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Newsom Signs Gonzalez Incentives Bill For Affordable Housing Developers

Construction crews work on a 24-unit apartment building in North Park, July 23, 2019.
Andrew Bowen
Construction crews work on a 24-unit apartment building in North Park, July 23, 2019.

Gov. Gavin Newsom Monday signed into law Assembly Bill 2345, written by Assemblywoman Lorena Gonzalez, D-San Diego, to incentivize developers to increase the number of affordable housing units built in the state.

"This law will encourage the construction of more affordable housing units using a data-proven mix of incentives and density bonuses," Gonzalez said. "We must stop making excuses for our housing crisis and it starts with creating more housing, period."

AB 2345 allows developers to increase their density bonuses — the number of units permissible on any plot of land — to 50%, depending on the number and level of deed-restricted affordable homes on a piece of property. Under existing density bonus law, developers are able to receive up to a maximum of a 35% bonus of allowed density.


Additionally, the bill allows local governments to grant additional waivers for projects located within a half-mile of transit and which are 100% affordable, and incentivizes additional density bonus projects by reducing the maximum parking required for certain projects.

According to Gonzalez' office, California is facing a 3.4 million home shortage heading into 2021. Analysis by nonprofit housing advocacy group Up For Growth found that California could see as many as 195,000 additional homes produced over a five-year period under the new terms of AB 2345. Of the total forecasted production, 47,000 of these homes would be affordable to households earning very low incomes based on the requirements of the bill.

Gonzalez wrote the bill largely based on a similar program in San Diego, which in 2016 also increased the maximum bonus to 50% for developers.

According to transit and mobility-focused nonprofit Circulate San Diego's 2020 report "Good Bargain," the city has seen a 490% increase annually in project applications to use the density program and a 356% increase annually in the number of combined affordable and market-rate homes within the first 20 months of the expanded bonuses.