Attention Realtors! The California real estate market is buzzing with exciting new opportunities, and you don't want to miss out. The 2024 California Density Bonus Law has been revamped, offering you the chance to sell properties for more and close deals faster. Imagine transforming standard listings into lucrative gold mines for developers—all by leveraging the latest in housing legislation.
What's New in 2024?
California has turbocharged the State Density Bonus Law through AB 1287, effective January 1, 2024. The groundbreaking updates include:
- Stackable Density Bonuses: Projects can now achieve up to a 100% density bonus, effectively doubling the number of units allowed under base zoning.
- Enhanced Incentives: More waivers and concessions are available, allowing developers to overcome restrictive local development standards.
- Los Angeles Alignment: The City of Los Angeles now allows up to a 100% density bonus, putting it on par with other cities in California.
Why This Matters to You
Boost Property Values
By understanding and utilizing these new laws, you can:
- Market properties with significantly higher development potential, making them irresistible to developers.
- Command higher listing prices, as the potential for more units dramatically increases property value.
- Stand out in the market, offering insights that other Realtors might overlook.
Accelerate Your Sales
- Attract more buyers by highlighting the enhanced possibilities under the new law.
- Facilitate smoother transactions by providing detailed development insights upfront.
- Build stronger client relationships by positioning yourself as an expert in maximizing property value.
Real-World Example: Turning a 7,500 sq ft Lot into 40 Units
Let's dive into a concrete example to illustrate how you can harness the new Density Bonus Law to maximize property value.
Property Details
- Location: Los Angeles
- Lot Size: 7,500 sq ft
- Zoning: C1-1VL-CPIO (Commercial Zone with residential potential)
Step 1: Determine Base Density
Under the updated law, you can use the most favorable density from either the zoning code or the General Plan Land Use designation.
- General Plan Allows C2 Zoning: Permits 1 unit per 400 sq ft.
- Base Units Calculation: 7,500 sq ft / 400 sq ft per unit = 18.75 units, rounded up to 19 units.
Step 2: Apply the Primary Density Bonus (50%)
By committing to affordable housing, you unlock significant density bonuses.
- Affordable Units Required: Provide 15% of base units to Very Low-Income households.
- 15% of 19 units = 2.85 units, rounded up to 3 units.
- Primary Density Bonus: 50% increase.
- Bonus Units: 19 units * 50% = 9.5 units, rounded up to 10 units.
- Total Units After Primary Bonus: 19 base units + 10 bonus units = 29 units.
Step 3: Apply the Additional Stackable Density Bonus (33.33%)
AB 1287 allows an additional density bonus on top of the primary one, up to the 100% cap.
- Additional Affordable Units Required: Provide an extra 10% of base units to Moderate-Income households.
- 10% of 19 units = 1.9 units, rounded up to 2 units.
- Additional Density Bonus: 33.33% increase to reach 100% density bonus in total.
- Additional Bonus Units: 19 units * 33.33% = 6.33 units, rounded to 6 units.
- Total Units After Additional Bonus: 29 units + 6 bonus units = 35 units.
Step 4: Leverage Waivers and Concessions
To maximize the unit count, you can request waivers for development standards that would otherwise limit your project’s potential.
- Increase Floor Area Ratio (FAR): Request a waiver to exceed the standard FAR, allowing more buildable space.
- Adjust Height Restrictions: Use waivers to add extra floors beyond local height limits.
- Modify Setbacks and Open Space Requirements: Maximize the building footprint.
With effective use of waivers, you can fit an additional 3 units on the lot, bringing the total unit count to 38 units.
Step 5: Add 2 Accessory Dwelling Units (ADUs)
California law allows for the addition of ADUs to multifamily properties.
- ADUs Allowed: Up to 2 detached ADUs on the property.
- Final Unit Count: 38 units + 2 ADUs = 40 units.
Final Unit Breakdown
- Base Units: 19 units
- Primary Bonus Units: 10 units
- Additional Bonus Units: 6 units
- Units Gained Through Waivers: 3 units
- ADUs: 2 units
- Total Units: 40 units
Affordable Units Summary
- Very Low-Income Units: 3 units (from primary bonus)
- Moderate-Income Units: 2 units (from additional bonus)
- Total Affordable Units: 5 units
- Percentage of Total Units: 5 affordable units / 40 total units ≈ 12.5%
The Impact on Property Value
By transforming a lot with a base allowance of 19 units into a 40-unit development opportunity, the property’s value skyrockets. This makes your listing exceptionally attractive to developers looking for profitable projects.
How FliPro.com Can Elevate Your Business Navigating these complex calculations and regulations can be challenging. That’s where FliPro.com comes in.
Unlock Comprehensive Property Development Reports
- Detailed Analysis: Gain access to in-depth reports on any property's maximum development potential.
- Accurate Calculations: Automatically compute density bonuses, affordable housing requirements, and more.
- Stay Compliant: Ensure all development possibilities align with the latest laws and regulations.
Benefits for Realtors
- Enhance Listings: Provide potential buyers with valuable insights that set your properties apart.
- Educate Sellers: Show clients how their property’s value can be maximized under the new law.
- Increase Earnings: Higher property values lead to higher commissions and a more robust portfolio.
Action Steps for Success
- Visit FliPro.com: Explore our suite of tools designed to maximize your real estate success.
- Purchase a Property Development Report: Gain access to all the hard data you need to market properties effectively.
- Market with Confidence: Use these insights to attract developers and close deals faster.
Conclusion The 2024 updates to California’s Density Bonus Law are a golden opportunity for forward-thinking Realtors. By leveraging these changes, you can:
- Significantly increase property values
- Outshine your competition with expert knowledge
- Accelerate your sales and boost commissions
Don’t miss out on this chance to transform your real estate business!
Unlock the full potential of your property listings today. Visit FliPro.com and get started!
