California legislators restrict Density Bonus Law to residential projects only

California's Assembly Bill 87, introduced on March 18, 2025, aims to clarify the application of the Density Bonus Law, specifically restricting its benefits to residential projects that do not include visitor-serving uses. This legislative move is designed to ensure that incentives meant to encourage affordable housing development are not misapplied to projects that cater primarily to tourists or transient populations.

The bill's proponents argue that by narrowing the scope of the Density Bonus Law, California can better address its ongoing housing crisis, focusing resources on projects that provide long-term housing solutions rather than short-term accommodations. This shift is seen as a necessary step to prioritize the needs of residents in a state grappling with skyrocketing housing costs and a shortage of affordable units.

However, the bill has sparked notable debate among stakeholders. Critics, including some developers and tourism advocates, express concern that the restrictions could hinder economic growth and limit the potential for mixed-use developments that benefit local economies. They argue that visitor-serving projects can also contribute to community vitality and should not be excluded from density bonuses.

As the bill progresses through the legislative process, its implications could be significant. Experts suggest that if passed, AB 87 could reshape the landscape of housing development in California, potentially leading to a more focused approach to affordable housing while also igniting further discussions about the balance between residential needs and economic interests.

With the bill currently under review, stakeholders are closely monitoring its trajectory, anticipating amendments and further debates that could influence its final form. The outcome of AB 87 may set a precedent for how California addresses housing policy in the future, making it a critical piece of legislation to watch.