Court Rejects Local Agency Efforts To Undermine State Density Bonus Law

Author(s): Andrew B. Sabey

Source: CCN Client Alert

7/25/2013

The court of appeal has upheld the State Density Bonus Law against an effort by Napa County to impose its own local inclusionary zoning requirements, which had the effect of defeating the purpose of a state-mandated bonus for developers who agree to build affordable housing as part of a project.

The Density Bonus Law is a powerful, but underused, tool to promote development of affordable and senior housing.  It provides that when a developer proposes to construct a certain percentage of affordable units as part of a housing project, the developer is entitled to an increase in the number of market rate units to be built, even if the increased “density” would otherwise exceed the local zoning standards.  Similar rules apply for senior projects.  The Density Bonus Law sets forth tables showing the bonus that must be granted based on percentages of very low, low, or moderate income units proposed to be built as part of a project.  As the court observed, “in other words, the Density Bonus Law rewards a developer who agrees to build a certain percentage of low-income housing with the opportunity to build more residences than would otherwise be permitted by local regulations.”
 
Some communities across the state have been hostile to the Density Bonus Law and have adopted their own “inclusionary zoning” ordinances requiring a certain percentage of affordable housing as a condition of approval.  They argue that the affordable units required under the local ordinance cannot be counted toward the percentages that would otherwise trigger a density bonus under state law because they are already required and the developer is not proposing them, but rather, complying with a local mandate.  Napa County had adopted such an inclusionary zoning ordinance, and affordable housing advocates challenged it as void under state law.

The petitioners, Latinos Unitos del Valle Napa Y Solano, contended that the County’s approach conflicted with the plain meaning and the purposes of the Density Bonus Law.  Napa County contended that the meaning and purpose of the Density Bonus Law were unclear and that it should be permitted to exercise local authority over inclusionary zoning requirements above and beyond what might trigger a density bonus under state law. The court rejected Napa County’s approach, concluding that it conflicts with state law. The court held that the plain meaning of the statute precluded Napa County’s interpretation that it could impose its own inclusionary requirement and a builder would have to meet that before it could then propose even greater percentage of affordable units that might trigger the benefit of the state DBL. As the court stated:  “The county’s ordinance which fails to credit low cost units satisfying the county’s inclusionary requirement toward satisfying the density bonus requirements fails to comply with the state law. To the extent the ordinance requires a developer to dedicate a larger percentage of its units to affordable housing than required by [Government Code] section 65915, the ordinance is void.”
 
This is the first published opinion to squarely address the issue and should put to rest any debate about the viability of local ordinances that were designed to, or have been applied to, thwart the straight application of the Density Bonus Law.  Resolution of this issue may encourage more builders to consider including affordable units in projects where they can reap the benefits of additional market rate units to make the project feasible.

If you have any questions, please contact:

Andrew B. Sabey at 415.262.5103 or asabey@coxcastle.com
David P. Waite at 310.284.2218 or dwaite@coxcastle.com
Tim Paone at 949.260.4655 or tpaone@coxcastle.com

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