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Housing and Community Investment – AB2556

On September 27, 2014, Governor Jerry Brown signed AB 2222 as amended by AB 2556 on August 19, 2016, to amend sections of California’s Density Bonus Law (Gov. Code §§ 65915). Major changes to the law are applicable to new density bonus developments resulting in a loss in existing affordable units or rent-stabilized units. The law aims to replace units and ensure rental affordability periods for 55 years.

The first step is to complete an application for an Affordable Unit Determination to find if you have potential affordable units. According to AB 2556, all rental dwelling units that exist at the time of application, or have been vacated or demolished in the five-year period preceding the application date shall be replaced on a one-for-one basis.

We will need tenant income information, among other items, to determine if affordable units need to be replaced. It is the responsibility of the owner to obtain all the required documentation verifying the tenant income and the project’s rental and occupancy.

For density bonus projects in the absence of income documentation, the Land Use staff will make a determination that rental units were last occupied by 50% very low income and 18% low income households pursuant to the U.S. Department of Housing and Urban Development’s (HUD) Comprehensive Housing Affordability Strategy (CHAS) database. For transit oriented communities (TOC) projects in the absence of income documentation, the determination breakdown will be 31% extremely low income, 19% very low income, and 18% low income.