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California’s Density Bonus Law: 2019 Update

California’s Density Bonus Law provides housing developers with powerful tools to encourage the development of much needed affordable and senior housing, including the right to build up to 35% more homes, and other favorable local development requirements. In 2018, the California Legislature approved four bills that expanded the density bonus to a wider range of housing projects and strengthened procedures to make the density bonus more workable for developers. Those changes include bills granting a density bonus for affordable student housing, clarifying and strengthening the use of the density bonus in the Coastal Zone, allowing the density bonus to be provided through a floor area ratio bonus for certain transit-adjacent projects, and requiring local jurisdictions to provide developers with more comprehensive information about their density bonus rights. The 2018 legislation reflects the Legislature’s commitment to maintaining and fortifying the Density Bonus Law as a critical tool for incentivizing affordable housing development in California.

These legislative changes are outlined below and incorporated into the 2019 update of our Guide to the California Density Bonus Law. Please click here to read or print out the 2019 Guide. If you have questions about the Density Bonus Law or information in the Guide, please contact the author of the Guide, Meyers Nave Principal Jon Goetz, at 800.464.3559 or jgoetz@meyersnave.com.

Student Housing Density Bonuses.  SB 1227 (Skinner) requires cities and counties to grant a 35% density bonus for housing developments that will include at least 20% of the units for low income college students. The housing must be used exclusively for full-time students at accredited colleges, and must be subject to an operating agreement or master lease with one or more colleges. Unlike other forms of affordable housing, resident income levels will be determined through the student’s eligibility for the state’s Cal Grant financial aid program. Affordable rent levels are also specially tailored for a student population, with maximum rents established per bed for individual residents, rather than for the entire apartment unit. Homeless students will receive priority for affordable units.

Harmonizing Density Bonus and Coastal Act.  AB 2797 (Bloom) requires the density bonus to be administered in the Coastal Zone in a manner that is consistent and harmonized with the California Coastal Act. This bill overturns a 2016 appellate court ruling, Kalnel Gardens, LLC v. City of Los Angeles, which found that a proposed housing project that violates the Coastal Act as a result of a density bonus could be denied on that basis. The court in Kalnel Gardens held that the Density Bonus Law is subordinate to the Coastal Act, but AB 2797 attempts to strike a balance between the goals of promoting housing and protecting the coast.

Floor Area Ratio Bonuses.  AB 2372 (Gloria) allows a local jurisdiction, at the request of a developer, to grant a floor area ratio bonus rather than a traditional density bonus to certain affordable housing projects located adjacent to public transit. Eligible projects are also entitled to special parking ratios as low as one-tenth of a parking space per unit.

Strengthening Notice to Applicants.  AB 2753 (Friedman) provides greater certainty to a developer submitting a density bonus application by requiring local governments to notify developers what information must be submitted for a complete density bonus application. Once the application is determined to be complete, this bill also requires the local government to notify the developer of the level of density bonus and parking ratio the development is eligible to receive. If the developer requests incentives, concessions, waivers or reductions of development standards, the local jurisdiction is now required to notify the developer if it has submitted sufficient information necessary for the local government to make a determination on those issues.