Court upholds density bonus law that exempts certain housing projects from local restrictions
By Bob Egelko, Feb 4, 2022

A state appeals court says developers who agree to include affordable housing in their projects can be exempted from zoning rules, height limits and other local restrictions on neighborhood construction. The ruling, in a case from San Diego, has potential statewide impact as tensions over local control and the state’s housing crisis continue to escalate.

California’s 1979 density bonus law “incentivizes the construction of affordable housing,” the Fourth District Court of Appeal said in a decision it certified Wednesday as a precedent for future cases.

Once the developer commits to making a specified portion of the project affordable to lower-income households, “local government must allow increased building density, grant permits, and waive any conflicting local development standards unless certain limited exceptions apply,” Justice Judith Haller said in the 3-0 ruling.

Those exceptions include threats to public health or safety, harm to a historic resource, or conflicts with state or federal laws. None applied to the proposed 20-story project overlooking Balboa Park in San Diego, so it can be built despite opposition from some community organizations, Haller said.

The court had first issued the ruling Jan. 7 as a decision that applied only to the San Diego project, but agreed to make it a published precedent after hearing from the California Building Industry Association and its Bay Area affiliate, as well as the project contractor.

Many local governments have “attempted to erect all manner of obstacles to the construction of new housing, whether market-rate or affordable,” Bryan Wenter, an attorney for the builders’ groups, said Thursday. “This makes new housing harder to provide generally, and substantially more expensive than it would otherwise be.”

The tensions between local governments seeking to limit housing development and state efforts to alleviate California’s housing crisis have escalated in recent years. Multiple potential measures that seek to reinforce local authorities’ control over housing development are currently collecting signatures in order to qualify for a future ballot. Meanwhile, Attorney General Rob Bonta announced in November the creation of a statewide housing strike force, intended to enforce laws promoting housing development and tenants' rights.

Heather Riley, a lawyer for Greystar, the San Diego project developer, said Thursday that although the Density Bonus Law has been on the books for more than 40 years and has been upheld by the courts, it is not always enforced.

“Some agencies are still hesitant to approve density-bonus projects when neighborhood groups are opposed,” she said.

That’s consistent with the principle of local self-government, said Everett DeLano, lawyer for the Bankers Hill/Park West Community Association, which challenged the San Diego development.

The ruling “greatly restricts what influence communities can have on development projects, what cities are able to do,” DeLano said. “It seems be saying that if you have a density-bonus project, you can do whatever you want.”

He noted that San Diego, whose Planning Commission and City Council had approved the development under local standards, also asked the court not to publish the decision as a precedent for future cases. The city said the Density Bonus Act, the basis of the ruling, had not been discussed during arguments in the case.

DeLano said his clients have not decided whether to appeal to the state Supreme Court. If the ruling becomes final, it will be binding on trial courts statewide.

The development is being built on vacant land formerly owned by a local church. Local standards would normally limit construction to about 170 feet and 147 housing units, but the city approved Greystar’s plan for a 223-foot building with 204 housing units after the developer promised to make 18 of the units affordable for households with 50% or less of the local median income.

The project was also allowed to include a courtyard and exempted from normal requirements for setbacks from lot boundaries. Riley said construction is almost completed.

DeLano’s client and other neighborhood groups said the development would interfere with views, cast shade on areas of Balboa Park and potentially interfere with flight paths to the airport.

But the court said the extra height and other exemptions were proper under the state law, and noted that city officials had found the project consistent with San Diego’s overall land-use plan. Haller said the law also allows developers to include “amenities,” such as the courtyard, that are unrelated to affordable housing.

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