April 21, 2026, Item #6
AGENDA RE PQ RT City of Poway
DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
April 21, 2026
Honorable Mayor and Members of the City Council
Julie Procopio, Director of Development Services ~
Alan Fenstermacher, City Attorney
Julie Procopio, Director of Development Services
[email protected]
Alan Fenstermacher, City Attorney
[email protected]
Density Bonus Law Overview and Summary
CITY COUNCIL
The City Council has requested an overview and summary of the scope of the California State Density Bonus Law (Gov. Code,§§ 65915 et seq.) as applied to development projects in the City of Poway. This report and accompanying presentation provide a general overview of Density Bonus Law requirements and applications.
Recommended Action:
It is recommended the City Council receive the report and summary. No formal action is proposed.
Discussion:
Density Bonus Law Generally
The Density Bonus Law provides developers with certain advantages for producing specified percentages of housing in a development that is affordable to extremely low, very-low, low, and moderate income households. There are four main categories of advantage. Developers are entitled to one or multiple of the following based on criteria defined in the law:
(1) Density Bonuses. The first type of advantage is referred to as a "density bonus." This is additional density or units over the otherwise allowable general plan and zoning densities.
Density bonuses generally are based on the percentage of affordable units in a development, ranging from a 20% density bonus (that is, 20% more units than would otherwise be allowed), to increasing numbers up to 100% for developments with higher percentages of affordable 1 of 5
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units and meeting other criteria.
Density bonus applicants are required to restrict units to the established affordability levels for at least fifty-five (55) years.
(2) Waivers and Reductions in Development Standards
Local agencies are required to grant an unlimited number of waivers or reductions (herein referred to as "waivers") to development standards that physically preclude the construction of the development project at the density allowed by state law. Unlike incentives/concessions (discussed herein), these are relief from physical standards, and only where necessary to accommodate the development allowed by the law.
Waivers are to physical development standards such as setbacks, height requirements, open space requirements, and similar standards which generally reduce the developable space on a parcel. Notably, a local agency cannot require fundamental changes to a project to avoid the need for a waiver, even if it can show the change would avoid the need. (See e.g. Bankers Hill 150 v. City of San Diego (2022) 7 4 Ca I.App.5th 755.)
The Density Bonus Law only allows local agencies to deny a requested waiver based on substantial evidence of any of the following:
1. The development standard at issue does not have the effect of physically precluding the construction of the development at the density allowed by state law.
2. The waiver would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Government Code section 65589.5, upon public health and safety or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact without rendering the development unaffordable to low-income and moderate-income households. "Specific, adverse impact" means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application for the development project was deemed complete. Inconsistency with the zoning ordinance or land use designation cannot qualify as a specific adverse impact.
3. The waiver would be contrary to State or Federal law. (3) Incentives and Concessions
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The third type of advantage are incentives or concessions. The two terms are used interchangeably for the purposes of the Density Bonus Law. The number of incentives/concessions ranges based on the number of affordable units provided. In general, a project will typically qualify for one to two incentives/concessions, but particular affordable projects can qualify for five or more depending on project contents.
An incentive or concession is defined as any of the following:
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1. A reduction in site development standards or a modification of zoning code or architectural design requirements that exceed the minimum standards approved by the California Building Standards Commission located in Health and Safety Code section 18901 et seq. that would result in "identifiable and actual cost reductions" to provide for affordable housing costs as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units.
2. Approval of mixed-use zoning if the mixed use would reduce the cost of the housing development and is compatible with the housing project and the existing or planned development in the area.
3. Other regulatory incentives or concessions proposed by the developer or local agency that result in identifiable and actual cost reductions to provide for affordable housing costs as defined in section 50052.5 of the Health and Safety Code, or for rents for the targeted units.
In mixed use developments, the incentive/concession applies to both the residential, and nonresidential portions of the development. Importantly, California Department of Housing and Community Development (HCD) has taken the position the concessions can be applied to reduce or even potentially eliminate mixed use/ground floor retail requirements.
The Density Bonus Law only allows local agencies to deny a requested incentive/concession based on substantial evidence of any of the following:
1. The incentive/concession does not result in identifiable and actual cost reductions to provide for affordable housing costs or for rents for the targeted units.
2. The incentive/concession would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Government Code section 65589.5, upon public health and safety or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact without rendering the development unaffordable to low-income and moderate-income households. "Specific, adverse impact" means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application for the development project was deemed complete. Inconsistency with the zoning ordinance or land use designation cannot qualify as a specific adverse impact.
3. The incentive/concession would be contrary to State or Federal law. (4) Parking Ratios
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Finally, the Density Bonus Law provides reduced parking ratios for projects which qualify for a density bonus upon request of the developer. The local agency is prohibited from requiring parking, including accessible parking that exceeds one space for zero to one bedrooms, one
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and a half spaces for two to three bedrooms, and two and a half spaces for four or more bedrooms. Some lower income developments are allowed even lower parking ratios, with certain developments being located one-half mile from a major transit stop allowed to be constructed without any parking.
Local Agency Discretion
The Density Bonus Law is heavily developer friendly. Any local agencies desiring to deny or fight against a density bonus advantage a developer has earned under the law will likely face challenges from both developers and HCD.
As indicated above, the law does not provide any avenue to deny density bonuses and parking ratios. Once a developer qualifies for them, there is no legally supportable mechanism to deny them. Incentives, concessions, and waivers may only be denied if the local agency can make a denial finding with substantial evidence. The burden is on the agency, not the developer, to show the development either does not qualify for the requested incentive, concession, or waiver, or the local agency has identified a specific adverse impact to public health or safety based on the request. The specific adverse impact must be further tied to objective, written, public health or safety standards.
There is currently no support in the Density Bonus Law, case law, or HCD opinions to deny a requested advantage under any other circumstance, including limitations to the scope of "allowable" incentives, concessions, or waivers, or denial for "common sense" reasons. Any denial not clearly supported by the law risks litigation and enforcement by HCD.
Risks of Denial
There is limited case law on the Density Bonus Law, and no case has limited the applicable scope or interpreted the law narrowly. Most importantly, no case has addressed the breadths of the currently broad incentive/concession definition and interpreted any limits into it.
HCD, charged with implementing the Density Bonus Law, has issued several opinion and advisory letters on the topic, and interprets the Density Bonus Law to mirror the text of the statute. HCD does not have any opinions where it supported a local agency's denial of a requested advantage.
The law grants both developers and HCD the right to litigate to enforce the Density Bonus Law, and, if a party prevails on enforcement, they are entitled to recover their attorney's fees and costs from the local agency.
Noncompliance with the Density Bonus Law may also provoke HCD enforcement of other housing laws integrated into a local agency's Housing Element, up to and including potential decertification of the Housing Element.
Local Examples
Three recent projects within the City have used state law to increase density, including McKee Orchard, Apollo and Poway Paseo. In exchange for building one home affordable to very low- 4of 5
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income households, the Mc Kee Orchard project received the State-allowed 20% density increase, or five bonus units, increasing the number of homes allowed to be developed from 15-units to 20- units. In addition, the project was entitled to receive three waivers to 1) reduce the lot size from 10,000 square foot minimum to 7,012 square foot minimum, 2) reduce the minimum lot width and 3) reduce side yard setbacks from 10 feet to five feet as these waivers were required to accommodate the 20-units.
The Apollo project was processed as a part of a larger development, the Poway Commons. While the density for the overall project fell within allowable densities, the Apollo project installed 44 senior apartments on 0.82-acres for a density of 53.65 dwelling units per acre. This project provided 43 units affordable to low-income seniors and one manager's unit. Some of the concessions the project was entitled to receive include 1) the parking was reduced to 44 spaces, 2) side yard setbacks were reduced from 15 feet to 1 O feet, 3) street setbacks were reduced from 10 feet to five feet, and 4) the requirement for ground-floor commercial was waived.
The Poway Paseo project included nine units affordable to low-income households in exchange for a 29% density bonus, increasing the number of units from 55 units to 72 units. The project height remains in compliance with the Poway Road Specific Plan (38-feet). The street setback was reduced to zero along a portion of the property line.
Environmental Review:
The agenda item is exempt from environmental review. Pursuant to Section 15061 (b)(3) of the California Environmental Quality Act (CEQA) Guidelines the activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
Fiscal Impact:
None.
Public Notification:
None.
Attachments:
None
Reviewed/Approved By:
Assistant City Manager
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Reviewed By:
Alan Fenstermacher
City Attorney
Approved By:
Chr~
2 City Manager