9/9/2024
State Density
Bonus Law
(SDBL)
State Density Bonus Law (SDBL) gives developers the right to build additional dwelling units and obtain flexibility in local development requirements, in exchange for building on-site affordable or senior housing. To support the development of affordable and senior housing, projects can receive “waivers” and “concessions” to modify applicable regulations. This includes standards such as height, setbacks, parking and ground-floor retail requirements.
WAIVERS:
Projects can request waivers, which
are generally used to modify physical
standards affecting the building envelope.
CONCESSIONS:
Projects are eligible for between one to
five concessions, which are generally used
to modify land use or design requirements
that add to the cost of development.
How Many?
Unlimited 1 to 5, depending on level of affordability
Which Standards?
Development standards that would
physically preclude the construction of the
development at the density permitted by
SDBL.
Other regulations, where modifications
would result in identifiable and actual
cost reductions to provide for affordable
housing costs
Common Examples
• Height limits
• Daylight planes
• Setbacks
• Ground-floor retail requirements
• Undergrounding utilities
• Public or private open space
requirements
FURTHER READING:
• Government Code Section 65915
MORE REQUIREMENTS
AND EXAMPLES >
Palo Alto Municipal Code Chapter 18.15
As required by State Law, the City’s zoning ordinance includes a code section detailing how State Density Bonus Law will be implemented in Palo Alto. Where the local ordinance is in conflict with State law, State law takes precedence.
The SDBL offers developers the ability to modify
certain development standards by requesting either
waivers or concessions from the local jurisdiction.
The City cannot require submission of reports of
studies that are not otherwise required by State
law. The burden is on the City to demonstrate that a
requested concession or waiver is inconsistent with
State law.
SDBL vs. City Inclusionary Ordinance
In order for a for-sale project to satisfy both SDBL and the City’s inclusionary housing requirements, units would need to remain affordable for at least 99 years.
Rental projects pay a fee in-lieu of the on-site inclusionary housing requirement. However, under SDBL, a rental project must place units on- site and therefore, generally, will be not be subject to the fee PAMC Ch. 16.65: Affordable
Housing Requirements
State Density Bonus
Law
For-Sale
Projects
15% on-site inclusionary
requirement (moderate income
level)
99-year term
Very-low, low, and
moderate income
options 55-year term
Rental
Projects Fee payment in-lieu 55-year term
Pro Tip:
A project sponsor is not required to take advantage of a density bonus. If a project qualifies for State Density Bonus Law because of the City’s inclusionary housing requirement, it can still take advantage of the flexible development standards by requesting waivers and concessions.
9/9/2024
BASIC DENSITY BONUS ACHIEVABLE
The density bonus and concessions achievable scale in
proportion to the level of affordability and percentage of affordable units provided. The more affordable units and more deeply affordable those units are, the more a project can exceed local density standards.
Various scenarios of affordability qualify, including the following minimum thresholds.
Density Bonus
(% increase)
20% 35% 50% 80%+
Number of
Concessions 1 2 3 4 5
% Very Low-
Income 5% 11% 15% 16% 100%
% Low-Income 10% 20% 24% N/A 100%
% For-Sale
Moderate Income 10% 40% 44% 45% N/A
+20%
50% Base
+35%
50% Base
+50%
50% Base
70%
85%
100%
Affordable
Housing
+
Additional
Affordable
Housing
= Total Income
Restriction
Moderate
Income
44% +
Min. 5% Very
Low or Moderate
Moderate Income
5% =
Maximum
50% Income
Restriction
49%
Low-
Income
24% +
Very Low Income
9% = 33%
Very Low-
Income
15% +
Moderate Income
15% = 30%
BASIC DENSITY BONUS BASED ON AFFORDABILITY
ADDITIONAL DENSITY BONUS
Maximum 100% Density Bonus
Additional
Density
Bonus
ADDITIONAL DENSITY BONUS
Recent changes in SDBL allow an additional density bonus. • Projects that achieve the maximum 50% “basic” density bonus are eligible for additional density bonus, up to a 100% total bonus.
• Projects must provide at least 5% additional units
restricted to very-low or moderate income households.
• The resulting development may not income restrict more than 50 percent of the total units.
SDBL Eligible Project
Types
Minimum Affordability
Percentage
(Area Median Income)
Very-Low Income 5% at <50% AMI
Low-Income 10% at <80% AMI
Senior Housing None
Moderate Income
(For Sale only) 10% at <120% AMI
100% Affordable Up to 20% at <120% AMI; at
least 80% at <80% AMI
Special Populations 10% at <50% AMI
Student Housing
20% low-income (30% of
65% AMI for single room
occupancy room)
Childcare Facility
+ Any of the Above See eligibility above
Land Donation 10% at <50% AMI
9/9/2024
DENSITY BONUS FOR SPECIAL
POPULATIONS
• Projects housing seniors, foster youth,
veterans, or homeless persons, are
entitled to a density bonus equal to 20% of
the target population units.
• Affordable student housing projects are
entitled to a density bonus equal to 35% of
the student housing units.
• Projects that include on-site childcare
facilities may be entitled to an additional
density bonus equal to the square footage
of the childcare facility, as well as a
concession or incentive that contributes to
the economic feasibility of the facility.
CALCULATING DENSITY (WITHOUT DU/ACRE DENSITY STANDARDS) Senior Housing
Student Housing
Veterans
Foster Y outh
Homeless
Childcare
Facilities
20%20%
20%20%
35%35%
20%20%
20%20%
Replacement Unit Requirements
• Projects proposed with SDBL must replace any existing units that are rent-restricted or occupied by lower
income households at the same income levels.
• If household income is unknown, units are presumed to be occupied by lower income households in proportion
to the percentage of lower income renters citywide.
• For vacant or demolished units, look at affordability/ occupancy in the past 5 years.
• Replacement means equivalent size (at least the same
number of bedrooms).
• Replacement units count toward density bonus
qualification.
• SB 330 (Gov Code. Section 66300.6) includes
replacement/relocation provisions for protected units
that may also apply to a project.
Density Bonus =
+17 more units Base development
capacity = 48 units
1.5 FAR
(50% Lot Coverage)
Lot Size 200 feet x 200 feet = 40,000 square feet
Base Floor Area 40,000 square feet x 1.5 FAR = 60,000 square feet Average Unit 40 feet x 25 feet = 1000 sq. ft per unit Common Space 25% x 1000 sq. ft. = 250 sq. ft. per unit Average Area per Unit Average Unit + Common Space = 1250 sq. ft. feet per unit Base Development = Base Floor Area = 60,000 square feet = 48 units Capacity Average Area per unit 1250 square feet per unit
Density Bonus = Base Development Capacity x 35% 48 units x 35% = 16.8 rounded up to 17 units
• For sites/zoning districts where maximum dwelling units per acre is not regulated, project sponsors must calculate “base” density by determining the realistic development capacity based on the combination of FAR, site coverage, building height, and other physical standards. • The density bonus is then granted as additional floor area/FAR in proportion to the number of bonus units. Therefore, FAR cannot be granted as a waiver. 9/9/2024
STATE DENSITY BONUS LAW (SDBL) PROJECT EXAMPLES
Small Lot 15% Very Low-Income SDBL Rental Project
Example: 10,000 sq. ft. site, FAR = 1.5:
Typical Project
+ in-lieu fee payment
(15,000 GFA @1,500 sf/unit)
SDBL Project (50% Density bonus)
Includes 2 on-site Very-Low Income units
(50% bonus x 15,000 GFA = 22,500 sf
@1,500 sf/unit)
In 2024, a two-person household with a maximum income of $73,750 is eligible for a Very-Low Income unit. Their maximum rent for an apartment unit, or monthly costs for a for-sale unit, would be approximately $1,850.
10 units
15 units
Medium Lot 20% Low-Income SDBL Rental Project
Example: 1 acre site, Density = 30 du/ac
SDBL Project (35% Density bonus)
Includes 6 on-site Low Income units
(61,500 sf @ 1,500 sf/unit)
Typical Project
+ in-lieu fee payment
(45,000 GFA @1,500 sf/unit)
In 2024, a four-person household with a maximum income of $146,100 is eligible for a Low Income unit. Their maximum rent for an apartment unit, or monthly costs for a for-sale unit, would be approximately $3,650. 30 units
41 units
State Density Bonus law sets a maximum parking standard that the City can impose on projects depending on unit sizes and distance to public transit.
Project Types Maximum Ratio
Any
1 space for each studio/1-bed
1.5 spaces for each 2-bed/3-bed
2.5 spaces for each 4+bed
20% low-income or 11% very
low-income; and within ½ mile
of a major transit stop
0.5 spaces per bedroom
100% affordable housing,
supportive housing, and senior
housing projects within ½ mile
of a major transit stop
No parking required
Major Transit Stops
• Caltrain stations
• Intersecting bus lines with headways < 15 mins
(SamTrans ECR, VTA line 22, and Marguerite
line P, X, and Y)
• Bus rapid transit stop (none in Palo Alto)
100% affordable housing projects within 1/2 mile of
a major transit stop are eligible for
• 5 concessions
• 3 extra stories/additional 33 feet in height
• Unlimited density bonus
• No addtional waivers (unless the City agrees
to them)
1/2 mile
1/2 mile
DENSITY BONUS AROUND MAJOR TRANSIT STOPS (AS OF MA Y 2024)
PARKING REQUIREMENTS