If you are a California affordable housing developer, this article is for you. It is intended as a quick reference guide for understanding the so-called “super density bonus.” Part I below describes the four general components of a density bonus in California under Government Code Section 65915. Part II describes the criteria for a “super density bonus.” Part III describes two scenarios for applying the “super density bonus.”
Part I: Density Bonuses Generally
Certain housing development projects qualify for density bonuses under Government Code Section 65915. Typical ways to qualify for a density bonus include providing at least 10% of base units in a housing development project for low- or moderate-income households or at least 5% of base units for very low-income households. If a project qualifies as a density bonus project, then the applicant can request four different categories of benefits for the project. These include the following:
Increase in Density: The project qualifies for an increase in density over the otherwise maximum allowable density pursuant to the general plan and zoning. Importantly, an applicant is not required to take advantage of an increase in density to qualify for the other benefits of a density bonus. In this regard, the term “density bonus” is arguably a misnomer. Note also that for purposes of a density bonus, numbers are always rounded up. Thus, if the maximum allowable density with a density bonus is 10.01 units, then the applicant is entitled to construct 11 units.
Concessions: The project qualifies for one or more concessions. The number of concessions varies depending upon the level of affordability proposed and the basis upon which the density bonus is requested. A concession is an exception from an otherwise applicable development standard. A concession is supposed to result in a cost savings for affordable housing, and the local agency can deny a concession if it finds that a requested concession will not result in a cost savings for affordable housing. The agency has the burden to prove the absence of cost savings, but the applicant can be required by the local agency to submit “reasonable documentation” demonstrating such a savings.
Waivers: Density bonus projects are entitled to unlimited waivers. A waiver is an exception from an otherwise applicable development standard. A waiver should be granted if the design standard from which an exception is sought would physically preclude a project that an applicant is otherwise entitled to construct at the allowed density and with any concessions granted.
Parking Reductions: Government Code Section 65915(p) establishes certain maximum parking ratios for density bonus projects. A project that meets the applicable ratio under subdivision (p) may take advantage of the ratio without using a concession or waiver. If a project requires a further reduction in parking standards from what the local agency otherwise requires, then that further reduction must be sought as a concession or waiver.
Part II: “Super Density Bonus” Projects
A special set of rules applies to certain housing development projects. To qualify, all the units in the project must be affordable, excluding managers’ units. A maximum of 20% of the units in the development may be for moderate-income households, and the remaining units must be for lower income households. Note that normally for density bonus projects, HCD rents are used to calculate affordable rents. However, for “super density bonus” projects, TCAC rents may be used for up to 80% of units. A “super density” bonus project qualifies for the following benefits:
Increase in Density: The project qualifies for an 80% density bonus. This is calculated based only upon the lower income units in the project. Moderate income units and managers’ units are excluded from the calculation. However, if the project is within one-half mile of a major transit stop, then no maximum density applies. Major transit stops include, for example, ferry terminals, train stations, and light rail stops. A bus stop served by two or more bus lines with 15 minute headways during peak commute hours also qualifies as a major transit stop. Distance from a major transit stop is measured from nearest property line to nearest property line.
Concessions: The project qualifies for up to four concessions, which is the maximum available for any type of density bonus project.
Waivers: Projects not located within one-half mile of a major transit stop may claim unlimited waivers. Waivers are discretionary for projects located within one-half mile of a major transit stop, but in lieu of waivers, such a project is entitled to an automatic height increase of 33 feet or three stories.
Parking Reductions: Parking reductions under Government Code Section 65915(p) apply. Importantly, subdivision (p) includes a special parking ratio intended for certain “super density bonus” projects. Specifically, a rental project within one-half mile of a major transit stop is not required to provide any parking if all the units in the project, exclusive of managers’ units, are for lower income households. Note that subdivision (p) includes several other special parking ratios that apply to certain types of projects and that may also overlap with the “super density bonus” classification.
Part III: Scenarios
Let’s look at how the “super density bonus” might work in practice. Consider the following two hypothetical projects:
Project #1: The project is located on a site where the maximum allowable density is 50 dwelling units per acre. The project site is 1.5 acres in size. The developer plans to offer two and three bedroom units only. Exclusive of a manager’s unit, 100% of the units will be for lower income households. The project site is not located within one-half mile of a major transit stop. Assume that no special parking ratio applies under Government Code Section 65915(p).
The site supports a maximum density of 75 units. Assuming one manager’s unit, 74 of these base units will be for lower income households. Applying an 80% density bonus and rounding up as required, the project would be entitled to 60 density bonus units, or 135 units in total.
74 x 0.8 = 59.2 ~ 60 density bonus units
75 base units + 60 density bonus units = 135 units
The project would also qualify for up to four concessions, unlimited waivers, and a parking ratio of not more than 1.5 parking spaces per unit.
Project #2: Same project, but now assume the project is located within one-half mile of a major transit stop. Now the project qualifies for unlimited density and up to four concessions. The project is entitled to a height increase of up to 33 feet or three stories, but any additional waivers would be discretionary with the local agency. No parking would be required for the project.