HAC-Ed Highlight: State Density Bonus Law — What's Working, What Isn't, and What Comes Next
Some HAC-Ed sessions are about learning what's new. This one was about taking stock of what's actually working and being honest about what isn't. Following Circulate’s recently published report, Win-Win Bonus, Colin Parent, CEO and General Counsel of Circulate Planning & Policy, joined for a full session on California's state density bonus law: the data behind it, the politics around it, and the legislative reforms that could make it even more powerful. What followed was one of the more candid conversations about housing policy with real pushback, real practitioner experience, and real ideas for what comes next.
The Data: Density Bonus Is Working By a Wide Margin
Using data from HCD's Annual Progress Reports, Circulate analyzed housing production across California from 2018 through 2024. The findings are striking. Before AB 2345 took effect in 2021, which increased the maximum bonus from 35% to 50%, density bonus was being used on about 15,000 units per year. By 2024, that number had more than tripled. And when you compare density bonus to the other streamlining laws that HCD tracks – SB 35, SB 9, AB 2011, SB 6 – density bonus was used on ten times more homes than all of them combined in 2024.
The streamlining laws that have generated the most public debate, cost the most political capital, and generated the most press – SB 9, AB 2011 – have produced relatively little housing. Density bonus, by contrast, has quietly become the dominant tool for housing production in California. In 2024, it was used on 47% of all multifamily approvals statewide. For 100% affordable projects, the number was 75%.
Parent's framing was direct: "I think a lot of the time and effort on a lot of the bills from the pro-housing community in California have been misspent." Density bonus, on the other hand, is working and deserves more advocacy attention, more resources, and more legislative priority than it's currently getting.
Why It's Working
Parent walked through three structural reasons why density bonus has outperformed other streamlining laws.
First, it's a genuine win-win. Developers get density and other benefits; the public gets affordable units. Neither side has to lose for the other to gain, which makes it more politically durable than policies that ask one side to absorb costs.
Second, it builds on a large existing baseline. There's already a meaningful volume of multifamily development in California. An incremental improvement to that baseline produces a lot of units, even if the percentage change looks modest. SB 9, by contrast, tried to create a new category of small-scale production where almost none existed. Starting from near zero makes it very hard to produce meaningful numbers.
Third, it provides flexible tools to repair broken local zoning. Bonus law gives developers incentives and waivers to work around restrictions like height limits, setbacks, parking requirements without having to fight each one individually in a political process. That flexibility is enormously valuable in a state where local restrictions are endlessly varied and creative.
The Nuances: What Members Are Seeing on the Ground
The Q&A opened up into some of the most useful dialogue of the session.
On prevailing wage: The absence of prevailing wage requirements in bonus law has been a deliberate and hard-won choice by the pro-housing community. Parent noted that Senator Arreguin of Berkeley is currently running a bill that would prevent developers from using density bonus concessions to waive locally adopted labor standards; not impose new state requirements, but limit one tool developers currently use.
On the height backlash: Multiple members raised what's becoming a live political problem: density bonus projects in low-density areas that are triggering intense opposition because of their scale, and maybe even run the risk of neutering the law. One case study brought up was an 18-story project proposed in a 3-story neighborhood in San Diego. Though there was support for the project itself, worry arose about whether outlier cases like this could create enough political backlash to threaten the law. Some ideas came up to battle this, like proportionality limit on height waivers – perhaps you can pierce the height limit only up to the percentage of your bonus – while also acknowledging the tension of not wanting to negotiate against yourself.
On construction type constraints: Several developers noted that doubling density on paper doesn't always translate to doubling units in practice. When you hit a threshold that requires a more expensive construction type (say, going from wood frame to concrete) the math can stop working. Parent noted that data from their next report will look at what percentage bonus projects actually use on average, and previewed that it's well below 100%.
On feasibility: One project example came up that finally got through entitlement after years, partly unlocked by AB 1287, but now can't move to construction drawings because lenders and investors won't underwrite the affordable units due to uncertainty around housing vouchers. "The reliability of housing vouchers, or some sort of alternative support for affordable housing in a mixed-income project, redevelopment went away and took that source away, and we're stuck." It's not a density bonus problem per se, but it illustrates that streamlining alone doesn't get housing built.
On local workarounds: Parent flagged that some cities, like San Francisco and Palo Alto, have created plans that are structured as an alternative to, not a complement to, state density bonus law, with the fairly clear intent of giving the city more control over project outcomes and reducing developers' ability to rely on state law. These local workarounds are worth watching.
On historic resources and SROs: A real implementation gap: in San Francisco, SROs often qualify as historic resources based solely on their age. Bonus law currently does not allow for adverse impacts on historic resources, which is preventing feasible SRO rehabilitation and redevelopment into 100% affordable housing. A targeted carve-out for SROs could be transformative.
On replacement unit requirements: A structural limitation of bonus law that doesn't get enough attention: because of replacement unit requirements, the law is effectively only being used on vacant land. Redeveloping existing low-density multifamily – the 50s and 60s apartment stock sitting on underused land in inner cities – is too expensive because of those requirements. She proposed thinking creatively about protections that actually prevent displacement (like guaranteed housing at the same rent for existing tenants) while allowing that kind of densification to occur. Parent agreed it's a real issue and said he's heard it frequently from the HAC community.
AB 2433 – What's in the Bill
Parent walked through Circulate's current bill in the legislature, AB 2433 with Assemblymember Alvarez, which HAC is supporting. Key provisions:
Closing the 100% affordable donut hole. Right now, 100% affordable projects not near transit are capped at an 80% bonus, while market-rate projects with affordability can get a 100% bonus. AB 2433 fixes that asymmetry.
Making benefits automatic. Currently developers have to opt in to bonus law. About 25% of projects that qualify don't use it, partly because some developers fear retaliation from local jurisdictions if they invoke state law. The bill would flip this: if a project comes in with enough affordability, the city must treat it as a bonus law project automatically.
Two extra incentives for for-sale projects. A thumb on the scale for homeownership.
Clarifying FAR-based density. A cleaner calculation for jurisdictions that limit density by floor area ratio rather than unit count.
Reaffirming non-discretionary waivers and incentives. This is potentially the most impactful provision. Most jurisdictions treat incentives as non-discretionary but waivers as discretionary – meaning they can condition, delay, or deny them. AB 2433 would reaffirm that both are non-discretionary. Some planning departments have been triggering the PlanCheck process prematurely, causing all city departments to pile on conditions during the entitlement phase rather than post-entitlement. Worth watching as the bill moves forward.
By-right approval for AB 130-qualifying projects. This provision was stripped due to opposition from the building trades, but Parent said good faith conversations are ongoing and it's not off the table, potentially paired with negotiations around Arreguin's labor standards bill.
What Comes Next: Ideas the Room Generated
Beyond the current bill, Parent opened the floor for ideas for future legislation. Several worth flagging:
Coastal Commission reform. The statute currently limits the non-discretionary treatment of waivers and incentives to cities and counties. A small fix, like adding "public agencies" or specifically naming the Coastal Commission, could make a significant difference for coastal projects.
Fee waivers for affordable units. Rather than trying to change how fees are calculated, waiving fees on the affordable units within a bonus law project could meaningfully reduce project costs.
Renaming the law. Circulate tried to include a rename – "Affordable Homes Bonus Program" – in AB 2433, but it got stripped. Parent suggests it might be worth it to try again. His point: having elected officials defend "density bonus" in public hearings is a political liability. Reframing it around affordability is both more accurate and more defensible.
Protections for SRO redevelopment. A targeted amendment on historic resources for SROs could unlock a significant pipeline of affordable housing in San Francisco.
Replacement unit reform. Thinking carefully about how to allow redevelopment of existing low-density multifamily without displacing existing residents, potentially through guaranteed continued housing at current rents rather than unit-for-unit replacement.
What HAC Is Doing With This
HAC, Parent, and members left the meeting feeling like there was plenty of follow-up warranted from this discussion – like sending a survey to developers and builders in its network to gather additional feedback on density bonus in practice on what's working, what isn't, and what legislative changes would be most valuable. Importantly and excitedly, that feedback will inform Circulate's next report and legislative program. Keep an eye out for that in future member communications!
If you want to be part of the conversation about where HAC's advocacy priorities should go: the July 22nd Quarterly Breakfast Briefing + Legislative Session is exactly the right place for that. We hope to see you there!
→ Want to connect with Parent or share ideas for future density bonus legislation? Reach Colin Parent at cparent@circulatesd.org or connect with Brianna at brianna@housingactioncoalition.org.
