City Council
Update to State Density Bonus Law due to AB1287
April 23, 2024
Presentation Overview
Key Provisions of Assembly Bill 1287 (AB 1287)
• Updates State Density Bonus Law, effective January 1, 2024 • Authorizes potential for 100% bonus on project’s base density in exchange for additional very-low or moderate income affordable units
• Additional moderate income units are allowed to be rental units Planning Commission Recommendation
What Does the AHPP Require?
Number of Units in
the Project
On-Site Requirement Off-Site Option (in
lieu of on-site
requirement)
2-5 units Pay the Affordable Housing Fee. Projects that provide an affordable housing unit in accordance
with State Density Bonus Law are not required to pay
the Affordable Housing Fee.
--
6-19 units 15% affordable units for up to 80% income
households
--
20 units or more 15% affordable units with even distribution across 50% AMI, 80% AMI, and Moderate Income
20% affordable units at
50% or 80% AMI
How Much Bonus Can a Housing Project Receive?
• State Density Bonus requires the
City to grant an initial density
bonus based on the percentage
of on-site affordable units
• Per HCD direction, meeting the
AHPP’s requirement of 15% onsite affordable units evenly split across Very Low, Low and
Moderate Income qualifies a
project for the 50% density bonus
Excerpt from State Density Bonus table (Gov Code 65915) Percentage Very Low Income Units Percentage Density Bonus 5 20
6 22.5
7 25
8 27.5
9 30
10 32.5
11 35
12 38.75
13 42.5
14 46.25
15 50
Density Bonus #1
Under AB 1287 - How Much Bonus Can a Housing
Project Receive?
• State Density Bonus
requires the City to grant an
additional density bonus if
additional moderate
income or very-low income
units are provided
• Project must have provided
the maximum percentage
of on-site affordable units
to achieve the maximum
initial density bonus
Excerpt from State Density Bonus table
(Gov Code 65915)
Percentage Moderate
Income Units
Percentage
Density Bonus
5 20
6 22.5
7 25
8 27.5
9 30
10 32.5
11 35
12 38.75
13 42.5
14 46.25
15 50
Developer Can Choose Either Table for Additional Bonus
Excerpt from State Density Bonus table
(Gov Code 65915)
Percentage Very Low Income
Units
Percentage
Density Bonus
5 20
6 23.75
7 27.5
8 31.25
9 35
10 38.75
OR
Can SDBL’s Development Bonus Exceed
a City’s General Plan and Zoning?
• Yes. SDBL requires that a density bonus be granted, even if it goes beyond a City’s General Plan and Zoning maximum limits.
Can an Incentive/Concession or Waiver be denied?
• Yes, however SDBL and recent legal decisions govern this • Incentives/Concessions
• The City must demonstrate that the incentive/concession would not result in cost reductions
• City may request reasonable documentation but has very limited ability to require what information is submitted by an applicant to support their request - AB 1287 has further restricted this
• Waivers
• City cannot deny a waiver if the development standard would prevent the construction of a project including any State density bonus and requested incentives/concessions. • As confirmed by recent legal decisions and HCD guidance, the legal standard is very high and difficult to demonstrate
AHPP + State Density Bonus Work Together
By providing on-site affordable units as required by the City’s AHPP, market-rate housing projects receive: • Up to 50% density bonus
By providing up to 15% additional moderate-income units on-site, market-rate housing projects receive: • Up to an additional 50% density bonus = potential 100% density bonus and may request: • Up to 3 incentives/concessions
• Unlimited waivers
• To qualify for possible 100% density bonus, end result is housing project with • 5% Very Low Income
• 5% Low Income
• 20% Moderate Income
• Base Project as allowed by
local zoning standards
• 100 unit base project
100 Units
Base Project as
allowed by local
zoning standards
Base
Units
Bonus
Units
Market
Rate
Affordable
Units
%
Very Low
%
Low
%
Moderate
100 -- -- -- -- -- --
Step 1: AHPP + Density Bonus
100 Units
15 units
on-site affordable
Base Project +
On-Site Affordable Units
Required 15% Affordable
Base
Units
Bonus
Units
Market
Rate
Affordable
Units
%
Very Low
%
Low
%
Moderate
100 -- 85 15 5 5 5
• 100 unit base project
• AHPP Requirement – 15%
evenly split
• 5% Very Low
• 5% Low
• 5% Moderate Income
Step 2: AHPP + Density Bonus
100 Units
50 Bonus Units
as required
by State law
(50% of 100
base units)
Base Project +
On-site Affordable Units +
Bonus Units
15 units
on-site affordable
Base
Units
Bonus
Units
Market
Rate
Affordable
Units
%
Very Low
%
Low
%
Moderate
100 50 135 15 5 5 5 Incentives/Concessions or
Waivers apply to
accommodate bonus units
(Example standards:
• 100 unit base project building height, floor area)
• AHPP Requirement – 15%
evenly split
• Density Bonus – 50%
• 150 unit proposed project
Step 3: AHPP + Density Bonus
Effectively 10% affordable
100 Units
Incentives/Concessions or
Waivers apply to
accommodate bonus units
(Example standards:
building height, floor area)
50 Bonus Units
as required
by State law
(50% of 100 base
units)
Base Project +
Very Low Affordable Units +
Moderate Affordable Units +
Extra Bonus Units
30 units
on-site affordable
Addtl 50 Bonus Units
as required
by State law
(50% of 100 base
units)
Effectively 15% affordable
Base
Units
Bonus
Units
Market
Rate
Affordable
Units
%
Very Low
%
Low
%
Moderate
100 100 170 30 5 5 20
• 100 unit base project
• AHPP Compliance – 15%
evenly split
• AB 1287 Benefits – Additional
15% Moderate Income
• Density Bonus #1 – 50%
• Density Bonus #2 – 50%
• 200 unit proposed project
Step 4: AHPP + Stackable Density Bonus
per AB 1287
100 Units
Base Project as
allowed by local
zoning standards
100 Units 100 Units
50 Bonus Units
as required
by State law
(50% of 100
base units)
Base Project +
On-site Affordable Units +
Bonus Units
Incentives/Concessions or
Waivers apply to
accommodate bonus units
(Example standards:
building height, floor area)
Base Project +
On-Site Affordable Units
Required 15% Affordable
100 Units
50 Bonus Units
as required
by State law
(50% of 100 base
units)
Base Project +
Very Low Affordable Units +
More Moderate Affordable Units +
Extra Bonus Units
Addtl 50 Bonus Units
as required
by State law
(50% of 100 base
units)
Effectively 15% affordable
Addtl 15% Moderate
Tying It All Together – AB 1287
30 units
on-site affordable
15 units
on-site affordable
15 units
on-site affordable
Planning Commission Recommendation
• Adopt ordinance as proposed for consistency with AB1287 • Memo to Council requesting that Council direct staff to create a local density bonus program if a housing project provides off-site affordable units • What such a program would accomplish
• Justifications for the request
Considerations to evaluate request
• Local density bonus program would need to be more attractive than AB1287 and would have a lot of policy flexibility
• Not necessary for Housing Element implementation due in October 2024 • Could support more affordable units off-site
Recommended Council Action
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines
2. Introduce for First Reading of an Ordinance amending the text of the Zoning Ordinance to update provisions related to the implementation of State Density Bonus Law for consistency with recent amendments to State Law adopted by AB 1287 and make other minor changes, corrections, and clarifications
3. Provide direction regarding the Planning Commission’s recommendation regarding a potential local density bonus program for projects that provide off-site affordable housing