HCD letter of technical assistance — Danville (101–119 Town & Country Dr.) — SDBL base density & concessions

STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT DIVISION OF HOUSING POLICY DEVELOPMENT 651 Bannon Street, Suite 400 Sacramento, CA 95811 (916) 263-2911 / FAX (916) 263-7453 www.hcd.ca.gov

GAVIN NEWSOM, Governor

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August 12, 2025

David Crompton, Chief of Planning Town of Danville 500 La Gonda Way Danville, CA 94526

Dear David Crompton:

The California Department of Housing and Community Development (HCD) received a request for technical assistance from the Town of Danville (Town) regarding a proposed housing development project to be located at 101-119 Town & Country Drive. The purpose of this letter is to provide technical assistance to the Town regarding the State Density Bonus Law (SDBL) and the calculation of base density and use of incentives and concessions to permit mixed use in a multifamily zone.

HCD understands that Blake Grigg Properties (Applicant) is seeking approval of a 200-unit multifamily development that includes 21 very low-income (VLI) units (Project) on a parcel that is identified as a Housing Opportunity Site in the Town’s 6[th] Cycle General Plan Housing Element. The Project contains a multifamily development on the north side of the site and retains the existing retail commercial building and associated surface parking on the south side of the site.

The existing parcel is 3.89 acres and zoned DBD 13 (Downtown Business District Area 13: Multifamily Residential-High Special), and the General Plan Land Use Designation is DBD 13 (Multifamily Residential – High Density Special, Downtown Master Plan). In addition, the entire downtown area has a base P-1 (Planned Unit District) zoning, which includes some district-wide procedural and application submittal requirements but does not include specific development standards. According to the Town, the DBD 13 zoning—which contains the specific land use and development standards—applies to the site.

On February 7, 2023, the Town amended its 2030 General Plan Land Use Element and Downtown Business District Zoning to comply with State Housing Element Law and accommodate the Town’s regional housing need allocation (RHNA) for the 6[th ] Cycle planning period. The land use designation and zoning allow for multifamily residential

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land use at a housing density range of 30 to 35 units per acre. Mixed-use residential and commercial uses are not permitted on the 3.89-acre site.[1]

It is HCD’s understanding that the Applicant is considering whether to subdivide the parcel.

• If subdividing. The 3.89-acre parcel would be subdivided into a 2.34-acre parcel and a 1.55-acre parcel. The Project is proposed on the 2.34-acre parcel, and no residential development would be proposed on the 1.55-acre parcel containing commercial use, which would be legal but nonconforming. The Town does not have a local Transfer of Development Rights (TDR) policy or other administrative procedure in place that would explicitly allow the Applicant to transfer the residential density from the 1.55-acre parcel to the 2.34-acre parcel.

• If not subdividing. The 3.89-acre parcel would remain intact, and the proposed multifamily units, in conjunction with the existing commercial use, would be a horizontal mixed-use development application.

Yes, the SDBL specifically defines a concession or incentive to include “[a]pproval of mixed-use zoning in conjunction with the housing project” if the commercial or other non-residential use will reduce the cost of the housing development and is “compatible with the housing project and the existing or planned development in the area where the proposed housing project will be located.”[2] A concession can be used to allow for mixed-use where the underlying zoning would otherwise not allow such use, unless the Town can make one of the three statutory findings of denial.[3] In other words, a concession could allow the existing commercial buildings and use to remain in conjunction with the proposed multifamily development as one housing development project application.

The SDBL defines a “housing development” to mean “a development project for five or more residential units, including mixed-use developments…and consists of residential units or unimproved residential lots…. For the purpose of calculating a density bonus, the residential units shall be on contiguous sites that are the subject of one development application , but do not have to be based upon individual subdivision maps or parcels.”[4] (Emphasis added.)

1 DMC § 32-45.21.2(b) Area 13: Multifamily Residential-High Special, Permitted Uses. Available at: https://codelibrary.amlegal.com/codes/danvilleca/latest/danville_ca/0-0-020033

2 Gov. Code, § 65915, subd. (k)(2).

3 Gov. Code, § 65915, subd. (d)(1).

4 Gov. Code, § 65915, subd. (i).

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Therefore, for purposes of applying the SDBL, the base density for the Project is calculated based on the site (or contiguous sites) that contains the residential use proposed as part of one development application.

If the Applicant subdivides the parcel, the project application would contain a housing development on a 2.34-acre parcel and therefore the base density for the Project would be 89 units, or 35 units per acre density multiplied by 2.34 acres.

• Example A: If the Project includes 21 VLI units, the Applicant can apply a 50-percent density bonus under Government Code section 65915, subdivision (f), as well as an additional 27.5-percent density bonus under subdivision (v) to achieve an overall yield of 158 units.

• Example B: If the Applicant wishes to apply only one 50-percent density bonus, the number of VLI units may be reduced to 14 to achieve an overall yield of 134 units. See Table 1 below for calculation details.

Notably, a separate development application may propose additional multifamily units on the 1.55-acre commercial parcel, with a base density of 55 units, or 35 units per acre multiplied by 1.55 acres.

If the Applicant does not subdivide the parcel, the project application would contain a housing development on a 3.89-acre parcel. The base density would therefore be 137 units, or 35 units per acre density multiplied by 3.89 acres. The project application would include existing commercial use and be considered mixed-use.

5 Gov. Code, § 65915, subd. (f)(2). 6 Gov. Code, § 65915, subd. (v)(2).

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If the Project includes 21 VLI units, the Applicant can apply one 50-percent density bonus under Government Code section 65915, subdivision (f) to achieve an overall yield of 206 units, or 137 base units plus 69 density bonus units.

If the Project maximizes its allowable density, either under the SDBL or specific provisions of the Town’s density bonus ordinance, the Town is not required to approve additional residential density on the 3.89-acre parcel at a later date. If a future housing development application results in the 3.89-acre site exceeding the maximum allowable density, a general plan and zoning amendment would be required, initiated by either the Town or an applicant.

For the purposes of the SDBL, the applicable base density for a project depends on the site area that contains the residential use proposed as part of one development project application. Therefore, the base density for the Project would be 89 units if the parcel is subdivided, or 137 units if the parcel is not subdivided. In addition, the SDBL places the burden of proof on the Town to deny a concession to allow for mixed-use zoning.[7]

If you have any questions or need additional information, please Contact Grace Wu at grace.wu@hcd.ca.gov.

Sincerely,

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David Zisser Assistant Deputy Director Local Government Relations and Accountability

7 Gov. Code, § 65915, subd. (d)(4).