STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
July 26, 2023
Denice Thomas, AICP
Community Development Director
City of Agoura Hills
30001 Ladyface Court
Agoura Hills, CA 91301
Dear Denice Thomas:
RE: 2904 Agoura Road – Letter of Technical Assistance
The California Department of Housing and Community Development (HCD) is aware that the City of Agoura Hills (City) is reviewing an application for a housing development project located at 29045 Agoura Road (Project). The Project proposal includes a mixed- use development with the construction of a four-story apartment building with approximately 6,257 square feet of commercial space, including an existing 4,257- square-foot, single-story commercial building to remain on-site. The Project would result in the creation of 278 multi-family residential units, including 28 units affordable to very low-income households and 10 units affordable to low-income households. The project includes a request to utilize the State Density Bonus Law (SBDL, Gov. Code § 65915) to achieve a density bonus.
HCD
received a request for technical assistance from the Project applicant on May 5, 2023, regarding the interpretation of the SDBL in the context of the proposed Project.
The applicant expressed concerns that the City is using net acreage rather than gross acreage to calculate the base density, and ultimately the density bonus. More specifically, the applicant is requesting to include in its SDBL gross acreage calculation the area of an existing improved City-maintained public street right-of-way adjacent to the Project. The City, however, does not want to include that right of way in the SDBL gross acreage calculation. The purpose of this letter is to provide technical assistance on this matter.
Gross Acreage for the Purposes of State Density Bonus Law The question of which portions of private property are included in gross acreage was examined in HCD’s December 2022 letter to the City of Watsonville. 1 The SDBL
1 HCD’s December 2022 letter to City of Watsonville addressing gross acreage is available at https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/HAU/watsonville-TA- 121522.pdf
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requires that base density be determined using the gross acreage and not net acreage.
Government Code Section 65915, subdivision (f), states that a density bonus means, “a density increase over the otherwise maximum allowable gross residential density…” (emphasis added). As stated in the Watsonville letter, HCD confirms that all portions of the site that are undevelopable including, but not limited to, riparian areas, wetlands, steep slopes, and easements (including public rights of way) are included in gross acreage.
T
o expand and clarify HCD’s previous interpretation of gross acreage, any portion of the property that is owned in fee and for which an easement was granted for a public street right-of-way, or any public right-of-way area, is like any other easement on the property (such as utility easements, conservation easements, etc.).2 Therefore, an easement for a public street right-of-way is included in gross acreage for the purpose of calculating density for SDBL projects. Included in gross acreage are all existing easements, and all future easements or dedications that are typical conditions of approval for a project, such as but not limited to, driveways, drive aisles, private or public streets, and any public rights-of-way.
I
mportantly, Government Code Section 65915, subdivision (r), explicitly states that the SDBL shall be interpreted liberally in favor of producing the maximum number of total housing units. Therefore, the use of net acreage (or the exclusion of the public right-of- way easement, in this case) would result in fewer housing units and conflict with SDBL's express intent to produce the maximum number of housing units.
T
he City has asserted that the legal distinction between a public street right-of-way created via a dedication and the granting of an easement is arbitrary. This is false. A dedication typically results in the conveyance of the underlying fee interest in the land, whereas the granting of an easement does not. If the landowner utilized an easement, then that portion of the site must be included in the SDBL calculation. As to concerns that some property owners may be unfairly advantaged by having the good fortune of owning a fee interest in an adjacent street, there is no statutory issue. The ultimate result is the production of more affordable and market-rate housing – the stated intent of both the SDBL and the City’s Housing Element.
HCD is
aware that the City is improperly utilizing a county assessor’s map to determine gross acreage for the proposed Project. Assessors’ maps are not; however, accurate representations of actual property boundaries because they are used to determine usable, or taxable areas of a property. They; therefore, exclude areas that are owned in fee but dedicated in easement for a public street right-of-way because public streets are not subject to property tax. Accordingly, HCD advises the City to utilize land surveys prepared by licensed surveyors or engineers that identify the entirety of a property 2 “A public right-of-way is a form of easement, in that it grants the use rights in a particular parcel of land to nonowners of that land.” Bello v. ABA Energy Corp. (2004) 121 Cal.App.4th 301, 308 (citing Cal. Civ. Code, § 801, subd. (4).).
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boundary (which includes all easements owned in fee) to calculate density for SDBL projects to ensure the maximum allowable gross density is achieved.3 Conclusion
HCD respects the challenges inherent in infill development and applauds the construction of a mixed-income development on a site identified in the City’s 6th Cycle Housing Element. HCD advises that the contents of this letter not be used to delay or otherwise unnecessarily complicate a project moving forward through the entitlement process. Local agencies should be pragmatic in their considerations of SDBL applications that provide much needed affordable and market-rate housing throughout California.
H
CD would also like to remind the City that HCD has enforcement authority of the SDBL, among other state housing laws. Accordingly, HCD may review local government actions and inactions to determine consistency with these laws. If HCD finds that a city’s actions do not comply with state law, HCD may notify the California Office of the Attorney General that the local government is in violation of state law (Gov. Code, § 65585, subd. (j)). If you have any questions regarding the content of this letter or would like additional technical assistance, please contact Jessica Evans at [email protected].
Sincerely,
S
hannan West
Housing Accountability Unit Chief
3 In fact, SDBL is implemented most effectively when both an applicant and a local government can rely on the preparation of a professional land survey to determine the size of a site, based on the area owned in fee.
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