City of Los Angeles Approves New Ordinances to Encourage Housing Development

In the face of California’s ever-growing housing crisis, the City of Los Angeles (City) has recently adopted a number of new programs in an attempt to address housing shortfalls. While certain key updates are summarized below, Allen Matkins has a dedicated team following changes affecting housing development in the City and is prepared to assist with any questions related to such projects.

Housing Element

On November 24, 2021, the Los Angeles City Council adopted the 2021-2029 Housing Element (the Housing Element) and certified the Housing Element 2021-2029 Update / Safety Element Update Environmental Impact Report (the Housing Element EIR), the first of many subsequent efforts to address the housing crisis. The Regional Housing Needs Assessment (RHNA) goal for the City’s 2021-2029 Housing Element is 456,643 new housing units, of which 40% are targeted for very-low and low-income households. The Housing Element (aka the Plan to House LA) attempts to address this deficit by targeting high rents, overcrowded conditions, and housing instability. The Housing Element EIR is also structured to encourage a streamlined process for compliance with the California Environmental Quality Act (CEQA) for future housing projects that are consistent with the EIR, which should allow many projects to either be exempt from CEQA or to significantly reduce their environmental compliance processing time.

While the Housing Element was a good start, the City acknowledged that additional legislative updates would imminently be needed to in order to make these goals achievable. As such, the City has adopted several implementing ordinances, broadly referred to as the Housing Element Rezoning Program. These ordinances are generally intended to update the City’s zoning regulations to allow for additional housing units to be built. Key elements of the Housing Element Rezoning Program are summarized below.

Citywide Housing Incentive Program

On February 7, 2025, the City adopted the Citywide Housing Incentive Program (CHIP) and certified an amendment to the Housing Element EIR. The CHIP ordinance has three main components: (i) revising the City’s local Density Bonus Ordinance to be consistent with State law; (ii) enacting a new Mixed Income Incentive Program (MIIP); and (iii) enacting a new Affordable Housing Incentive Program (AHIP).

• • Local Density Bonus Ordinance

The CHIP revisions to the local Density Bonus Ordinance are more procedural than substantive in nature; substantively, State Density Bonus Law (DBL) (i.e., Government Code Section 65915) still governs density bonuses under State law. However, the City made some important clarifications regarding how density bonus projects are processed. Under the prior Density Bonus Ordinance, the City only allowed for ministerial review of projects that requested “on menu” incentives. Under the new ordinance, both “on menu” and “off menu” incentives are considered ministerial; off-menu requests are merely subject to a slightly expanded administrative review. Now (notwithstanding any other entitlements that may be required by the Zoning Code), the only density bonus projects that will be subject to discretionary review are those that exceed a 50% (for low income or moderate income units) or 88.75% (for very low income units) bonus or those that request a waiver of a development standard.

• • Mixed Income Incentive Program

The MIIP essentially reimagines and expands upon the City’s prior Transit Oriented Communities Program (TOC Program). There are three types of projects that may be eligible for benefits under the MIIP:

1. TOC Incentive Area: Projects located within a half mile of a major transit stop.
2. Opportunity Corridors: Projects located on a designated corridor with frequent bus service, high quality transit service, or within a half mile of a Metro Rail Station in a Higher Opportunity Area.
3. Opportunity Corridor Transitional Area: Projects located within 750 feet from the furthest property line of a lot from the corridor located within an Opportunity Corridor Incentive Area.

The Planning and Zoning Tab on ZIMAS has already been updated to reflect the new MIIP categories, so one can easily determine whether a property would be eligible for the MIIP. The exact benefits that a project may be eligible for depend on which subarea the property is located in and also the market level of the property. If a site qualifies, the incentives can include a density bonus of up to 120% and a floor area ratio (FAR) increase of up to 55%. This is notable because the prior TOC Program was rarely more beneficial than a DBL project. However, under the MIIP, certain eligible projects may be able to exceed DBL bonuses. In addition to the aforementioned base incentives, eligible projects also earn up to four additional incentives, which can be used for the same “on menu” or “off menu” incentives as a DBL project. Like under the revised Density Bonus Ordinance, the MIIP base incentives and on- or off-menu incentives are eligible for ministerial review.

1. • Affordable Housing Incentive Program

In addition to offering density bonus, height, and parking incentives for projects that are 100% affordable (One Hundred Percent Affordable Housing Projects) under DBL, the new AHIP will provide tailored land use incentives for One Hundred Percent Affordable Housing Projects citywide. Additionally, the ordinance will expand the types of zones eligible for One Hundred Percent Affordable Housing projects to include “P” Parking zones. The AHIP also expands the types of projects that can qualify to include: (i) Public Land Projects (100% income restricted on land owned by a public agency or on parcels zoned for “PF” Public Facilities); (ii) Faith-Based Organization Projects (80-100% income restricted on land owned by a religious institution); and (iii) Shared Equity Projects (80-100% income restricted on land owned by a Community Land Trust or Limited Equity Housing Cooperative).

Housing Element Sites and Minimum Density Ordinance

The Housing Element Sites and Minimum Density Ordinance (the HE Ordinance) aims at fulfilling State law requirements for sites that were identified in the City’s Inventory of Housing Element Sites (Inventory Sites). Importantly, the HE Ordinance establishes a by-right development review process for sites that have been designated for lower-income households (Lower Income Rezoning Sites) and Inventory Sites (within the current or prior versions of the Housing Element) that meet objective zoning standards and set aside 20% of their units for lower-income households. A list of Inventory Sites can be found here, and the City is currently working on preparing the Lower Income Rezoning Sites list. The City must ministerially approve a qualifying housing project proposed on one of these identified sites if the projects meets objective development standards, and neither CEQA review nor discretionary review is required, with the exception of subdivision procedures.

One key provision is the introduction of a housing replacement requirement. All development projects on Inventory Sites will be required to replace all units, including existing protected units and any protected units demolished on or after January 1, 2020.