California Legislature modifies Density Bonus Law to enhance affordable housing incentives

California lawmakers have introduced Assembly Bill 87, a significant legislative measure aimed at addressing the state's ongoing affordable housing crisis. Introduced on March 18, 2025, the bill seeks to enhance the existing Density Bonus Law, which allows developers to build more housing units than local zoning laws typically permit in exchange for including affordable housing options.

The primary purpose of Assembly Bill 87 is to incentivize the construction of very low, low-, and moderate-income housing units by offering developers additional density bonuses. This means that if developers commit to providing a certain percentage of affordable units, they can increase the total number of units in their projects. For instance, a development that includes 24% of its units for lower-income households could qualify for a density bonus of up to 38.75%. This approach aims to reduce the financial burden on public entities by decreasing the need for subsidies while simultaneously increasing the availability of affordable housing across California.

Key provisions of the bill include the removal of minimum unit size and bedroom requirements for shared housing developments, allowing for more flexible housing solutions. Additionally, the bill clarifies that local governments are not required to amend their existing ordinances to comply with the new density bonus provisions, streamlining the implementation process.

However, the bill has sparked notable debates among stakeholders. Proponents argue that it is a crucial step toward alleviating the housing shortage and making housing more accessible to low-income families. Critics, on the other hand, express concerns about potential overdevelopment and the impact on local communities, fearing that increased density could lead to overcrowding and strain on public services.

The implications of Assembly Bill 87 are significant, as California continues to grapple with a housing affordability crisis that has left many residents struggling to find suitable living conditions. Experts suggest that if passed, the bill could lead to a substantial increase in affordable housing units, potentially transforming the housing landscape in urban and suburban areas alike.

As the legislative process unfolds, the future of Assembly Bill 87 will be closely watched by housing advocates, developers, and local governments, all of whom have a stake in the outcome of this pivotal legislation. The bill's success could pave the way for a more sustainable and inclusive approach to housing in California, addressing the urgent needs of its diverse population.