One source of the controversy surrounding Fairfax's just-repealed ordinance that would have facilitated construction of 124 new housing units in the Ross Valley community, is that when it comes to Bay Area planning, 124 doesn't mean 124.
Thanks to California laws mandating housing "density bonuses," when certain criteria are met, 124 can really mean something significantly higher than the number of residential units contained in any particular zoning ordinance's text.
The confusion associated with housing density bonuses inevitably fuels public distrust of government. The state Legislature and its regional minions, including the Association of Bay Area Governments, invented and then adopted upzoning bonuses that automatically increase density, effectively overriding local planning.
Once zoning is established or project approval is granted, there is a "bonus" of
Incentives are fine, but the number of units assigned after bonuses are calculated are the numbers that need to be disclosed in black letters when zoning is set or specific plans considered.
In their booklet "Density Through Affordability," the prominent law firm of Kronick, Moskovitz, Tiedemann and Girard advises potential clients, "This ability to force the locality to modify its normal development standards is sometimes the most compelling reason for the developer to structure a project to qualify for the density bonus."
Real estate lawyers understand that developer profitability is all about density and that state-mandated bonuses equal increased density. They know going in what they can get. It's time the public is supplied the same information in an easy-to-understand fashion well before zoning regulations or housing developments are approved.
Dick Spotswood: Marin Independent Journal http://www.marinij.com/opinion/ci_26322937/dick-spotswood-housing-density-bonus-can-make-numbers?source=pkg
290 DISCUSSION ITEM#2: Impact Fees and Affordable Housing Fund
291 Housing Program #14 and 15 identifies evaluating a single-family impact fee and
292 establishing a dedicated affordable housing fund for deposit of in-lieu and impact fees
295 Since the Palmer decision, many California jurisdictions have adopted or are considering
296 adopting an affordable housing impact fee, consistent with the requirements of the
297 Mitigation Fee Act. Fee revenues would be used to assist construction of new affordable
298 units as mitigation for increased affordable housing needs linked to new market rate
299 residential construction. The link between new market rate units and increased demand
300 for affordable units is quantified and documented by a nexus study. Advantages of
301 housing impact fees compared to inclusionary housing in-lieu fee programs include the
302 ability to apply fees to rental projects, one-unit single family homes, and residential
303 additions. Many Bay Area jurisdictions with new and/or revised affordable housing
304 programs have included impact fees for single units.
306 Impact fees.An affordable housing nexus analysis establishes maximum supportable
307 Housing Impact Fee levels based on a quantification of the impact that new market rate
308 residential development has on the need for affordable housing. Keyser Marston
309 Associates, Inc. has prepared a draft nexus analysis for the City that will help illustrate
310 how development of new market rate residential projects create an increased demand for
311 affordable housing and what level of fee( s) would be appropriate and proportional to that
312 anticipated impact. The nexus analysis does not set the fee amount nor does it provide a
313 recommended fee amount.It simply establishes the legal ceiling for fee levels.
314 For many reasons, cities typically select fee levels significantly below the maximum
315 allowable levels. Impact fees can be assessed on single family, multi-family and non-
316 residential development. Keyser Marston's analysis is currently only related to new
317 residential development. However, fees can also be assessed on new commercial square
318 footage and/or renovations. Staff is interested in determining if this is of interest to the
319 City Council and Planning Commission. A separate nexus analysis would be required,
320 although there is significant overlap between the two analyses, allowing some cost-
322 Establishing the level of the impact fee is a policy decision for the City. Typical
323 considerations include the City's onsite inclusionary requirements, the strength of the real
324 estate market, and fees charged in comparable jurisdictions within the region. In
325 addition, if the developer has a choice between providing units onsite and paying a fee, it
326 is important to understand the incentives created by different fee levels in relation to the
327 cost of providing onsite units. For instance, impact fees that are created based on square
328 footage usually provide a financial incentive for creating small units, as opposed to a per
329 unit fee. Fees can also be set at different rates for rental or ownership projects to
330 incentivize one type of project over another, as an alternative to a mandatory inclusionary
331 unit requirement.
333 Should Mill Valley wish to incentivize smaller sized, rental units, the City Council and
334 Planning Commission may wish to consider fees on a square foot basis and/or lower fees
335 for rental units.
Attachment 2: Support information for "scorecard" table5
337 Review of Fees. Currently, the City of Mill Valley's affordable housing fees are not
338 comparable to the actual cost associated with building a unit on site, as required by the
339 inclusionary regulations established in the Zoning Code. The most recent project being 3
340 townhome project on Laurelwood, each of which sold for approximately $1.2 million.
341 The construction cost was identified as $351 per square foot, which equated to an in-lieu
342 fee of $62,786.13.
344 Below is a table providing an estimate of approximate costs and fees associated with the
345d~velopment of typical types of housing projects in the City of Mill Valley. See
346 ATIACHMENT 4 for details on other Bay Area jurisdictions' affordable housing fees.
Testing per unit Impact Fee Amounts for Various Types and Size Units
Single Family New Single New Single New Multi·
Renovation: Family Family Family NewMulti~ New Multi·
""""2,000 (Detached, (Detached, Townhome Family Family
Additional Lot Over Lot 6,00G- (Attached or Condo Apartments
Square Feet 8,000 Sq Ft)B,OOOSq Ft) Detached) (Attached) (Attached)
1 unit 1 unit 1 unit 5·_,.- unlts 5'., units 5·. units
Average Unit Size
(SF) 3,600 2500 1500 850 850
Sates Price $2,500,000.00 $1,700,000.00 $1,200,000.00 $800,000.00 $3,000.00
price per sq foot $690.00 $680.00 $800.00 $941.00 $3.53
Affordable Housing Impact Fees
Milt ValleyI Existing $0 $0 $0 $39,436 $13,593 $13,593
Marin County $10,000 $36,000 $12,500 20% inctusionary on a five unit project equates to 1
unit. Fee only permitted for fractional inctusionary
units tess than .50. Nexus fee to revise multi-family
fee in progress. Fee currently $232,020/unit.
San Rafael $0 $0 $0 $25,400
larkspur $0 $0 $0 $50,719 $31,990
Tiburon $0 $0 $0 $71,175
Petaluma $0 $0 $0 $6,347 $3,287 $3,287
Napa County $18,400 $44,100 $26,875 $13,500 $0 $4,675
Napa City $4,400 $7,920 $5,500 $3,300 $1,870 $3,187
Sonoma County $13,676 $26,837 $18,894 $7,364 $2,104 $2,104
Pleasanton $10,880 $10,880 $10,880 $2,696 $2,696 $2,696
Note: Fees may be higher/lower based on the 1nctus1onary percentage associated w1th each proJect. For Instance, San
Rafael requires 10% inclusionary with a $254,000 per unit fee while Larkspur has a 15% inclusionary requirement with a fee
for rental projects set at $213,267/unit and a fee of $338,126/unit for ownership projects.
349 Most jurisdictions exempt certain residential development from affordable housing
350 impact fees, such as:
351 • New square footage associated with new second units
352 • Single-family development under a certain size threshold (Marin County = less
353 than 2,000 square feet; Sonoma and Napa Counties= less than 1,200 square feet)
354 • Owner-Builder (Santa Rosa)
355 • Special needs housing (such as homeless shelter, community care facilities,
356 transitional or supportive housing)
357 • Unit built to replace an existing unit of comparable size on the same site
Attachment 2: Support info!imation for "scorecard" table6
359Trust Fund. Typically, Housing Trust Funds are used to increase the supply of
360 affordable housing by leveraging other local, State and Federal funds (e.g., low income
361 housing tax credits, etc.). Currently the City has a balance of $106,357 in its affordable
362 housing fund.In most recent years, funds have been utilized as part of refinancing. In
363 2013, Shelter Hill was given a bond in the amount of $11,425 as part of refinancing,
364 which was repaid to the City.In 2006, the Redwoods received $50,000 from the housing
365 fund as part of expansion master planning work.
367 Impact fees deposited in an Affordable Housing Trust are used for the purposes of
368 developing affordable housing within the City of Mill Valley, including, but not limited
369 to, the acquisition of property, cost of construction, including costs associated with
370 planning, administration and design, as well as actual building or installation costs, and
371 program administration. Since impact fees are directly related to jobs and housing, the
372 trust fund must address workforce housing in addition to disable and/or senior housing.
373 The Mitigation Fee Act does include some requirements for expenditure of fee revenues
374 (time limits, administration, etc.).
376 DISCUSSION ITEM 3: Density Bmius.
377 State density-bonus law (found in Government Code Sections 65915-65918) was fust
378 enactedin 1979, with significant changes to density bonus provisions enacted in 2005
379 pursuant to SB 1818.In general, the law requires local governments to provide density
380 increases above that permitted under zoning, along with other incentives, to developers of
381 residential projects with five or more units who commit to providing a certain
382 percentage of affordable units within their projects.
384 The following affordable housing projects can qualify for a density bonus:
385 • Housing projects (5 or more units) that provide at least 5% of the units for very
386 low income households
387 • Housing projects (5 or more units) that provide at least 10% for lowerin~ome
389 • Housing projects that are for ownership (5 or more units) that provide at least
390 10% for moderate income households
391 • Senior citizen housing developments of at least 35 units
392 • Land donations for affordable housing or onsite childcare also qualify
393 See ATTACHMENT 5 for additional details on the State Density bonus law.
395 Currently, the Mill Valley Municipal Code does not reflect the State Density Bonus Law.
396 Under State law, a local jurisdiction is required to adopt an ordinance specifying how it
397 complies with this law. A jurisdiction must provide a density bonus, and between 1-3
398 concessions/incentives granted at the applicant's request, based on the following criteria:
.%Target for Units for Density Concessions/ It Concessions/
Density Bonus Bonus Incentives !Incentives
Very Low Income rental or ownership5% 20% 5% 1
(<50% median)10% 33% 10% ~
11% or .above 35% 15% or above~
Attachment 2: Support information for "scorecard" table 7
Lower Income2 -rental or ownership 10% 20% 10% 1
(51- 80% median)20% 35% 20% ~
30% or above 35% 30% or above~
Moderate Incomej -ownership10% 5% 10% 1
(Condominium or planned development)20% 15% 20% ~
(81- 120% median)30% or above 25% 40% or above f3
Land Donation '1 0% (very low 15-35% n/a rta
Senior Citizen Housing Development4 100% 20% n/a rta
• California Civil Code Section 65915 applies only to proposed developments of five (5) or more units.
1For each 1% increase over 5% of the Target Units, Density Bonus is increased by 2.5% up to a maximum of 35%
2For each 1% increase over 1 0% of the Target Units, Density Bonus is increased by 1.5% up to a maximum of 35%
3For each 1% increase over 10"/o of the Target Units, Density Bonus is increased by 1% up to a maximum of 35%
435 units dedicated to senior housing as defined in Civil Code Sections 51.3 and 51.12
Under state law, the City generally has no discretion regarding the approval of density
bonus units and has limited discretion in granting concessions. Jurisdictions, however,
can indicate preferences in those concession(s) offered.
To qualify for concession(s), an applicant must first demonstrate that they need the
exceptions from the City in order to make the project financially feasible (in terms of
providing the affordable units). The local jurisdiction "shall grant the concession or
incentive requested by the applicant," unless it makes a written finding that:
(1)the concession or incentive is not required in order for the designated units
to be affordable, or
(2) the concession or incentives would have a "specific adverse impact" on
health, safety or the physical environment or an adverse impact on an
historic resource listed in the California Register of Historic Resources.
Findings are included in the Draft Ordinance.
While several projects constructed in Mill Valley have qualified for the state density
bonus program (due to the City's inclusionary requirements), no projects have chosen to
apply for a density bonus, parking reductions and/or concession(s) under the state's
density bonus program.In fact, there are a limited number of projects in Marin County
that have actually applied for Density Bonuses. The table which follows presents the
results of a May 2014 survey conducted by the City of Sausalito, and identifies a total of
seven density bonus projects approved~ Marin over .the past decade.
Attachment 2: Support information for "scorecard" table8
AppnM!d Marin Stale Law DensityBonus Protects 2.004-2014
MarinJurtsdktion Projects Utlllzlna State Protect 1 . Profe<t 2 Project3 Project4 ...................
Belvdere 0 n/a
Note: Development application was submitted last month for 16 for-sale townhouse units (4 of the units by Stare Density Bonus).
0 The protect also Includes a requestfor two concessions per State Densltv Bonus.
Fairfax 0 na
Larkspur 0 n/a
MIIIVaUey 0 n/a
San Anselmo 0 n/a
Sausalito 0 n a
Tiburon 0 n/a
Toussln Senior Housins project
In Kentfll!ld, 13·unlt project with
1 2 densltv bonus units.
Virstnla Grove, an eight unit
project, with two units for the Warner Creek, a 61 unit
density bonus (an ownership apartment building for seniors
Novato project).The concessions were: (55+); 16 of the units were
reduced lot sizes, reducing throush the bonus density
setbacks, and parklns within the process. A reductionIn parlclng
2 setback. was the Citv's concession.
33 San Pablo - 82 residential
condominium units (81 base
1867 Uncoln -16 total units indudingl6.2 affordable to low 1203 Uncoln-36 total units (30 524 Mission -15 townhornes
San Rafael (12 base including 2low~ncome and moderate Income base induding 6 affordable (13 base units induding 2 below
units, plus 4 additional marlcet households, plus 1 additional units. plus 6 additional market marlcet rate units, plus 2
rate units. One concessionmarket rate unit. One rate units. One concession additional market rate units.
granted for use of state parking concession granted for useof granted for use of state parlcing One concession granted for use
4 rates.) state parking rate<.l rates.) of state parking rates.)
i:\COD\PROJECTS • NON-ADDRESS\GPA\2013\HE Update\lnformatlon to the Public\Marln Density Bonus Research.xlsx
Source: City of Sausalito Staff Analysis, May 2014.
Attachment 2: Support information for "scorecard" table9
429Density Bonus Example /10 Unit Project
430 Th etab l e be 1 o w 1·n ustrates h ow de ns1ty b onus wou ld be ap£!l ie d to a 10 urut proJeCt.
Proportion of Total
Affordable Maximum Density Example Project with 10 Base Units
Bonus (Except Senior Citizen Housing Development)
5% 20%9 1 1
10% 33%9 1 4
11% or above 35%8 2 4
Low 10% 20%9 1 2
Income12l 20% or above 35% 8 2 4
Moderate 10% 5%9 1 1
Income(a) 20% 15% 8 2 2
developments 40% or above 35% 46 4
(minimum) 20% 357
(1) For each 1% increase over 5% of the Target Units, the Density Bonus shall be increased by 2.5% up
to a maximum of 35%
(2) For each 1% increase over 10% of the Target Units, the Density Bonus shall be increased by 1.5% up
to a maximum of 35%
(3) For each 1% increase over 1 0% of the Target Units, the Density Bonus shall be increased by 1% up
to a maximum of 35%
(4) Rounded up to the next whole number
432Density Bonus Example I Local
433Example: The project pictured below in
434 San Rafael has 38 residential apartment
435 units and 4,740 square feet of retail on the
436 ground floor. The former Pacific
437 Telephone building, circa 1920s, was
438 rehabilitated in 1994 to become a key
439 project in the area known as the "West
440 End" of downtown San Rafael. A 45%
441 density bonus was granted to the project
442 for affordable housing based on 20 units
443 being affordable to low income (50-80%
444 of median income) households for 40
445 years.In addition, the City relaxed its
446 parking requirements to help make the
44 7 project possible
Attachment 2: Support information for "scorecard" table10
452Alternative Parking Standards. Density bonus applicants are eligible to use the
453 following_altemative parking standards specified in the State statutes: 1 onsite parking
454 space for studio or one bedroom units; 2 spaces for two and three bedroom units; and 2.5
455 spaces for units with four or more bedrooms. Requesting these parking standards do not
456 count as an incentive of concession, and do not require a pro forma.
458Concessions and Incentives. In addition to the density bonus, an applicant who utilizes
459 the density bonus may request one or more concessions or other incentives based on the
460 chart on page 14. Pursuant to Government Code Section 65915(k), a concession or
461 incentive is defined as:
462 • A reduction in site development standards or a modification of zoning code or
463 architectural requirements, such as reduction in setback or minimum square
464 footage requirements, which result in identifiable, financially sufficient, and
465 actual cost reductions.
466 • Approval of mixed use zoning in conjunction with the housing project if the
467 inclusion of non-residential uses in the project will reduce the cost of the housing
468 development and such non-residential uses are compatible with the housing
469 project and surrounding area.
470 • Other regulatory incentives or concessions which result in identifiable,
471 financially sufficient, and actual cost reductions.
4 72 The draft language related to Density Bonus for Mill Valley will require applicants
473 requesting an incentive or concession to submit a pro forma demonstrating financial
474 need (excluding the parking incentive).
476 Within the context of State density bonus law, incentives and concessions are ·
477 applicable to projects with a minimum of5 units. However, the City may wish to
478 consider offering incentives and concessions to all inclusionary housing projects as a
479 means of offsetting the cost of providing the affordable units. The extension of
480 incentives and concessions to projects with 2-4 units may also serve as a way to
481 encourage applicants to provide affordable units on-site rather than paying the
482 affordable housing impact fee.
484 •"Preferred" Incentives and Concessions. The City does not have discretion over
485 allowing a density bonus or concessions if a qualifying applicant requests them.
486 However, the City does have some discretion regarding the process for reviewing
487 density bonus requests. Some cities have identified concessions/incentives in their
488 Density Bonus Ordinances that they would prefer to see as part of a project that is
489 submitting under the state density bonus program.
491 Local example: The City of Sausalito has recently adopted a "tiered approach"
492 highlighting the City's preferences for incentives/concessions. Applicants are
493 encouraged to select incentives identified in Tier 1 before selecting incentives in Tier
494 2 as incentives with an anticipated greater level of impact are identified as Tier 2 and
495 are less preferred, and thus require a higher level of review and approval by the City.
Attachment 2: Support information for "scorecard" table 11
City of Sausalito Density Bonus:
Tier 1 requires review/decision by the Planning Commission:
• reduced minimum lot setbacks
• reduced minimum lot sizes and/or dimensions
• increased maximum building coverage
• increased maximum floor area ratio (FAR)
• reduced common or private open space
• approval of mixed use zoning in conjunction with the residential
development if non-residentialland uses will reduce the cost of residential
Tier 2 requires review/recommendation by the Planning Commission and review/
decision by the City Council:
• reduced parking (beyond the State Alternative Parking Standards in the
State Density Bonus)
• building heights that do not comply with Sausalito Municipal Code
• other regulatory incentives or concessions (such as impacts to primary
views that do not comply with Sausalito Municipal Code Section
10.54.050.0.4) proposed by the applicant or City which result in
identifiable, financially sufficient, and actual cost reductions.
Staff can modify the density bonus language based on the "tiered" approach
reflecting incentives and concession preferences for each tier, based on feedback
received at the joint study session meeting.
Attachment 2: Support information for "scorecard" table12
525 ATTACHMENT 3:
526 Overview of Affordable Housing - Qualifying Incomes and Households
528 Mfordable Housing Income Levels. Mfordable housing income levels are determined
529 periodically by the US Department of Housing and Urban Development (HUD). Marin
530 County is part of the San Francisco, CA HUD Metro Fair Market Rent Area, which
531 includes Marin, San Francisco and San Mateo Counties. See the tables below for
532 description of levels of affordability and examples based on household size.
FY2014 Marin County Income Limits.MH.....O. ,A.U..,SR ..I N'NG ......,.
4020 Civic Center onve
san Rafael. CA9490~17
Public Housing, Section 8 & CDBG Programs BMR Home Ownership Program
HHSize 30% of Median Very-Low Low Median Moderate
1 23,250 38,750 62,050 67,950 81 ,600
2 26,600 44,300 70,900 77,700 93,200
3 29,900 49,850 79,750 87,400 104,850
4 33,200 55,350 88,60097,100 116,500
5 35,900 59,800 95,700 104,850 125,850
638,550 64,250 102,800 112,650 135,150
7 41 ,200 68,650 109,900 120,400 144,500
8 43,850 73,100 117,000 128,150 153,800
9 46,500 77,500 124,000 135,950 163,150
The"30% of Median, • "Very Low lnoome" and "Low Income" schedules shown above were published by the
U.S. Dept. of Housing and Urban Development (HUD), effective 12118/13. The"Median Income" schedule
shown above is based on the FY2014 median family income for the San Francisco HMFA of $97,100 for a
four-person household, issued by HUD effective 12118/13, with adjustments for smaller and larger household
sizes. The"Moderate Income" schedule sho'M'I above represents 120% of median income. For additional
information, you may consult the HUD website atW!\W.huduser.org!datasets/~ . htm! .
HUD Income Limits FY2014 12/1812013
536 Establishing Affordable Ownership/Rental Prices. Affordable rental and sales prices are
537 calculated by Marin Housing based on household size and a ratio of annual income that is
538 spent on housing (30% for rental. units, 33% for ownership units. For a rental unit, total
539 housing costs include the monthly rent payment and utilities. For an ownership unit, total
540 housing costs include the mortgage payment (principal and interest), homeowner's
541 association dues, mortgage insurance, property taxes, and any other related assessments.
542 The applicable household size is calculated as the number of bedrooms in the dwelling
543 unit plus one (e.g., a studio unit has a household size of 1; a one-bedroom unit has a
544 household size of 2 and so on). See the example of a moderate income, for-sale
545 inclusionary housing unit provided below.
Attachment 3: Examples of Affordable Housing lnclusionary Housing Requirements and Impact Fees
EXAMPLE: RECENT INCLUSIONARY OWNERSHIP SALES PRICE- MODERATE INCOME
Number of bedrooms of inclusionary unit 2 bedrooms 1 bedroom
Household size 3 persons 2 persons
Maximum income allowed (120% AMI) $104,850 $93,200
Target income (90% AMI) $78,650 $69,900
Monthly Income $6,550 $5,830
33% housing/expense ratio $2,160 $1,920
Financing (30 year fixed) 4.75% 4.75%
Loan amount $247,300 $216,200
Purchase Price $260,300 $227,600
Down payment@ 5% $13,000 $11,400
Closing Costs (4%) $10,400 $9,100
Cash (down payment plus closing costs). $23,400 $20,500
548Source: Mann Housmg Authonty, August 2014.
549 Qualifications. Affordable Housing Unit must be owner occupied.
551 Maintaining Affordability. Mfordable Housing Units are usually deed restricted and based
552 on a given term. The length of term has varied based on legal parameters and fmancial
553 requirements associated with obtaining loans. Currently the Marin Housing has established
554 a clause that allows the affordable unit to remain in perpetuity.In previous, but recent
555years, the timeframe has been 55 years.
Attachment 3: Examples of Affordable Housing lnclusionary Housing Requirements and Impact Fees
I "'·~,:'<'il_. ,~. :;,
Mill Valley- Existing
Summary of Other Jurisdictions' lnclusionary Housing and
Affordable Housing Impact Fees
Project size that Project size %'of total unitsOwnership Projects/
can provide in-lieuthat must required to be Level of Affordablity of
fees build unit affordablelnclusion~ry units
10 or more 10% low to moderate
2-10 units 10%
5 or more 11-20 units 15% Half low
2-4 units units 21 or more 20% Half moderate
15%5-14 units Half low
5-14 units 15 or more 20% 15 or more units Half moderate
5% very low or low
If only one affordable unit is
required, moderate allowed
in code but usually
2-12 units= 15% negotiated at low-very low
3-6 units or new lots 7 or more 13+ units= 20% throught design review.
10% for projects with
less than 7 units or
lots/acre and 15% for
10 or more projects 7 units or
units lots/acre or more All moderate income
units are required to
be built unless
waiver is granted to
pay in-lieu fee
instead 3 or more 20% All low (60% AMI)
Attachment 4: Examples of Affordable Housing lnclusionary Housing Requirements and Impact Fees
Level of Affordablity of
Half very low
Half low income
Half very low
5% low/very low and 1 0-
depending on project
All moderate income
Rental Housing Impact
Fee required; however
applicant can request to
provide very low
affordable rental units
instead (at 50% AMI)
sliding scale, with max
Novato set at 20% for project Half moderate (90% AMI) Half low (60% AMI)
3-6 units 7 or more with 20 or more Half Low (65% AMI) Half Very low (50% AMI)
5% very low 5%very low
10 or more 10% low 10% low
1-9 units units 25% 1 0% moderate 1 0% moderate
5 or more
units for condo
units in mixed
1-6 units must
provide 1 unit
and over 6
build 20% 15% of units, and not
Sausalito affordable less than one low to moderate low to moderate
Belvedere None None N/A N/A N/A
Fairfax None None N/A N/A N/A
Ross None None N/A N/A N/A
Source: Correspondence with local Planning Directors, July 2014.
Attachment 4: Examples of Affordable Housing lnclusionary Housing Requirements and Impact Fees 2
lnclusionary Requirements: Jurisdictions within San Mateo County sorted byo/o inclusonary required)
Project size that Project sizeo/o of total units Ownership Projects/ Rental Projects/
can provide in-lieuthat must required to be Level of Affordablity of Level of Affordablity of
Jurisdiction fees build unit affordable lnclusionary units lnclusionary Units
Burlingame4+ units 10% Not s_Q_ecified Not specified
Daly City 10% 1 0% low income 1 0% very low income
San Mateo no projects all projects 10% 1 0% Moderate 1 0% low income
only if developer can10-19 Units= 10%
prove construction of
affordable units is10-19 Units= 10% Moderate 10-19 Units= 10% low
Menlo Parkinfeasible aU projects 20+ units= 15% 20+ units = 15% Moderate 20+ units = 15% low
Brisbane no projects all projects 15%
8 or more units4.5% moderate
Pacifica projects not in
and projects in
redevelopment areaarea 15% 6% very low
Portola Valley Not specified Not specified 15% Not specified Not specified
7% very low
San Carlos 7%1ow
2-6 units 7+ units 15% 1% moderate
6% low and moderate, plus
San Bruno 10+ units 15% 9% moderate
East Palo Alto 15% Not specified Not specified
San Mateo County 10% low income 1 0% very low income
5-9 units 20% 1 0% moderate income 1 0% low income
only if developer can
prove construction 6% very low
of affordable units is 7%1ow
Half Moon Bay infeasible all projects 20% 7% moderate
South San Francisco 2-4 units 5+ units 20% 12% Moderate
Foster City 10+ units 20% Not specified Not specified
Source: Analysis based on 2008 San Mateo County Workbook.
Attachment 4: Examples of Affordable Housing lnclusionary Housing Requirements and Impact Fees3
lnclusionary Requirements: Jurisdictions within Sonoma County (sorted by % inclusonary required)
Project size that % of total unitsOwnership Projects/
can provide in-lieuMinimum required to be Level of Affordablity of
Jurisdiction fees Project Size affordable lnclusionary units
Rohnert Park Data not provided 5+ units 15% low and moderate
Healsburg Data not provided 7+ units 15% Ve!'f_ low, low and moderate
Petaluma Data not provided 3-5+ units 15-30% low and moderate
low and moderate (10+
City of Sonoma units must have 1 0% low
Data not provided 5+ units 20% income)
Calistoga Data not provided 5+ 20% low and moderate
Windsor Data. not provided 5+ 20% 15% low and 1 0% very low
1/3 Very low, 1/3 low and
Data not provided None listed 20% moderate
Cloverdale Data not provided 5+ 15% moderate
Source: Analysis based on dataprovi~ed on the follow1ng website: www.caruralhousmg.org, accessed July 2014.
lnclusionary Rec uirements: Other Jurisdictions (sorted by% inclusionary requiredl
Project size that% of total units Ownership Projects/
can provide in-lieuMinimum required to be Level of Affordablity of
Jurisdiction fees Project Size affordable lnclusionary units
Davis Data not pJovided 5+ units 25-35% Very low, low and moderate
Montclair Data not provided 10+ units 15% Very low, low and moderate
Monterey Data not provided 5+ units 10-25% low and moderate
Los Gatos Data not provided 5+ units 10-20% moderate
Berkeley Data not provided 5+ units 20% Moderate, low and veJY low
Source: Analys1s based on data prov1ded on the followmg webs1te: www.calruralhousmg.org/?page_ld=11 0, accessed July
Attachment 4: Examples of Affordable Housing lnclusionary Housing Requirements and Impact Fees
Level of Affordablity of
very low and low
Very low, low and
very low and low
low and moderate (1 0+
units must have 1 0% low
low and moderate
Level of Affordablity of
very low and low
Very low, low and
low and moderate
Moderate, low and very
565IMPACT AND IN-LIEU FEES
Jurisdiction Atlordable Housing Impact Feel
~.1• Inclusionary In-Lieu Fee
Marin CountySingle Famil~ ImQact Fee:
lmQact fee applicable to individual single-family homes. <2,000 sf: exempt
In-lieu fee applicable to any fractional unit requirements 2,000-3,000 sf: $5/sf ($0 if 2nd unit/agric worker unit)
under Co 20% inclusionary housing program. 3,000 sf+: $10 /sf ($5/sf if 2nd unit/agric worker unit)
Mountain ViewRental: $10/s.f.
Menlo Park3% of sales price
Napa (City)Single Famil~ or Condo: $2.20/s.f.
In-Lieu Fees converted to impact fees in 2012, adding fee
option for rental Rental: $3.75/s.f.
Napa (County)Single Famil~ or Condo:
Fee applicable to 1 or more units < 1,200 sf: exempt
Exempt units include: 1 ,200 - 2000 sf: $9 /sf
- Farmworker units < 1,200 sf 2,001-3,000 sf: $10.75/sf
- Deed restricted affordable units 3,001 and up: $12.25/ sf
- Projects located on aSpecific Priority Hsg Development
SiteRental: $5.50/ sf
Palo Alto7.5% - 12.5% of sales price
PetalumaGraduated fee based on unit size (rental & ownershiQ)
Fee applicable to5 or more units <640 sf: exempt
1,000 sf: $3,951
2,000 sf: $9,022
3,000 sf: $15,213
Attachment 4: Examples of Affordable Housing lnclusionary Housing Requirements and Impact Fees
4,000 sf: $22,500
"Lower Income Housing Fee" applicable to 15 or 1,500 sf or less: $2,696/unit
more units >1 ,500 sf: $10,880/unit
Fee applicable to 1 or more units For sale: 2.5% of unit sales price
Exempt units include:
- replacement unit on same lot Rental: graduated fee based on unit size, ranges from:
- 2nd units <910 sf: $1/sf
- deed restricted homeless shelters, community care/health 910 sf: $1,008
care facilities 1,500 sf: $7,666
- unit constructed by owner/builder 1,990 sf or more: $12,712
Fee applicable to 1 or more units Graduated fee based on unit size (rental& ownership)
Exempt units include: <1,000 sf: exempt
- New units& additions < 1,000 sf - 2nd units 1,500 sf: $7,364
- SROs 3,000 sf: $22,427
- Special needs housing (transitional, supportive, group 4,500 sf: $32,543
homes, care facilities) > 4,500 sf: $7.25/sf
1-4 unit projects eligible to pay fee in-lieu of inclusionary For sale and rental:
rqmnt. Fractional unit rqmnts on ail projects canbe met 2.5% of valuation of construction
by in-lieu fee payment.
Walnut CreekUnit Count Ownership fee
Currently applicable only to ownership projects with 2 or 2 $2/sf
more units 4 $4/sf
10 and up $15/sf
Attachment 4: Examples of Affordable Housing lnclusionary Housing Requirements and Impact Fees6
\IJ!•,:.· .. i l l!I Jillli l l·.: \.,,,._,II i"li
n~.·m, . -~~-- U·. . -- •. -- • • SB1818Q&A
CCAPA's Answers to Frequently Asked Questions Regarding
SB 1818 (Hollingsworth)- Changes to Density Bonus Law - 2005
Prepared by Vince Bertoni, AICP, Bertoni Civic Consulting & CCAPA Vice President for
Policy and Legislation; Barbara Kautz, Esq., FAICP, Goldfarb & Lipman, LLP; Vivian
Kahn, FAICP, Dyett& Bhatia; and Terry Rivasplata, AICP, Jones & Stokes Associates.
The State of California enacted significant changes to the state's density bonus law,
which went into effect on January 1, 2005. The legislation, SB 1818 introduced by
Senator Hollingsworth (chaptered as Government Code Section 65915-65918), requires
cities and counties to overhaul their ordinances to bring them into conformance with new
state mandates. The previous law allowed for a 25% density bonus when housing
projects provided between 1 0- 20% of the units affordable (depending upon the level of
affordability). In addition, cities and counties needed to provide at least one
"concession" such as financial assistance or a reduction in development standards. The
new law significantly reduces the amount of units that a developer must provide in order
to receive a density bonus and requires cities and counties to provide between one to
three concessions, depending upon the percentage of affordable units that the developer
provides. It also imposes a .new-land donation rule, and statewide parking standards.
Given the sweeping changes that the state has put in effect, CCAPA received numerous
questions from its members regarding the new law and the following are answers to the
most frequently asked questions.
Please note that the information provided is the opinion of experts in State housing law,
but are not intended as legal advice. Please seek the guidance of your city attorney or
county counsel on implementing the provisions of the new law in your jurisdiction.
Density Bonus.The number of affordable units that a developer must provide in order
to receive a density bonus is significantly reduced from prior law.
ATIACHMENTS1 Page 1 of 10
If at least 5% of the units are affordable to Very Low income households or 10% of the
units are affordable to Low income households, then the project is eligible for a 20%
If 1 0% of condominium or planned development units are affordable to Moderate income
households, then the project is eligible to receive a 5% density bonus.
In addition, there is a sliding scale that requires:
??an additional 2.5% density bonus for each additional increase of 1% Very Low
income units above the initialS% threshold;
??a density increase of 1.5% for each additional 1% increase in Low income units
above the initial10% threshold; and
??a 1% density increase for each 1% increase in Moderate income units above the
initial 1 0% threshold.
These bonuses reach a maximum density bonus of 35% when a project provides either
11% Very Low income units, 20% Low income units, or 40% Moderate income units.
Continued Affordability. The continued affordability requirements for Very Low and
Low income units have not changed. However, the requirements for Moderate income
condominium units have changed significantly. The new law specifies that the city or
county must insure that the initial occupants of Moderate income units meet the income
qualifications. However, upon resale of the units the seller retains the down payment,
the value of any improvements, and the seller's proportionate share of appreciation. The
city or county recaptures its proportionate share of appreciation and those funds must be
used within three years to promote Lower or Moderate income home ownership. It is
unclear whether these units mustbe sold at market rate, or if a city or county can limit
appreciation (see Question 7 below).
Concessions and Incentives. Cities and counties must grant more "concessions or
incentives" reducing development standards, depending on the percentage of affordable
units provided. "Concessions and incentives" include reductions in zoning standards,
other development standards, design requirements, mixed use zoning, and any other
incentive that would reduce costs for the developer. Any project that meets the
minimum criteria for a density bonus is entitled to one concession from the local
government agency, increasing up to a maximum of three concessions depending upon
the amount of affordable housing provided. For example:
??For projects that provide either 5% of the units affordable to Very Low income
households, 1 0% of the units affordable to Lower Income households, or 25%
Moderate Income condominiums, then the developer is entitled to one
??When the number .of affordable units is increased to 10% Very Low income units,
20% Lower income units, or 20% Moderate income units, then the developer is
entitled to two concessions.
??When the number of affordable units is increased to 15% Very Low income, 30%
Lower income, or 30% Moderate income units, then the number of concessions
is increased to three.
ATIACHMENT52 Page 2 of 10
Waivers and Modifications of "Development Standards." A city or county may not
impose a "development standard" that makes it infeasible to construct the housing
development with the proposed density bonus. In addition to requesting "incentives and
concessions," applicants may request the waiver of an unlimited number of
"development standards" by showing that the waivers are needed to make the project
economically feasible. The bill defines "development standards" as "site or construction
Land Donation. Additional density is available to projects that donate land for residential
use. The land must satisfy all of the following requirements:
a) have the appropriate general plan designation and zoning to permit construction
of units affordable to Very Low income households in an amount not less than
1 0% of the units in the residential development;
b) be at least one acre in size or of sufficient size to permit development of at least
c) be served by adequate public facilities and infrastructure.
The base density bonus is 15%, with increases in 1% increments for each percentage
increase in the units that can be accommodated above the minimum 10% of the units
described in (a), up to a maximum of 35%. The maximum combined density bonus is
35% under all rules. When the land is transferred, it must have all of the permits and
approvals necessary for the development of the Very Low income housing units. The
land and affordable units must be subject to deed restrictions ensuring continued
affordability. The city or county may require that the land be transferred to a developer
instead of the city.
Parking Standards. If a project qualifies for a density bonus, the developer may
request (and the City and County must grant) new parking standards for the entire
development project. The new standards are:
??zero to one bedroom - one on-site parking space
??two to three bedrooms - two on site parking spaces
??four or more bedrooms- two and one-half on-site parking spaces.
These numbers are inck.Jsive of guest parking and handicapped parking and may be
tandem or uncovered (but cannotbe on-street). The parking standards may be
requested even if no density bonus is requested.
1. Does this law apply to charter cities and charter counties?-
2.Can inclusionary requirements be imposed on the bonus units?
Most experts agree that inclusionary requirements cannot be imposed on the
density bonus units themselves. The reasoning is that the Legislature intended to
give developers market-rate units in exchange for affordable units. For instance,
ATTACHMENT 53 Page 3 of 10
if a 1 00-unit project becomes a 120-unit project after receiving a density bonus,
the inclusionary requirements may be imposed only on the original 100 units, not
the 20 bonus units. If a city has a 20% inclusionary requirement, normally the
city would require 24 inclusionary units in a 120-unit project (20% of 120 units).
However, if 20 units are density bonus units, then the 20% inclusionary
requirement can only be imposed on 100 units, requiring only 20 inclusionary
units (20% of 100 units). The net impact is that only 16.7% (20/120) of the total
units will be affordable inclusionary units, rather than 20% (24/120) as intended
by the inclusionary ordinance.
3. Do inclusionary units qualifya project for a density bonus?
The density bonus law applies when an applicant "seeks a density bonus" and
"agrees to construct" the required percentages of affordable units. There have
been two interpretations of this section.
Many localities interpret the bill to mean that if the inclusionary units meet the
requirements of the density bonus law, then the inclusionary units will qualify the
development for a density bonus. For instance, in these jurisdictions, if an
inclusionary ordinance requires that ten percent of the units be affordable to Low
income households, a project complying with the ordinance will be eligible for a
20% density bonus.
Other localities interpret this to mean that when a local jurisdiction imposes its
inclusionary housing requirement, the applicant is not "agreeing· to construct" the
units and so is not eligible for a density bonus. The legislative history of the
amendments to SB 1818 confirms that the changes in the law were not intended
to affect an inclusionary zoning ordinance.
You may want to discuss this issue with your city or county attorney.
Note that no density bonus need be given in any case unless an applicant
actually "seeks"--applies for--the bonus, even if the project would otherwise be
eligible for a density bonus. ·
4. Can adeveloper successfully argue that the inclusionary requirements
make the project infeasible?
·No. Developers can only request a waiver of "development standards" that make
a project infeasible. "Development standards" are defined as "site or construction
conditions." The proponents of the bill included this definition specifically so that
an inclusionary ordinance would not be considered a development standard. An
inclusionary ordinance doesn't regulate site or construction conditions; it only
affects the economics of the project. Consequently, a developer cannot request a
waiver by arguing that the inclusionary ordinance makes the project infeasible.
Some inclusionary ordinances do have requirements that might be considered to
be site and construction conditions such as requiring dispersal of units, similarity
in design to market-rate units, etc. Presumably a developer could try to show that
these are site or construction conditions and request that they be waived,
following the procedures discussed in Question 9.
ATTACHMENT 54 Page 4 of 10
5. Can acity or county require design review for density bonus projects, even
if it renders the project infeasible?
The short answer is "no"--if, indeed, design review will make the project
infeasible. As discussed in the previous question, no local agency can
apply any development standard that will preclude the development of a density
bonus project How would this work in the case of design review? The process
of design review is not a development standard, so no waiver could be
requested. Design review conditions. however, usually involve site or
construction requirements, so would probably be considered to be "development
standards." The issue would most likely arise if an applicant argued that design
review conditions made the project infeasible and presented evidence sho\Mng
that the project would not be economically feasible with the conditions. Cities
and counties should consider including in their local ordinances a process for
evaluating requests for waivers including the type of economic information which
must accompany the request and how the information will be evaluated.
6. Cana city or county place additional resale restrictions on a Moderate
income condominium and planned developments?
If an applicant receives no public subsidy and agrees to impose the
equity-sharing required by SB 1818, the city or county cannot require additional
resale restrictions (see discussion in Question 7 below).
However, if a city or county has an inclusionary ordinance that requires Moderate
income units to have resale restrictions or longer periods of affordability, the city
is under no obligation to count as inclusionary units, those Moderate income
units that meet only density bonus standards. For instance, assume that a city
has a 15% Moderate income inclusionary requirement and requires a 55-year
resale restriction. A developer could propose 15% Moderate income units with
the equity-sharing required by SB 1818 and receive a density bonus. However,
since none of the units would meet the standards in the City's inclusionary
ordinance, the City would not be required to count any of the units as
inclusionary units. The developer would have to provide another 15% Moderate
income units meeting the City's standards for resale restrictions and 55 years of
affordability. In this case, most developers would choose to apply the city's
standards to their Moderate income units.
7. Is therea requirement for continued affordability for Moderate income
condominium and planned developments?
No, only the initial occupant must meet the affordable income criteria. After the
initial owner sells the unit, that person is entitled to receive the value of their
down payment, improvements to the property, and proportional share of the
appreciation of the unit. The City or County receives its proportional share of the
appreciation and must use that money within three years to promote affordable,
The bill is not clear about how appreCiation is defined. Proponents of the bill state
that it was intended to work as follows: if a locality makes a unit available for
ATIACHMENT 55 Page 5 of 10
$200,000 to a moderate income purchaser but the unit has a value at the time of
purchase of $300,000, then the locality gets to recapture the $100,000 subsidy
upon resale. In addition, if the unit goes up in value another $30,000 between the
date or purchase and the date of resale, the locality and purchaser split the
appreciation per the formula in the bill. The bill does not specifically require that
the unitsbe re-sold at fair market price, which may allow localities to impose
resale controls limiting the amount of appreciation.
8. Ifa developer is proposing a mixture of affordable housing types (i.e., 5%
Very Low plus 10% Low income units) how is the density bonus
SB 1818 amended Government Code Section 65915 to delete the language in
subsection (1), which previously stipulated that an applicant who "agrees to
construct both 20 percent of the total units for Lower income households and 1 0
percent of the total units for Very Low income households is entitled to only one
density bonus and at least one additional concession or incentive". Localities
should assume, therefore, that if the proposed percentage of units by affordable
housing type meets or exceeds the thresholds stipulated in subsection (g) they
will have to grant the 20 percent density bonus to which the applicant is entitled
for each type of affordable housing that exceeds the threshold specified in
subsection (g) (1 ). Note, however, that this subsection now specifies that the
maximum density bonus to which an applicant is entitled is 35 percent, in
contrast to the previous requirement, which stated that the applicant was entitled
to a minimum bonus of 25 percent but did not specify a maximum. If the
applicant proposes a mixture of affordable housing types that meets or exceeds
the threshold for more than one housing type, he or she is, therefore, not entitled
to receive a bonus that exceeds 35 percent of the density that would otherwise
be allowed by applicable zoning and the land use element.
Neither the former version of Sec. 65915 nor the amendments in SB 1818
provide more guidance about how agencies should calculate the density bonus
for a project that includes a mixture of affordable housing types when the project
does not meet the specified thresholds for each affordable housing type. For
example, an applicant might propose to make 5 percent of the units affordable to
Very Low income households plus 5 percent affordable to Low income
households. In that case, one way to calculate the bonus would be to grant the
incremental density allowed ·in subsection (g) for the Low income units (1.5
percent multiplied by 5 or a total of 7.5 percent for the Low income units) in
addition to the 20 percent bonus to which the applicant is entitled for the 5
percent Very Low income units.
Another way to calculate a mixture of affordable housing types it to first evaluate
the Very Low income units only. If a project has 5% Very Low income units then
it wouldbe entitled to a 20% bonus. Then evaluate the 5% Low income units by
themselves. These don't qualify for any density bonus ( 10% Low income units
required). Then, consider all 10% of the units as Low income units. This again
permits a 20% bonus. Consequently, the project is only entitled to a 20% bonus.
(This has the effect of encouraging developers to have more Very Low income
units, since 8% Very Low income units would give the developer the 27.5%
density bonus.) Since the law is silent on which manner to calculate a density
ATTACHMENT 56 Page 6 of 10
bonus for a mixture of income levels, it is important for the city or county to
choose a method and be clear and consistent in the implementation.
Also, cities and counties should amend their density bonus provisions to delete
any reference to the "one density bonus" limit that Sec. 65915 previously
imposed. They may want to amend their ordinances to also specify how to
calculate both the minimum and the maximum number of additional units that
might be granted pursuant to this section and to specify the 35 percent maximum
stipulated as a result of SB 1818.
9. Cana city or county require the developer to choose from a specific list of
concessions chosen by the local agency? What happens if they wanta
concession that is not on the list?
A city or county can request that a developer choose a concession or incentive
from a list that the city or county has prepared as acceptable concessions;
however, under certain circumstances, the developer may be entitled to other
incentives not on the city or county list.
Section 65915(J) defines "concession or incentive" as a reduction in site
development standards or a modification of zoning code requirements or
architectural design requirements that exceed the minimum building standards
approved by the California Building Standards Commission. Examples include a
reduction in setback and square footage requirements and reduction in parking
ratios. Approval of mixed use zoning is a "concession" if the non-residential use
is compatible with the housing project and the existing or planned development in
the area. In addition, the developer may propose other regulatory incentives or
concessions that result in "identifiable, financially sufficient, and actual cost
Subsection (d)(1) does make clear that the city or county may refuse to grant a
concession or incentive if it makes certain findings based upon substantial
evidence. The type of evidence that would be required to support such findings
is spelled out in subsections (d)(1) (A) and (B) and includes a determination that
the concession or incentive is not required in order to provide the proposed
affordable housing units or "would have a specific adverse impact ... upon public
health and safety or the physical environment or on any real property that is
listed in the California Register of Historical Resources" so long as there is no
way to mitigate or avoid the specific impact without making the development
unaffordable to Low and Moderate income households. As noted in subsection
(d)(3), these are essentially the same findings that Government code Section
65589.5 requires in order to deny or impose certain conditions on an affordable
Local agencies are advised to pay close attention to these provisions because of
the penalties that subsection (e) imposes on localities that refuse to waive
standards and requirements in violation of the law. In addition to being ordered
to grant the requested waiver, the local agency may be liable for the plaintiff's
attorney's fees and litigation costs.
ATTACHMENT 57 Page 7 of 10
In addition to the required concessions and incentives, note that subsection(f)
states that cities may not apply development standards that would preclude the
development of the density bonus units. The applicant may request a waiver and
"shall show that the waiver or modification is necessary to make the housing
units economically feasible." Local agencies should, therefore, require that
applicants provide financial data showing that the proposed waiver or
modification is necessary to make the affordable units economically feasible.
Pursuant to subsection (d) (3), agencies should also amend their ordinances to
establish procedures for accommodating qualified projects by ''waiving or
modifying development and zoning standards that would otherwise inhibit the
utilization of the density bonus on specific sites.n Applicants proposing qualified
projects should not be subjected to a variance procedure but, instead, should be
able to apply for an exception or waiver based on specific findings, including
economic considerations, that are spelled out in the ordinance.
10. Do the new reduced parking requirements apply to the affordable units
only or to the entire project?
The new parking standards apply to the entire project, both affordable and
market rate units but only upon request of the developer.
11. Can cities and counties require guest parking for affordable projects?
· No. The new parking standards that apply upon request of the developer are
inclusive of guest parking and handicapped parking. It should be noted that state
law cannot preempt federal ADA requirements.
12. Doesa city or county need to conduct a CEQA analysis prior to adopting
changes to their local ordinances in order to comply with the new law?
Yes. A change in zoning or other land use ordinance is a project subject to
CEQA (State CEQA Guidelines Section 15378(a); Bozung v. LAFCO  13
Cal. 3d 263). Under CEQA, the baseline for determining the significance of a
project is the existing environment. SB 1818 will require agencies to adopt
ordinances that may result in significant indirect effects on the environment by
reducing the effectiveness of existing protective standards. Adopting new, less
restrictive standards may result in a significant effect.
For example, in City of Redlands, eta/. v. County of San Bernardino (2002) 96
Cai.App.4th 398, Redlands and other cities sued San Bernardino County over a
general plan amendment which modified existing County general plan provisions
relating to development within City spheres of influence. Where previous County
policy had been to defer to City development standards within the spheres
(including more restrictive regulations and growth control measures), the general
plan amendment would have provided the County more leeway to approve
projects that did not conform to City standards. The County adopted a negative
declaration for the general plan amendment.
The court found that the County's initial study "does not provide evidence to
show how such a shift in policy would have little or no effect on the environment."
ATTACHMENT 58 Page 8 of 10
The court noted that "CEQA reaches beyond mere changes in the language in
the agency's policy to the ultimate consequences of such changes to the physical
environment." Although the CEQA analysis is not required to be as detailed as a
project-specific analysis, it is required to analyze the expected secondary effects
of the general plan amendment. The cities presented substantial evidence, in
the form of specific examples of city standards that were more restrictive than
County standards and that would no longer be required within unincorporated
spheres if the general plan amendment were approved, that the general plan
amendment may have a significant effect. The court ordered preparation of an
13. Are affordable projects exempt from CEQA or cana local government
agency require negative declarations or environmental impact reports for
affordable projects with inadequate parking?
SB 1818 does not establish an exemption from CEQA requirements. The
regulatory concessions that must be offered to a qualifying project do not and
cannot include non-compliance with CEQA. CEQA operates independently of
SB 1818 and is not limited by that statute. However, a project may qualify for a
categorical exemption under State CEQA Guidelines Section 15332 (lnfill
Development Projects) if it meets the criteria set out in that section and is not
subject to any of the exceptions established under Section 15300.2.
Separately, Public Resources Section 21159.24 provides a qualified, statutory
exemption for specified inclusionary infill housing projects. This exemption would
not apply if there is "a reasonable possibility that the project will have a projectspecific,
significant effect on the environment due to unusual circumstances."
An agency must prepare an initial study for any project (including an affordable
project) that is not exempt from CEQA. If there is substantial evidence (e.g.,
facts or expert opinion based on facts) that the project may result in a significant
effect on the environment, an EIR must be prepared. If there is no substantial
evidence to that effect, a negative declaration or mitigated negative declaration
can be prepared.
The baseline for determining the significance of a project impact is the existing
environment. The significance of a project's impacts depends upon the extent of
adverse change to the environment that would result from the project. Where a
project involves a density bonus, the "project" for purposes of CEQA is the
proposed activity including the bonus and any related concessions.
Government Code Section 65915 comprises the density bonus law. Subdivision
(d) authorizes a local agency to deny a proposed incentive/concession when
there is substantial evidence that the incentive/concession would have a "specific
adverse impact" on "public health and safety" (as defined in Government Code
Section 65589.5(d)), or the physical environment, or on a property listed on the
California Register of Historical Resources and there is "no feasible method to
satisfactorily mitigate or avoid the specific adverse impact without rendering the
development unaffordable to low- and moderate-income households." This
would authorize an agency to deny a proposed incentive/concession when an
EIR has been prepared that identifies significant project impacts that either
ATTACHMENT 59 Page 9 of 10
cannot be avoided or that could be mitigated, but the mitigation would make the
project unaffordable. Because a mitigated negative declaration can only be
released when the applicant has agreed to the mitigation measures, a local
agency could also deny incentives/concessions on the basis of an initial study if
the applicant was unwilling to agree to the mitigation measures due to cost. The
EIR or the initial study would provide the "substantial evidence" necessary to
support denial under Section 65915(d).
It is important to note that the clear intent of the legislation is to facilitate the
construction of affordable housing through density bonuses and reductions in
local development standards. Therefore, the CEQA analysis conducted by the
city or county should focus on reasonable CEQA impacts, and not as a potential
loophole to make the process of building affordable housing more difficult.
1333 36thStreet~ Sacramento, CA 95816 ~(916)736-2434~FAX (916)456-1283
ATTACHMENT 510 Page 10 of 10