Government Code section 65583.2(c)(3)

Determine if the zoning on the site is appropriate to accommodate low- and very lowincome (termed together as “lower”) housing.

The statute allows jurisdictions to use higher density as a proxy for lower income affordability, as long as certain statutory requirements are met. Parcels must be zoned to allow sufficient density to accommodate the economies of scale needed to produce affordable housing. To make this determination, the statute allows the jurisdiction to either demonstrate that the zoning allows a specific density set forth in the statute (default density)[5] or to provide an analysis demonstrating the appropriateness of the zoned densities of the site identified to accommodate the lower RHNA.

Step 2A: Does the parcel’s zoning allow for “at least” the following densities?

• For an incorporated city within a nonmetropolitan county and for a nonmetropolitan county that has a micropolitan area: sites allowing at least 15 units per acre.

• For an unincorporated area in a nonmetropolitan county not included in the first bullet: sites allowing at least 10 units per acre.

• For a suburban jurisdiction: sites allowing at least 20 units per acre.

• For a jurisdiction in a metropolitan county: sites allowing at least 30 units per acre.

“At least” means the density range allowed on the parcel by the zone has to include the default density. For example, if a jurisdiction has a default density of 30 units per acre and the zone allows for range of 24 – 35 units per acre, the zoning is considered appropriate to accommodate the RHNA for lower income households. This is different than the program standard outlined in Part E which requires a minimum of a specific density in the allowed

5 Sometimes called “Mullin densities” after the author of AB 2348, Statutes of 2004, which originated these requirements.

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density range in the zone. To determine the default density for jurisdictions, please refer to HCD Memorandum: Default Density Standard Option (2010 Census Update).

If Yes: Move to Step 3

If No: Move to Step 2B

Step 2B: Can the analysis demonstrate the appropriateness of the zoning to accommodate housing?

Provide an analysis demonstrating how the allowed densities facilitate the development of housing to accommodate the lower income RHNA. The analysis shall include, but is not limited to, factors such as market demand, financial feasibility, and information based on development project experience within a zone or zones, or at densities that accommodate housing for lower income households.

Information gathered from local developers on densities ideal for housing development in the community and examples of recent residential projects that provide housing for lower income households is helpful in establishing the appropriateness of the zone. Other information could include land costs, market demand for various types of affordable housing, and the gap between typical market rents and subsidized rents. It is recognized that housing affordable to lower income households requires significant subsidies and financial assistance. However, for this analysis, identifying examples of subsidized housing projects alone is not sufficient to demonstrate the adequacy of a zone and/or density to accommodate the housing affordable to lower income households. In particular, identification of older project(s) or one-off projects that cannot be easily duplicated is not sufficient to demonstrate a development trend.

The analysis of “appropriate zoning” should not include residential buildout projections resulting from the implementation of a jurisdiction’s inclusionary program or potential increase in density due to a density bonus, because these tools are not a substitute for addressing whether the underlining (base) zoning densities are appropriate to accommodate the RHNA for lower income households. Additionally, inclusionary housing ordinances applied to rental housing must include options for the developer to meet the inclusionary requirements other than exclusively requiring building affordable units on site. While an inclusionary requirement may be a development criterion, it is not a substitute for zoning. The availability of density bonuses is also not a substitute for an analysis, since they are not a development requirement, but are development options over the existing density, and generally require waivers or concessions in development standards to achieve densities and financial feasibility.

If Yes: Move to Step 3

If No: Site is not appropriate to accommodate lower income. Reclassify pursuant to Part A, Step 5.

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