State Density Bonus Law

The State Density Bonus Law (Senate Bill 1818 that originally went into effect in January 2005) created a mechanism to obtain more favorable development requirements for projects with affordable or senior units.  To meet the affordable housing goals, developers are entitled to a density bonus that corresponds to specified percentages of units set aside for very-low, low, or moderate-income households.  It permitted a maximum bonus of 35 percent for developments in which at least 11 percent of the total units are for very-low; or 20 percent low; or 40 percent moderate-income households. Income levels are tied to the project’s Area Median Income (AMI).

In 2021, Assembly Bill (AB) 2345 amended the Density Bonus Law to expand and enhance development incentives for projects with affordable and senior housing components.  It permits a number of different options, including an increase in the maximum density bonus of up to 50 percent if a project sets aside 15 percent for very-low; 24 percent low; or 44 percent moderate-income households.

In addition to the density bonuses, projects are entitled to one or more concessions or incentives.  These can include a reduction in site development standards or modification of zoning or architectural design requirements that exceed minimum building standards: for example, reduction in setbacks or increase in building height.  A project can be entitled for one to three such incentives based on the number of affordable units provided within each tier of affordability. 

The law provides for reduced parking of one space per studio or 1 bedroom; 2 spaces per 2 or 3 bedroom; and 2.5 spaces per 4 bedroom units, with no guest or covered parking required.  AB 2345 further reduces the 2 and 3 bedroom requirement to 1.5 spaces.  It should be noted that if a developer requests the State parking rate, the locality must grant this and the reduction in parking can be applied to the entire project, not just the affordable units.

Additionally, a local government is prohibited from applying any development standard that would physically preclude a development with the bonus and incentives entitled.  Projects within a half mile of a major transit stop may be granted additional wavers or reductions in development standards, such as a further reduction in parking requirements.