Housing development: density bonuses.

The bill now amends only Section 65915 of the Government Code instead of six sections (65589.5, 65912.101, 65912.123, 65912.124, 65915, and 65915.3). All amendments to the builder's remedy and housing approval provisions in Section 65589.5 were removed.

All legislative findings about California's housing crisis, policies on not rejecting housing projects, disapproval standards for local agencies, and builder's remedy project protections previously included in the bill were deleted.

The bill now states it would incorporate additional changes to Section 65915 proposed by SB 92, operative only if both bills are enacted and AB 87 is enacted last. This creates a conditional interplay between the two bills.

The previous version's specific prohibition on applying density bonus incentives to hotel, motel, bed and breakfast inn, or other visitor-serving portions of mixed-use developments was replaced with a broader provision that certain provisions do not require local governments to approve, grant concessions for, or waive standards applicable to transient lodging as part of a housing development.

New requirements that local governments must adopt ordinances specifying how to implement the density bonus section, provide complete document lists, notify applicants of completeness within timelines specified in Section 65943, and make determinations on bonus amounts, parking ratios, and incentives/concessions.

Anti-displacement replacement requirements were added. If a proposed development is on property with existing rent-controlled or affordable rental units, the applicant must replace those units at equivalent size and income level, subject to 55-year affordability restrictions. Specific rules apply for vacated or demolished units based on the five-year highpoint of occupancy.

Equity sharing agreement requirements were added for for-sale units that qualify for density bonuses. Local governments must enforce these agreements and recapture initial subsidies plus proportionate share of appreciation, to be used within five years to promote home ownership.

A new student housing development category was added as a qualifying use for density bonuses. It requires 20 percent of units for lower income students at rent set at 30 percent of 65 percent of area median income for SRO unit type, with priority for homeless students and a 55-year affordability restriction.

A definition of 'qualified nonprofit housing corporation' was added, specifying it must be a 501(c)(3) organization based in California with all board members residing in California, whose primary activity is developing and preserving affordable homeownership housing with repurchase options ensuring at least 45 years of affordability.

All procedural language from the enrolled bill was removed, including Assembly passage date (September 3, 2025), Senate passage date (September 2, 2025), Governor receipt line, and the legislative counsel's digest summarizing the bill's purpose.

The full statutory text of the enrolled version of Section 65915 amendments was removed for replacement with the chaptered publication format. The substantive policy content (Density Bonus Law provisions regarding housing development, density bonuses, incentives, concessions, and waivers) is expected to remain unchanged in the chaptered version.

The treatment of visitor-serving uses (hotels, motels, bed and breakfast inns) in mixed-use developments was narrowed. The old version stated the Density Bonus Law would apply only to residential projects with no visitor-serving portions at all, effectively disqualifying any project containing such uses from all density bonus benefits. The new version instead prohibits incentives or concessions from applying to the visitor-serving portion of a mixed-use development, while still allowing them for the residential portion.

The broad legislative intent statement that the Density Bonus Law 'in its entirety is only applied to residential projects with no portions being used for visitor serving purposes or uses' was removed and replaced with the more targeted provision described above.

A new digest sentence was added stating that existing law requires the number of incentives or concessions a qualifying developer receives to be pursuant to a formula based on the total number of units in the housing development.

A cross-reference in Section 65589.5 paragraph (6)(C)(ii) was corrected from 'paragraph (6) of subdivision (o)' to 'paragraph (7) of subdivision (n)' of Section 65915, fixing an incorrect statutory citation.

Page numbering shifted from page 98 to page 97 throughout the bill, and line number formatting was adjusted. These are non-substantive formatting changes.

Removed all prior amendment history headers (Amended in Senate August 27, July 10; Amended in Assembly April 24, March 17) and associated formatting metadata that are no longer needed in the final enrolled version.

Removed page number markers, line number formatting, and legislative counsel digest header formatting consistent with conversion to the clean enrolled bill format for gubernatorial signature.

Removed the requirement that applicants for density bonuses must agree to record a land use restriction or covenant preventing any unit in the development from being listed as a short-term rental unit.

Removed the definition of 'mixed-use development' as a development with at least 70% of square footage designated for residential uses and no square footage designated for visitor-serving purposes (hotels, motels, bed and breakfast inns).

Added language specifying that certain provisions of the Density Bonus Law do not require a city, county, or city and county to approve, grant a concession or incentive requiring approval of, or waive or reduce development standards otherwise applicable to transient lodging as part of a housing development.

Changed the state-mandated local program designation from 'yes' to 'no,' meaning the bill no longer imposes a state-mandated local program on local agencies.

Changed the fiscal committee requirement from 'yes' to 'no' and removed the language stating that no reimbursement is required for a specified reason, indicating the fiscal impact analysis changed.

Defines 'mixed-use development' for Density Bonus Law purposes as a development with at least 70 percent of square footage designated for residential uses and no square footage designated for hotel, motel, bed and breakfast inn, or other visitor-serving purposes.

Prohibits an applicant from being eligible for a density bonus or any other incentives or concessions unless the applicant agrees to, and the local agency ensures, a recorded land use restriction or covenant providing that no unit in the development may be listed as a short-term rental unit.

The bill's scope expanded from a single section stating legislative intent to amendments of six sections of the Government Code (65589.5, 65912.101, 65912.123, 65912.124, 65915, and 65915.3), making it a state-mandated local program applicable to all cities including charter cities.

The bill's fiscal and mandate designations changed: 'Fiscal committee' changed from no to yes, and 'State-mandated local program' changed from no to yes, indicating the amendments impose enforceable obligations on local agencies with potential cost implications.