In a density bonus scheme, a developer is permitted to build a larger project on a site than would otherwise be permitted, in exchange for including specific elements such as a certain percentage of affordable housing units. In some cases, a developer can contribute land or funds for creating off-site affordable housing.
In California, State law requires local governments to encourage housing development for all income levels and assist in the development of adequate housing to meet the needs of low- and moderate-income households. In 2016, the city of San Francisco revised its original scheme to adopt a 100 per cent “Affordable Housing Bonus Program”.
Approved developments involve up to three stories higher than is normally permitted. All apartments in such buildings must be rented at reduced rates to households with an income at 80 per cent of the area median. Such developments are typically built by not-for-profit developers operating within the city. They usually require additional public subsidies for projects to be economically feasible.
In creating a density bonus policy, local jurisdictions must determine specifics such as (i) what amount of additional density can be accommodated, (ii) where/on what sites additional density can be accommodated, (iii) what kinds of affordable units are feasible (e.g. senior, workforce housing, very low income), and (iv) how much additional density will be granted based on the number/type of affordable units created. Public entities should also ensure that the programme provides sufficient incentives to encourage participation in the scheme.
Legislation for the Affordable Housing Bonus Programme is available at https://sfgov.legistar.com/View.ashx?M=F&ID=4607864&GUID=E25217EF-B19C-40A4-A243-D56F1E36FAAD.https://sfplanning.org/ahbp