In Friends of Lagoon Valley v. City of Vacaville, (— Cal.Rptr.3d —, 2007 WL 2420093, 2007 Daily Journal D.A.R. 13,253, Cal.App. 1 Dist., Aug. 28, 2007), a California Court of Appeal considered the meaning and intent of the “density bonus” provisions of state law, and whether a city violated those provisions by awarding a developer a 40.5 percent density bonus for including certain levels of low-income and senior citizen residential housing units in a proposed development project. The court upheld the award.
Facts
In February 2005, the City of Vacaville (“City”) approved a development plan (“the Project”) for a portion of Vacaville known as the Lower Lagoon Valley (“LLV”). The Project was planned by two developers, Triad Communities, L.P., and Lagoon Valley MPC, LLC (collectively, “Triad”), and included (1) construction of a business village and town center with 700,000 square feet of office, retail, and commercial space; (2) development of a 338-acre residential community, to include 874 single-family homes (with 24 affordable housing units), 100 attached townhouses reserved for senior citizens, and an additional 51 affordable units in the mixed-use town center; (3) preservation of 443 acres of open space for parks and other recreation uses; and (4) creation of public uses such as fire station and roadways. In conjunction with its approval, City also approved a planned development permit that provided for a “density bonus” of 40.5 percent for the Project.
In April 2005, Friends of Lagoon Valley (“Plaintiff”) filed a petition for writ of mandate challenging City’s decision. In addition to claiming the Project was inconsistent with City’s General Plan and the LLV Policy Plan, Plaintiff claimed City’s approval of the Project’s residential development violated state and municipal laws concerning density bonus awards, which Plaintiff claimed were limited by state statute to a maximum of 35 percent. The trial court denied Plaintiff’s petition. Plaintiff appealed.
Decision
The Court of Appeal agreed with the trial court. With regard to Plaintiff’s claim that City had violated state density bonus laws, the appellate court explained that “density bonus” provisions were added to state law in 1979 by the California Legislature to address a shortage of affordable housing. One of these provisions, Gov. Code § 65915, encourages developers to include low-income and senior citizen housing in their projects by requiring local governments to provide a “density bonus,” which allows developers to increase a development’s density by a percentage above the maximum allowed by local zoning law.
At the time relevant to City’s approval of the Project, § 65915 required a local government to grant a density bonus increase of at least 20 percent to developers who provided a certain percentage of low-income units, very-low-income units, or senior citizen housing. Section 65915 further directed that, for every percentage point increase the developer provided above the minimum amounts stated in the statute, the city or county had to increase the amount of the density bonus by 1.5 percent, “up to a maximum of 35 percent.” Plaintiff argued that this language meant City legally could not grant Triad a density bonus of more than 35 percent, thus precluding the 40.5 percent award. The Court of Appeal disagreed. It held that, under § 65915, “35 percent represents the maximum amount of bonus a city is required to provide, not the maximum amount a developer can ever obtain.”
The intent of § 65915 has always been to provide incentives for developers to construct affordable housing for low-income families and senior citizens, the court said. To adopt Plaintiff’s interpretation and impose an absolute cap of 35 percent “would undermine this policy . . . since such a rule would prevent developers from negotiating to obtain a higher density bonus in exchange for including even more low income or senior housing than is provided for in Section 65915.” The California Legislature clearly intended that 35 percent was the maximum amount that a city was statutorily required to give but it was not the maximum amount that a city had authority to give, the court said. Therefore, City was within its discretion in awarding the 40.5 percent bonus to Triad.
The court also rejected Plaintiff’s argument that the only way a city could avoid the 35-percent cap was by enacting an ordinance that specifically provided for a higher density bonus. Nothing in § 65915 imposed such a requirement, the court said, and reading such a limitation into the law would impede implementation of the statute’s clear intent. Also rejected was Plaintiff’s argument that City could not rely on the portion of the Project devoted to senior citizen housing in calculating the bonus because – according to Plaintiff — § 65915(b)(3) permitted an increase in the density bonus only when a developer agreed to devote an entire development project to senior citizen housing. This interpretation would require application of density bonus provisions to senior units differently than to low-income units, the court said, and, again, nothing in the statute or its legislative history suggested the Legislature intended such a result.
Finally, the court rejected Plaintiff’s argument that the Project was inconsistent with City’s General Plan and the LLV Policy Plan, primarily based on Plaintiff’s claim that the Project would result in increased traffic. The court found Plaintiff’s reading of General and Policy plans was so “rigid” that it would essentially rule out development in the area altogether — a result that clearly was at odds with the policies expressed in the plans. Substantial evidence supported City’s decision that the Project was consistent overall with both the General Plan and the more precise guidelines of the Policy Plan, and City did not abuse its discretion in approving the Project, the court held. It therefore affirmed the trial court’s decision in all respects.