Report: California's density bonus is a 'win-win' for developers and affordable housing

Of the multiple new California laws aimed at increasing housing production, the state's density bonus is creating the most new housing units, according to a report from Circulate Planning & Policy. 

As Tessa Balc explains in a Times of San Diego article, "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."

Since a series of changes made the benefit more lucrative to developers in 2020, the policy has become the state's most widely used housing development tool. "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."

Before AB 2345, a 2020 law that increased the density bonus from 35% to 50% for a higher share of low-income units, fewer than 20% of multifamily projects used a density bonus. After the law was passed, that number jumped to 47% in 2024.