Inclusionary Housing Units Must Be Counted Toward State Density Bonus Requirements in California - Appellate Court Issues Ruling in Case Involving Napa County

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A California appellate court recently held that cities and counties must count affordable housing units developed pursuant to local inclusionary requirements toward satisfying density bonus standards set forth in state law. In Latinos Unidos del Valle de Napa y Solano v. County of Napa, the First District Court of Appeal overturned a portion of Napa County’s local density bonus ordinance. The court based its ruling on the fact that the county’s density bonus ordinance counted only those units in excess of the units required by the county’s inclusionary housing ordinance in determining whether a project would be eligible for a density bonus and other concessions under the State Density Bonus Law. In light of this decision, cities and counties should review their local density bonus ordinances to confirm that they are consistent with the court’s holding in the Latinos Unidos case.

In Latinos Unidos, the court found in its July 11 ruling that the county’s local density bonus ordinance violates the State Density Bonus Law. The Density Bonus Law requires that when a developer agrees to construct a certain percentage of units in a housing development for low or very low income households, or to construct a senior citizen housing development, the local government must grant the developer certain development concessions, as well as a density bonus. The density bonus allows the developer to increase the density of the development by a certain percentage above the maximum allowable limit under local zoning law. The concessions and density bonus are offered on a sliding scale, based on the number of affordable units provided and the level of affordability.

In 2010, Napa County adopted an inclusionary housing ordinance requiring that up to 20 percent of new dwelling units in a residential development be affordable to moderate income households. At the same time, the county amended its local density bonus ordinance to provide that only affordable units in excess of those required by the county’s inclusionary requirement be counted toward the threshold necessary to receive a density bonus and other concessions pursuant to the Density Bonus Law. The court found that the county’s local ordinance placed a greater burden on developers than is permissible under state law. Therefore, the court ordered that the requirement be removed from the county’s ordinance. 

Cities and counties in California should review their local density bonus ordinance to confirm that they are not setting a higher threshold for density bonus concessions than is allowed by state law and the Latinos Unidos decision.