Good News For Developers And Affordable Housing Advocates: California Court Of Appeal Rejects Significant Challenge To State's Density Bonus Law

Author:Mr Matthew Hinks
Profession:Jeffer Mangels Butler & Mitchell LLP

State density bonus law -- one of many California statutes enacted to implement the state's policy of promoting the construction of affordable housing -- has withstood a significant challenge posed by the County of Napa (the "County") in a new California Court of Appeal opinion, Latinos Unidos del Valle de Napa y Solano v. County of Napa. The Court's opinion is good news, not only for advocates of affordable housing, but also developers of multifamily housing who rely upon the law, which provides valuable development incentives and is a useful and powerful tool in the permitting process.

The California Legislature enacted the density bonus law -- Government Code § 65915 -- in 1979 to address the shortage of affordable housing in California. The law is fairly straightforward. Where a developer agrees to set aside a certain percentage of units in a new housing development for low income households, the law mandates that a city or county grant the developer one or more itemized concessions from otherwise applicable zoning standards and a "density bonus," which allows the developer to increase the density of the development by a certain percentage above the maximum allowable limit under local zoning law. The density bonus given is a sliding scale depending upon the percentage of units set aside for either low, very low or moderate income households. For example, a developer is entitled to a 5% density bonus for setting aside 10% of a development's units for moderate income households, and a 35% density bonus for setting aside 11% of a development's units for very low income households. To ensure compliance with density bonus law, local governments are required to adopt an ordinance implementing the directives of the statute.

In 2010, the County amended its density bonus ordinance to provide that the density bonus available to a developer would be calculated based only upon units set aside in addition to those already set aside pursuant to the County's "inclusionary requirement." That requirement mandated that up to 20% of new dwelling units in a residential development project be made available at prices affordable to moderate-income households. Thus, the County's code was amended to provide that "units that qualify a project for a density bonus pursuant to [density bonus law] must be provided in addition to the affordable units required by [the inclusionary requirement] and do not meet the affordable housing requirements contained in this...

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