Insights
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

Treasury Department Guidance Will Stimulate Opportunity Fund Investments

The Opportunity Zones Program (OZ Program) aims to infuse capital into low-income communities known as qualified opportunity zones (QOZs) by offering tax-advantaged investments benefiting electing Qualified Opportunity Fund (QOF) investors including: A temporary deferral...

Read More
News

Farella Braun + Martel Announces 2019 New Partner Elevations

SAN FRANCISCO, January 22, 2019: Farella Braun + Martel LLP is pleased to announce the election of senior associates Quinn Arntsen and Daniel Callaway to the partnership effective January 1, 2019. “Quinn and Dan...

Read More
Publication

California Legislators Tackle Affordable Housing with Flurry of Proposed Bills

The California legislative session is currently underway, and several bills related to housing creation are being considered through the committee hearing process. Legislators representing San Francisco and other Bay Area cities and counties have...

Read More
Publication

Opportunity Zone Program Drives Investments to Low-Income Communities

Read More
Publication

San Francisco’s HOME-SF Density Bonus Program: Three Key Changes Important to Developers

On July 31, 2018, San Francisco’s Board of Supervisors approved changes to the City’s local density bonus program, known as HOME-SF. Introduced by Supervisors Katy Tang and Ahsha Safai, the new ordinance seeks to...

Read More
Publication

Smoke Gets In Your Eyes: Legal Strategies for Smoke-Exposed Grapes

Following on last year’s Northern California firestorm in Napa, Lake, Sonoma, Mendocino, Butte and Solano counties, various North Bay regions have also seen wildfires in 2018. A large wildfire in Mendocino and Lake counties...

Read More