California lawmakers have passed a flurry of high-profile bills in recent years aimed at spurring home building by eliminating local development restrictions to combat a housing shortage built up over decades.
But of those legislative efforts, it’s the state’s density bonus law that developers have mostly taken advantage of, according to a new report by Circulate Planning & Policy, a development and transportation advocacy group.
The law, which lets developers exceed density and other development restrictions if they reserve some units for low-income tenants, wasn’t always as powerful as it is now. State lawmakers have bolstered it multiple times in recent years — and many of those reforms came from San Diego lawmakers.The report, “Win-Win Bonus,” found that since 2020 when a series of changes supercharged the benefit available to developers, it transformed from a little-used benefit to the most widely used policy tracked by the state to speed up housing development.In 2024, nearly half of new California townhouses or apartments were in projects that relied on the density bonus — and 78% of homes in projects of 100% low-income housing.
It was also used in projects that represented 10 times as many homes as every other piece of recent housing deregulation tracked by state housing officials.
Those four other laws, including the contentious SB-9 from San Diego’s former state Sen. Toni Atkins — have typically drawn much more attention. But “use of these laws has been very limited,” concluded a review from advocacy group YIMBY Law.
California first adopted its “density bonus” statute in 1979, but for decades developers rarely used it.
In 2020, the legislature passed AB 2345 — proposed by San Diego’s former Assemblywoman Lorena Gonzalez and co-sponsored by Circulate — increasing the bonus from 35% to 50%, if the project included a higher share of low-income units. In 2023, Gov. Gavin Newsom signed San Diego Assemblyman David Alvarez’s AB 1287 providing another 50% bonus if a project maxed out its low-income housing requirements, and provided homes for moderate-income residents.
Developers could use both laws at once, effectively doubling the base density allowed by city restrictions, in exchange for a share of price-restricted units.
The year AB 2345 was adopted, California cities approved roughly 17,000 homes using the density bonus. By the time AB 1287 came around, cities approved more than 42,000 homes.
Before AB 2345, fewer than 20% of multifamily homes built in California used the law. That proportion jumped to 47% of multifamily builds using the density bonus four years later, in 2024.
But just as San Diego officials played a central role in expanding the law, there’s also a San Diego official working to reign it back in.
Newsom last year signed State Sen. Catherine Blakespear’s SB 92, a proposal she said would “stop the exploitation of the law” by developers.
She describes the bill as one that closed a loophole that a Pacific Beach developer relied on to propose the controversial “Turquoise Tower” in the community.
Her law restricts the bonus available to commercial development — including hotel rooms — to 2.5 times the local restriction. The Turquoise Tower developer reached its proposed 23 story height in part by maximizing the bonus on hotel rooms, even though it said it would lease the hotels as if they were apartments.
The city earlier this year told the developer it “could not have it both ways,” and said that as proposed the project does not meet local development limits.
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