Hayward City Council Turns Against ACUs

During a presentation on the new Business Friendly Hayward initiative, the City Council took a sharp turn against the idea of Accessory Commercial Units (ACUs). Despite unanimous approval at the April 9th Planning Commission meeting, the majority of the City Council appeared to turn against the idea of ACUs, citing concerns about enforcement, impacts on local communities, and potential complaints from residents. The remainder of the Business Friendly Hayward proposals were moved forward without issue, but ACUs were pushed off for up to a year.

Trying To Be More Business Friendly

The majority of the Business Friendly Hayward proposals were supported by everyone on City Council. The initial plans were put forward in August of 2025. Although some changes have been made, the goal of the project remains the same: "make it easier for businesses to locate and thrive in the City's commercial and mixed-use areas, while also working to revitalize vacant and underused properties."

This comes in the form of relaxed permitting requirements, especially for beer and wine sales, updated definitions, and simplifications of the municipal code. The most recent changes are:

• A Major Conditional Use Permit (MCUP) was created that will require approval by the full City Council
• Cannabis businesses, gas stations, and data centers with over 50Mw of power generation all require MCUPs
• A Limited Entertainment Permit, which will be much easier to get, will apply to live entertainment events involving amplified sound for 10 to 100 attendees
• A Minor Temporary Use Permit will apply to outdoor events of up to 1,000 people
• ACUs will be piloted in single-family homes South of Tennyson Road and not allow any restaurants

The proposals were unanimously supported by the Planning Commission at their April 6th meeting and all issues with ACUs from the Commission appeared to have been addressed.

Council Wants To See All Data Centers

Councilmember George Syrop pushed for all data centers to require City Council approval. "49(Mw) is one below 50, before something comes to the full council and that's still talking about 10,000 homes worth of energy," he said. Senior Planner Elizabeth Blanton explained that the 50Mw threshold already exists in California law and is a standard line among data centers.

But Councilmember Syrop insisted. "I still think that the scale that the State is dealing with is different than the scale and direct impacts the city deals with," he said. Councilmember Ray Bonilla agreed that all data centers, regardless of size, should require City Council approval. All data centers will now require a MCUP.

Enforcement Worries Drives Scare

Councilmember Julie Roche said, "I am worried about creating another unenforceable permitting option." She said that some homes are already running businesses out of their garages illegally and appeared to believe that allowing any legal uses might cause illegal uses to increase. She worried about customers not knowing if a business was operating legally. "Once it's allowed... then when somebody operates a yoga studio, I won't know whether they're permitted or not," she said.

Councilmember Angela Andrews asked how enforcement would occur and Senior Planner Blanton said that, like much of code enforcement, it will operate on a complaint basis. But she seemed confident it wouldn't be a big problem all at once. "I think it'll probably be a pretty slow rollout," she said. Councilmember Andrews continued to worry about staffing impacts, despite reassurances from City Manager Jennifer Ott. "We may not even get that many permits," City Manager Ott said.

But Councilmember Andrews remained unconvinced. "I would like to see more on the enforcement side and how the cost recovery would happen," she said.

Mayor Mark Salinas was also a strong opponent of the idea, and pushed to have it separated from the remaining Business Friendly Hayward policies so it could be voted down while approving everything else. "I can't support this," he said, "and it's because of the ACU element." He called for it to be delayed for two years to increase resources for enforcement "to do this right," he said. "I don't think we're ready to do this yet because of enforcement."

Tying ACUs To Street Vendors

Many of the arguments against ACUs were tied to the issue of policing street vendors. Mayor Salinas has repeatedly alleged that most illegal street vendors are a network being coordinated by an out-of-city entity. And, despite no restaurants being allowed in ACUs, he was certain that street vendors would expand into the space. "Now what's going to happen is you're going to get a vendor that's going to start tapping multiple homes that's going to open up like chains of vendors."

Councilmember Ray Bonilla Jr., who had been a proponent of ACUs in prior meetings, appeared to side with Mayor Salinas. "Adding in new things that could be done when we don't have the enforcement capability for that, may not be the wises decision right now," he said.

Councilmember Francisco Zermeno also used street vendors as justification for denying ACUs. "At the moment, we're not enforcing the street vendor ordinance that we passed, and then if we add another one, it would be just as bad."

Senior Planner Blanton, Development Services Director Sara Buizer, and City Manager Jennifer Ott pointed out ways that ACUs were different from street vendors and would likely not be an issue. Unlike street vendors, ACUs must be run by the homeowner, meaning fines are easier to enforce and collect. Food isn't allowed to be consumed on site and trash receptacles are required, which should address waste concerns.

Since food prep isn't allowed, the Alameda County Public Health Department won't be involved. Senior Planner Blanton said that ACPHD is the primary reason street vendors aren't getting permitted in Hayward, with waits of up to 2 years for approval.

Economic Liberation Or Neighborhood Nuisance

Ultimately, detractors viewed ACUs as a burden on neighborhoods. Mayor Salinas framed it as an equity issue. "[People in Stonebrae] would be the first ones to reject this," he said. "What are we doing to these neighborhoods?" Councilmember Andrews felt certain that residents would be against it. "If we were to make the decision tonight without the community's input... we're going to get some backlash," she said.

Despite saying that ACU-type businesses are an appeal in other cities, Mayor Salinas remained opposed. Councilmember Roche admitted that it is unfair to conflate ACUs and street vendors, but continued to do so. And Councilmembers Andrews and Bonilla framed ACUs as a burden on local residents, despite assurances from city staff that the pilot could be stopped at any time if significant issues arose.

On the other hand, Councilmember Syrop strongly supported the idea as a benefit to those looking to start a small business. "One of the largest expenses for business owners," he said, "is also the cost of rent. We're not trying to take any business away from anybody in particular but ensuring that everyone reaps the benefits of there being more businesses in our community and cheaper commercial rents across the board."

Councilmember Syrop framed ACUs as a benefit to historically underserved communities and the city as a whole. "A neighborhood where you have amenities that you can walk to is one where you don't have to get into a car... you're creating another option for neighbors to support neighbors. You're generating new tax revenue." He summarized the difference in views, "Not do this to a neighborhood, but give this to a neighborhood that hasn't seen this kind of investment before."

Councilmember Syrop reiterated the points brought up by city staff around enforcement and spoke plainly about what he felt was happening. "We're fearmongering ourselves into not making a decision," he said.

Councilmember Dan Goldstein also supported ACUs and framed them as economic liberation for South Hayward communities. "One of the great privileges we have is to improve the lives of our entire community," he said. He was also clear about who this could help. "We've said we are business friendly," he said. "What does that mean? Are you big box friendly? When I think about business friendly, I think about having an impact on business opportunities for the folks that live, work, and play here."

Delayed For Months, At Least

Councilmember Roche initially asked for the Council to consider bringing the item back in six months to a year, but after staunch opposition from others on Council, she instead pushed for the ACU element to be delayed six months. "I am more concerned about it now than when we started," she said.

Councilmember Syrop reluctantly agreed to a six month delay, but took issue with the last-minute complaints. "It has been a year that an ACU has been brought up and we are 99% at the finish line," he said. "And now all of these concerns that we've had a year to actually surface are coming up? What changed?... Who called between three months ago and now?" He closed by saying, "At the end of the day, I just want a coffee shop in my neighborhood."

City Manager Ott cautioned that six months may not be possible due to staffing, however and that it may be delayed longer. Development Services Director Buizer said that staffing in her departments is ever-changing and requested flexibility on the timeline. At the end, staff agreed to return within a year.

"It's messy, but it gets done," Mayor Salinas said. The rest of the Business Friendly Hayward proposals passed unanimously.