CALIFORNIA STATE DENSITY BONUS LAW GOVERNMENT CODE §65915 INTRODUCTION

California’s density bonus law was enacted in 1979. Density bonus law is intended to support the construction of affordable housing by offering developers the ability to construct additional housing units above an agency’s otherwise applicable density range. The ability to construct additional units is offered to help off-set a developer’s costs to subsidize affordable housing units in a project. Generally, density bonus law operates as an incentive to provide affordable housing units. The state density bonus law is codified in California Government Code Section 65915.

The density bonus law was substantively amended in 2019 by Assembly Bill (AB) 1763 (Chiu). AB1763 added new affordability categories and substantially increased density bonuses for certain projects. The following is a brief description of the most significant provisions of Government Code Section 65915, including the 2019 amendments which became effective in January 2020.

ELIGIBILITY & DENSITY BONUS LEVEL

State law specifies specific levels of density bonus which are applicable to a housing development project which includes affordable housing units. In accordance with Government Code Section 65915, a housing development project which includes affordable units is eligible for a sliding scale of percentage bonus based on the number of affordable units proposed in the development and the level of affordability (from moderate to extremely low income). Until January of 2020, the maximum percentage of density bonus which could be achieved by a proposed project was a 35% bonus. However, AB 1763, substantially increased the maximum bonus which could be achieved by certain affordable projects.

In accordance with AB 1763, a project proposed as a 100% affordable project with at least 80% of the units reserved for lower income households and 20% of the total units reserved for moderate-income households is entitled to a density bonus of 80%. If the development is located with one-half mile of a major transit stop, as defined in Public Resources Code §21155(b), the proposed project is entitled to an unlimited density bonus subject to some limitations.

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DENSITY BONUS CALCULATION

State density bonus law utilizes dwelling units per acre as the metric to calculate a density bonus. A density bonus calculation starts with determining the base density level applicable to a given property based on the maximum gross density assigned by a general plan. This calculation yields a maximum unit count. The applicable density bonus percentage is then applied to the maximum unit count to yield the number of density bonus units.

Example: A 1-acre site with an assigned density of 20 dwelling units per acre is proposed to be developed with 10% of its base units reserved for low income households. The property has a base unit yield of 20 dwelling units. The applicable density bonus in accordance with Government Code Section 65915 is 20%. The project is eligible to construct up to 4 density bonus units, bringing the total housing unit count in the project to 24 units.

An agency may offer an additional density bonus beyond that mandated by state law.

INCENTIVES, CONCESSIONS, WAIVERS, & REDUCTIONS

Incentives and Concessions

Density bonus law requires local agencies to grant incentives and concessions to projects that are eligible for a density bonus. Accordingly, a developer may request specific incentives or concessions that result in “identifiable and actual cost reductions to provide for affordable housing costs.” Incentives and concessions can be requested in addition to waivers and reductions noted in the section below.

The number of incentives and/or concessions that must be granted by an agency is as follows:

a. One incentive or concession where a project reserves at least 10% of the housing units for lower income households, 5% of the housing units for very-low income households, or 10% of the housing units for persons and families of moderate income in common interest developments.

b. Two incentives or concessions for projects reserving at least 20% of the total units for lower income households, at least 10% for very low income households, or at least 20% for persons and families of moderate income in a common interest development.

c. Three incentives or concessions for projects reserving at least 30% of the total units for lower income households, at least 15% for very low income households, or at least 30% for persons and families of moderate income in a common interest development.

d. In accordance with AB 1763, effective January 2020, four incentives or concessions for 100% affordable projects as described above.

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An agency may offer additional incentives and concessions beyond those mandated by law. A developer may qualify a project for a density bonus for the purpose of obtaining incentives or concessions, but is not required to construct any additional dwelling units allowed under density bonus law. An agency can decline to grant an incentive or concession upon demonstrating that approving a given concession and/or incentive will result in a specific, adverse impact upon public health or safety or the environment and for which there is no feasible method to mitigate or avoid the specific adverse impact. Waivers & Reductions Density bonus law requires local agencies to grant waivers or reductions of any development standard that will have the effect of physically preluding the construction of a development meeting the requirements of state density bonus law. Waivers or reductions can be requested in addition to concessions and incentives noted above, except in limited circumstances noted below. In accordance with AB 1763, effective January 2020, 100% affordable projects as described above, which are located within one-half mile of a major transit stop are eligible to receive a height increase of up to three additional stories, or 33 feet. However, where a developer proposes such a project, the project is not eligible for a waiver or reduction other than the additional height increase noted above.

An agency can decline to grant a waiver or reduction where it can demonstrate that approving a given waiver or reduction will result in a specific, adverse impact upon public health or safety or the environment and for which there is no feasible method to mitigate or avoid the specific adverse impact. A developer may request a density bonus for the purpose of obtaining incentive and concessions, but is not required to construct any additional dwelling units allowed under density bonus law.

PARKING

Density bonus law provides a variety of specific parking standards that agencies must accept for eligible projects:

Upon the request of the developer, an agency shall not require a vehicular parking exceeding the following ratios:

(A) zero to one bedroom: one onsite parking space.

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(B) two to three bedrooms: two onsite parking spaces.

(C) four and more bedrooms: two and one-half parking spaces.

If a development reserves 20% of the units therein at the low-income level or 11% of the proposed units at very-low income level and the development is located within one-half mile of a major transit stop, as defined of the Public Resources Code §21155, and there is unobstructed access to the major transit stop from the development, then, upon the request of the developer, an agency cannot impose a vehicular parking ratio, inclusive of handicapped and guest parking, that exceeds 0.5 spaces per bedroom.

If a development consists solely of rental units that is 100% affordable to lower income families, then, upon the request of the developer, an agency shall not impose a vehicular parking ratio, inclusive of handicapped and guest parking, that exceeds the following ratios:

(a) If the development is located within one-half mile of a major transit stop and there is unobstructed access to the major transit stop from the development, the ratio shall not exceed 0.5 spaces per unit.

(b) If the development is a for-rent housing development for individuals who are 62

years of age or older the ratio shall not exceed 0.5 spaces per unit. The development shall have either paratransit service or unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day.

If a development consists solely of rental units with an affordable housing cost to lower income families and the development is either a special needs housing development or a supportive housing development, then, upon the request of the developer, an agency shall not impose any minimum vehicular parking requirement. A development that is a special needs housing development must have either a paratransit service or unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day.

A development may provide onsite parking through tandem parking or uncovered parking, but not through on street parking.

An applicant may request parking incentives or concessions beyond those provided above.

An agency may reduce or eliminate a parking requirement for development projects of any type in any location.