Skip to main content
Nossaman LLP

E-Alerts

Court Holds That Developers Building Affordable and/or Senior Citizen Housing May Be Awarded Density Bonuses dIncentives in Excess of the Statutory Minimum


09/17/07

In a recent California Court of Appeal decision, the First Appellate District upheld the approval by a municipality of a mixed use development, including an award of a 40% density bonus for the inclusion of affordable and senior citizen housing.  Friends of Lagoon Valley v. City of Vacaville (August 28, 2007, A113236) __ Cal.App. 4th __.  The Court of Appeal looked to the plain language and legislative history of Government Code section 65915 and determined that the 35% maximum density bonus level described in the statute reflects the maximum density increase statutorily imposed upon municipalities.  But nothing in the statute constrains a municipality from exercising its discretion to award a density bonus in excess of the statutory minimum.  Further, a municipality is not required to enact an ordinance in order to award density bonuses and incentives.  Friends of Lagoon Valley should provide developers with much-needed guidance to navigate the complicated but powerful California density bonus law. 

 

The purpose of the State density bonus law is to provide developers incentives to construct affordable and senior citizen housing.  When a developer agrees to construct a certain percentage of the units in a housing development for low, very low, or moderate income households, or to construct a senior citizen housing development of more than 35 units, the municipality must grant the developer one or more itemized concessions or 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.  Gov. Code, § 65915, subds. (a), (b).  A developer may initiate judicial proceedings for a municipality’s refusal to award such density bonuses or incentives.  If the court finds a municipality in violation of Government Code section 65915, the court must award the developer its reasonable attorney’s fees and costs.

 

The current density bonus percentages were set by amendments to Government Code section 65915 enacted by the Legislature in 2005, and range from a low of 5% (for moderate income housing) or 20% (for senior and all other affordable housing); to a maximum of 35% depending on the number of affordable units provided over the minimum number necessary to qualify for a bonus.  Gov. Code, § 65915, subds. (a), (b).  A developer that agrees to include a senior citizen housing development as defined in Civil Code sections 51.3 and 51.2 is entitled to a 20% density bonus or incentive as long as the senior citizen housing includes at least 35 units.

 

The Court’s ruling in Friends of Lagoon Valley clarifies that a municipality has discretion to award density bonuses and incentives cumulatively based upon the inclusion of affordable housing for various incomes, and/or senior housing, such that the total award available may exceed 35%.  Further, a municipality may go beyond Government Code section 65915 and may award a density bonus or incentives for other aspects of a project that provide a public benefit such as inclusion of parks and a fire station.

 

A developer seeking to take advantage of the State density bonus law should:

 

·         Consider including affordable housing units and/or a senior citizen housing development consisting of at least 35 units.

·         Review the municipality’s ordinances concerning density bonus awards.

·         Make an application for a density bonus and/or other incentives early on in the entitlement process.  A developer should make such an application informally if the local jurisdiction has not adopted a procedure allowing for such applications.

·         Have discussions with the municipality regarding the possibility of a density bonus and/or incentives for public benefits provided by the project.

·         Challenge a municipality’s refusal to award density bonuses and incentives in accord with Government Code section 65915.

 

The municipality’s general plan consistency determinations were also at issue in Friends of Lagoon Valley.  The Court noted that State law does not require perfect conformity between a proposed project and an applicable general plan.  The Court determined that the project was consistent with the applicable general plan.  General plans are flexible policy documents that do not set forth specific mandates or prohibitions, rather they set forth polices and goals.  A project is consistent with the general plan if it will further the objectives and policies of the general plan.  The Court upheld the municipality’s consistency determinations concerning traffic, reduced commercial development and increased residential development as follows:

 

·         Fair share contribution for traffic improvements was adequate because the municipality identified specific improvements that would receive the fair share contribution.

·         Although the project included less commercial use than anticipated in the general plan, the municipality was not required to approve the project with the maximum permitted commercial density.

·         Increased number of residential units did not frustrate the overall general plan goals and policies.

 

Friends of Lagoon Valley provides clarity for developers with respect to the State density bonus law.  The decision also paves the way for municipalities to award developers with increased density bonuses and other incentives for projects which include affordable and/or senior housing.  The Court’s decision provides further incentives to developers to provide such housing to meet market demands as well as help municipalities meet State mandated regional housing goals.  To view a complete copy of the Court’s decision, click here.

 

Suzanne Skov’s practice emphasizes land use and environmental law, specializing in the processing of all types of land use and environmental approvals.  She assists clients in compliance with federal, state and local land use and environmental regulations.  She also advises clients concerning legal issues related to California environmental, land use and planning laws.  She can be reached at (949) 833-7800 or sskov@nossaman.com.

  • Professionals
  • Practices
  • Success Stories
  • News
  • Events
  • Resources
  • Firm Pages