TechEquity Supports Increasing Affordable Housing
We support AB 2345 which will boost affordable housing production by expanding the state’s density bonus program. The density bonus encourages affordable housing production by allowing developers to add more units and receive exemptions from building restrictions when they add more affordable units to their projects.
This bill will grant developers more units if they add more affordable housing than is currently called for in the density bonus. It will also increase the exemptions a developer can receive if they add more affordable units.
We have submitted a letter of support to the California Assembly which you can read below.
Dear Assemblymember Chiu,
On behalf of TechEquity Collaborative and our members, I am writing to express my strong support for AB 2345 which will enhance the state’s density bonus and increase production of affordable and market-rate housing.
TechEquity Collaborative is a community organization that educates, activates, and connects thousands of tech workers in California. We believe the tech industry can and should contribute to broad-based growth that benefits everyone. Instead of being a force for displacement and inequality, tech can create opportunities and widespread prosperity. We have a responsibility to use our voice to advocate for policy that will grant access to abundant housing for everyone who wants to live in California.
California is in the middle of a housing crisis, with rents hitting record highs and an unprecedented number of our neighbors unable to find a home. The main reason for the crisis is the acute shortage of housing in the state. California needs 3.5 million additional housing units to alleviate this shortage, which would tame rental prices and bring many unhoused Californians into a home. Governor Gavin Newsom, while running for office in 2018, promised to achieve this goal by 2025, but last year California saw a decline in housing production. Clearly we need more action to spur housing production in California.
AB 2345 will increase housing production in California by expanding the state’s density bonus. It will increase the number of incentives new developments can receive and the number of units in exchange for including more affordable housing in the project.
The law will grant housing developers three accommodations from local regulations if they keep 12% of a project’s units affordable for lower-income residents and up to five accommodations if 33% units are affordable for lower-income residents. This is a large increase from current law, which allows for three accommodations if 15% of units are affordable to lower-income households. These accommodations are useful to developers because they lower building costs, increasing the financial feasibility of the project. Since these extra accommodations are tied to the inclusion of additional affordable housing, AB 2345 will increase both affordable and market-rate housing production.
With AB 2345, projects that keep 33% of their units affordable for lower-income residents will also qualify for a 50% increase in the total number of units in the project. Under current law, the bonus maxes out at a 35% increase in total units if 20% of the project is affordable to lower-income households. With more units, developers can lower their cost per unit making the project more financially feasible. As with the accommodations, developers must include additional affordable units to unlock the extra units, so the larger bonus will increase both affordable and market-rate production.
AB 2345 will help combat California’s housing crisis by enhancing the state’s density bonus. It will lower development costs with more accommodations and a higher number of units in a project. Since these increases are only unlocked with additional affordable housing, AB 2345 will boost affordable and market-rate production. TechEquity is proud to support AB 2345 and we urge you to pass this bill.