California’s ongoing housing crisis has many causes, including, as prominently noted in the Housing Accountability Act, the “activities and policies of many local governments that limit the approval of housing, increase the cost of land for housing, and require that high fees and exactions be paid by producers of housing.” See, e.g, Cal. Gov’t Code § 65589.5(a)(1)(B). Fortunately, however, these abuses of the police power are driving the legislature to act. For example, in explaining the purpose of Senate Bill 50, which we wrote about here, California State Senator Scott Wiener explained that “absent state intervention, communities will continue to effectively prohibit people from living near transit and jobs by making it illegal to build small apartment buildings around transit and jobs, while fueling sprawl and inhumane supercommutes.”
State intervention in land use and housing policy is certainly necessary, but it is not always sufficient given that numerous local governments simply ignore the law even when its mandates are clear. This reality was captured in Attorney General Opinion No. 17-602, published on April 9, 2019, addressing the fact that several California cities have apparently adopted ordinances that condition the grant of a density bonus under Government Code section 65915 on the payment of a so-called “public benefit fee” despite the unambiguous legislative intent of the Density Bonus Law:
“In enacting this chapter it is the intent of the Legislature that the density bonus or other incentives offered by the city, county, or city and county pursuant to this chapter shall contribute significantly to the economic feasibility of lower income housing in proposed housing developments . . . [A] locality shall not offer a density bonus or any other incentive that would undermine the intent of this chapter.”
The Density Bonus Law, which expressly applies to both general law cities and charter cities, also states that “[t]his chapter shall be interpreted liberally in favor of producing the maximum number of total housing units.”
The question to the Attorney General was thus one of preemption. Although “[a] county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws” (Cal. Const. art XI, § 7), a local ordinance that conflicts with state law is invalid.
In short, the Density Bonus Law incentivizes the building of affordable housing by granting developers “a density increase over the otherwise maximum allowable gross residential density,” as well as other incentives or concessions, in return for a commitment to provide affordable housing as part of a development project.” If the developer meets the requirements of section 65915, the city or county must award a density bonus.
Accordingly, in a pithy opinion that hardly should have been necessary, the Attorney General opined that:
“The type of ordinance at issue here—one that imposes a fee only on additional units allowed as a density bonus—contradicts the Density Bonus Law. Rather than encourage construction of affordable housing, such a fee taxes developers for acquiring density bonuses. Thus the local law disincentives [sic] what the state law means to incentivize. Therefore, we conclude that an ordinance imposing a fee only on units created through a density bonus under section 65915 is invalid.”
Questions? Please contact Bryan W. Wenter, AICP of Miller Starr Regalia.
For more than 50 years, Miller Starr Regalia has served as one of California’s leading real estate law firms. Miller Starr Regalia has expertise in all types of real property matters, including full-service litigation and dispute resolution, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, exactions, title insurance, environmental law, and land use. Miller Starr Regalia attorneys also write Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. For more information, visit www.msrlegal.com.