Technically defined as something given, paid, or received above what is due or expected, bonuses have long been used to incentivize people to act a certain way. As demonstrated by the recent decision in the case of Wollmer v. City of Berkeley (2011) 193 Cal.App.4th 1329 (petition to publish granted March 30, 2011), Government Code section 65915, i.e., the state “Density Bonus Law,” is a tool that should be considered by all residential real estate developers, especially those focusing on affordable and/or infill development projects.

In its Wollmer opinion, the First District Court of Appeal not only offers important new guidance regarding the application of the Density Bonus Law, but joins its prior decisions in Wollmer v. City of Berkeley (2009) 179 Cal.App.4th 933 and Friends of Lagoon Valley v. City of Vacaville (2007) 154 Cal.App.4th 807 to demonstrate that the courts are likely to continue to broadly interpret the Density Bonus Law and afford great deference to local agencies in support of their affordable housing decisions.

Density Bonus Law

To encourage developers to include low-income units within the mix of proposed residential projects, local governments must grant developers specified percentage increases from what would otherwise be the maximum allowable residential density under the applicable zoning ordinance and the land use element of the general plan when various types of affordable units are proposed. (Gov’t Code § 65915 (b) and (f)). For example, an applicant is entitled to a 20% density bonus for proposing 5%, 10%, or 25% of total units that are affordable to very low-income, low-income, or moderate-income households, respectively, or for proposing a senior housing development or mobilehome park as defined in sections 51.3 and 51.12 (senior housing) and 798.76 and 799.5 (mobilehome park) of the Civil Code. While the law’s mandatory density bonus is capped at 35%, section 65915 (n) expressly authorizes local agencies to permit even greater percentages of density bonuses by local ordinance. But that’s not all.