AB 1287 was signed into law in October 2023 and went into effect on January 1, 2024. The amendment's goal is to create more affordable housing options geared toward different income levels. AB 1287 is a bonus program on top of the existing state density bonus, meaning that to be eligible, a developer must already maximize the number of very-low, low, or moderate-income units as allowed by the existing California Density Bonus Law. Those percentages are as follows:
15% Very Low-Income Units
24% Low-Income Units
44% Moderate Income Units (for sale projects)
If one of these percentages is met, then a density bonus of up to 50% is available. If additional very low or moderate-income units are set aside, then an additional density bonus is available, up to 50% for a total density bonus of 100%. Density bonuses are based on the following calculations:
Here are two examples that put the above into practice based.
Example 1 - Standard State Affordable Density Project
20 unit development
3 units are set aside for very low-income (15%)
A density bonus of 50% allows the developer to build an additional 10 units
The new unit count is 30 units, with 3 units set aside for very low-income
Example 2 - Uses New State Density Bonus Law AB 1287
20 unit development
3 units are set aside for very low-income (15%)
A density bonus of 50% allows the developer to build an additional 10 units
In addition
3 units are set aside for moderate-income (15% of the original 20-unit development)
An additional density bonus of 50% allows the developer to build an additional 10 units
The new unit count is 40 units, with 3 units set aside for very low-income and 3 units set aside for moderate-income
In addition to the increased density, the projects also receive an additional development incentive.
Recap
Standard State Density Bonus Law: A 20 unit development increases to 30 units with 3 units set aside for very low income
AB 1287: A 20 unit development increases to 40 units with 3 units set aside for very low income and 3 units set aside for moderate income
Like most laws, there are gray areas, we are still waiting for each municipality's interpretation of AB1287 so it’s best to build your consultant team with people experienced in taking advantage of California’s density bonuses. Schedule a free consultation with AERO, and we can help you navigate the best options for your parcel.