Bill Summary
AB 1287 would require a city or county to grant a
housing development a density bonus and incentives
when an applicant proposes to maximize existing
incentives to construct deed-restricted affordable
units, and provides additional deed-restricted
moderate-income units. The project would become
eligible for an additional density bonus and incentives, stacked on top of the existing available benefits
available under Density Bonus Law.
Existing Law
The Density Bonus Law is a housing statute that
incentivizes developers to build affordable housing. In exchange for dedicating a certain percentage of their
base density to Very-Low, Low, or Moderate Income
homes, projects become eligible for a density bonus,
among other benefits.
The law prescribes the amount of bonus and incentives
that a development can claim, which depends on the
percentage of Very-Low, Low, or Moderate Income
homes built in the project. There is a sliding scale, such that the more affordable units are dedicated, the more
bonus and other benefits become available. In addition
to more density, projects receive other benefits,
including "concess ions” from local development
restrictions.
Most projects using Density Bonus Law choose to
build at the deeply affordable Very-Low Income level,
because it requires deed -restrictions on the fewest
number of units. The bonuses and concessions for that
level of affordability are shown in Figure 1.
Figure 1:
Current Density Bonus Law for Very-Low
Income Units
Percentage
Very-Low
Income Units
Percentage
Density Bonus Concessions
5 20 1
6 22.5 1
7 25 1
8 27.5 1
9 30 1
10 32.5 2
11 35 2
12 38.75 2
13 42.5 2
14 46.25 2
15 50 3
For projects to be eligible to use Density Bonus Law,
they must provide:
- At least 5% of the housing units are restricted to
Very Low-Income residents,
- At least 10% of the housing units are restricted to
Low-income residents, or
- At least 10% of the housing units are restricted to
Moderate Income residents in a for-sale development.
100% of the housing units (other than manager’s
units).
AB 1287 (Alvarez) Middle Income Homes Bonus
Problem
The current structure of Density Bonus Law
encourages developers to dedicate a relatively small
number of base density units at the deeply affordable
Very-Low Income level. This has proven successful to
create homes for the most in need , as well as more
market-rate homes . However , it leaves a “missing
middle” with very few projects choosing to included
homes that are deed-restricted at Moderate Income.
Prior efforts to create incentives for Moderate Income
homes under Density Bonus Law have raised concerns
that they might come at the expense of the preexisting
incentives to build more deeply affordable Very -Low
Income units. It has been a challenge to create new
incentives for Moderate Income production, without
undermining the continued production of Very -Low
Income units, which continue to be very necessary for
Californians who have the greatest challenges finding
affordable homes.
Solution
AB 1287 creates a new incentive that can only be used
when a project maximizes the production of Very-
Low, Low, or Moderate Income units, as allowed by
current Density Bonus Law. Only when those
maximums are met, does an additional bonus become
available when a project deed-restricts an additional
set of Moderate Income units.
This structure ensures that the new Moderate Income
Bonus never undermines existing incentives under
Density Bonus Law. In fact, it even creates new
economic reasons to maximize deeply affordable unit
production, by offering an additional sweetener in the
form of the stacked bonus and additional
concessions.
Use of this program could allow a development to
dedicate 15% at Very-Low income to receive a 50%
bonus, and to also dedicate another 15% at Moderate
Income, to receive a second stacked 50% bonus. The
Moderate Income benefits would stack on top of the
existing Density Bonus Law benefits, in an amount
shown on Figure 2.
Figure 2:
Once projects maximize the Very Low, Low, or
Moderate-Income under preexisting Density
Bonus Law, additional stacked bonuses can
include:
Percentage of
Additional
Moderate
Income Units
Percentage
Density Bonus
Concessions
5 20 1
6 22.5 1
7 25 1
8 27.5 1
9 30 1
10 32.5 2
11 35 2
12 38.75 2
13 42.5 2
14 46.25 2
15 50 3
Support
Circulate San Diego, SPUR, Bay Area Council
For More Information
Vincenzo Caporale, Legislative Aide
Assemblymember David Alvarez, District 80
Office: 916-319-2080
[email protected]