The California Density Bonus law is a state housing development mandate that supersedes local land use requirements and encourages the development of affordable and seniors' housing. It is found in California Government Code Sections 65915-65918 (this is the Planning and Land Use Section of the California law).
The California Density Bonus allows for up to a 30 percent increase in project density tied to the amount of affordable or seniors' housing included in the development. The bonus is also applicable when developers donate land to local government for the development of affordable housing. In addition to allowing for the greater density, the legislation also benefits developers by providing exemptions from strictures such as parking, setback and minimum square footage requirements, which can have a significant impact on the costs of a project.
The statutes cover new developments as well as condominium conversion projects. There is similar legislation (see Government Code Section 65917.5 Density Bonuses) that provides a density bonus for developments that include a childcare facility designed to be accessible to low and moderate income families.
Criteria for Qualifying for the Density Bonus
- Cities and counties must grant the Density Bonus to projects that meet at least one of the following criteria:
- Project donates at least 1 acre of land that can be used for affordable housing (e.g. has appropriate general plan designation, zoning, permits, and approval and has access to public services)
- At least 5% of the project's housing units are reserved for very low-income residents
- At least 10% of the project's' housing units are restricted to lower-income residents
- At least 10% of the project's housing units in a for-sale common interest development are set aside for residents of moderate income
- Project is a senior citizens' housing development (affordable housing units are not required in this scenario)
- Project is a mobile home park age-restricted to senior citizens (affordable housing units are not required in this scenario)
Maximum rents, for-sale-unit pricing and incomes pertaining to the affordable units and their potential residents are stipulated by the legislation and must be governed by project agreement. Equity sharing agreements with the local government and affordable unit buyers are also stipulated by the legislation.
"Concessions" Afforded to Developers by the Density Bonus (CEQA)
With the acceptance of the Density Bonus, the local government is required to provide one or more of the following kinds of incentives to developers whose projects qualify. The number of concessions required is tied to the percentage of affordable units in the project - with the number of concessions increasing as the percentage of affordable units does, with the incentive of encouraging the creation of more affordable units:
- Modifications or reductions to the development standards or zoning code (such as to setbacks or minimum sq. footage, for example)
- Approval of mixed-use zoning
- Other land and development associated concessions outside of the two aforementioned categories
The local government may refuse to grant concessions if they can show that the incentives are not necessary to make it possible financially for the affordable housing units to be produced, if the incentives interfere with health and safety, present an environmental problem, harm historical features or property, or are illegal/contrary to the law.
The municipality or county may opt to provide financial incentives, fee waivers or reductions in dedication requirements but these are not required by the Density Bonus Law.
The Density Bonus and the California Environmental Quality Act
There is no specific Density Bonus exemption from the California Environmental Quality Act. However, Density Bonus projects may qualify for the CEQA exemptions for infill and affordable housing.
The Density Bonus As A Mandate
The Density Bonus is a California state requirement and as such not subject to the discretion of local governance bodies, including charter cities (e.g. a long list of California's cities, including Los Angeles, San Francisco, San Jose, San Diego, Sacramento, Palo Alto and San Luis Opispo) which are otherwise free of state requirements. This means that a project that meets the law's requirements is entitled to the Density Bonus, as of right, regardless of the locality's wishes or local legislation (with the exception of the possible bars listed above). A developer who sues a local government to ensure that the Density Bonus is awarded is entitled under the statute to recoup his/her legal costs from that body, providing a powerful incentive for municipalities and counties to comply with granting the Density Bonus, rather than oppose it.