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Density Bonus Agreement No. 2020-02, FX Residences March 22, 2021 Page 3 5 6 8 AMI for Orange County. For example, based on current figures, if a qualifying tenant’s gross annual income is $20,000, the maximum annual rent cannot exceed $6,000. Density Bonus The California Density Bonus law allows developers proposing five or more residential units to seek increases in base density for providing on-site housing units in exchange for providing affordable units on site. To help make constructing on-site affordable units feasible, the law allows developers to seek up to three incentives/concessions and an unlimited number of waivers, which are essentially variances from development standards that would help the project be built without significant burden and without detriment to public health. The first version of the Density Bonus Law was adopted in 1979 and has since been amended at various times. Recent revisions allow affordable housing developers to request incentives/concessions and/or waivers for 100-percent affordable developments, even if they do not require a numerical density bonus. Moreover, in early 2017, the law was amended to restrict the ability of local jurisdictions to require studies to “justify” the density bonus and requested incentives/waivers and places the onus on local jurisdictions to prove that the incentives/concessions or waivers are not financially warranted. Due to the project’s 100-percent affordability rate, the developer can seek up to three density bonus concessions and unlimited waivers, pursuant to Section 65915 et al. of the California Government Code (Density Bonuses and Other Incentives). In addition, California Assembly Bill No. 2345, approved September 28, 2020, revised the State Density Bonus Law originally adopted in 1979 to provide additional benefits for projects that include qualifying affordable housing. The bill requires that housing development in which 100 percent of all units (exclusive of manger units) are for lower-income households receive a maximum density bonus of eighty percent (80%). Pursuant to Section 65915 et al. of the California Government Code, the developer is requesting a 70-percent (70%) state density bonus. As outlined by Table 2 below, the maximum unit yield for the 0.344-acre site using the TZC standards and the State density bonus is 18 units and the applicant is proposing to development 17 units on the site. Table 2: Density Bonus Calculation Density or Bonus Allowed for Project Under State Density Bonus Law Proposed by Project Base Density of the UN-2 zoning class for the property is 30 units per acre 10 units (0.344 acres x 30 units/acre base density based on Courtyard Housing type, which is the most “intense” type allowed in UN-2). 10 Units Add on the 80-Percent State Density Bonus 8 units (10 x 0.80)+7 Units Total Units 18 units maximum 17 units proposed City Council 2 –3 3/22/2021