If you are thinking of developing your property or purchasing a new property to develop, you must be aware of the new laws that have been put in place to promote density bonuses for multi-family projects. Below, we have some tips and background information to help you take advantage of these new laws while you develop your property.
Here is what you need to know about the law that was passed and came into effect in January of 2020.
Through the California Government Code, local governments are instructed to provide bonus density applications and all documents and information applicable to complete a bonus density project. The applications must have appropriate turnaround times and provide the applicants with clear directions on the acceptable density for the subdivision and any factors to be considered regarding incentives, concessions, or waivers to the development codes and standards. The applicant can agree to construct a housing development, excluding any of the units permitted from the density bonus, as long as they contain one of the requirements within the Government Code 65915(b). These requirements cover percentages of the housing development that must have specified uses such as senior living, low-income housing, and disabled veteran units.
How does Density Bonus affect Development?
You may be wondering what this means for you in your area. This implies that it is a state-mandated practice for local counties and cities to provide a permitting capability that expedites the services for increasing density on housing development.
California’s Need for Housing
It’s worth exploring the reasons behind California deciding to pass a law to hasten the approval process for development projects. The main reason is simple, there is a shortage of housing options, and citizens that we walk among, personally know, and our neighbors need a place to live. Among these citizens that need a place to live are students, seniors, veterans, low-income families – essentially people susceptible to housing insecurity with the steady increase of rental and housing costs.
Furthermore, we can dive into the hard data regarding these Californians. According to Census.gov, 12.8% of Californians are living under the poverty line, there are approximately 1.6 million veterans in the state, and 14.3% of Californians are 65 years of age and above. We can draw some connections to the housing situation with more information from the census that includes the fact that about 54% of the housing units in California are occupied by the owner and the median value of the housing units is $475,900.00 while the median monthly costs to sustain those units is $2,282. Now for those that do not own the housing unit they reside in, the census shows that for them the median gross rent is about $1,400 monthly.
Senior citizens are typically on a fixed monthly income due to retirement or other financial obligations. Disabled veterans are among that 1.6 million Californians who are considered veterans, and they are, in some cases, unable to go back to serving in the military due to the complications associated with the disability. Also, students attending community college or a four-year university may not have the money to pay a staggering $1,400 monthly rent if they do not have a full-time job, scholarship or grant funding to cover this additional cost. There is a connection between the bonus density law and the types of developments this law is intended to serve. Developers are incentivized to add additional housing units to serve the lower-income population; therefore, it is an excellent opportunity to work with an engineering professional to assist in the process if you find a density bonus may apply to your multi-family housing development.
There is a social incentive to expedite the project’s approval to get these citizens in safe and affordable housing. Developers are given the opportunity to help the community in order to qualify for the waivers and incentives outlined in the government code. Housing has become increasingly too expensive for Californians and has caused many issues in finding affordable locations to live. The spread of multi-family housing has increased the density in many locations in addition to providing competitive pricing for housing units in cities.
A city that has outpriced many senior citizens among other populations is San Francisco, California. The median monthly rent for a one-bedroom apartment in the city was recorded to be $3,690 in the year 2019. That is almost three times the amount of the state-wide median identified by the census. The median household income is approximately $71,000 a year in California, so this would mean that 70% of a household income would be living on rent in San Francisco. Let’s not forget the tax rate associated with the household income, and also the fact that among those who live in this area are students, seniors, and disabled vets, to name a few that more than likely make a significant amount less than the reported median household income. It is evident that expeditiously processing permits and providing guidelines for affordable units to create multi-family housing developments within a city like San Francisco is necessary.
Get Started Today!
A developer can take advantage of the density bonus laws by hiring an engineer and project manager to research how the local jurisdiction applies the density bonus laws within their governing area. It is important to make sure that the multi-family development adheres to the law and takes advantage of the expedited permit process. This means quicker turnaround times in the review to permit a development. Additionally, some applicable requirements may even be waived off. Developers have the opportunity to develop land with fewer hassles and possibly save costs on permitting fees, improvements, and technical studies associated with the permitting process.
The most significant take away from the density bonus law is getting lower-income families into affordable and safe housing units in growing cities. Multi-family housing can bridge the gap between the many different income groups that make up the state of California. You can be the person to take advantage of these government codes put in place to bring housing to many deserving citizens.
Our team, here at Design Everest, can help get you started and take advantage of the density bonus law. Contact us today at (877) 582-8089.
*Note: The content published above was made in collaboration with members of Design Everest.
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