by William W. Abbott
Concerned over the supply of affordable housing, the Legislature has in recent years sought to create incentives for developers. One incentive area involves density bonuses. (Gov. Code, § 65915.) Although this concept has been embodied in the state zoning law for a number of years, it failed to achieve its purpose of providing meaningful incentives, at least in those cities and counties opposed to the idea. Effective January 1, 2005, the Legislature further amended the density bonuses provisions to further increase the incentive and to decrease city and county discretion. Abbott & Kindermann, LLP explores this law at length in its April 2005 article Supersize This Project! The New Rules for Density Bonuses. The key provisions are summarized below:
Density bonuses are available for projects consisting of 10% Lower Income, or 5% Very Low Income, or a seniors project, or where 10% of units in a condominium or planned development are affordable to moderate income households. For condominium or townhome builders, this last category has great appeal as the qualifying income requirements are the highest. Projects qualifying in this last category earn a 5% density bonus, with an additional 1% for each percent of added affordability for moderate income households.
Qualifying condominium projects are also entitled from one to three incentives as well (10% affordable-1 incentive; 20% affordable-2 incentives; 30% affordable-3 incentives.) These incentives or concessions include reduction in site standards, parking, architectural standards or granting of mixed use approvals.
For condominium projects, the affordable units are subject to an equity recapture provision which requires the seller to share appreciation with the city or county.
All cities and counties must adopt local ordinances to implement this law.
Regardless of the type of project, the granting of a density bonus is not a basis to require a general plan or Local Coastal Plan amendment, zoning change or discretionary approval.
Utilization of the density bonuses and incentives/concessions can impact project design. As the Legislature did not exempt these actions from CEQA review, it is important for the developer to work with the city up front to identify the compliance strategy, so that the environmental review will address all project features.
William W. Abbott is a partner with Abbott and Kindermann, LLP. For questions relating to this article or any other California land use, environmental and planning issues contact Abbott & Kindermann at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.