First District Court of Appeal Strikes Portion of Local Ordinance for Conflict with State Density Bonus Law

On July 11, 2013, in Latinos Unidos Del Valle De Napa Y Solano v. County of Napa (2013) __Cal.App.4th__ (Case No. A135094), the First District Court of Appeal issued a partially published opinion addressing the County of Napa’s local density bonus ordinance. The appellate court determined that a provision of the County’s local ordinance conflicted with the State Density Bonus Law and was invalid.

The state Density Bonus Law (Cal. Gov. Code, § 65915) provides incentives to encourage development of low, very-low income, and senior citizen housing developments. These incentives are generally granted in the form of density bonuses for qualifying projects. To ensure compliance, local governments are required to adopt ordinances establishing procedures for implementing the statute.

Napa County amended its density bonus zoning ordinance in 2010. The amended ordinance indicated that density bonuses described in Section 65915 would be granted at the request of the applicant if the applicant also met the local ordinance’s new “inclusionary requirement.” This new ordinance required up to 20 percent of new dwellings within a residential development project be made available at prices affordable to moderate-income households.

Plaintiffs argued this new local ordinance required developers to include a higher percentage of affordable units than section 65915 requires to obtain a density bonus. The ordinance did so by excluding from the target units necessary to qualify for the density bonus those units necessary to satisfy the county’s inclusionary requirement. Thus, for example, under the wording of the county’s ordinance, a developer would only qualify for a density bonus if it restricted 22% of the project units to lower-income households. Under the state law, a density bonus is available if a developer agrees to restrict at least 10% of the project’s units to lower-income households. The court agreed that the county ordinance impermissibly placed a greater burden on developers than is permissible under the state law.

The court cited Friends of Lagoon Valley v. City of Vacaville (2007) 154 Cal.App.4th 807, where the court had previously determined that Section 65915 sets forth the maximum density bonus a city is required to provide (35 percent), but not the maximum amount a developer can ever obtain. The court noted in Friends of Lagoon Valley that because the aim of Section 65915 is to provide incentives to developers to construct low income housing, a local government could exercise its discretion to award density bonuses greater than those described in Section 65915. In this case, however, the requirements of the county’s ordinance represented the opposite situation. The county argued that the language of Section 65915 implied the county had discretion to set the (higher) minimum requirements to quality for a density bonus. The court disagreed and found that neither the language of the statute nor its legislative history supported such an interpretation. The court found that allowing local governments to increase the minimum number of affordable units required for a density bonus would directly conflict with Section 65915, subdivision (f), which bases the amount of density bonus on the percentage of affordable housing units in the project. The appellate court concluded that the provision in the county’s ordinance stating that units satisfying the inclusionary requirement do not count towards the number of units necessary to qualify for the density bonus was invalid due to this conflict with state law. The court directed that a writ of mandate be issued striking down this requirement in the ordinance.