In Latinos Unidos del Valle de Napa y Solano v. County of Napa, 217 Cal.App.4th 1160 (2013), the First District Court of Appeal invalidated portions of Napa County’s density bonus ordinance because it imposed more rigorous requirements than those set by the state Density Bonus Law (DBL, Gov. Code § 65915 et seq.). The court’s decision clarified that the DBL “imposes a clear and unambiguous mandatory duty on municipalities to award a density bonus when a developer agrees to dedicate a certain percentage of the overall units in a development to affordable housing.” The court specifically overturned a local ordinance that restricted the application of density bonuses under the DBL to the provision of affordable housing units in excess of those required by the DBL.
The DBL was passed in 1979 to address the shortage of affordable housing in California. The law rewards developers who agree to dedicate a certain number of units in a housing development to low income housing, or to construct a senior citizen housing development, by granting them a “density bonus.” This bonus allows those projects to contain up to 35 percent more density than would otherwise be allowed under local zoning laws. For example, if a city’s zoning ordinance allowed 20 housing units per acre in a particular area, a 35 percent density bonus would increase the limit to 27 units per acre. By allowing developers to build additional market-rate units, the law compensates the developer for the lower rent he or she will receive for the affordable units. In addition to the density bonus, developers that satisfy the DBL’s requirements also receive one or more itemized concessions, such as a reduction in site development standards, a modification of zoning or architectural requirements, or any other concessions that may result in “identifiable, financially significant, and actual cost reductions.”
The DBL creates a sliding scale for the size of the bonus and number of concessions a developer will receive, Id.Ia 20 percent density bonus while a developer that dedicates 20 percent of a project’s units to lower income households is entitled to two concessions and a 35 percent density bonus. The DBL requires local governments to implement these provisions by enacting local ordinances.
The Napa County law considered in Latinos Unidos consisted of two parts. First, the county’s inclusionary housing ordinance required that up to 20 percent of new units in a residential development be dedicated to affordable housing. Second, the county’s local density bonus ordinance provided that only the units exceeding the number required by the inclusionary housing ordinance would be counted toward a development’s eligibility for a density bonus under the DBL. Together, these ordinances required developers to dedicate a higher percentage of their units to affordable housing in order to be eligible for a density bonus. For instance, while a developer would be entitled to a density bonus under the DBL if 10 percent of project units were dedicated to lower income households, under the Napa County ordinance, the developer would have to dedicate approximately 22 percent of units to lower income households in order to receive the same density bonus.
In Latinos Unidos, the plaintiffs challenged the county’s density bonus ordinance as conflicting with the DBL. Reversing the trial court’s decision, the appellate court agreed with the plaintiffs that the ordinance placed a greater burden on developers than is allowed under state law. The court invalidated the ordinance to the extent that it required a developer to dedicate a larger percentage of units to affordable housing than was required by the DBL.
The decision in Latinos Unidos benefits developers and those who support the development of affordable housing by enforcing the density bonus provisions established by state law. In light of this decision, interested parties should review local density bonus laws to ensure that they do not impose more stringent requirements than those authorized by the DBL.