Updated July 21, 2026
California's State Density Bonus Law lets a residential developer build more units than local zoning otherwise allows in exchange for reserving a share of units as affordable housing — up to a 50% density increase, with 2024's AB 1287 allowing a second, additive bonus on top of that.
The bonus scales with the affordability commitment: setting aside roughly 15% of units for very-low-income households, 24% for low-income, or 44% for moderate-income households each unlocks the maximum 50% base density bonus, plus incentives/concessions (reduced parking, added height, reduced setbacks) and waivers of development standards that would otherwise block the project. AB 1287, effective January 2024, added a further density bonus on top of the base 50% for projects that max out their affordable set-aside, potentially doubling the achievable increase.
For LA multifamily land and small-lot sellers, density bonus capacity — stacked with LA's own TOC program where applicable — is frequently the real basis of a site's value, not the base zoning. A seller who hasn't had a broker or land-use consultant model out achievable density-bonus unit count is very likely leaving money on the table.
From the Sterman LA Multifamily Glossary — defined the way a broker actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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