In his Staff Report for the March 14, 2023, Planning Commission meeting (and then repeated for the March 27, 2023, meeting), Community Development Director David Loya provided a concise explanation of California’s myriad Density Bonus housing laws.

Rather than have this buried in the middle of a staff report, to be unseen or forgotten about by future Planning Commissioners, City Councilmembers, and the public, it is included here on Arcata1.com so it can be referred to at any time.

Density Bonus law is a hot-button item, as under certain circumstances it could be utilized to bypass all the Community Benefit and height bonuses that are a part of Arcata’s Gateway Plan. This would have the effect of making much of the Gateway Plan essentially of little value, since developers would not have to follow it.

To find other articles on “Density” the reader can use the Search function here on Arcata1.com, at the upper right of each page. Articles that may be of interest include:

• Visualizing Compatible Density
• Density Guide for Housing Types
• “Housing Units” and “Housing Density” – Why these are terrible ways to measure housing success
• “Dwelling Units per Acre” – Another terrible way of measuring housing
• Gateway Plan needs inclusionary affordable housing requirements, says Rebecca Buckley-Stein

From the March 14, 2023, Planning Commission Staff Report, by David Loya:

The Commission also asked for a discussion of maximum densities given the various state laws related to housing. While there are myriad laws that taken together may have multiplying effects on density, staff has focused on three areas. Density bonus law and accessory dwelling unit (ADU) law are the two most likely to affect base density in the City. It is also possible that the Affordable Housing and High Road Jobs Act (AB 2011) may affect housing density.

The following provide a summary of impacts related to these laws. These are not comprehensive. These laws are constantly changing, and the Commission should consider keeping any discussion of them in the General Plan at a surficial level.

Density Bonus

The state has had a density bonus law since 1979. In 2020, the law was amended, and court cases in 2021 and 2022 resolved some outstanding questions about how the law works in practice. In summary, if a project reserves a percentage of units for low, very-low, or moderate income households, or if it reserves units for certain demographics (senior, foster youth, student), it is entitled to up to an 80% bonus in units above base density. In addition, the projects are entitled to up to four incentives or concessions. These could be exceptions from development standards, including an increase in building height, reduction in setbacks, or any other incentive that results in a cost reduction for the project. These concessions or incentives are decided by the developer, not the city.

Furthermore, projects that qualify for a density bonus receive waivers or reductions in specific development standards, including reduced parking, or any other standard that would prevent the development from being built at the density the developer is proposing. The developer decides which standards these may be, and the threshold for granting them is whether they can show that the development could not be built at the proposed density given the regulatory constraint. The project can require any number of waivers necessary to build at the given density. The City cannot refuse these unless they can demonstrate health and safety, property damage, cause significant environmental harm, or other equally difficult findings. The courts have ruled consistently with developers in these challenges. The law is complex and showing the range of densities that would be allowed in each land use designation would be problematic. The example below shows the impact of eight possible density bonus unit counts on any on a single parcel, but the parameters that could be applied are shown in Attachment C.

A more detailed discussion of density bonus law is provided at: https://www.meyersnave.com/wp-content/uploads/California-Density-Bonus-Law_2021.pdf

Table 1. Density Bonus Effect on Base Density four levels of percent restricted units for Very-Low Income at three levels of percent restricted units for Low Income. Low-income units do not receive a bonus at 5%.

In short, if a developer invokes density bonus law, they can exceed any development standard, they can ask for concessions, and they can develop at densities of up to 80% higher than base density. There are modest streamlining requirements for density bonus projects, and the jurisdiction cannot require a reduction in units as a condition of approval.

ADUs

Accessory dwelling unit law has changed multiple times since 2017. At this point, ADUs are ministerial, are not used in determining base density, and are exempt from several development standards if certain conditions are met. The ADU law is exceedingly complex and convoluted.

The state Housing and Community Development Department (Department) has published updated guidance (https://www.hcd.ca.gov/sites/default/files/2022-07/ADUHandbookUpdate.pdf). This review is very superficial.

In short, at least one ADU is ministerially permitted on any property that is zoned for residential use. On any lot with an existing or proposed development, a combination of one primary unit, a junior ADU, and an ADU may be built by-right (ministerially). On any property with a duplex, two additional ADUs are ministerial by-right. On any parcel with a multifamily existing or proposed development, at least two additional ADUs may be build by-right.

ADU law has had a significant impact on ADU production. The City has seen an doubling in ADU production with 2017 as the transition year. While SB 9 (small lot subdivision) could have similar density impacts, the City has not seen much interest in SB 9.

AB 2011

AB 2011 establishes that any property where retail, commercial, or parking are permitted uses, housing can be built ministerially with few limitations. There are requirements for prevailing wage, and a few limitations. The density allowed under AB 2011 ranges from 20-70 units per acre depending on parcel size, distance from transit, and width of commercial corridor. AB 2011 projects can only be held to objective design standards.

AB 2011 is a sign of desperation. The state has been frustrated with the pace of development in meeting its housing need. In effect, the state is removing the ability of local jurisdictions to plan their communities and handing the reigns over to developers to find markets that the developers believe will pencil for housing. They are removing all the procedural steps, including public hearings, that slow, stall, or stop housing development. And, they are effectively making almost every zoning district a mixed-use zone.

Staff does not recommend amending the Land Use Element to include this information. Instead, the Commission could consider a statement acknowledging the impact of current and future state laws on the City’s ability to estimate density on a given parcel. The steps the state has taken over the last several years to boost housing production is a developing body of law. Anything specific encoded in policy will be outdated before long.

The Commission could consider the following:

LU-1q State mandated housing production

The City recognizes that the state’s housing goals have resulted in laws that increase density above City established base density, removed discretion in housing development, required streamlining in approval processes, established by-right development for certain housing types, and has reduced local control over many land use decisions related to housing production. The City shall monitor and comment on state actions to advocate for reasonable solutions to housing production that meet both state objectives and City need for housing development that produces high-density, infill housing in mixed-use or residential projects in appropriately zoned and designated areas.

California Density Bonus Law – Chart – 2021

Staff report “Consider a Recommendation to the City Council on the General Plan Updates” for March 27, 2023, Planning Commission meeting