Density Bonus Law Changes Could Scare Off Developers

Changes to the state’s density bonus law that go into effect in January will make it more difficult -- and perhaps less likely -- for developers to pursue housing projects under the statute, say industry experts. The revisions to the law, which permits developers to build more units on a property than allowed by local regulations for agreeing to make a percentage of the units affordable, were approved by the state Legislature earlier this fall. David Blackwell, a San Francisco-based partner at Allen Matkins Leck Gamble Mallory & Natsis LLP, said having to replace a development’s affordable units will be the most challenging new rule for developers to address. Timothy Hutter, a San Diego-based real estate litigator at Allen Matkins, said he fears that in addition to the law being more difficult for developers to navigate, implementing the changes will create a lot of additional work for cities and counties. “It puts a strong burden on cities and counties, which are already overburdened, to review a lot more material than they have in the past,” said Hutter, one of the attorneys representing the BIA in its lawsuit challenging Encinitas’ policies for enforcing the density bonus law.