JMBM Development Rights: Los Angeles Adopts Provisions of SB 1818

After two years of toiled history, the City of Los Angeles adopted a Density Bonus Ordinance to implement the State Density Bonus requirements prescribed by Senate Bill (SB) 1818. The L.A. Density Bonus Ordinance became effective on April 15, 2008.

The L.A. Density Bonus Ordinance provides a minimum 20% density bonus to any residential development that provides 10% of the total units of the proposed project for low-income households or 5% of the total units of the proposed project for very low-income households. Additional density would also be provided to senior citizen housing developments or projects which include a child care facility on the premises. Alternative options for density bonus projects located near a transit stop or major employment center are further described in the L.A. Density Bonus Ordinance.

The reduced parking requirements dispenses with code-required guest parking and requires one on-site parking space for each studio or one-bedroom unit, and two on-site parking spaces for each two or three-bedroom unit. Oftentimes, the parking reduction, on its own, sufficiently serves as justification for a developer to include affordable housing on the premises.

Under the L.A. Density Bonus Ordinance, an apartment project which does not require any incentives or concessions (beyond the automatic increased density and reduced parking) is treated as a “ministerial” application. However, the L.A. Density Bonus Ordinance allows developers to select from a menu of incentives—increased height, increased lot coverage, reduced setback, decreased lot width, reduced open space and averaging of floor-area ratio (FAR) calculations. Embarking on a density bonus project with on-menu incentive(s) is a longer process, which could include an appeal to the City Planning Commission. In Los Angeles, such an application could easily be a six-month ordeal. Developers may also seek off-menu incentives, which are subject to a more burdensome review. The L.A. Density Bonus Ordinance permits up to three incentives on a development project, depending on the percentage of affordable housing provided.

The procedures for approval of a density bonus project can be complicated. This is particularly true where an applicant is requesting an off-menu incentive that is not subject to any other discretionary approvals. Here, the applicant must provide a pro forma or other documentation to show that the waiver or modification of any development standard(s) are needed to make the affordable units economically feasible.

Given the current political climate surrounding the much debated L.A. Density Bonus Ordinance, and the lawsuits which have ensued as a result of the same, it is probable that we may see some changes to the L.A. Density Bonus Ordinance. As the number of density bonus projects are processed, it remains to be seen how the LA Density Bonus Ordinance will be implemented.