Publications

Attorney General Finds Impact Fees on Density Bonus Projects Invalid

April 12, 2019 Articles

In response to questions from a variety of cities across the state regarding the application of “public benefit fees” to density bonus projects, the State Attorney General’s Office published an opinion on April 9 clarifying the issue. The Attorney General’s office concluded that local ordinances imposing a fee only on units created through a density bonus under state law (Government Code Section 65915) are invalid. 

Several cities, including San Francisco, require that projects receiving additional units or floor area under the State Density Bonus Law pay an additional affordable housing fee on the “bonus” units or increased floor area (see more here).

In its opinion, the Attorney General’s Office referenced the legislative intent behind creation of the State Density Bonus Law, which is to encourage the construction of housing for low or moderate income households by providing incentives to developers in return for the construction of these housing units. Rather than encouraging construction of affordable housing, the opinion explained, imposing fees on developers for acquiring density bonuses in fact creates a disincentive to affordable housing production.

Under the State Density Bonus Law, which was adopted in 1979, cities are required to grant a density bonus and a certain number of concessions or incentives to a developer who agrees to construct housing developments that provide either affordable or senior housing and meet certain criteria. Additionally, the law states that cities/counties shall adopt an ordinance that specifies how compliance with the State Density Bonus Law would be implemented. 

We will be following how this recent opinion affects current and future projects. You can view the full opinion here.

Firm Highlights

Publication

Housing Fee Reform Legislation

San Francisco officials have introduced a number of new policies they hope will jump start the construction of new housing in San Francisco, which has largely stalled due to high construction costs, rising interest...

Read More
Publication

Office-to-Housing Conversion: State and Local Efforts to Revitalize the Downtown

Originally published in The Registry . As office vacancies soar in traditional downtown areas like San Francisco’s Financial District, state and local officials are moving quickly to adopt incentives they hope will bring people...

Read More
Publication

Downtown San Francisco Adaptive Reuse Legislation Slated To Go Into Effect

As we alerted you on May 9 , legislation to incentivize office and commercial building conversions to housing had begun working its way through the Board of Supervisors after approval by the San Francisco...

Read More
Publication

AB 1633: The Housing Accountability Act

The Housing Accountability Act (HAA) requires local agencies to approve housing projects that meet objective zoning, general plan, subdivision, and design standards unless there is a specific, adverse impact upon public health and safety...

Read More
Publication

San Francisco Board of Supervisors Passes Housing Fee Reform Legislation

The San Francisco Board of Supervisors took the first of two votes to approve housing fee reform legislation last week. The legislation reduces by as much as a third the affordable housing fees and...

Read More
News

Affordable Housing Outlook: What Challenges Will 2024 Pose?

Real estate partner CJ Higley provided expert commentary in the Multi-Housing News article "Affordable Housing Outlook: What Challenges Will 2024 Pose?" The article is available here .

Read More
Publication

San Francisco Planning Commission Endorses Ordinances to Incentivize Adaptive Reuse in Downtown

The San Francisco Planning Commission unanimously recommended approval on May 4 of two ordinances aimed at revitalizing the City’s Downtown, South of Market Street, and Union Square districts. Vacant Office and Commercial Building Conversion...

Read More
Publication

California Court Issues First Decision Addressing Builder’s Remedy; Decision on Related Lawsuit Pending

The first California court decision to issue declaratory relief to a developer under the “builder’s remedy” appears to be on the horizon. The builder’s remedy has garnered significant attention over the past two years...

Read More