Learn about the State Density Bonus Law, the 2014 Housing Element, the Inclusionary Housing Ordinance and Proposition K.

State Density Bonus Law

In 1979, the State of California adopted the State Density Bonus Law, which requires all cities and counties to offer a density bonus and other incentives to housing developments that include at least one of the following options:

  • Five percent of total housing units available to very low-income households
  • Ten percent of total housing units available to low-income households
  • Ten percent of total housing units available to moderate-income households
  • A senior citizen or mobile home park that limits residency based on age requirements for older persons

A density bonus is an increase in the number of housing units than are currently allowed under a specific zoning regulation in exchange for building more affordable housing units and helping the City meet its housing goals. In addition to a density bonus, incentives could include changes in development design requirements such as building setbacks or provided parking.

In 2013, the State Supreme court clarified that any residential development that provides affordable housing units on-site, including those provided to comply with local inclusionary programs, enable project sponsors to request a density bonus under the State Density Bonus Law.  

Read the State Density Bonus Law in detail here. Learn more about the 2013 court case here.

Proposed Affordable Housing Bonus Program

The AHBP was developed to go above and beyond the State requirements by incentivizing and supporting permanently affordable middle-income housing, while protecting the character of San Francisco’s neighborhoods.

The proposed Affordable Housing Bonus Program:

  • Implements the 2014 Housing Element
  • Builds on the City’s Inclusionary Housing Ordinance
  • Helps the City meet the housing goals mandated in Proposition K

2014 Housing Element

In April 2014, San Francisco Planning updated the City’s Housing Element. This recent update includes Implementation Measure 38b, recommending the development of an Affordable Housing Bonus Program.

Implementation Measure 38b: Planning will develop a density bonus program with the goal of increasing the production of affordable housing. The program will be structured to incentivize market rate projects to provide significantly greater levels of affordable housing than required by the existing City Programs.

Inclusionary Housing Ordinance

The AHBP builds on the existing Inclusionary Housing Ordinance to support the development of a greater number of on-site affordable units. The City’s Inclusionary Housing Ordinance (Section 415 of the SF Planning Code) requires all market-rate residential projects of 10 housing units or more contribute to San Francisco’s affordable housing supply. This can happen by:

  • Contributing to the City’s Affordable Housing fund commensurate with the number of total project units;
  • Building 12 percent of the affordable housing units on-site to low and moderate-income households; or
  • Building 20 percent of the affordable housing units off-site to low and moderate-income households.

Proposition K

In November 2014, San Francisco voters passed Proposition K, which established an additional affordable housing policy goal of constructing or rehabilitating at least 30,000 housing units by 2020, 33 percent of which are to be affordable housing available to low and moderate‐income households. More than 50 percent of the affordable housing units will be available to middle-income households, with at least 33 percent affordable for low and moderate-income households.