 2 Days Before NYE
2021 Assignments - Council Representation (primary/backup)
January February March April May June
Doria Summa Giselle Roohparvar Michael Alcheck Ed Lauing Cari Templeton Giselle Roohparvar
Michael Alcheck Cari Templeton Bart Hechtman Giselle Roohparvar Doria Summa Bart Hechtman
July August September October November December
Bryna Chang Doria Summa Bart Hechtman Michael Alcheck Cari Templeton Ed Lauing
Ed Lauing Michael Alcheck Bryna Chang Ed Lauing Bryna Chang Giselle Roohparvar
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Planning & Transportation Commission
2021 Tentative Future Agenda
The Following Items are Tentative and Subject to Change:
Meeting Dates Topics
July 14, 2021 • TBD
Upcoming items:
Topics
• Study Session: Ordinance Amending 18.42.110 (Wireless Communication Facilities)
• Castilleja School
• University Avenue In-Lieu Parking Program
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Planning & Transportation Commission
Staff Report (ID # 12380)
Report Type: Action Items Meeting Date: 6/30/2021
City of Palo Alto
Planning & Development Services
250 Hamilton Avenue
Palo Alto, CA 94301
(650) 329-2442
Summary Title: ADU Code Changes: Affordability Regulations
Title: PUBLIC HEARING/LEGISLATIVE: Review and Discuss Potential
Ordinance Changes to Palo Alto Municipal Code Chapter 18.09
to Consider Regulations to Encourage Affordability for
Accessory Dwelling Units (ADUs). Environmental Assessment:
Exempt from the CEQA pursuant to Public Resources Code
Section 21080.17 and CEQA Guidelines sections 15061(b)(3),
and 15305.
From: Jonathan Lait
Recommendation
Staff recommends the Planning and Transportation Commission (PTC) take the following
action(s):
1. Discuss potential modifications to Palo Alto Municipal Code Chapter 18.09 to promote
affordable accessory dwelling units and junior accessory dwelling units;
2. Provide recommendations on policies and development standards to develop further
for inclusion in a draft ordinance.
Executive Summary
This report discusses policies and development standards intended to yield deed-restricted,
income-restricted accessory dwelling units (ADU) and junior accessory dwelling units (JADU)
that can be leased at affordable rates.
The following ideas are discussed in this report as incentives for rent restricted ADUs:
i. Allowing Reconstruction/Expansion of Non-Conforming Structures
ii. Removing the Existing Garage Requirement for Conversions
iii. Allowing an Additional ADU to be Built when Providing an Affordable Unit On-Site
iv. Exempting Basement Square Feet from Maximum Unit Size Calculations
v. Increase Allowed Maximum Size for ADU/JADU
vi. Allowing Reduced Setbacks for Affordable Units
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Planning & Development Services Department Page 2
vii. Exempting Affordable Units from Development Impact Fees
viii. Expediting Reviews of Affordable Units
This report and associated discussion follow two prior PTC hearings regarding proposed
modifications to the city’s ADU/JADU ordinance. The prior meetings were held on February 10,
20211 and 24, 20212 and; more information is available online at: https://bit.ly/2QzrW1Y.
Background
On October 26, 2020, the Palo Alto City Council adopted Palo Alto Municipal Code Chapter
18.093, the most recent Accessory and Junior Accessory Dwelling Unit Ordinance (Attachment
A). The October 5, 2020 first reading staff report4 and minutes5 are available online. The
ordinance’s adoption occurred after PTC’s public hearing held on May 27, 2020. At that time,
the PTC recommended adoption of the ordinance.
While the Council adopted the ordinance, the Council also directed the PTC and staff to
continue pursuing additional changes to the ordinance that can further the production of ADUs
and JADUs in Palo Alto. The PTC previously considered and recommended changes to
development standards to encourage ADU production. This report proposes changes to the
ordinance that could lead to affordable ADUs.
Defining Housing Affordability and Affordable Housing
When using the term “affordable”, staff is referring to deed-restricted units that are offered for
reduced rent to income-qualifying households. The tenant household must have an income that
falls within a range established by City policy. The income corresponds to Santa Clara County’s
Income Table as developed by the Department of Housing and Urban Development (HUD). Each
year, HUD publishes a table for each county identifying the median income, and the incomes of
extremely low-, very low-, and low-income households. The household income varies based on
household size. As of April 26, 2021, the area median income (AMI) in Santa Clara County is
$151,300. Most affordable housing programs focus on serving households below the area
median income; those households that fall within the extremely low, very low, and low-income
categories.
Table 1: Santa Clara County Income Table Issued by HUD April 26, 20213
1 February 10, 2021 Staff Report: https://www.cityofpaloalto.org/files/assets/public/planning-amp-development-
services/file-migration/bc/ptc/2021-agenda/ptc-2.10-agenda-packet.pdf; February 10, 2021 Minutes:
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/planning-and-
transportation-commission/2021/ptc-2.10.2021-bgh-revisions.pdf
2 February 24, 2021 Staff Report: https://www.cityofpaloalto.org/files/assets/public/planning-amp-development-
services/file-migration/bc/ptc/2021-agenda/ptc-2.24-agenda-packet.pdf; February 24, 2021 Minutes:
https://www.cityofpaloalto.org/files/assets/public/planning-amp-development-services/file-
migration/bc/ptc/2021-agenda/ptc-2.24-agenda-packet.pdf
3 PAMC Chapter 18.09 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-58731
4 CMR 10-5-20 https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=59061.88&BlobID=78541
5 Minutes 10-5-20 https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=42759.83&BlobID=79414
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Household Size
Income 1 2 3 4 5 6 7 8
Extremely Low $34,800 $39,800 $44,750 $49,700 $53,700 $57,700 $61,650 $65,650
Very Low $58,000 $66,300 $74,600 $82,850 $89,500 $96,150 $102,750 $109,400
Low $82,450 $94,200 $106,000 $117,650 $127,200 $136,600 $146,050 $155,450
Median $105,900 $121,050 $136,150 $151,300 $163,400 $175,500 $187,600 $199,700
Moderate $127,100 $145,250 $163,400 $181,550 $196,050 $210,600 $225,100 $239,650
Source: California Department of Housing and Urban Development, 2021
A household’s income and size determine the income-qualifying category within which the
household falls. Further, the federal government provides guidance that housing is affordable if
a household spends no more than thirty percent of its income on rent. For example, a home is
affordable to a household of 4 earning 100% of the AMI if that household pays approximately
$3,782.50 per month for housing costs; or $45,390 per year. As further illustration, the City’s
BMR (below market rate) rental price range for a one-bedroom unit is $1,580 per month at 50%
AMI to $2,244 per month at 80% AMI.
There are three primary ways that housing can be made affordable (30 percent of a
household’s income or less). First, the market rate cost of the housing in an area can be
affordable; this is sometimes referred to as “naturally” occurring affordable housing. This may
be because the household earns sufficient income in relation to the housing, because the
housing design commands a lower market price, or other factors. In relation to ADUs, the state
has assumed that due to the smaller size of an ADU that ADUs will be lower cost. The actual
rental price of ADU/JADUs, though, is not regulated; they are not required to be rented nor are
they required to be rented at specific rental rates. The rates can rise and fall with the market
and with the owner’s preferences.
Second, housing can be made affordable through public policy. The City of Palo Alto, for
example, has a policy that requires 15% of for-sale housing units be deed-restricted to be
affordable to lower income households. These are often known as inclusionary below market
rate units, as they are included in a development that has both market-rate and BMR units.
Through this policy and others like it, the City facilitates the development of units that must be
rented to households in certain income categories and at rates that household can afford. The
management and rental and/or sale of these units ensures that only qualifying households
purchase and/or rent the affordable units.
Finally, housing can be constructed by affordable housing developers who specifically serve
households falling with in the lower income groups. Such housing is often supported by public
subsidy, philanthropic support, and/or private sector support (primarily tax credits), which
generally also require a recorded covenant strictly limiting rents.
Discussion
Potential Incentives for Affordable ADUs
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Planning & Development Services Department Page 4
The policies and development standards described below are intended to incentivize property
owners to voluntarily restrict an ADU/JADU to an affordable rent for income-qualifying
households. Some of these items may be appealing to provide as a right to all owners of
accessory units rather than just affordable units. Staff, however, believes these incentives can
help further the creation of affordable housing, which is acutely needed.
Further, staff propose to allow a property owner to utilize all the policies and standards. That is,
a J/ADU owner need not choose one policy or standard but can benefit from all incentives as
they are applicable to the J/ADU. In order to apply, though, the unit must be restricted to
income-qualified households only.
Finally, all these proposals assume the affordable ADU would be constructed on site and do not
contemplate any in-lieu fee or other means of providing the affordable unit.
i. Allowing Reconstruction/Expansion of Non-Conforming Structures
State ADU law provides a simple path for conversion of an existing, non-conforming structure
to an ADU, including complete demolition and reconstruction of the structure in place. If the
non-conforming structure is expanded, however, state law allows local governments to impose
some minimal regulations, like a four-foot setback and a 16-foot maximum height. A group of
local architects has advocated for allowing some degree of expansion when converting or
reconstructing non-conforming structures. Reconstruction can lead to a higher quality housing
unit than converting a structure that was not intended for human habitation. However, modern
building techniques may result in some expansion of the building envelope.
The PTC may consider allowing reconstruction of non-
conforming buildings in the same location with a slightly
different building envelope. Such policy could allow a
converted structure to accommodate contemporary
building code requirements for habitable buildings
without significantly increasing the degree of non-
conformity.
The PTC may, for example, consider recommending that
the height of the structure can increase by up to one foot
in height and the width of the structure to grow by a
total of six inches in all other directions (see image and
Attachment B), while remaining in the same non-
conforming location. This could be considered
“substantially the same” structure. Alternatively, the PTC
could consider establishing a maximum
height/dimension that a non-conforming unit could be
expanded to (e.g., max height of 10 to 12 feet with a
4/12 roof pitch on all sides) or meet a predetermined daylight plane (established at 10 feet and
angled 45 degrees towards property with max height for the structure of 10-12 feet).
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The policy may, however, exacerbate perceived concerns regarding privacy. For example, if a
non-confirming structure is closer than 4 feet from the neighboring property line, the
reconstruction of a slightly larger structure at this location, and now for habitation purposes,
could be perceived as a challenge to privacy. It would also be contrary to how the City’s
Municipal Code generally treats other non-conforming structures and would conflict with the
City’s general policy to eliminate non-conforming structures over time.
ii. Removing the Existing Garage/Carport Requirement for Conversions
Current state and local regulations provide that replacement parking need not be provided for
covered parking that is eliminated in order to create an ADU. In maintaining this requirement, it
requires that a structure must first be built and then later modified in order to benefit from the
reduced parking requirements. For a project that is proposing a new garage or new house
(which requires one covered and one uncoved space at a minimum), this would mean applying
for two different permits with the City; each with their own plans, inspections, plan check fees,
etc. This creates a two-step process for applicants that can add time, money, and barriers to
unit production. Requiring a permit to build a garage or carport and a subsequent permit to
convert the garage or carport does not add value to the quality of an application if the
homeowner is intent on building a second unit and eliminating the covered parking. In the end,
this results in more time for staff to review a project at two different stages.
Instead, the City could provide a single step process as an incentive for properties to build units
that are compliant with the City’s goals; namely, providing an affordable unit. The City could
still require that, in this instance, uncovered parking spaces must be located on site, including
an opportunity to locate within the front or street-side setbacks, to satisfy the primary unit’s
parking needs. Alternatively, the City could simply reduce the parking requirement for the
primary unit, as that is the result of the two-step process.
The result would be that applicants could choose at any point to provide an ADU on their
property, even during the review of a brand new single family home/garage. This change would
mean that plans could indicate a house that does not provide any form of covered parking on
the site at all. Although this raises some concerns about the existence of sufficent parking on
the site, staff believe this could be an acceptable trade-off for the development of an affordable
housing unit.
iii. Allowing an Additional ADU to be Built when Providing an Affordable Unit On-Site
Other jurisdictions within the state have provided incentives to allow additional ADUs to be
developed on a site that also provides an affordable unit. In particular, the City of San Diego has
allowed a homeowner one additional ADU if an ADU is provided at an affordable rent. Within a
transit priority development area, San Diego allows an additional ADU for each affordable ADU
provided on-site to an unlimited amount. The City of San Diego additionally requires that the
affordable ADU is available to very low income, low income, and moderate-income households,
with a deed restriction of not less than 15 years.
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The City could develop a similar program, though a limit of 1 additional ADU may be more
appropriate for Palo Alto. In combination with the existing ordinance, such a policy would allow
a single-family zoned parcel to have (1) a primary home, (2) a JADU (3) an ADU, (4) a deed
restricted affordable ADU. If there is a preference for these additional units to be attached or
detached from the primary dwelling, limited to a certain size, follow specific setback criteria,
etc., then staff would seek PTC’s guidance on this. This type of policy may benefit larger parcels
more than smaller ones; a separate policy could permit a greater number of additional units
built on very large parcels (e.g., one additional unit for lots less than 10,000 sf, two for lots that
are 10,000 – 20,000 sf, etc.).
iv. Exempting Basement Square Feet from Gross Floor Area/Floor Area Ratio Calculations
Per PAMC 18.09.040(i)(2), basements under ADUs are not allowed to extend into the setbacks
required for the primary dwelling. Following the PTC hearing on 2/24, PTC voiced support for
allowing basements under second units, provided they follow the four-foot side and rear
setbacks.6 The ordinance could be further modified to treat basement square footage under an
affordable unit as exempt from Gross Floor Area (GRA)/Floor Area Ratio (FAR). This basement
would need to follow the footprint and setbacks required of all unit types so that they would
not be able to project closer than four feet to a property line.
By exempting the basement space from GFA/FAR for affordable units, it could allow an
individual to build a large unit, up to the maximum sizes prescribed in state law of 1,200 square
feet for a detached unit or 50% of the primary dwelling for an attached unit. Providing a larger
unit can provide a more equitable living situation for families looking for an affordable place to
live in Palo Alto. It also can provide some flexibility to homeowners who may want to build a
bigger unit but still want to preserve a portion of their yard for other uses. Staff would continue
to review applications to confirm such basements would not have an adverse impact to
adjacent trees, privacy, or dewatering. Potential concerns within the community regarding
impacts of large units could include school district student increases (and impacts on other
government services if development impact fees were waived for ADUs).
v. Increase Allowed Maximum Size for ADU/JADU
The City’s ADU ordinance allows for a maximum ADU size of 900 square feet (sf), or 1,000 sf
with 2 or more bedrooms, while a JADU has a maximum size of 500 sf. The architect group
suggested in their comment letter (Attachment B) that the City should look at expanding the
maximum allowed unit sizes. If the PTC would like to recommend Council pursue this change,
staff would recommend limiting it to affordable units that meet the thresholds mentioned
before in this report. At the moment, staff would suggest allowing up to 1,200 sf square feet for
affordable ADUs and 800 sf for affordable JADUs.
vi. Allowing Reduced Setbacks for Affordable Units
The 2020 state law reduced setbacks for certain second units to a four-foot separation from the
rear and side property lines. Staff has heard from homeowners and the architect group that
6 PTC 2-24-21 Staff Report: https://bit.ly/3e1CuyE; PTC 2-24-21 Minutes: https://bit.ly/32dxba3
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while individuals are keen on developing second units, there is often a balance they seek to
achieve between space for the unit and maintaining space for themselves. The City could
consider further reducing interior yard setbacks for an affordable unit to a two-foot or zero
setback allowance, so long as there were no concerns for fire and life safety. Within these zero-
to-four-foot setback areas, the City would have greater authority to regulate the structure by
establishing predetermined heights, daylight planes, or other envelope-based restrictions for
new construction or even converted structures in these locations.
By allowing reduced setbacks, this could provide additional site planning flexibility for the
homeowner and doubly serve to limit massing impacts on an adjacent property. If the PTC
wishes to recommend this option, staff will need input on what height/setback would be
acceptable before providing mock-ups for consideration. One concern with this approach is the
area available for screening vegetation would be constrained with a two-foot setback, and non-
existent with a zero setback. Likewise, impacts on neighboring property trees is a factor to
consider.
vii. Exempting Affordable Units from Development Impact Fees
In order to encourage development of units that meet the City’s goals of providing affordable
housing, the City could exempt units of all sizes from Development Impact Fees. Staff does not
generally support eliminating fees that are meant to cover the impacts of development within
the City due to the long-term effects of deferred maintenance. However, this may be an
acceptable trade-off to achieving the type of affordable development the City wants and needs.
While exempting units from Development Impact Fees does not cover the entire costs
experienced through the permit review process, it can serve to remove barriers to unit
construction.
viii. Expediting Reviews of Affordable Units
The architect group noted that in addition to all the costs homeowners deal with when
submitting permits to the City, processing time can be a significant cost factor. The current
review time frames for building permits are: 30-day review of new submittals and 14-day
review of resubmitted projects.
Staff could investigate reducing the time frames of these reviews to seven-days on the initial
review and three-days on any resubmittal. However, without additional staff, it is likely this
expedited permit effort would affect current staff’s ability to provide on-time reviews for all
other project types. As it is unknown how much development this program could generate,
there is no metric to effectively gauge the impact to staff’s workload. Staff would seek Council
guidance on this possible incentive related to the City’s resources.
Other Dimensions of Affordable ADU Policy
In addition to the incentives discussed above, the PTC may also consider several other
important policy dimensions:
(1) The length of time that a unit must be affordable - The ADU could be subject to
restrictions for 55 or 99 years, similar to the treatment of inclusionary BMR units;
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however, this might not be tolerable for many homeowners and could lead to limited
affordable J/ADU production. The PTC might consider a shorter time period such as 10,
15, 20, or 30 years. Staff recommend a minimum of 15 years; during that period the
J/ADU must be leased to an income qualified household. After the time ends, the owner
could lease the unit to any household.
In meetings with the architect group, staff learned the group had not heard support
from their clients and other residents for a 15-year minimum. They had heard support
for a 5 to 10-year period. Staff does not believe that a 5 to 10-year period is sufficient,
as some of the proposed incentives (e.g., an additional unit) provide significant ongoing
value to the property owner. At a minimum, staff would seek to establish a graduated
metric for the length and time for such units to remain affordable, with more deeply
affordable units (50%-80% AMI) having a shorter sunset period. Staff is seeking PTC’s
input on this potential approach and whether there are additional possibilities to
consider, such as terms related to eight-year housing element cycles and affordability
levels.
(2) The income categories affordable units must serve – The program could follow the same
affordability requirements for the City’s existing BMR program, targeting households
within the 80% to 120% AMI range (moderate-income households). The PTC may wish
to apply the same standards to the affordable J/ADUs.
Alternatively, the PTC may wish to serve low, very low, or extremely low-income
households. Typically, units restricted to the latter two categories are supported
through 100% affordable housing developments that offer additional services and
supports to the households.
(3) Process to Lease Affordable ADUs and JADUs – The rental process for the ADU/JADUs
could follow a similar process to the rentals for inclusionary BMR housing units, which
are administered for the City by Alta Housing. For BMR rental units, Alta Housing is
contacted by a property owner when a BMR unit is or will be vacated. Alta Housing is
responsible for advertising the unit and finding tenants. As part of the income
certification process, the applicants are required to submit income documentation such
as a W-2 form, paystubs, asset holdings, etc. Once placed in the housing, Alta Housing
recertifies the tenant annually.
In speaking with Alta Housing, since there is not an affordable ADU rental program in
place, their preference is for the City to create a waitlist that can be used to place pre-
qualified tenants in available units. The income certification of prospective tenants can
take 30-60 days. During this time, the owner of a vacant ADU is not collecting rent. This
may discourage potential homeowners from participating because of the timing issue.
(4) Tenant Selection – ADU owners could choose between (1) vetting a potential renter to
submit to the administrator for income certification or (2) receiving a referral from the
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program administrator. The former could add time and cost to securing a tenant, but
the latter may not be ideal as the administrator only provides income certification of
potential tenants. The landlord would still need to perform their own due diligence and
qualification process with the prospective tenant.
(5) Program Administration Costs - Alta Housing has suggested requiring a $700 charge for
initial certification of tenants and $500 for annual recertification of tenants. This is
based on costs for Alta Housing’s administration of the Los Altos BMR program.
Typically, this cost is paid by the landlord. This charge would be paid directly to Alta
Housing to cover the cost to perform income certification of tenants. Please note that
this fee is for income certification only. Other background review (credit history, rental
history, criminal check, etc.) are all performed by the housing provider.
There are not funds available for the administration of this program within the City’s
budget. If the PTC and Council want to cover the program administration with public
funds—as opposed to landlord’s paying as described above—then funding sources will
need to be identified and appropriated.
Staff can pursue State grant funds, such as the Permanent Local Housing Allocation
(PLHA) to support creating this program. The PLHA was created in 2017 which
established a $75 recording fee on real estate documents to increase the supply of
affordable homes in California.7 Based on conversations staff has had with HCD, roughly
$231,000 per year could be made available to the City to build this program. But staff is
still reviewing the different funding activities in which this could be an eligible activity.
This is a non-competitive program.
(6) Financing ADU Development – Some cities and counties partner with financial
institutions and other organizations to help finance the construction of ADUs. For
example, Palo Alto could partner with organizations such as Housing Trust Silicon Valley
(HTSV) which provides loans to homeowners trying to develop ADUs. Should the City
pursue such partnerships and/or directly establish a loan fund to support ADU
development, requiring affordability could be part of the loan terms.
Environmental Review
This ADU Ordinance is exempt from the provisions of the California Environmental Quality Act
(CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines sections
15061(b)(3), and 15305 because it implements requirements related to accessory dwelling units
as established in Government Code Section 65852.2, represents only minor changes to land use
limitations, and is likely to result in additional dwelling units dispersed throughout the City. As
such, it can be seen with certainty that the proposed action will not have the potential for
causing a significant effect on the environment. Moreover, the actual development of ADUs
would be exempt pursuant to CEQA Guidelines sections 15301, 15302, and 15303.
7 PLHA - https://www.hcd.ca.gov/grants-funding/active-funding/plha.shtml
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Public Notification, Outreach & Comments
The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper
and mailed to owners and occupants of property within 600 feet of the subject property at least
ten days in advance. Notice of a public hearing for this project was published in the Daily Post
on April 30, 2021, which is 12 days in advance of the meeting.
Report Author & Contact Information PTC8 Liaison & Contact Information
Garrett Sauls, Associate Planner Rachael Tanner, Assistant Director
(650) 329-2471 (650) 329-2167
Garrett.Sauls@CityofPaloAlto.org rachael.tanner@cityofpaloalto.org
Attachments:
• Attachment A: Ordinance 5507 (PDF)
• Attachment B: Architect Group's Correspondence (PDF)
8 Emails may be sent directly to the PTC using the following address: planning.commission@cityofpaloalto.org
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Ordinance No. 5507
Ordinance of the Council of the City of Palo Alto Amending Title 18 (Zoning) of the Palo Alto
Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior
Accessory Dwelling Units
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. Housing in California is increasingly unaffordable. In 2017, the average California home
cost about 2.5 times the national average home price and the monthly rent was 50%
higher than the rest of the nation. Rents in San Francisco, San Jose, Oakland, and Los
Angeles are among the top 10 most unaffordable in the nation.
B. Housing in Palo Alto is especially unaffordable. The average Palo Alto home currently costs
about 8 times the national average home price and the monthly rent is about 2.5 times the
national average.
C. Palo Alto has a jobs/housing imbalance. When addressing this imbalance, the City must
not only provide housing but also ensure affordability.
D. 68, 587, 671, and
pertain to accessory dwelling units s junior accessory dwelling units s
and were approved by the California Legislature on September 13, 2019 and signed by the
Governor on October 9, 2019. These bills, codified primarily in California Government Code
sections 65952.2 and 65952.22, are intended to spur the creation of lower cost housing by
easing regulatory barriers to the creation of ADUs and JADUs.
E. This ordinance is adopted to comply with the mandates of the State ADU Law.
SECTION 2. Section 18.42.040 (Accessory and Junior Accessory Dwelling Units) of Chapter 18.42
(Standards for Special Uses) of Title 18 (Zoning) of the PAMC is deleted in
its entirety.
SECTION 3. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of Title 18
18.09.010 Purpose
The intent of this Chapter is to provide regulations to accommodate accessory and junior
accessory dwelling units (ADU/JADU), in order to provide for variety to the city's housing stock
and additional affordable housing opportunities. These units shall be separate, self-contained
living units, with separate entrances from the main residence, whether attached or detached.
The standards below are provided to minimize the impacts of units on nearby residents and
throughout the city, and to assure that the size and location of such dwellings is compatible
with the existing or proposed residence(s) on the site and with other structures in the area.
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18.09.020 Applicable Zoning Districts
The establishment of an accessory dwelling unit is permitted in zoning districts when single-
family or multi-family residential is a permitted land use.
18.09.030 Units Exempt from Generally Applicable Local Regulations
(a) Government Code section 65852.2, subdivision (e) provides that certain units shall be
approved notwithstanding state or local regulations that may otherwise apply. The following
types of units shall be governed by the standards in this section. In the event of a conflict
between this section and Government Code section 65852.2, subdivision (e), the
Government Code shall prevail.
i. An ADU or JADU within the existing space of a single-family dwelling or an ADU
within the existing space of an accessory structure (i.e. conversion without
substantial addition).
ii. An ADU or JADU within the proposed space of a single-family dwelling.
iii. A detached, new construction ADU on a lot with a proposed or existing single-family
dwelling, provided the ADU does not exceed 800 square feet, sixteen feet in height,
or four-foot side and rear (i.e. interior) setbacks.
iv. ADUs created by conversion of portions of existing multi-family dwellings not used
as livable space.
v. Up to two detached ADUs on a lot with an existing multi-family dwelling.
(b) The Development Standards for units governed by this section are summarized in Table 1.
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Table 1: Development Standards for Units Described in Government Code Section 65852.2(e)
Single-Family Multi-Family Conversion of Space Within an Existing Single-Family Home or Accessory Structure
Construction of Attached ADU Within the Space of a Proposed Single-Family Home
New Construction of Detached ADU
Conversion of Non-Habitable Space Within Existing Multi-family Dwelling Structure
Conversion or Construction of Detached ADU
Number of Units Allowed 1 ADU and 1 JADU 25% of the existing units (at least one) 2
Minimum size1 150 sf Maximum size1 N/A2 800 sf N/A
Setbacks
N/A, if condition is sufficient for fire and safety
Underlying zone standard for Single Family Home (ADU must be within space of Single-Family Home)
4 feet from side and rear lot lines; underlying zoning for front setback
N/A
4 feet from side and rear lot lines; underlying zoning for front setback Daylight Plane N/A N/A
Maximum Height N/A 163 N/A 164
Parking None
State Law Reference 65852.2(e)(1)(A) 65852.2(e)(1)(A) 65852.2(e)(1)(B) 65852.2(e)(1)(C) 65852.2(e)(1)(D)
(1) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or
greater
(2) Up to 150 sf may be added for the purpose of ingress and egress only.
(3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling.
(c) Development standards stated elsewhere in this Section or Title 18, including standards
related to FAR, lot coverage, and privacy, are not applicable to ADUs or JADUs that qualify
for approval under this section.
(d) The establishment of accessory dwelling units and junior accessory dwelling units pursuant
to this section shall not be conditioned on the correction of non-conforming zoning
conditions; provided, however, that nothing in this section shall limit the authority of the
Chief Building Official to require correction of building standards relating to health and
safety.
(e) The installation of fire sprinklers shall not be required in an accessory dwelling unit if
sprinklers are not required for the primary residence. Nothing in this section shall preclude
the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with
generally applicable fire protection requirements.
(f) Rental of any unit created pursuant to this section shall be for a term of 30 days or more.
(g) Attached units shall have independent exterior access from a proposed or existing single-
family dwelling. Except for JADUs, attached units shall not have an interior access point to
the primary dwelling (e.g. hotel door or other similar feature/appurtenance).
(h) Conversion of an existing accessory structure pursuant to Government Code section
65852.2(e)(1)(A) may include reconstruction in-place of a non-conforming structure, so long
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as the renovation of reconstruction does not increase the degree of non-compliance, such
as increased height, envelope, or further intrusion into required setbacks.
(i) Street addresses shall be assigned to all units prior to building permit final to assist in
emergency response.
(j) The unit shall not be sold separately from the primary residence.
(k) Replacement parking is not required when a garage, carport, or covered parking structure is
converted to, or demolished in conjunction with the construction of, an ADU.
(l) JADUs shall comply with the requirements of Section 18.09.050.
18.09.040 Units Subject to Local Standards
(a) This section shall govern applications for ADUs and JADUs that do not qualify for approval
under section 18.09.030 and for which the City may impose local standards pursuant to
Government Code section 65852.2, subdivisions (a) through (d).
(b) The Development Standards for units governed by this section are provided in Table 2.
Table 2: All other Units Attached Detached JADU
Number of Units Allowed1 1 1
Minimum size 150 sf
Maximum size
900 sf (1,000 sf for two or more bedrooms); no more than 50% of the size of the single-family home
900 sf (1,000 sf for two or more bedrooms) 500 sf
Setbacks 4 feet from side and rear lot lines; underlying zone standard for front setback
Daylight Plane Initial Height 8 feet at lot line Angle 45 degrees
Maximum Height3 Res. Estate (RE) 30 feet
Open Space (OS) 25 feet All other eligible zones 16 feet
Parking None
Square Footage Exemption Up to 800 sf(4) Up to 500 sf(4)
(1) An attached or detached ADU may be built in conjunction with a JADU on a lot with an existing or proposed single family home (2) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Lots with both an ADU and a JADU may exempt a maximum combined total of 800 square feet of the ADU and JADU from FAR, Lot Coverage, and Maximum House Size calculations.
(c) A single-family dwelling shall exist on the lot or shall be constructed on the lot in conjunction
with the construction of an ADU/JADU.
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(d) ADU and/or JADU square footage shall not be included in FAR, Lot Coverage, and Maximum House Size calculations for a lot with an existing or proposed single family home, up to the amounts stated in Table 2. ADU and/or JADU square footage in excess of the exemptions provided in Table 2 shall be included in FAR, Lot Coverage, and Maximum House Size calculations for the lot.
(e) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Except for JADUs, attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance).
(f) No protected tree shall be removed for the purpose of establishing an accessory dwelling unit unless the tree is dead, dangerous or constitutes a nuisance under Section 8.04.050. Any protected tree removed pursuant to this subsection shall be replaced in accordance with the standards in the Tree Technical Manual.
(g) For properties listed in the Palo Alto Historic Inventory, the California Register of Historical Resources, the National Register of Historic Places, or considered a historic resource after completion of a historic resource evaluation, compliance with the appropriate Secretary of
(h) Noise-producing equipment such as air conditioners, water heaters, and similar service equipment, shall be located outside of the setbacks for the ADU/JADU. All such equipment shall be insulated and housed, except that the planning director may permit installation without housing and insulation, provided that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure
(i) Setbacks
i. Detached units shall maintain a minimum three-foot distance from the primary unit, measured from the exterior walls of structures.
ii. No basement or other subterranean portion of an ADU/JADU shall encroach into a setback required for the primary dwelling.
iii. Projections, including but not limited to windows, doors, mechanical equipment,
venting or exhaust systems, are not permitted to encroach into the required
setbacks, with the exception of a roof eave of up to 2 feet.
(j) Design
i. Except on corner lots, the unit shall not have an entranceway facing the same lot line (property line) as the entranceway to the main dwelling unit unless the entranceway to the accessory unit is located in the rear half of the lot. Exterior staircases to second floor units shall be located toward the interior side or rear yard of the property.
ii. Privacy
A. Second story doors and decks shall not face a neighboring dwelling unit. Second story decks and balconies shall utilize screening barriers to prevent views into adjacent properties. These barriers shall provide a minimum five-foot, six-inch, screen wall from the floor level of the deck or balcony and shall not include perforations that would allow visibility between properties.
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B. Second story windows, excluding those required for egress, shall have a five-foot sill height as measured from the second-floor level, or utilize obscured glazing on the entirety of the window when facing adjacent properties. Second story egress windows shall utilize obscured glazing on the entirety of the windows which face adjacent properties.
C. privacy.
(k) Parking i. Replacement parking is not required when a garage, carport, or covered parking structure is converted to, or demolished in conjunction with the construction of, an ADU. ii. Replacement parking is required when an existing attached garage is converted to a JADU. These replacement spaces may be provided as uncovered spaces in any configuration on the lot including within the front or street side yard setback for the property.
A. The Director shall have the authority to modify required replacement parking spaces by up to one foot in width and length upon finding that the reduction is necessary to accommodate parking in a location otherwise allowed under this code and is not detrimental to public health, safety or the general welfare. B. Existing front and street side yard driveways may be enlarged to the minimum extent necessary to comply with the replacement parking requirement above. Existing curb cuts shall not be altered except when necessary to promote public health, safety or the general welfare. iii. When parking is provided, the unit shall have street access from a driveway in common with the main residence in order to prevent new curb cuts, excessive paving, and elimination of street trees, unless separate driveway access will result in fewer environmental impacts such as paving, grading or tree removal. iv. If covered parking for a unit is provided in any district, the maximum size of the covered parking area for the accessory dwelling unit is 220 square feet. This space shall count towards the total floor area for the site but does not contribute to the maximum size of the unit unless attached to the unit.
(l) Miscellaneous requirements
i. Street addresses shall be assigned to all units prior to building permit final to assist
in emergency response.
ii. The unit shall not be sold separately from the primary residence.
iii. Rental of any unit created pursuant to this section shall be for a term of 30 days or
more.
iv. The installation of fire sprinklers shall not be required in an accessory dwelling unit
if sprinklers are not required for the primary residence. Nothing in this section shall
preclude the Fire Marshal from accepting fire sprinklers as an alternative means of
compliance with generally applicable fire protection requirements.
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18.09.050 Additional Requirements for JADUs
(a) A junior accessory dwelling unit shall be created within the walls of an existing or proposed
primary dwelling.
(b) The junior accessory dwelling unit shall include an efficiency kitchen, requiring the following
components: A cooking facility with appliances, and; food preparation counter and storage
cabinets that are of reasonable size in relation to the size of the junior accessory dwelling unit.
i. A cooking facility with appliances shall mean, at minimum a one burner installed
range, an oven or convection microwave, a 10 cubic foot refrigerator and freezer
combination unit, and a sink that facilitates hot and cold water.
ii. A food preparation counter and storage cabinets shall be of reasonable size in relation
to a JADU if they provide counter space equal to a minimum 24-inch depth and 36-
inch length.
(c) For the purposes of any fire or life protection ordinance or regulation or for the purposes of
providing service for water, sewer, or power, a junior accessory dwelling unit shall not be
considered a separate or new unit.
(d) The owner of a parcel proposed for a junior accessory dwelling unit shall occupy as a primary
residence either the primary dwelling or the junior accessory dwelling. Owner-occupancy is
not required if the owner is a governmental agency, land trust, or housing organization.
(e) Prior to the issuance of a building permit for a junior accessory dwelling unit, the owner shall
record a deed restriction in a form approved by the city that includes a prohibition on the sale
of the junior accessory dwelling unit separate from the sale of the single-family residence,
requires owner-occupancy consistent with subsection (d) above, does not permit short-term
rentals, and restricts the size and attributes of the junior dwelling unit to those that conform
with this section.
SECTION 4. Subsection (g) of Section 16.58.030 of Chapter 16.58 (Development Impact Fees) of Title 16
is amended to read:
(f) Accessory dwelling units (ADU) less than 750 square feet in size. Any impact fees to be
charged for an accessory dwelling unit of 750 square feet or more shall be proportional to
the square footage of the primary dwelling unit established by the conversion of an existing
garage or carport, provided that the existing garage or carport was legally constructed, or
received building permits, as of January 1, 2017, and is converted to an ADU with no
expansion of the existing building envelope;
SECTION 5. Subsections (a)(4) and (a)(75) of Section 18.04.030 (Definitions) of Chapter 18.04
to read:
[. . .]
attached or a detached residential dwelling unit which
provides complete independent living facilities for one or more persons. It shall include permanent
provisions for living, sleeping, eating, cooking, and sanitation on the same parcel as the single-
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family dwelling is situated. An accessory dwelling unit also includes the following:
(A) An efficiency unit, as defined in Section 17958.1 of the Health and Safety Code.
(B) A manufactured home, as defined in Section 18007 of the Health and Safety Code.
In some instances this Code uses the term second dwelling unit interchangeably with accessory
dwelling unit. For the purposes of this definition,
a dwelling unit shall not have an interior access point to another dwelling unit (e.g. hotel
door or other similar feature/appurtenance).
[. . .]
(75 Kitchen a room designed, intended or used for cooking and the preparation of food
and dishwashing. Kitchen facilities include the presence of major appliances, utility connections,
sink, counter, for storing, preparing, cooking, and cleaning.
(A) For ADUs, major appliances shall mean a minimum two burner installed range, and
an oven or convection microwave, as well as a minimum 16 cubic foot freezer and
refrigerator combination unit. Kitchens shall also include counter space for food
preparation equal to a minimum 24-inch depth and 36-inch length, and a sink that
facilitates hot and cold water.
[. . .]
SECTION 6. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the
provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or
modified to that extent necessary to effect the provisions of this Ordinance.
SECTION 7. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason
held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such
decision shall not affect the validity of the remaining portions of this Ordinance. The City Council
hereby declares that it would have passed this Ordinance and each and every section, subsection,
sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any
portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 8. The Council finds that the adoption of this Ordinance is exempt from the provisions of the
California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and
CEQA Guidelines sections 15061(b)(3), 15301, 15302 and 15305 because it constitutes minor
dwelling units as established in Government Code Section 65852.2, and these changes are also likely to
result in few additional dwelling units dispersed throughout the City. As such, it can be seen with
certainty that the proposed action will not have the potential for causing a significant effect on the
environment.
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SECTION 9. This ordinance shall be effective on the thirty-first date after the date of its adoption.
INTRODUCED: October 5, 2020
PASSED: October 26, 2020
AYES: CORMACK, DUBOIS, FILSETH, FINE, KNISS, KOU, TANAKA
NOES:
ABSENT:
NOT PARTICIPATING:
ATTEST:
__________________________________ __________________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED: __________________________________ ___________________________________
Assistant City Attorney City Manager
__________________________________
Director of Planning & Development
Services
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Envelope Id: 9071942B9F384F1BB4988D8AE22A87BE Status: Completed
Subject: Please DocuSign: ORD 5507 - Ordinance Amending Title 18 (Zoning) of PAMC to Amend Requirements ...
Source Envelope:
Document Pages: 9 Signatures: 5 Envelope Originator:
Certificate Pages: 2 Initials: 0 Kim Lunt
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
250 Hamilton Ave
Palo Alto , CA 94301
kimberly.lunt@cityofpaloalto.org
IP Address: 199.33.32.254
Status: Original
10/29/2020 1:45:24 PM
Holder: Kim Lunt
kimberly.lunt@cityofpaloalto.org
Location: DocuSign
Security Appliance Status: Connected Pool: StateLocal
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Albert Yang
Albert.Yang@CityofPaloAlto.org
Assistant City Attorney
City of Palo Alto
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Jonathan Lait
Jonathan.Lait@CityofPaloAlto.org
Interim Director Planning and Community
Environment
City of Palo Alto
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Ed Shikada
ed.shikada@cityofpaloalto.org
Ed Shikada, City Manager
City of Palo Alto
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Beth Minor
Beth.Minor@CityofPaloAlto.org
City Clerk
City of Palo Alto
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City Of Palo Alto ADU Ordinance, First Reading, Meeting Date 10/5/2020 Agenda Item #8
To the Members of The Palo Alto City Council:
We want to begin by expressing commendation for what has been done to date by Council and PTC but
particularly by Staff. This is a complex political and technical topic and we consider the ordinance to be
mostly in alignment with the State Statutes. We applaud the effort where choices have been made to
exceed limitations in a reasonable way, and understand clearly the boundaries established by State
legislation.
What we need to remember is that the State is promoting this legislation to incentivize and streamline the
creation of ADUs. We should also remember to view all of this through the local lens of prioritizing
residential development as a clearly stated Palo Alto goal. As professionals, we seek a clear and precise
set of rules we can rely on in the design process to achieve a predictable result for our clients.
A number of individuals spoke in warning when we came before Council in January, and we have been
proven correct in stating Palo Alto's urgency ordinance was seriously flawed. Many elements did not
properly conform to State legislation. Since then, Staff has adjusted their interpretations, in some cases
after being challenged by the professional community, and partly when influenced by input from HCD.
The updated document before you makes good progress toward alignment, but we still fall short in some
important areas.
The Palo Alto ADU Task Force (PAADUTF), now approximately 20 individuals and growing, was created
out of a grassroots desire for peer communication between professionals who are active in ADU
development. Sharing information regarding regulatory interpretations, design methodology, and
construction strategy, this group came together to evaluate the August 17 staff report and associated
ordinance language. Unfortunately, we were not aware of the May 27 PTC hearing and recognize this
was a missed opportunity to interact with staff. Over the course of five meetings conducted during August
and September, the group developed a narrative along with an annotated review of the proposed
ordinance. As indicated, two additional meetings were conducted with staff included to review and discuss
the information. Several significant points from that discussion have been captured in your staff report.
There are others that were not, that we nonetheless feel are critical to implement as part of this update.
Through direct and frequent interaction with HCD and supported by other experts active in ADU
regulatory action, The PAADUTF has identified several specific areas where the proposed local ordinance
departs from the State intent. We recognize Staff feels they have rigorously evaluated the language
presented to you tonight, but we do not believe they are entirely correct. The HCD ADU Handbook,
released just last week, seems to confirm a few areas where the proposed language is in conflict with
HCD’s guidance. As you have heard, if inconsistency is not corrected, there is a significant possibility the
ordinance will be challenged and potentially deemed invalid.
The most significant issue is the approach taken in the ordinance regarding the Statewide Exemption
ADU and how that language relates to all other units, particularly those exceeding 800 square feet.
Gov. Code, § 65852.2, subd. (c)(2)(C) “Any other minimum or maximum size for
an accessory dwelling unit, size based upon a percentage of the proposed or
existing primary dwelling, or limits on lot coverage, floor area ratio, open space,
and minimum lot size, for either attached or detached dwellings that does not
permit at least an 800 square foot accessory dwelling unit that is at least 16 feet in
height with four-foot side and rear yard setbacks to be constructed in compliance
with all other local development standards.”
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Staff's interpretation of this section includes a vision that the Exemption Unit is an isolated obligation. In
fact, the Statute language says clearly “at least”, so we have been told any attempt at creating limitations
for units which are larger (daylight plane restrictions, placement on the lot, a limitation for subterranean
construction, or basement construction) is simply inconsistent with the State Statute.
Another significant departure is the approach taken in regard to 2-story construction. Staff is seeking to
create limits on the basis of privacy, but the restrictions they have offered are inconsistent with the
statutes. It is important to remember that the State put these new rules in place to shake up the norms,
and we need to understand and align with that intent. As an example, HCD has described a scenario
where if a lot is so small that 800 sf cannot be accommodated on one level, then 2-stories can be the only
option. Because of this, HCD has confirmed there can be no restriction against 2-story units, under any
condition. Whether in conformance with an Exemption ADU or larger, 2-story construction must be
embraced. We would offer that Santa Cruz has done an excellent job in this area and has elected to allow
22’ of height with additional restrictions for distance from the property line once beyond 16’ of height.
(https://www.cityofsantacruz.com/government/city-departments/planning-and-community-development/ac
cessory-dwelling-units-adus)
Again, there are a number of specific areas of improvement in the proposed ordinance, and we applaud
that. What we ask of you tonight is the consideration of 15 areas of concern we identify below, some of
which have already been described by Staff. We believe all of these are important and nuanced topics
that are truly necessary to implement. Some are changes only included to simplify the development of
ADUs, but others are very technical responses to costly or avoidably complex limitations. We ask that you
remember our pace is 1,000 units short of our RHNA requirement and that we need to do better and
move faster. This set of considerations provides an easy way to encourage the development of additional
units with minimal collateral impact when compared to larger, more dense projects with their significant
timelines and approval hurdles.
15 Suggestions for Consideration:
1.Alignment with Gov. Code, § 65852.2, subd. (c)(2)(C)
a.Remove language that improperly restricts daylight plane, placement on the lot, limitation for
subterranean construction, or basement construction.
2.Two-Story
a.Provide definition for subterranean 1st level construction. (1st level partially recessed in the
ground)
i.Clarify how deep this can be without being interpreted as a ‘basement’
1.Suggest 36” max below existing natural grade as the threshold
b.Confirm Staff’s recommendations for privacy management
i.Windows obscured when sills are below 5’ above adjacent finish floor on walls parallel to
property lines when the structure is within 8’ of a property line
ii.Set sills at 5’ above adjacent finish floor on walls parallel to property lines when the structure
is within 8’ of a property line
iii.Sleeping rooms endeavor to have egress windows located on walls non-adjacent to property
lines
iv.Use of (operable) skylights in bathrooms and other spaces where windows could be
considered optional
v.No exterior lighting mounted above 7’ on walls adjacent to property lines to keep it at or
below maximum fence height
c.Consider adopting language similar to that used in Santa Cruz:
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i.ADUs higher than one story may be up to 22’ tall at the peak, measured from average
grade, and any portion of the structure that exceeds 16’ in height must be set back a
minimum of 5’ from the side yard property line and 10’ from the rear yard property line.
ii.Exception: An ADU that faces an alley or street can be up to 22’ tall and any portion of the
structure that exceeds 16’ in height must be set back 5’ from the side and rear property
lines.
iii.Detached New Construction ADUs higher than one story shall limit the major access stairs,
decks, entry doors, and windows to the interior of the lot or an alley if applicable. Windows
that impact the privacy of the neighboring side or rear yards should be minimized or
otherwise restricted as in (b.) above
3.Fees
a.Significant cost is incurred relative to fees for Plan Check, Building Permit, Planning Impacts,
Specialty Consultants, School Fees, etc. They are not always levied in a relative fashion.
i.Why not just charge a flat fee based on ADU floor area?
ii.Included in that methodology, remove some of the fees to further incentivize ADU
construction.
b.It is important to note that the proportionate language in regard to Planning Impact Fees for units
>750 sf contained in Gov. Code, § 65852.2, subd. (f)(3)(A) creates a significant disincentive for
individuals with existing small homes. Please note the following examples:
i.Project #1, Demolish an existing detached garage and replace it with a new conforming
detached ADU.
1.Main house at 3,427 sf and new ADU at 800 sf = 23.3% = $4,511.47
ii.Project #2, Convert an existing detached garage and construct an addition to create a new
detached ADU.
1.Main house at 1,209.6 sf and new ADU at 882 sf = 73.0% = $14,101.46
c.Both are roughly the same scope but because of the more modest house on Project #2, the
weighted ratio pushes the fee to be $10k more.
d.Add to this about $9,000 for: School Impact Fees ($3,000), Plan Check Fees ($2,800) and
Building Permit Fees ($3,300) - That puts the fees for Project #2 at around $23k, or almost 11%
of the total anticipated project construction cost!
4.Subterranean/Basement Construction
a.Without some flexibility in this, floor to ceiling heights are substandard (+/- 7’-0”). Codifying this in
a thoughtful way can provide tangible improvements in privacy management and enhancement to
overall massing.
b.Partially subterranean 1st floor lowers 2nd floor and allows 8’ ceilings with a reasonable roof slope
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c.Adding a basement could reduce an entire floor of height/massing
1.Reduce impact to neighbors
2.Required exclusionary excavation techniques remove any concerns related to
dewatering
ii.Tree root impacts could be conditioned since the 800 sf exemption ADU is not obligated in
regard to underground space
iii.Add clarifying language requiring the interior basement FA to count toward the 800 sf
exemption triggering the additional area beyond 800 sf to be deducted from overall site FA
iv.No further encroachment other than that required for emergency egress.
v.Consider, as an additional incentive, allowing a 1200 sf max ADU if 50% of FA is below
grade?
5.Minimal increase to non-conforming structures
a.Create an allowance to avoid complete demolition or unnecessary
complexity due to energy or structural upgrades
i.Clarify that it can only be accessed for compliance with energy or
structural obligations
1.Grant an additional 12” of height – increase framing depth
above top plate rather than hanging, which is structurally
complex and reduces ceiling heights.
2.Note that the structure height will still be restricted by the 16’
height limit.
3.Grant an additional 6” in plan on any side for structural
seismic sheathing, exterior insulation, or replacement siding,
so long as no portion of the structure encroaches beyond
the property line.
ii.Add a clarification regarding structures with existing
parapets. A non-conforming portion of the structure
may be modified up to the height of the existing
parapet. This can be done without creating an
increased impact to neighbors. Previous interpretation
of ‘shrink-wrap’ rules should not apply to recessed roof
areas below the top of the parapet. This flexibility will
allow the interior to be a reasonable residential height.
6.Utility Connections
a.Separate meters placed only at the owner’s discretion
b.The requirement to provide a separate sewer line for detached ADUs has been directed by the
Chief Building Official.
i. There is an exception in the Plumbing Code recognized in many jurisdictions to avoid the
significant cost this causes (often greater than $9,000) CPC 311.1 Exception: Where one
building stands in the rear of another building on an interior lot, and no private sewer is
available or can be constructed to the rear building through an adjoining court, yard, or
driveway, the building drain from the front building shall be permitted to be extended to the
rear building.
1.Recognize that the high cost can be viewed as the basis for applying the exception
2.Question - If no separate line is required for an attached ADU, why obligate the cost
and complexity for a detached ADU. The outcome is the same so why regulate
differently?
3.An alternative to this might be a study performed by experts under CPC 301.3
“Alternate Materials and Methods of Construction Equivalency” with the establishment
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of standards for equipment (backflow prevention) and cleaning/inspection schedules.
Once established in the City, this could be relied on as an alternate approach.
c.Routing of utilities at the discretion of property
owner (rear alley or another alternate to avoid
disruption to landscape or trees)
i.This graphic compares three lots with an
alley behind. Parcel 3 has an attached
ADU and the sewer may connect to the
main house line. There is no impact to the
site. Parcels1 and 2 have detached ADUs
and are currently required to run their
sewer line shown as ‘A’, around the main
house, and out to the street at the front
yard. This is highly problematic, especially
if there are protected trees on site. A
reasonable option would be to allow the
sewer line placement shown by the ‘B’ or
‘C’ routing.
7.Garage replacement associated with Detached ADU
a.When replacement covered parking is provided, and attached to an ADU, that area should not
count against the 800 sf ‘bonus’
i.Staff has not indicated agreement with this.
ii.It represents a significant disincentive toward the creation of covered parking spaces.
iii.The space designated as a garage should count against the overall FA and not be allowed if
the FAL or Lot Coverage will be exceeded as a result.
8.Retroactive Actions for all ADUs in process after 1/1/2020 (for projects without Building Final)
a.Retract all enacted Deed Restrictions which are not in compliance with the updated regulations
i.Require new Deed Restrictions in conformance with the updated requirements
b.Refund any overpayment of fees for all projects in process (between approvals and Building
Final) since January 1, 2020 for:
i.Proportionate Impact Fees, if they remain in place
ii.Other fees as adjusted by the revised ordinance
iii.Council could elect to refund the full amount or an adjusted amount according to
16.06.110/R108.5 at 80%?
9.Green Building
a.The current detached ADU regulations require Tier 2 with exceptions
i.Tier 2 obligates requirements for third party preparation of documents and site evaluation
which comes at significant cost
b.If a homeowner proposes an addition/alteration to their home under 1,000sf, a third party is not
required and the project is only required to meet CALGreen Mandatory measures
c.To streamline the ADU permitting and construction process, detached ADUs under 1,000 sf
should only be required to comply with CALGreen Mandatory for consistency
10.Noise producing equipment
a.Allow placement at any location on the property as long as documentation is provided which
confirms noise level will be below the 66 decibel limit at the property line. What should be codified
for these issues are rules that direct the desired result. Don’t overcomplicate what can be
achieved simply.
i.Equipment should be <66 dB without accessories such as blankets (can fail/degrade over
time)
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ii.Asking for site-specific studies creates an additional unreasonable cost burden and must be
avoided
11.Doorway between ADU and Primary Unit
a.This really should be allowed as long as it is a hotel style communicating door. Note that it is
allowed for a JADU so why not for an ADU?
i.Provides indoor access to care for or interact with the occupant but can be closed if privacy
or separation is needed
b.Don’t create rules people will routinely circumvent - just remove the unnecessary regulation -
Some may take advantage but there is little stopping them anyway
12.60-day Processing
a.Sets unrealistic expectations without clear narrative
b.Explain how this will be interpreted/implemented
c.Note that HCD has indicated the State says once an application is submitted, the City must
approve within 60 days or it is automatically approved.
i.It is assumed that the clock is stopped when waiting for applicant response to comments,
but there is nowhere this is codified and creates frustration for homeowners
13.Sprinkler requirements
a.Clarify rules relative to the California State Fire Marshal Information Bulletin 17-001 (1/24/17)
i.Current PA implementation is not in alignment with Senate Bill 1069
ii.Safety concerns and physical constraints must be balanced against compliance with the
State language
14.Flood Zone
a.Better articulate requirements and permitted exceptions
i.Consider an example of the Exemption 800 sf ADU in the flood zone on a small lot – if
reconstructing a non-conforming structure, it must be allowed to go higher than the 16 foot
limitation by the delta between existing grade and the project site base flood elevation to
raise the first floor level.
15.Remove requirement to convert “existing” garage/carport
a.Only applies to projects where a new home is constructed with the intent of the garage or carport
being converted to an ADU as a second ‘step’ after final inspection.
b.Allow for a one-phase process
i.Offer incentive for streamlining
1.Cannot be setbacks, height, etc. as these are enshrined in Gov. Code, § 65852.2,
subd. (c)(2)(C)
2.Could offer an additional fee reduction for saved staff time or something similar
While we recognize the Ordinance before you has been in process for the better part of a year, your
action tonight will set the tone for what is possible until the next iteration of this language evolves. We are
hopeful the commitment you have voiced toward incentivizing residential development, aligned with a
stated goal of streamlining the approval of ADUs, will lead you to adopt some version of the 15 points we
have presented. As professionals serving as guides to those who wish to construct an ADU, and being
tasked with implementing the regulations, we want you to understand how important we believe these
items are. If anything, we hope you might consider this as a starting point. We welcome your willingness
to perhaps go further and, as many other cities have done, consider the adoption of additional language
which will make ADUs more livable, desirable, and affordable.
Respectfully submitted,
Page 6 Jessica Resmini, Architect Randy Popp, Architect
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Planning & Transportation Commission
Staff Report (ID # 12403)
Report Type: Approval of Minutes Meeting Date: 6/30/2021
City of Palo Alto
Planning & Development Services
250 Hamilton Avenue
Palo Alto, CA 94301
(650) 329-2442
Summary Title: May 26, 2021 Draft Meeting Minutes
Title: May 26, 2021 Draft PTC Meeting Minutes
From: Jonathan Lait
Recommendation
Staff recommends that the Planning and Transportation Commission (PTC) adopt the meeting
minutes.
Background
Draft minutes from the May 26, 2021 Planning and Transportation Commission (PTC) meetings
were made available to the Commissioners prior to the June 30, 2021 meeting date. The draft
PTC minutes can be viewed on line on the City’s website at
https://www.cityofpaloalto.org/Departments/Planning-Development-Services/Planning-and-
Transportation-Commission-PTC
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Planning & Transportation Commission
Staff Report (ID # 12404)
Report Type: Informational Reports Meeting Date: 6/30/2021
City of Palo Alto
Planning & Development Services
250 Hamilton Avenue
Palo Alto, CA 94301
(650) 329-2442
Summary Title: Accessory Dwelling Units (ADUs) Cost Effectiveness Study
Title: 2020 Reach Code Cost-Effectiveness Analysis for New
Detached Accessory Dwelling Units (ADUs)
From: Jonathan Lait
Recommendation
This is an informational report for the Planning and Transportation Commission (PTC).
Introduction
California Building Energy Standards are updated every three years by the California Energy
Commission (CEC). The 2019 California Title 24 standards has been in effect since January 1,
2020. Local jurisdictions may adopt reach codes with more stringent requirements than the
state standards, e.g. increased energy efficiency standards, or lower greenhouse gas emissions.
Reach codes must meet these criteria: (i) compliance with the state-mandated energy
requirements, (ii) demonstrated cost-effectiveness, i.e. do not create additional financial
burden, 1 and (iii) must not preempt federal appliance efficiency standards. Local jurisdictions
must obtain approval from the CEC and file the reach code ordinance with the Building
Standards Commission for the ordinance to be legally enforceable.
For the current 2019 Title 24 code cycle, Palo Alto has adopted a reach code that mandates all-
electric low-rise residential new construction. The reach code exempts Accessory Dwelling
Units (ADUs) from this all-electric requirement due to challenges with the space requirements
for heat pump water heaters (HPWHs) and setback limitations for exterior installations. Also, it
was unclear whether an all-electric mandate for ADUs met the cost effectiveness criterion for
reach code adoption.
Results of 2020 Reach Code Cost-Effectiveness Analysis for New Detached ADUs
Palo Alto joined a 2020 statewide study (“Study”) to assess the cost effectiveness of
constructing a new all-electric detached ADU compared to a mixed-fuel detached ADU2. This
1 Section 10-106 of the California Building Energy Efficiency Standards
2 “2020 Reach Code Cost-Effectiveness Analysis: Detached Accessory Dwelling Units”, March 2021.
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City of Palo Alto
Planning & Development Services Department Page 2
Study was coordinated through the California Energy Codes and Standards Program. The cost
effectiveness analysis considers both the upfront infrastructure costs and operational costs for
an all-electric versus a mixed-fuel ADU.
The Study covered two electrification packages against a mixed-fuel baseline package:
(i) Mixed-fuel baseline package: This baseline package assumes mixed-fuel construction,
with an extension of the gas line from the primary dwelling unit to the detached
ADU.
(ii) All-Electric prescriptive minimum package: This package assumes all-electric
construction, with electric panel upgrade for the ADU, and no gas line extension
from the primary dwelling. The heat pump water heater is assumed to be located in
the conditioned space inside the ADU. This package has the same PV size as the
mixed-fuel baseline package.
(iii) All-Electric Energy Efficiency + PV package: This package has added energy efficiency
measures, and additional solar PV. The heat pump water heater is assumed to be
located in outside the ADU in an outdoor closet.
Table 1 below compares the construction costs of a mixed-fuel ADU versus an all-electric ADU.
Overall, the cost of constructing an all-electric ADU is about $1,000 to $1,700 lower than a
mixed-fuel ADU, primarily due to cost savings in gas service extension.
Table 1: New Detached ADU Construction Costs, All Climate Zones
Using City of Palo Alto Utilities’ residential electric and gas rates, the Study results for Palo Alto
are summarized in Table 2 below. For each all-electric package, the Energy Design Rating (EDR)
https://localenergycodes.com/download/760/file_path/fieldList/2019%20New%20Detached%20ADUs%20Cost-
effectiveness%20Report.pdf
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City of Palo Alto
Planning & Development Services Department Page 3
margin compared to a mixed-fuel package must be positive in order to demonstrate compliance
with the Title 24 energy standard requirements, and the Net Present Value (NPV) must also be
positive in order to demonstrate cost effectiveness. The Study found that both the All-electric
prescriptive minimum package and the All-electric energy efficiency + PV package meet the
current Title 24 energy standards and are cost effective. The expected annual GHG emissions
reduction of an all-electric package compared to a mixed-fuel package is 0.8 metric tonnes.
EDR Margin Net Present Value
All-electric prescriptive
minimum package
0 $4,186
All-electric energy efficiency +
PV package
16.1 $3,120
Table 2: Cost effectiveness results for All-Electric ADUs in Palo Alto
Implications for Planning and Transportation Commission
Staff will bring forward and the City Council will consider changes to the local reach code
regarding all electric ADUs. Such changes, if adopted, would be part of the Building Code and
are not under Planning Commission purview. Staff do want to ensure that PTC members are
aware of the Study and potential changes. Likewise staff hope this informational report
provides an opportunity for public awareness.
PTC3 Liaison & Contact Information
Rachael Tanner, Assistant Director
(650) 329-2441
Rachael.Tanner@cityofpaloalto.org
Attachments:
• 2020 New Detached ADUs Cost-effectiveness report (PDF)
3 Emails may be sent directly to the PTC using the following address: planning.commission@cityofpaloalto.org
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Prepared by:
TRC, P2S Engineers
Prepared for:
Christopher Kuch, Codes and Standards Program, Southern California Edison Company
Last modified: 2021/03/12
2020 REACH CODE
COST-EFFECTIVENESS ANALYSIS: Detached Accessory Dwelling Units
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Cost-effectiveness Analysis: Detached Accessory Dwelling Units
Legal Notice
This report was prepared by Southern California Edison Company
and funded by the California utility customers under the auspices of
the California Public Utilities Commission.
Copyright 2021, Southern California Edison Company. All rights
reserved, except that this document may be used, copied, and
distributed without modification.
Neither SCE nor any of its employees makes any warranty, express
or implied; or assumes any legal liability or responsibility for the
accuracy, completeness or usefulness of any data, information,
method, product, policy or process disclosed in this document; or
represents that its use will not infringe any privately-owned rights
including, but not limited to, patents, trademarks or copyrights.
Acronym List
B/C – Benefit-to-Cost Ratio
CBECC - California Building Energy Code Compliance
CBSC - California Building Standards Commission
CEC - California Energy Commission
CZ – Climate Zone
GHG - Greenhouse Gas
IOU – Investor-Owned Utility
POU – Publicly Owned Utility
PG&E – Pacific Gas & Electric (utility)
SCE – Southern California Edison (utility)
SCG – Southern California Gas (utility)
SDG&E – San Diego Gas & Electric (utility)
CPAU – City of Palo Alto Utilities
SMUD – Sacramento Municipal Utility District
LADWP – Los Angeles Department of Water and Power
kWh – Kilowatt Hour
NPV – Net Present Value
PV - Solar Photovoltaic
TDV - Time Dependent Valuation
Title 24 – California Code of Regulations Title 24, Part 6
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Cost-effectiveness Analysis: Detached Accessory Dwelling Units
Summary of Revisions
Date Description Reference (page or section)
3/12/2021 Original Release NA
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Cost-effectiveness Analysis: Detached Accessory Dwelling Units
TABLE OF CONTENTS
1 Introduction ................................................................................................................................................................ 1
2 Methodology and Assumptions ............................................................................................................................... 2
2.1 Reach Codes ........................................................................................................................................................................ 2
2.1.1 Benefits ......................................................................................................................................................................... 2
2.1.2 Costs ............................................................................................................................................................................. 2
2.1.3 Metrics .......................................................................................................................................................................... 2
2.1.4 Utility Rates ................................................................................................................................................................... 3
2.2 Greenhouse Gas Emissions ................................................................................................................................................. 4
3 Prototypes, Measure Packages, and Costs ............................................................................................................ 5
3.3 Measure Definitions and Costs ............................................................................................................................................. 6
3.3.1 All-Electric ..................................................................................................................................................................... 6
3.3.2 Efficiency and Solar PV ................................................................................................................................................ 7
3.4 Measure Packages ............................................................................................................................................................... 8
4 Results ...................................................................................................................................................................... 10
4.1 All-Electric Prescriptive Minimum Results ........................................................................................................................... 11
4.2 All Electric Plus Efficiency and PV Results ......................................................................................................................... 13
5 Summary .................................................................................................................................................................. 15
6 References ............................................................................................................................................................... 17
7 Appendices .............................................................................................................................................................. 18
7.1 Map of California Climate Zones ......................................................................................................................................... 18
7.2 Mixed Fuel Baseline Energy Figures .................................................................................................................................. 19
7.3 All-Electric Energy Efficiency Only Results ......................................................................................................................... 20
7.4 Utility Rate Schedules ......................................................................................................................................................... 23
7.4.1 Pacific Gas & Electric .................................................................................................................................................. 23
7.4.2 Southern California Edison ......................................................................................................................................... 27
7.4.3 Southern California Gas .............................................................................................................................................. 29
7.4.4 San Diego Gas & Electric............................................................................................................................................ 30
7.4.5 City of Palo Alto Utilities .............................................................................................................................................. 32
7.4.6 Sacramento Municipal Utilities District (Electric Only) ................................................................................................. 34
7.4.7 Los Angeles Department of Water and Power (Electric Only)..................................................................................... 36
7.4.8 Fuel Escalation Rates ................................................................................................................................................. 36
LIST OF TABLES
Table 1. Utility Tariffs Used Based on Climate Zone ............................................................................................................................ 3
Table 2. Detached ADU Baseline Mixed-fuel Prototype Characteristics ............................................................................................... 6
Table 3. New Construction Detached ADU Construction Costs, All CZs .............................................................................................. 7
Table 4. Measures for Detached ADU .................................................................................................................................................. 7
Table 5. Solar PV Measure Cost Breakdown ........................................................................................................................................ 8
Table 6. Heat Pump Water Heater Location, All-Electric Prescriptive Baseline .................................................................................... 9
Table 7. Cost-Effectiveness for ADU: All-Electric Prescriptive Minimum, 2019 TDV .......................................................................... 11
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Cost-effectiveness Analysis: Detached Accessory Dwelling Units
Table 8. Cost-Effectiveness for ADU: All-Electric Prescriptive Minimum, 2022 TDV .......................................................................... 12
Table 9. Cost-Effectiveness for ADU: All-Electric Energy Efficiency + Additional PV, 2019 TDV ....................................................... 13
Table 10. Cost-Effectiveness for ADU: All-Electric Energy Efficiency + Additional PV, 2022 TDV Results ........................................ 14
Table 11. Detached ADU Summary of EDR Margin and Cost-Effectiveness...................................................................................... 16
Table 12. Detached ADU Mixed Fuel Baseline ................................................................................................................................... 19
Table 13. Cost-Effectiveness for ADU: All-Electric Energy Efficiency Without PV, 2019 TDV ............................................................ 21
Table 14. Cost-Effectiveness for ADU: All-Electric Energy Efficiency Without PV, 2022 TDV ............................................................ 22
Table 15. Real Utility Rate Escalation Rate Assumptions ................................................................................................................... 37
LIST OF FIGURES
Figure 1. Map of California climate zones. .......................................................................................................................................... 18
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Cost-effectiveness Analysis: Detached Accessory Dwelling Units 1 Introduction
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2021-03-12
1 Introduction
The California Building Energy Efficiency Standards Title 24, Part 6 (Title 24) (CEC, 2019) is maintained and updated
every three years by two state agencies: the California Energy Commission (the Energy Commission) and the Building
Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local
energy efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24 (as established
by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards).
Local jurisdictions must demonstrate that the requirements of the proposed ordinance are cost-effective and do not
result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain
approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable.
This report documents cost-effective combinations of measures that exceed the minimum state requirements, the 2019
Building Energy Efficiency Standards, effective January 1, 2020, for newly constructed detached Accessory Dwelling
Unit (ADU) buildings. This report was developed in coordination with the California Statewide Investor-Owned Utilities
(CA IOUs) Codes and Standards Program, key consultants, and engaged cities—collectively known as the Reach
Code Team.
The Reach Code Team published a residential new construction report in 2019 that documented the cost-effectiveness
of energy measure packages of single family and low-rise multifamily prototypes (Statewide Reach Code Team, 2019).
Based on stakeholder requests, this report extends that analysis to Residential Detached Accessory Dwelling Units
(ADUs). Measures include energy efficiency, electrification, solar photovoltaics (PV), and battery storage.
The Department of Energy (DOE) sets minimum efficiency standards for equipment and appliances that are federally
regulated under the National Appliance Energy Conservation Act, including heating, cooling, and water heating
equipment (E-CFR, 2020). Since state and local governments are prohibited from adopting higher minimum efficiencies
than the federal standards require, the focus of this study is to identify and evaluate cost-effective packages that do not
include high efficiency heating, cooling, and water heating equipment. High efficiency appliances are often the easiest
and most affordable measures to increase energy performance. While federal preemption limits reach code mandatory
requirements for covered appliances, in practice, builders may install any package of compliant measures to achieve
the performance requirements.
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2 Methodology and Assumptions
The Reach Codes Team analyzed one prototype design to represent a detached ADU building using the cost-
effectiveness methodology detailed in this section below. The general methodology is consistent with analyses of other
prototypes, whereas some specifics such as utility rate selection are customized for the residential detached ADU
prototype.
2.1 Reach Codes
This section describes the approach to calculating cost-effectiveness including benefits, costs, metrics, and utility rate
selection.
2.1.1 Benefits
This analysis used both on-bill and time dependent valuation (TDV) of energy-based approaches to evaluate cost-
effectiveness. Both on-bill and TDV require estimating and quantifying the energy savings and costs associated with
energy measures. The primary difference between on-bill and TDV is how energy is valued:
• On-Bill: Customer-based lifecycle cost approach that values energy based upon estimated site energy usage
and customer on-bill savings using electricity and natural gas utility rate schedules over a 30-year duration for
the detached ADU accounting for a three percent discount rate and energy cost inflation per Appendix 7.4 .
• TDV: TDV was developed by the Energy Commission to reflect the time dependent value of energy including
long-term projected costs of energy such as the cost of providing energy during peak periods of demand and
other societal costs including projected costs for carbon emissions and grid transmission impacts. This metric
values energy use differently depending on the fuel source (gas, electricity, and propane), time of day, and
season. Electricity used (or saved) during peak periods has a much higher value than electricity used (or
saved) during off-peak periods.
The Reach Code Team performed energy simulations using the most recent software available for 2019 Title 24 code
compliance analysis, CBECC-Res 2019.1.3. The Team also used CBECC-Res 2022.0.1 RV for testing the impacts of
updated weather files and 2022 TDV multipliers on cost-effectiveness. 2022 weather files have more cooling loads and
less heating loads, and 2022 TDV multipliers increased significantly for fossil-fuel sources to reflect CO2 price
forecasts and emissions abatement, while comparatively reducing for electricity to reflect increased renewable
generation penetration (California Energy Commission, 2019).
2.1.2 Costs
The Reach Code Team assessed the incremental costs and savings of the energy packages over the lifecycle of 30
years. Incremental costs represent the equipment, installation, replacements, and maintenance costs of the proposed
measure relative to the 2019 Title 24 Standards minimum requirements or standard industry practices. The Reach
Code Team obtained measure costs from manufacturer distributors, contractors, literature review, and online sources
such as Home Depot and RS Means. Taxes and contractor markups were added as appropriate. Maintenance and
replacement costs are included.
2.1.3 Metrics
Cost-effectiveness is presented using net present value (NPV) and benefit-to-cost (B/C) ratio metrics.
• NPV: The Reach Code Team uses net savings (NPV benefits minus NPV costs) as the cost-effectiveness
metric. If the net savings of a measure or package is positive, it is considered cost effective. Negative net
savings represent net costs to the consumer. A measure that has negative energy cost benefits (energy cost
increase) can still be cost effective if the costs to implement the measure are even more negative (i.e.,
construction and maintenance cost savings).
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• B/C Ratio: Ratio of the present value of all benefits to the present value of all costs over 30 years (NPV
benefits divided by NPV costs). The criteria for cost-effectiveness is a B/C greater than 1.0. A value of one
indicates the savings over the life of the measure are equivalent to the incremental cost of that measure. A
value greater than one represents a positive return on investment.
Improving the energy performance of a building often requires an initial investment. In most cases the benefit is
represented by annual on-bill utility or TDV savings, and the cost by incremental first cost and replacement costs.
However, some packages result in initial construction cost savings (negative incremental cost), and either energy cost
savings (positive benefits), or increased energy costs (negative benefits). In cases where both construction costs and
energy-related savings are negative, the construction cost savings are treated as the benefit while the increased
energy costs are the cost. In cases where a measure or package is cost-effective immediately (i.e., upfront
construction cost savings and lifetime energy cost savings), B/C ratio cost-effectiveness is represented by “>1”.
Because of these situations, NPV savings are also reported, which, in these cases, are positive values.
2.1.4 Utility Rates
In coordination with the CA IOU rate team, and the publicly available information for several Publicly-Owned-Utilities
(POUs), the Reach Code Team determined appropriate utility rates for each climate zone and package. The utility
tariffs, summarized in Table 1, were determined based on the annual load profile of the prototype and the
corresponding package, the most prevalent rate in each territory, and information assuring that the rates were not
getting phased out.
TRC assumed that the ADU would have a separate electric and gas meter. A time-of-use (TOU) rate was applied to all
cases. For cases with PV generation, the approved NEM tariffs were applied along with minimum daily use billing and
mandatory non-bypassable charges. For the PV cases annual electric production was always less than annual
electricity consumption; and therefore, no credits for surplus generation were necessary. For a more detailed
breakdown of the rates selected refer to Appendix 7.2 - Utility Rate Schedules.
Table 1. Utility Tariffs Used Based on Climate Zone
Climate Zones Electric / Gas Utility Electricity Natural Gas
IOUs
1-5,11-13,16 PG&E E-TOU Option C G-1
6, 8-10, 14, 15 SCE / Southern California Gas
Company TOU-D Option 4-9 GM
7, 10, 14 San Diego Gas and Electric
Company (SDG&E) TOU-DR-1 GM
POUs
4 City of Palo Alto (CPAU) E-1 G-1
12 Sacramento Municipal Utility District
(SMUD) / PG&E R TOD Option 5-8 G-1
6, 8, 9 Los Angeles Department of Water
and Power (LADWP) / SCG R-1 GM
(GM-E)
16 Los Angeles Department of Water
and Power (LADWP) / PG&E R-1 G-1
Utility rates are assumed to escalate over time, using assumptions from research conducted by Energy and
Environmental Economics (E3) in the 2019 study Residential Building Electrification in California (Energy &
Environmental Economics, 2019). Escalation of natural gas rates between 2020 and 2022 is based on the currently
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filed General Rate Cases for PG&E, SoCalGas and SDG&E. From 2023 through 2025, gas rates are assumed to
escalate at four percent per year above inflation, which reflects historical rate increases between 2013 and 2018.
Escalation of electricity rates from 2020 through 2025 is assumed to be four percent per year above inflation, based on
electric utility estimates. After 2025, escalation rates for both natural gas and electric rates are assumed to drop to a
more conservative one percent escalation per year above inflation for long-term rate trajectories beginning in 2026
through 2050. See Appendix 7.4 - Utility Rate Schedules for additional details.
2.2 Greenhouse Gas Emissions
The analysis uses the greenhouse gas (GHG) emissions estimates built-in to CBECC-Res. There are 8760 hourly
multipliers accounting for time dependent energy use and carbon emissions based on source emissions, including
renewable portfolio standard projections. Natural gas fugitive emissions, which are shown to be substantial, are not
included. There are two strings of multipliers—one for Northern California climate zones, and another for Southern
California climate zones.1.
1 CBECC-Res multipliers are the same for CZs 1-5 and 11-13 (presumed to be Northern California), while there is another set of multipliers for CZs 6-10 and 14-16 (assumed to be Southern California).
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3 Prototypes, Measure Packages, and Costs
This section describes the prototype and the scope of analysis drawing from previous 2019 Reach Code research
where necessary.
A customized detached ADU prototype was built to reflect California construction. TRC designed the baseline
prototype to be mixed fuel and have total EDR margins as close to zero as possible to reflect a prescriptively compliant
new construction building in each climate zone.
ADUs are additional dwelling units typically built on the property of an existing single-family parcel. ADUs are defined
as new construction in the energy code when they are ground-up developments, do not convert an existing space to
livable space, and are not attached to the primary dwelling. The Reach Code Team leveraged prior research and
performed interviews to help define the detached ADU baseline and measure packages, primarily to include
infrastructural costs.
3.1 Prior Reach Code Research
In 2019, the Statewide CA IOU Reach Codes Team analyzed the cost-effectiveness of residential new construction
projects for mixed-fuel plus efficiency, all-electric plus efficiency, and demand flexibility packages (Statewide Reach
Codes Team 2019a). Using this analysis, several cities and counties in California adopted local energy code
amendments encouraging or requiring that low-rise residential new construction to be all-electric. However, many
jurisdictions exempted ADUs from these requirements due to uncertainties around how infrastructural and operational
costs may be different between mixed-fuel and all-electric detached ADUs, and to avoid potentially stifling ADU
development.
Because the mixed-fuel packages plus efficiency ADUs are not subject to jurisdictional exemptions, this study focuses
on a new construction all-electric detached ADU and discerns how infrastructural costs and operational costs may
impact the cost-effectiveness compared to a mixed-fuel baseline.
3.2 Prototype Characteristics
To determine a typical set of ADU characteristics, the Reach Code team contacted over twenty ADU builders and city
staff members from regions representing Sacramento, the San Francisco Bay Area, the Los Angeles area, and the San
Diego area. Ultimately, four builders with construction experience with multiple projects and two city staff members with
experience reviewing and approving ADU project plans were interviewed. Respondents indicated that there are not
particular determinants for siting and sizing detached ADUs other than the site conditions—maximizing available space
is the key consideration. Responses varied greatly on detached ADU size, as client preference, location, and
avoidance of impact fees were expressed as considerations. Sizes can range from roughly 300 ft2 for a studio to over
1200 ft2 for a two-bedroom unit. The Reach Code team selected an average size of 750 ft2 as a typical size for a
detached ADU. 750 ft2 also relates to a threshold for state regulation over which impact fees and discretionary approval
would be applied. Some other findings include:
• Setback requirements follow the four-foot setback requirements of state Assembly Bill 881. Mechanical
equipment may not reside in the setbacks, however, interviewees indicated that there is always one side of the
ADU that isn’t against a setback. Mechanical equipment can usually be placed along those sides and be
hidden by a shed or fence.
• Mechanical equipment footprints may be too big to include inside an ADU with limited floor area, so clients
tend to want to locate the mechanical equipment outside. This is reflected in the all-electric Package 2 (see
Section 3.4).
• Some cities have noise ordinances that limit maximum decibels at the property line, which may pose issues
for exterior heat pump water heaters or heating, ventilation, and air-conditioning (HVAC) equipment. These
maximum noise requirements range from 50-66 decibels (dBs), and exterior heat pump equipment commonly
ranges between 45-60 decibels at the equipment. Interviewees did not express significant concerns about
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noise ordinances because manufacturers can provide sound blankets to reduce the decibel rating by five or
more decibels, or developers can locate equipment in an insulated shed to reduce noise.
• When adding a detached ADU the primary dwelling’s electrical panel and service connection nearly always
needs to be upgraded at least to a 125-amp panel, and at least a 200-amp panel where solar PV is being
installed. A 225-amp panel is also common. Electrical upgrades cost roughly $3500, for most common existing
panel sizes or upgraded panel sizes.
• The distance between the detached ADU and primary dwelling can range widely due to lot size and location of
meter and other infrastructure, from as little as five feet to over 100 feet. Based on respondent feedback, the
Reach Code Team used an average distance of 50 feet as the length for both the natural gas and electrical
line extensions for costing purposes.
• Cities do not impose a differing fee structure between all-electric or mixed-fuel ADU design. Fees range from
$4,000 - $6,000 including inspections.
Table 2 summarizes the ADU prototype characteristics, based on prescriptive Title 24 new construction requirements.
Table 2. Detached ADU Baseline Mixed-fuel Prototype Characteristics
Conditioned floor area (ft2) 750
Number of stories 1
Distance from primary dwelling (ft) 50
Wall U-factor 0.048 (CZ 1-5, 8-16), 0.065 (CZ 6,7)
Roof Assembly Option B in Table 150.1-A of Title 24 2019
Window-to-floor area ratio 20%
Solar PV size Each climate zone sized as ‘Specific PV System Scaling’ = 1 offsetting 100% of electricity load
3.3 Measure Definitions and Costs
ADU measures fall into two categories: those associated with building all-electric, and those associated with general
efficiency and demand flexibility.
3.3.1 All-Electric
For HVAC and water heating appliance-related costs, the Reach Code Team primarily leveraged measure definitions
and costs from the 2019 Residential New Construction Reach Code Cost-Effectiveness Study. For HVAC system, air-
conditioning is included in both baseline and proposed models. For in-house and site infrastructure the Reach Code
Team developed new data based on interviews and RS Means.
The Reach Code Team found that a new detached ADU would require that the building owner upgrade the service
connection to the lot in both the mixed-fuel ADU design and the all-electric design. The most common size for this
upgrade is 225A, which would not represent an incremental cost from the mixed-fuel project to the all-electric project.
Feeder wiring to the ADU and the ADU subpanel will need to be slightly upgraded for the all-electric design. Electric
vehicle (EV) infrastructure upgrades are excluded from this analysis as ADUs are not required to have dedicated
parking – however, a 225-amp panel is likely to be sufficient for some EV infrastructure for a majority of existing
homes. The total cost for the all-electric measures is summarized in Table 3.
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Table 3. New Construction Detached ADU Construction Costs, All CZs
Mixed-Fuel Cost
All-Electric Measure All-Electric Cost
All-Electric Incremental Cost Source
Appliances: Space heater, water heater, clothes dryer, range. ($221) Residential New Construction Report (2019) Table 6
In-house gas plumbing $540 In-house electrical upgrades for branch circuits $600 $60 RSMeans
Site gas service extension $1,998 No site gas service $0 ($1998)
Interviews, RSMeans
Site electrical service
connection upgrade 225A $3,500 Site electrical service connection upgrade 225A $3,500 $0
100A Feeder to ADU with breaker $933 125A feeder to ADU $1,206 $273
100A ADU subpanel $733 125A ADU subpanel $946 $213
Outdoor closet n/a Heat pump water heater closet* $650 $650
Total (HPWH outside closet) $7,704 $6,901 ($1,024)
Total (HPWH in conditioned space) $7,704 $6,251 ($1,674)
* Additional cost for outdoor closet is required only for climate zones where heat pump water heater is located ‘Outside’.
3.3.2 Efficiency and Solar PV
The Reach Code team used the efficiency measures and costs developed in the 2019 Residential New Construction
report (2019). The measures are summarized below by climate zone, including measure costs, in Table 4.
Table 4. Measures for Detached ADU
Measure Name
Applicable
Climate
Zones
Incremental Cost
Description
Cost for ADU
Prototype
Verified low leakage ducts in conditioned space (including HERS* verification) All $0.31/ft2 of floor area
+ $110 HERS test $343
Low pressure drop ducts - 2% vs 5% All $96/hr labor for installation $96
Reduced infiltration: 3ACH50 vs 5ACH50 13, 14, 16 $0.115/ft2 + $100 HERS test $186
Exterior wall insulation: R-7.5 vs R-5 (U-0.043) 15 $0.36/ft2 of floor area $272
High performance attics: R-38 attic floor + R-30 Under Deck 1, 11-16 $0.34/ft2 attic floor + $1.61/ft2 roof $1,563
Cool roof - 0.25 vs 0.20 9-15 $0.09/ft2 of roof $73
Improved fenestration 1, 2, 16 $4.23/ft2 of window $381
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Measure Name
Applicable
Climate
Zones
Incremental Cost
Description
Cost for ADU
Prototype
Slab edge insulation: R-10 vs R-0 1-5, 10-15 $4/linear foot $339
Solar PV to offset 90% of the annual electricity use** All $3.99/Wdc
$800-$6,200
depending on climate zone
Total Costs $4,500 - $10,253 depending on climate zone.
*HERS = Home Energy Rating System **Incremental cost for added PV over and above the prescriptive PV size in baseline models.
The cost for solar PV is derived from an LBNL study (Barbose, 2019) and Rooftop Solar PV System Measure Study
(California Energy Commission, 2017), summarized in Table 5. Solar PV prices have been discounted to reflect the
federal solar investment tax credit, by an average of 26% over 2021 and 2022.
Table 5. Solar PV Measure Cost Breakdown
Unit Cost, $2020
Present Value
Useful Life
(yrs.) Source
Solar PV System $3.70 / Wdc 30 LBNL Study
Inverter Replacement, year 11 $0.15 / Wdc 10 E3 Rooftop Solar
PV System Report
(CEC 2017)2
Inverter Replacement, year 21 $0.12 / Wdc 10
Annual Maintenance Costs $0.02 / Wdc 1
Total $3.99 / Wdc
3.4 Measure Packages
The Reach Code Team examined the two electrification packages against a baseline mixed-fuel prescriptive package:
• Detached ADU Baseline Package: Mixed-fuel prescriptively built, including gas utility extension from primarily
dwelling to detached ADU.
• All-Electric Prescriptive Minimum: All-electric prescriptively built, including heat pump water heater location per
Residential Alternate Calculation Method (ACM), shown in Table 6. Includes electric utility extension upgrade
from the primary dwelling to the detached ADU and avoided cost of gas utility extension. This package has the
same PV size as mixed-fuel prescriptive baseline model, offsetting 100 percent of annual electricity demand.
• All-Electric Energy Efficiency + PV: All-electric prescriptively built as above, except water heater location is
outside in exterior closet in all climate zones except Climate Zones 14, 15, and 16, plus energy efficiency
measures, and additional solar PV (offsetting 90 percent of kWh load) to improve cost-effectiveness based on
prior reach code research.
2 Available at: https://efiling.energy.ca.gov/getdocument.aspx?tn=221366
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Table 6. Heat Pump Water Heater Location, All-Electric Prescriptive Baseline
Source: California Energy Commission, Residential ACM
The Reach Code Team analyzed some additional measure packages:
• 2022 TDV: Both electrification packages, ‘Prescriptive Minimum’ and ‘Energy Efficiency + PV’ are analyzed
against the mixed-fuel baseline package using 2022 TDV multipliers and weather files in CBECC-Res 2022
software.
• Efficiency-Only: The All-Electric Energy Efficiency + PV package is analyzed using CBECC-Res 2019 without
solar PV measure to evaluate the impact of efficiency measures alone, in the case that solar PV cannot be
installed due to shading.
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4 Results
Results are presented as per the prototype-specific Measure Packages described in Section 3.
There are several overarching factors to keep in mind when reviewing the results include:
• What constitutes a ‘benefit’ or a ‘cost’ varies with the scenarios because both energy savings, and
incremental construction costs may be negative depending on the package. Typically, utility bill savings are
categorized as a ‘benefit’ while incremental construction costs are treated as ‘costs.’ In cases where both
construction costs are negative and utility bill savings are negative, the construction cost savings are treated as
the ‘benefit’ while the utility bill negative savings are the ‘cost.’
• All-electric packages will have lower GHG emissions than mixed-fuel packages in all cases, due to the clean
power sources currently available from California’s power providers.
• Since January 2020, compliance of low-rise residential building is analyzed using Energy Design Rating
(EDR). This rating scales from 1 to 100 with 100 being the performance equivalent of a 2006 International
Energy Conservation Code (IECC). This study uses ‘Total EDR Margin’ as a compliance metric that accounts
for all compliant loads along with renewable energy and battery storage. ‘Total EDR Margin’ of 0 represents a
prescriptively compliant building that exactly matches the minimum energy budget prescribed by the 2019 T24
code.
• To receive the Energy Commission’s approval, local reach codes that amend the energy code must both be
cost effective compared to the mixed-fuel baseline package and exceed the energy performance budget
using ‘Total EDR Margin’ metric (i.e., have a positive compliance margin) compared to the standard model in
the compliance software. To emphasize these two important factors, the figures in this Section highlight in
green the modeling results that have a positive compliance margin and/or are cost effective. This will allow
readers to identify whether a scenario is fully or partially supportive of a reach code, and the
opportunities/challenges that the scenario presents. Conversely, Section 5 only highlights results that have
both a positive compliance margin and are cost effective, to allow readers to identify reach code-ready
scenarios.
• When performance modeling residential buildings of three stories or less (such as the Detached ADU), the
Standard Design is electric if the Proposed Design is electric, which removes TDV-related penalties and
associated negative compliance margins. This essentially allows for a compliance pathway for all-electric
residential buildings.
• As mentioned in Section 2.1.4, the Reach Code Team coordinated with utilities to select tariffs for each
prototype given the annual energy demand profile and the most prevalent rates in each utility territory. The
Reach Code Team did not compare a variety of tariffs to determine their impact on cost-effectiveness
although utility rate changes or updates can affect on-bill cost-effectiveness results.
• As a point of comparison, mixed-fuel baseline energy figures are provided in Appendix 7.2.
• The cost-effectiveness results for 2022 analysis differs from 2019 mainly in $TDV savings, but also differs
slightly in energy consumption which translates in minor difference in on-bill energy savings. The Reach Code
Team has not reported the software outputs for 2022 EDR margins as the 2022 Title 24 Part 6 code is still
being developed.
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4.1 All-Electric Prescriptive Minimum Results
Table 7 shows results of the ADU all-electric prescriptive minimum compared to a mixed-fuel baseline using 2019 TDV, with heat pump water heater location as
per Residential ACM manual (reference Table 6). With federal-minimum efficiencies for mechanical equipment, the all-electric prescriptive pathway is not cost
effective in any climate zone using IOU rates with 2019 TDV. However, with relatively lower electric prices and higher gas prices of POUs, the package is on-bill
cost effective in some climate zones.
Table 7. Cost-Effectiveness for ADU: All-Electric Prescriptive Minimum, 2019 TDV
CZ Utility
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Annual GHG
Reductions (mtons)
Total
EDR Margin
Incremental
Package Cost
Lifecycle
Utility Cost Savings
Lifecycle
$TDV Savings
B/C
Ratio (On-bill)
B/C
Ratio (TDV)
NPV
(On-bill)
NPV
(TDV)
CZ01 PG&E (3,600) 259 0.1 0.00 ($1,024) ($7,213) ($6,951) 0.1 0.1 ($6,190) ($5,927)
CZ02 PG&E (2,646) 198 0.3 0.00 ($1,674) ($3,753) ($3,897) 0.4 0.4 ($2,079) ($2,223)
CZ03 PG&E (2,397) 174 0.3 0.00 ($1,024) ($3,518) ($4,366) 0.3 0.2 ($2,495) ($3,342)
CZ04 PG&E (2,263) 170 0.3 0.00 ($1,674) ($2,996) ($2,765) 0.6 0.6 ($1,322) ($1,092)
CZ04-2 CPAU (2,263) 170 0.3 0.00 ($1,674) $1,389 ($2,765) >1 0.6 $3,062 ($1,092)
CZ05 PG&E (2,524) 170 0.2 0.00 ($1,024) ($4,969) ($4,883) 0.2 0.2 ($3,945) ($3,860)
CZ05-2 SCG (2,524) 170 0.2 0.00 ($1,024) ($4,842) ($4,883) 0.2 0.2 ($3,818) ($3,860)
CZ06 SCE (1,853) 136 0.3 0.00 ($1,024) ($2,943) ($3,154) 0.3 0.3 ($1,920) ($2,131)
CZ06-2 LA (1,853) 136 0.3 0.00 ($1,024) $1,357 ($3,154) >1 0.3 $2,381 ($2,131)
CZ07 SDG&E (1,604) 121 0.3 0.00 ($1,024) ($3,993) ($3,035) 0.3 0.3 ($2,970) ($2,012)
CZ08 SCE (1,594) 122 0.4 0.00 ($1,674) ($2,282) ($2,279) 0.7 0.7 ($609) ($605)
CZ08-2 LA (1,594) 122 0.4 0.00 ($1,674) $1,477 ($2,279) >1 0.7 $3,151 ($605)
CZ09 SCE (1,669) 128 0.6 0.00 ($1,674) ($2,403) ($2,476) 0.7 0.7 ($729) ($803)
CZ09-2 LA (1,669) 128 0.6 0.00 ($1,674) $1,509 ($2,476) >1 0.7 $3,183 ($803)
CZ10 SDG&E (1,714) 130 0.5 0.00 ($1,674) ($5,035) ($2,544) 0.3 0.7 ($3,362) ($871)
CZ10-2 SCE (1,714) 130 0.5 0.00 ($1,674) ($2,549) ($2,544) 0.7 0.7 ($876) ($871)
CZ11 PG&E (2,333) 177 0.4 0.00 ($1,674) ($3,533) ($3,676) 0.5 0.5 ($1,859) ($2,003)
CZ12 PG&E (2,319) 182 0.5 0.00 ($1,674) ($2,695) ($3,257) 0.6 0.5 ($1,022) ($1,584)
CZ12-2 SMUD (2,319) 182 0.5 0.00 ($1,674) $627 ($3,257) >1 0.5 $2,301 ($1,584)
CZ13 PG&E (2,158) 167 0.3 0.00 ($1,674) ($2,683) ($3,334) 0.6 0.5 ($1,009) ($1,661)
CZ14 SDG&E (2,388) 175 0.7 0.00 ($1,674) ($7,894) ($3,378) 0.2 0.5 ($6,220) ($1,705)
CZ14-2 SCE (2,388) 175 0.7 0.00 ($1,674) ($4,476) ($3,378) 0.4 0.5 ($2,803) ($1,705)
CZ15 SCE (1,330) 99 (0.2) 0.00 ($1,674) ($1,766) ($2,398) 0.9 0.7 ($92) ($724)
CZ16 PG&E (3,439) 274 (0.3) 0.00 ($1,674) ($5,558) ($6,187) 0.3 0.3 ($3,885) ($4,514)
CZ16-2 LA (3,439) 274 (0.3) 0.00 ($1,674) $2,821 ($6,187) >1 0.3 $4,495 ($4,514)
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As shown in Table 8 below, the all-electric prescriptive minimum detached ADU is cost effective on TDV basis in all climate zones except 1 and 16 when using
2022 TDV and weather files, in contrast with results using 2019 TDV.
Table 8. Cost-Effectiveness for ADU: All-Electric Prescriptive Minimum, 2022 TDV
CZ Utility
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Annual GHG
Reductions
(mtons)
Total
EDR
Margin
Upfront
Incremental
Package Cost
Lifecycle
Utility Cost
Savings
Lifecycle
$TDV
Savings
B/C
Ratio
(On-bill)
B/C
Ratio
(TDV)
NPV
(On-bill)
NPV
(TDV)
CZ01 PG&E (3,353) 242 0.7 0.00 ($1,024) ($6,533) ($1,656) 0.2 0.6 ($5,509) ($632)
CZ02 PG&E (2,445) 180 0.7 0.00 ($1,674) ($3,617) $219 0.5 >1 ($1,944) $1,893
CZ03 PG&E (2,111) 153 0.6 0.00 ($1,024) ($3,192) ($7) 0.3 137.2 ($2,168) $1,016
CZ04 PG&E (1,880) 142 0.6 0.00 ($1,674) ($2,437) ($167) 0.7 10.0 ($763) $1,507
CZ04-2 CPAU (1,880) 142 0.6 0.00 ($1,674) $2,513 ($167) >1 10.0 $4,186 $1,507
CZ05 PG&E (2,113) 145 0.6 0.00 ($1,024) ($3,904) ($811) 0.3 1.3 ($2,880) $212
CZ05-2 SCG (2,113) 145 0.6 0.00 ($1,024) ($3,564) ($811) 0.3 1.3 ($2,541) $212
CZ06 SCE (1,623) 121 0.4 0.00 ($1,024) ($2,545) $62 0.4 >1 ($1,521) $1,086
CZ06-2 LA (1,623) 121 0.4 0.00 ($1,024) $1,381 $62 >1 >1 $2,405 $1,086
CZ07 SDG&E (1,563) 117 0.4 0.00 ($1,024) ($4,231) $98 0.2 >1 ($3,207) $1,122
CZ08 SCE (1,426) 114 0.4 0.00 ($1,674) ($1,738) $606 1.0 >1 ($64) $2,279
CZ08-2 LA (1,426) 114 0.4 0.00 ($1,674) $1,598 $606 >1 >1 $3,271 $2,279
CZ09 SCE (1,517) 119 0.4 0.00 ($1,674) ($1,986) $239 0.8 >1 ($312) $1,912
CZ09-2 LA (1,517) 119 0.4 0.00 ($1,674) $1,556 $239 >1 >1 $3,229 $1,912
CZ10 SDG&E (1,631) 125 0.4 0.00 ($1,674) ($4,978) $537 0.3 >1 ($3,304) $2,210
CZ10-2 SCE (1,631) 125 0.4 0.00 ($1,674) ($2,363) $537 0.7 >1 ($689) $2,210
CZ11 PG&E (2,155) 163 0.7 0.00 ($1,674) ($3,472) $192 0.5 >1 ($1,798) $1,865
CZ12 PG&E (2,108) 163 0.7 0.00 ($1,674) ($2,788) $244 0.6 >1 ($1,114) $1,917
CZ12-2 SMUD (2,108) 163 0.7 0.00 ($1,674) $464 $244 >1 >1 $2,138 $1,917
CZ13 PG&E (1,887) 143 0.7 0.00 ($1,674) ($2,765) ($93) 0.6 18.0 ($1,092) $1,581
CZ14 SDG&E (2,187) 158 0.4 0.00 ($1,674) ($7,311) ($321) 0.2 5.2 ($5,638) $1,353
CZ14-2 SCE (2,187) 158 0.4 0.00 ($1,674) ($4,058) ($321) 0.4 5.2 ($2,385) $1,353
CZ15 SCE (1,286) 97 0.5 0.00 ($1,674) ($1,636) ($112) 1.0 15.0 $38 $1,562
CZ16 PG&E (3,137) 249 0.5 0.00 ($1,674) ($4,873) ($2,248) 0.3 0.7 ($3,200) ($575)
CZ16-2 LA (3,137) 249 0.5 0.00 ($1,674) $2,502 ($2,248) >1 0.7 $4,175 ($575)
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4.2 All Electric Plus Efficiency and PV Results
Table 9 shows results of the all-electric prescriptive minimum using 2019 TDV with 1) heat pump water heater location is outside in exterior closet in all climate
zones except Climate Zones 14, 15, and 16, 2) energy efficiency measures, and 3) additional solar PV capacity. The all-electric detached ADU is cost effective
using either the on-bill or TDV approach in several climate zones. Also, similar to the package above, it is always on-bill cost effective using POU rates.
Table 9. Cost-Effectiveness for ADU: All-Electric Energy Efficiency + Additional PV, 2019 TDV
CZ Utility
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Annual
GHG
Reduction
s (mtons)
Total
EDR
Margin
Upfront
Incremental
Package
Cost
Lifecycle
Utility
Cost
Savings
Lifecycle
$TDV
Savings
B/C
Ratio
(On-
bill)
B/C
Ratio
(TDV)
NPV
(On-
bill)
NPV
(TDV)
CZ01 PG&E (524) 259 0.8 29.30 $5,794 $4,323 $4,123 0.7 0.7 ($1,472) ($1,671)
CZ02 PG&E (497) 198 0.8 18.70 $3,207 $2,159 $3,333 0.7 1.0 ($1,048) $126
CZ03 PG&E (459) 174 0.8 19.00 $2,363 $2,331 $2,348 1.0 1.0 ($32) ($15)
CZ04 PG&E (465) 170 0.7 16.10 $2,314 $1,934 $2,635 0.8 1.1 ($380) $320
CZ04-2 CPAU (465) 170 0.7 16.10 $2,314 $5,434 $2,635 2.3 1.1 $3,120 $320
CZ05 PG&E (472) 170 0.7 20.00 $2,339 $2,538 $2,206 1.1 0.9 $199 ($133)
CZ05-2 SCG (472) 170 0.7 20.00 $2,339 $2,664 $2,206 1.1 0.9 $326 ($133)
CZ06 SCE (427) 136 0.6 16.10 $1,512 $1,836 $1,898 1.2 1.3 $324 $386
CZ06-2 LA (427) 136 0.6 16.10 $1,512 $4,487 $1,898 3.0 1.3 $2,975 $386
CZ07 SDG&E (404) 121 0.6 14.00 $1,170 $2,843 $1,134 2.4 1.0 $1,672 ($36)
CZ08 SCE (421) 122 0.6 12.20 $1,244 $1,503 $1,618 1.2 1.3 $260 $375
CZ08-2 LA (421) 122 0.6 12.20 $1,244 $4,058 $1,618 3.3 1.3 $2,814 $375
CZ09 SCE (439) 128 0.8 12.90 $1,317 $1,641 $2,170 1.2 1.6 $324 $853
CZ09-2 LA (439) 128 0.8 12.90 $1,317 $4,227 $2,170 3.2 1.6 $2,910 $853
CZ10 SDG&E (449) 130 0.8 12.20 $1,680 $2,168 $2,065 1.3 1.2 $488 $385
CZ10-2 SCE (449) 130 0.8 12.20 $1,680 $1,632 $2,065 1.0 1.2 ($49) $385
CZ11 PG&E (535) 177 0.9 15.00 $3,975 $1,994 $3,433 0.5 0.9 ($1,980) ($542)
CZ12 PG&E (494) 182 0.9 15.60 $4,121 $1,508 $3,510 0.4 0.9 ($2,613) ($611)
CZ12-2 SMUD (494) 182 0.9 15.60 $4,121 $4,685 $3,510 1.1 0.9 $564 ($611)
CZ13 PG&E (525) 167 0.7 13.30 $3,991 $1,917 $3,109 0.5 0.8 ($2,074) ($881)
CZ14 SDG&E (515) 175 1.1 15.90 $3,316 $3,257 $3,874 1.0 1.2 ($59) $558
CZ14-2 SCE (515) 175 1.1 15.90 $3,316 $2,363 $3,874 0.7 1.2 ($953) $558
CZ15 SCE (544) 99 0.2 7.40 $1,744 $1,630 $1,534 0.9 0.9 ($115) ($210)
CZ16 PG&E (547) 274 0.4 23.10 $4,091 $3,785 $3,801 0.9 0.9 ($306) ($290)
CZ16-2 LA (547) 274 0.4 23.10 $4,091 $9,042 $3,801 2.2 0.9 $4,951 ($290)
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Table 10 shows that All-Electric detached ADUs are TDV cost effective in all climate zones using 2022 TDV when including efficiency measures and additional
solar PV. Note that the EDR margins have been removed since the 2022 Title 24 Part 6 code has not yet completed rulemaking at the time of the draft, but
preliminary results indicate that all EDR margins will be positive.
Table 10. Cost-Effectiveness for ADU: All-Electric Energy Efficiency + Additional PV, 2022 TDV Results
CZ Utility
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Annual GHG
Reductions
(mtons)
Total
EDR
Margin
Upfront
Incremental
Package
Cost
Lifecycle
Utility Cost
Savings
Lifecycle
$TDV
Savings
B/C
Ratio
(On-bill)
B/C
Ratio
(TDV)
NPV (On-
bill)
NPV
(TDV)
CZ01 PG&E (512) 242 0.3 >0 $5,648 $3,588 $7,903 0.6 1.4 ($2,060) $2,255
CZ02 PG&E (479) 180 0.4 >0 $3,012 $1,936 $6,490 0.6 2.2 ($1,076) $3,478
CZ03 PG&E (441) 153 0.3 >0 $2,070 $2,119 $5,235 1.0 2.5 $49 $3,165
CZ04 PG&E (444) 142 0.4 >0 $1,875 $1,780 $4,473 0.9 2.4 ($95) $2,597
CZ04-2 CPAU (444) 142 0.4 >0 $1,875 $5,210 $4,473 2.8 2.4 $3,335 $2,597
CZ05 PG&E (443) 145 0.4 >0 $1,949 $2,121 $4,416 1.1 2.3 $173 $2,468
CZ05-2 SCG (443) 145 0.4 >0 $1,949 $2,461 $4,416 1.3 2.3 $513 $2,468
CZ06 SCE (413) 121 0.3 >0 $1,049 $1,550 $4,256 1.5 4.1 $501 $3,208
CZ06-2 LA (413) 121 0.3 >0 $1,049 $4,067 $4,256 3.9 4.1 $3,018 $3,208
CZ07 SDG&E (409) 117 0.3 >0 $1,073 $2,480 $3,899 2.3 3.6 $1,407 $2,826
CZ08 SCE (431) 114 0.3 >0 $975 $1,458 $4,086 1.5 4.2 $483 $3,110
CZ08-2 LA (431) 114 0.3 >0 $975 $3,825 $4,086 3.9 4.2 $2,850 $3,110
CZ09 SCE (434) 119 0.3 >0 $1,049 $1,608 $4,002 1.5 3.8 $560 $2,954
CZ09-2 LA (434) 119 0.3 >0 $1,049 $3,960 $4,002 3.8 3.8 $2,912 $2,954
CZ10 SDG&E (457) 125 0.3 >0 $1,485 $1,760 $4,404 1.2 3.0 $274 $2,919
CZ10-2 SCE (457) 125 0.3 >0 $1,485 $1,525 $4,404 1.0 3.0 $40 $2,919
CZ11 PG&E (524) 163 0.4 >0 $3,853 $1,517 $5,752 0.4 1.5 ($2,336) $1,899
CZ12 PG&E (481) 163 0.4 >0 $3,829 $1,293 $5,448 0.3 1.4 ($2,535) $1,619
CZ12-2 SMUD (481) 163 0.4 >0 $3,829 $4,066 $5,448 1.1 1.4 $237 $1,619
CZ13 PG&E (514) 143 0.4 >0 $3,503 $2,400 $4,852 0.7 1.4 ($1,103) $1,349
CZ14 SDG&E (496) 158 0.3 >0 $2,731 $2,772 $5,873 1.0 2.2 $41 $3,142
CZ14-2 SCE (496) 158 0.3 >0 $2,731 $2,090 $5,873 0.8 2.2 ($641) $3,142
CZ15 SCE (539) 97 0.5 >0 $1,549 $1,608 $3,383 1.0 2.2 $58 $1,834
CZ16 PG&E (526) 249 0.3 >0 $3,871 $3,173 $6,689 0.8 1.7 ($698) $2,818
CZ16-2 LA (526) 249 0.8 >0 $3,871 $8,099 $6,689 2.1 1.7 $4,227 $2,818
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5 Summary
The Reach Codes Team developed packages of energy efficiency measures as well as packages combining energy
efficiency with solar PV generation, simulated them in building modeling software, and gathered costs to determine the
cost-effectiveness of multiple scenarios. The Reach Codes Team coordinated assumptions with multiple utilities, cities,
and building community experts to develop a set of assumptions considered reasonable in the current market.
Changing assumptions, such as the period of analysis, measure selection, cost assumptions, energy escalation rates,
or utility tariffs are likely to change results.
Table 11 summarizes results for each prototype and depicts the compliance margins achieved for each climate zone
and package. Because local reach codes must both exceed the Energy Commission performance budget (i.e., have a
positive compliance margin) and be cost-effective, the Reach Code Team highlighted cells meeting these two
requirements to help clarify the upper boundary for potential reach code policies:
• Cells highlighted in green depict a positive compliance margin and cost-effective results using both On-Bill and
TDV approaches.
• Cells highlighted in yellow depict a positive compliance and cost-effective results using either the On-Bill or
TDV approach.
• Cells not highlighted either depict a negative compliance margin or a package that was not cost effective
using either the On-Bill or TDV approach.
The Reach Code Team found that all-electric detached ADUs can have positive compliance margins and are cost
effective in all climate zones through either the utility bill or TDV metrics when compared to a mixed fuel baseline. This
is true for either prescriptive minimum or efficiency + PV packages. To promote decarbonization, local jurisdictions may
choose to include new construction detached ADUs in all-electric requirements.
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Table 11. Detached ADU Summary of EDR Margin and Cost-Effectiveness
CZ Utility All Electric, 2019 EDR All Electric, 2022 EDR
Code Minimum EE+PV Code Minimum EE+PV
CZ01 PG&E 0.0 29.3 0.0 >0
CZ02 PG&E 0.0 18.7 0.0 >0
CZ03 PG&E 0.0 19.0 0.0 >0
CZ04 PG&E 0.0 16.1 0.0 >0
CZ04-2 CPAU 0.0 16.1 0.0 >0
CZ05 PG&E 0.0 20.0 0.0 >0
CZ05-2 SCG 0.0 20.0 0.0 >0
CZ06 SCE 0.0 16.1 0.0 >0
CZ06-2 LADWP 0.0 16.1 0.0 >0
CZ07 SDG&E 0.0 14.0 0.0 >0
CZ08 SCE 0.0 12.2 0.0 >0
CZ08-2 LADWP 0.0 12.2 0.0 >0
CZ09 SCE 0.0 12.9 0.0 >0
CZ09-2 LADWP 0.0 12.9 0.0 >0
CZ10 SDG&E 0.0 12.2 0.0 >0
CZ10-2 SCE 0.0 12.2 0.0 >0
CZ11 PG&E 0.0 15.0 0.0 >0
CZ12 PG&E 0.0 15.6 0.0 >0
CZ12-2 SMUD 0.0 15.6 0.0 >0
CZ13 PG&E 0.0 13.3 0.0 >0
CZ14 SDG&E 0.0 15.9 0.0 >0
CZ14-2 SCE 0.0 15.9 0.0 >0
CZ15 SCE 0.0 7.4 0.0 >0
CZ16 PG&E 0.0 23.1 0.0 >0
CZ16-2 LADWP 0.0 23.1 0.0 >0
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Cost-effectiveness Analysis: Detached Accessory Dwelling Units 17 References
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2021-03-12
6 References
Barbose, G. a. (2019, October). Tracking the Sun. Pricing and Design Trends for Distributed Photovoltaic Systems in
the United States 2019 Edition. Retrieved from
https://emp.lbl.gov/sites/default/files/tracking_the_sun_2019_report.pdf
California Energy Commission. (2017). Rooftop Solar PV System. Measure number: 2019-Res-PV-D Prepared by
Energy and Environmental Economics, Inc. Retrieved from
https://efiling.energy.ca.gov/getdocument.aspx?tn=221366
California Energy Commission. (2019). Retrieved from
https://ww2.energy.ca.gov/title24/2022standards/prerulemaking/documents/2019-10-17_workshop/2019-
10-17_presentations.php
E3. (2020). E3 Rooftop Solar PV System Report. Retrieved from
https://efiling.energy.ca.gov/getdocument.aspx?tn=221366
E-CFR. (2020). https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt10.3.431&r=PART&ty=HTM
L#se10.3.431_197. Retrieved from Electronic Code of Federal Regulations: https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt10.3.431&r=PART&ty=HTM
L#se10.3.431_197
National Renewable Energy Laboratory. (2018). National Renewable Energy Laboratory (NREL) Q1 2018. Retrieved
from https://www.nrel.gov/docs/fy19osti/72399.pdf
Self Generation Incentive Program. (2020). Retrieved from
http://localenergycodes.com/download/430/file_path/fieldList/PV%20Plus%20Battery%20Storage%20Repor
t
Statewide Reach Code Team. (2019, August). 2019 Cost-effectiveness Study: Low-Rise Residential New Construction.
Prepared for Pacific Gas and Electric Company. Prepared by Frontier Energy. Retrieved from
https://localenergycodes.com/download/800/file_path/fieldList/2019%20Res%20NC%20Reach%20Codes
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7 Appendices
7.1 Map of California Climate Zones
Climate zone geographical boundaries are depicted in Figure 1. The map in Figure 1 along with a zip-code search
directory is available at: https://ww2.energy.ca.gov/maps/renewable/building_climate_zones.html
Figure 1. Map of California climate zones.
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7.2 Mixed Fuel Baseline Energy Figures
Table 12 show the annual electricity and natural gas consumption and on-bill cost, total EDR margin, and GHG
emissions for each prototype under the mixed-fuel design baseline. The non-zero EDR margins are largely a result of
compliance software complexities, and they are not expected to significantly impact the proposed case results or
nature of recommendations. The annual kWh usage is 0 since code requires that PV offset 100 percent of kWh usage.
Table 12. Detached ADU Mixed Fuel Baseline
CZ Utility
Annual Electricity
Consumption
(kWh)
Annual Natural Gas
Consumption
(Therms)
Annual
Electricity
Cost
Annual
Natural
Gas Cost
Total
Annual
Utility
Cost
Annual GHG
Emissions
(mtons)
CZ01 PG&E 0 259 $194 $358 $552 1.0
CZ02 PG&E 0 198 $194 $269 $463 0.9
CZ03 PG&E 0 174 $189 $237 $425 0.9
CZ04 PG&E 0 170 $185 $231 $416 0.8
CZ04-2 CPAU 0 170 $131 $297 $429 0.8
CZ05 PG&E 0 170 $167 $232 $399 0.8
CZ05-2 SCG 0 170 $167 $237 $404 0.8
CZ06 SCE 0 136 $156 $202 $358 0.8
CZ06-2 LA 0 136 $124 $202 $326 0.8
CZ07 SDG&E 0 121 $160 $200 $359 0.8
CZ08 SCE 0 122 $161 $187 $348 0.9
CZ08-2 LA 0 122 $124 $187 $311 0.9
CZ09 SCE 0 128 $172 $193 $366 1.1
CZ09-2 LA 0 128 $125 $193 $318 1.1
CZ10 SDG&E 0 130 $166 $215 $381 1.0
CZ10-2 SCE 0 130 $183 $195 $379 1.0
CZ11 PG&E 0 177 $205 $244 $450 1.0
CZ12 PG&E 0 182 $197 $250 $447 1.0
CZ12-2 SMUD 0 182 $293 $250 $542 1.0
CZ13 PG&E 0 167 $224 $231 $454 0.9
CZ14 SDG&E 0 175 $178 $290 $468 1.4
CZ14-2 SCE 0 175 $212 $243 $455 1.4
CZ15 SCE 0 99 $333 $163 $496 0.5
CZ16 PG&E 0 274 $181 $379 $560 0.6
CZ16-2 LA 0 274 $123 $379 $502 0.6
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7.3 All-Electric Energy Efficiency Only Results
Table 13 and Table 14 show the cost-effectiveness results for the all-electric energy efficiency package without PV
compared to the mixed-fuel baseline without PV, in scenarios where PV cannot be installed. Without PV, the efficiency
packages selected are cost effective under 2022 TDV in most Climate Zones. It is likely that a different set of efficiency
measures can improve cost effectiveness, given that the all-electric prescriptive minimum is TDV cost-effective
(reference Table 8), though optimization of efficiency measure packages have not been examined in this study.
Note that the 2022 EDR margins have been removed since the 2022 Title 24 Part 6 code has not yet completed
rulemaking at the time of the draft, but preliminary results indicate that all EDR margins will be positive.
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Table 13. Cost-Effectiveness for ADU: All-Electric Energy Efficiency Without PV, 2019 TDV
CZ Utility Elec Savings
(kWh)
Gas
Savings
(therms)
GHG
Reductions
(mtons)
Total
EDR
Margin
Incremental
Package Cost
Lifecycle
Utility Cost
Savings
$TDV
Savings
B/C
Ratio
(On-bill)
B/C
Ratio
(TDV)
NPV
(On-bill)
NPV
(TDV)
CZ01 PG&E (2,760) 259 0.8 9.30 $1,698 ($7,485) ($3,679) -4.4 -2.2 ($9,183) ($5,377)
CZ02 PG&E (2,492) 198 0.6 1.00 $135 ($7,004) ($3,739) -51.9 -27.7 ($7,139) ($3,874)
CZ03 PG&E (2,151) 174 0.5 2.80 ($246) ($6,522) ($3,578) 0.0 0.1 ($6,276) ($3,332)
CZ04 PG&E (2,171) 170 0.5 0.30 ($246) ($6,890) ($3,428) 0.0 0.1 ($6,644) ($3,182)
CZ04-2 CPAU (2,171) 170 0.5 0.30 ($246) ($3,483) ($3,428) 0.1 0.1 ($3,237) ($3,182)
CZ05 PG&E (2,284) 170 0.5 2.70 ($246) ($7,393) ($4,140) 0.0 0.1 ($7,147) ($3,894)
CZ05-2 SCG (2,284) 170 0.5 2.70 ($246) ($7,266) ($4,140) 0.0 0.1 ($7,021) ($3,894)
CZ06 SCE (1,790) 136 0.4 1.70 ($585) ($3,428) ($2,823) 0.2 0.2 ($2,843) ($2,238)
CZ06-2 LA (1,790) 136 0.4 1.70 ($585) $1,475 ($2,823) >1 0.2 $2,060 ($2,238)
CZ07 SDG&E (1,592) 121 0.4 0.70 ($585) ($5,304) ($3,042) 0.1 0.2 ($4,719) ($2,457)
CZ08 SCE (1,622) 122 0.4 0 ($585) ($2,987) ($2,644) 0.2 0.2 ($2,402) ($2,059)
CZ08-2 LA (1,622) 122 0.4 0 ($585) $1,405 ($2,644) >1 0.2 $1,990 ($2,059)
CZ09 SCE (1,685) 128 0.4 1.50 ($512) ($2,763) ($2,198) 0.2 0.2 ($2,251) ($1,686)
CZ09-2 LA (1,685) 128 0.4 1.50 ($512) $1,481 ($2,198) >1 0.2 $1,993 ($1,686)
CZ10 SDG&E (1,714) 130 0.4 1.60 ($173) ($6,070) ($2,211) 0.0 0.1 ($5,897) ($2,038)
CZ10-2 SCE (1,714) 130 0.4 1.60 ($173) ($2,821) ($2,211) 0.1 0.1 ($2,649) ($2,038)
CZ11 PG&E (2,255) 177 0.5 2.60 $1,390 ($5,976) ($2,879) -4.3 -2.1 ($7,366) ($4,270)
CZ12 PG&E (2,282) 182 0.5 1.20 $1,390 ($6,151) ($3,012) -4.4 -2.2 ($7,541) ($4,403)
CZ12-2 SMUD (2,282) 182 0.5 1.20 $1,390 $730 ($3,012) 0.5 -2.2 ($661) ($4,403)
CZ13 PG&E (2,084) 167 0.5 2.40 $1,577 ($5,407) ($2,465) -3.4 -1.6 ($6,983) ($4,041)
CZ14 SDG&E (2,066) 175 0.6 4.50 $927 ($5,783) ($1,635) -6.2 -1.8 ($6,710) ($2,562)
CZ14-2 SCE (2,066) 175 0.6 4.50 $927 ($3,804) ($1,635) -4.1 -1.8 ($4,731) ($2,562)
CZ15 SCE (949) 99 0.4 4.80 $1,013 ($413) ($10) -0.4 0.0 ($1,426) ($1,023)
CZ16 PG&E (2,872) 274 0.9 5.10 $799 ($6,367) ($4,021) -8.0 -5.0 ($7,166) ($4,820)
CZ16-2 LA (2,872) 274 0.9 5.10 $799 $3,889 ($4,021) 4.9 -5.0 $3,090 ($4,820)
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Table 14. Cost-Effectiveness for ADU: All-Electric Energy Efficiency Without PV, 2022 TDV
CZ Utility Elec Savings
(kWh)
Gas
Savings
(therms)
GHG
Reductions
(mtons)
Total
EDR
Margin
Incremental
Package
Cost
Lifecycle
Utility
Cost
Savings
$TDV
Savings
B/C
Ratio
(On-
bill)
B/C
Ratio
(TDV)
NPV
(On-bill) NPV (TDV)
CZ01 PG&E (2,629) 242 0.7 >0 $1,698 ($7,361) $1,769 -4.3 1.0 ($9,059) $71
CZ02 PG&E (2,279) 180 0.5 >0 $135 ($6,500) $1,060 -48.2 7.9 ($6,635) $925
CZ03 PG&E (1,958) 153 0.4 >0 ($246) ($6,269) $764 0.0 >1 ($6,023) $1,009
CZ04 PG&E (1,852) 142 0.4 >0 ($246) ($6,124) $57 0.0 >1 ($5,879) $303
CZ04-2 CPAU (1,852) 142 0.4 >0 ($246) ($3,703) $57 0.1 >1 ($3,457) $303
CZ05 PG&E (1,984) 145 0.4 >0 ($246) ($6,680) ($167) 0.0 1.5 ($6,434) $78
CZ05-2 SCG (1,984) 145 0.4 >0 ($246) ($6,340) ($167) 0.0 1.5 ($6,095) $78
CZ06 SCE (1,585) 121 0.4 >0 ($585) ($2,706) $615 0.2 >1 ($2,121) $1,200
CZ06-2 LA (1,585) 121 0.4 >0 ($585) $1,466 $615 >1 >1 $2,051 $1,200
CZ07 SDG&E (1,520) 117 0.4 >0 ($585) ($5,017) $528 0.1 >1 ($4,432) $1,113
CZ08 SCE (1,499) 114 0.3 >0 ($585) ($2,627) $493 0.2 >1 ($2,042) $1,078
CZ08-2 LA (1,499) 114 0.3 >0 ($585) $1,456 $493 >1 >1 $2,041 $1,078
CZ09 SCE (1,545) 119 0.3 >0 ($512) ($2,351) $421 0.2 >1 ($1,839) $933
CZ09-2 LA (1,545) 119 0.3 >0 ($512) $1,511 $421 >1 >1 $2,023 $933
CZ10 SDG&E (1,641) 125 0.4 >0 ($173) ($5,824) $674 0.0 >1 ($5,651) $847
CZ10-2 SCE (1,641) 125 0.4 >0 ($173) ($2,814) $674 0.1 >1 ($2,641) $847
CZ11 PG&E (2,087) 163 0.4 >0 $1,390 ($5,602) $1,063 -4.0 0.8 ($6,993) ($328)
CZ12 PG&E (2,094) 163 0.4 >0 $1,390 ($5,856) $634 -4.2 0.5 ($7,246) ($757)
CZ12-2 SMUD (2,094) 163 0.4 >0 $1,390 $500 $634 0.4 0.5 ($890) ($757)
CZ13 PG&E (1,786) 143 0.4 >0 $1,577 ($4,659) $995 -3.0 0.6 ($6,236) ($582)
CZ14 SDG&E (1,887) 158 0.5 >0 $927 ($5,466) $1,460 -5.9 1.6 ($6,393) $534
CZ14-2 SCE (1,887) 158 0.5 >0 $927 ($3,266) $1,460 -3.5 1.6 ($4,193) $534
CZ15 SCE (917) 97 0.3 >0 $1,013 ($361) $2,200 -0.4 2.2 ($1,374) $1,187
CZ16 PG&E (2,642) 249 0.8 >0 $799 ($6,054) $354 -7.6 0.4 ($6,853) ($445)
CZ16-2 LA (2,642) 249 0.8 >0 $799 $3,419 $354 4.3 0.4 $2,620 ($445)
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7.4 Utility Rate Schedules
The Reach Codes Team used the CA IOU and POU rate tariffs detailed below to determine the On-Bill savings for
each package.
7.4.1 Pacific Gas & Electric
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7.4.2 Southern California Edison
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7.4.3 Southern California Gas
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7.4.4 San Diego Gas & Electric
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7.4.5 City of Palo Alto Utilities
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The ‘Commodity and Volumetric Rates’ are selected for the latest available month of December 2020.3
7.4.6 Sacramento Municipal Utilities District (Electric Only)
3 https://www.cityofpaloalto.org/civicax/filebank/documents/30399
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7.4.7 Los Angeles Department of Water and Power (Electric Only)
7.4.8 Fuel Escalation Rates
Escalation of natural gas rates between 2020 and 2022 is based on the currently filed General Rate Cases for PG&E,
SoCalGas, and SDG&E. From 2023 through 2025, gas rates are assumed to escalate at 4 percent per year above
inflation, which reflects historical rate increases between 2013 and 2018. Escalation of electricity rates from 2020
through 2025 is assumed to be 2 percent per year above inflation, based on electric utility estimates. After 2025,
escalation rates for both natural gas and electric rates are assumed to drop to a more conservative 1 percent
escalation per year above inflation for long-term rate trajectories beginning in 2026 through 2050.
Table 15 below demonstrate the escalation rates used for residential (detached ADU) buildings.
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Table 15. Real Utility Rate Escalation Rate Assumptions
Statewide Electric
Residential Average
Rate (%/year, real)
Natural Gas Residential Core Rate
(%/yr escalation, real)
PG&E SoCalGas SDG&E
2020 2.0% 1.48% 6.37% 5.00%
2021 2.0% 5.69% 4.12% 3.14%
2022 2.0% 1.11% 4.12% 2.94%
2023 2.0% 4.0% 4.0% 4.0%
2024 2.0% 4.0% 4.0% 4.0%
2025 2.0% 4.0% 4.0% 4.0%
2026 1.0% 1.0% 1.0% 1.0%
2027 1.0% 1.0% 1.0% 1.0%
2028 1.0% 1.0% 1.0% 1.0%
2029 1.0% 1.0% 1.0% 1.0%
2030 1.0% 1.0% 1.0% 1.0%
2031 1.0% 1.0% 1.0% 1.0%
2032 1.0% 1.0% 1.0% 1.0%
2033 1.0% 1.0% 1.0% 1.0%
2034 1.0% 1.0% 1.0% 1.0%
2035 1.0% 1.0% 1.0% 1.0%
2036 1.0% 1.0% 1.0% 1.0%
2037 1.0% 1.0% 1.0% 1.0%
2038 1.0% 1.0% 1.0% 1.0%
2039 1.0% 1.0% 1.0% 1.0%
2040 1.0% 1.0% 1.0% 1.0%
2041 1.0% 1.0% 1.0% 1.0%
2042 1.0% 1.0% 1.0% 1.0%
2043 1.0% 1.0% 1.0% 1.0%
2044 1.0% 1.0% 1.0% 1.0%
2045 1.0% 1.0% 1.0% 1.0%
2046 1.0% 1.0% 1.0% 1.0%
2047 1.0% 1.0% 1.0% 1.0%
2048 1.0% 1.0% 1.0% 1.0%
2049 1.0% 1.0% 1.0% 1.0%
Source: Energy & Environmental Economics, 2019, Reach Code Team
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