When to Request a Density Bonus Concession, and When to Request a Waiver

Concessions are an economic subsidy. Waivers are a geometric backstop.

The statute treats concessions and waivers as separate tools that appear in different subdivisions of §65915. The legislative intent is visible in the structure.

A concession is a finite economic benefit. Section 65915(d) defines it as "a reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards … that results in identifiable and actual cost reductions." A qualifying project gets a fixed number of concessions — between one and five — depending on the depth of the affordability commitment. A project at the minimum threshold gets one. Deeper affordability commitments unlock additional concessions: two, three, or five, with five reserved under §65915(d)(2)(D) for projects that meet the 100% affordable criteria of §65915(b)(1)(G). Student housing projects sit on a separate sub-tier with one or two concessions depending on the share of lower-income student units.

A waiver is a different tool entirely. Section 65915(e) authorizes the waiver of any local development standard that would have the effect of "physically precluding" construction of the project at the densities and with the concessions the statute authorizes. There is no numerical cap. A developer may request as many waivers as the project geometry requires.

The clearest way to see the distinction: concessions are handed out for being a density bonus project (a finite set of free zoning modifications, scaled to the affordability commitment), while waivers are an unlimited backstop preventing local rules from physically blocking the bonus the statute authorizes. Concessions are about cost. Waivers are about feasibility.

A concession is presumed to produce cost reductions. The city has to prove otherwise.

The 2021 decision in Schreiber v. City of Los Angeles, 69 Cal.App.5th 549, settled an important question about how concessions are evaluated. The Second District held that an applicant does not have to prove a concession will produce cost reductions; the law presumes it. The burden runs the other way.

Section 65915(d)(1) lets a local agency deny a concession only if it makes a written finding, supported by substantial evidence, that the concession does not produce identifiable and actual cost reductions, would have a specific adverse impact on public health and safety, would harm a property listed on the California Register of Historical Resources, or would conflict with state or federal law. Schreiber read that structure as placing the burden on the city to overcome the presumption that incentives produce cost reductions, and the court invalidated a Los Angeles ordinance provision that required applicants to demonstrate "economic feasibility" — a higher bar than "cost reduction" — as preempted by state law.

The practical effect is that a developer requesting a concession does not need to commission a financial analysis to defend the request. The city may consider voluntarily-submitted financial documentation, but cannot require it. A concession request that names the standard being modified and identifies a plausible cost-reduction theory clears the statutory threshold.

Courts have rejected the "redesign first" defense to a waiver request.

The 2011 decision in Wollmer v. City of Berkeley, 193 Cal.App.4th 1329, established that the "physically preclude" test does not require a project to be stripped of design features in order to fit within local standards. Standards may be waived that physically preclude construction of a housing development meeting the requirements for a density bonus, the First District held, period. The statute does not say that what must be precluded is a project with no amenities, or that amenities may not be the reason a waiver is needed.

The 2022 decision in Bankers Hill 150 v. City of San Diego, 74 Cal.App.5th 755, applied Wollmer directly to a San Diego project and made the holding even harder to evade. The Fourth District held that a 20-story mixed-use project was entitled to waivers of local height and setback standards even though the city argued the project could be redesigned without a large interior courtyard to fit within those standards. Once the developer established eligibility for the density bonus and the requested setback reduction as an incentive, the court wrote, it was entitled to a waiver of any development standard that would preclude construction of the project unless the city could find a statutory exception.

Bankers Hill is the most useful case in this line for San Diego practitioners. It is a published Fourth District opinion, it interprets the same statute that governs every SDBL project in the city, and it specifically rejects the argument cities most often make: that a project should be redesigned to minimize the need for waivers. After Bankers Hill, the alternative-compliant-design argument is not a basis for denial under §65915(e).

The "specific adverse impact" exception is narrow, and it is rarely successful.

Both mechanisms include the same safety valve: a city can deny a concession or waiver if it finds, with substantial evidence, that granting the request would produce a "specific, adverse impact" on public health and safety with no feasible mitigation. The defined scope is tight. Inconsistency with the zoning ordinance or general plan land use designation is not, by itself, a specific adverse impact for this purpose. The impact must be quantifiable, direct, unavoidable, and grounded in objective written health-or-safety standards in effect when the application was deemed complete.

The published case law is unfavorable to cities that have invoked this exception on aesthetic, character, or general-plan-consistency grounds. The exception was drafted to handle genuine public-safety conflicts — life-safety setbacks that would be missed because of a fault trace, fire-access widths that cannot be met, structural conditions that cannot be mitigated. It was not drafted to relitigate the underlying zoning policy.

Three categories of standards sit in unsettled territory.

Parking placement is the first. State law preempts local minimum parking ratios for density bonus projects under §65915(p), and AB 2097 (Government Code §65863.2) preempts minimums entirely within half a mile of major transit stops. Neither statute clearly addresses parking placement — rules that prohibit parking in front yards, require structured parking, or limit vehicular use area on a primary frontage. Practitioner experience varies; some cities concede placement under §65915(d) and others treat it as a use-character regulation that survives the bonus. There is no published case law squarely on point.

Articulation and façade design is the second. Standards requiring façade plane articulation, ground-floor transparency, or specific exterior materials are commonly conceded under §65915(d) when the developer can show cost-reduction value, and commonly waived under §65915(e) when project massing requires geometry that the standards would prevent. Both pathways are available. The unsettled question is whether design-review processes that nominally apply "objective" standards but operate with discretionary review can survive density bonus law. Schreiber gestured at the issue without resolving it.

Open space and unit-mix triggers is the third. Per-unit private open space and project-wide common open space requirements are concession- and waiver-eligible. The complication arises when an open-space rule has a numeric trigger keyed to total dwelling-unit count, and the bonus pushes the project across the threshold. Whether the bonus units count toward the trigger is a recurring question. The conservative reading flows from §65915's structure: bonus units count, the trigger fires, and a waiver or concession must be requested if the rule would otherwise apply.

Project budgeting should match the standard to the right tool.

Concessions are a finite resource. Each concession spent on a height increase or FAR bump is a concession not available for setback relief, parking flexibility, or unit-mix modifications. Pre-application analysis should identify the standards whose modification produces the largest cost reductions and allocate the limited concession allotment accordingly.

Waivers are unlimited but narrower in scope. They are only available for standards that would physically preclude the project. A waiver request for a standard that doesn't reach that threshold will be redirected into the concession pool, consuming a slot the developer may have wanted for something else. The threshold question — does this standard prevent the project from being physically built, or does it just make the project more expensive — is the gate that determines which mechanism applies.

The case law since 2021 has strengthened the developer's posture in both contexts. Schreiber settled the cost-reduction presumption. Wollmer and Bankers Hill 150 settled that the physically-preclude test does not require design minimization. The burden of proof for denial sits with the city. None of this changes the statutory ceiling on concessions, but it does reduce the friction of obtaining the concessions and waivers a project actually needs.

The code tells the developer what's available. The case law tells the developer how the code actually operates. The pro forma tells the developer which mechanism to use for which standard.

This article is informational and is not legal advice. State Density Bonus Law is amended regularly through legislation, and the case law continues to develop; verify current statutory text and decisions before relying on any of this material for a specific project. This site is independent of the City of San Diego and the Development Services Department. The calculator allows users to model concession and waiver inputs on relevant pathways but does not predict approval outcomes — per-standard disposition is determined at entitlement on a project-specific basis. Cited authorities: Cal. Gov. Code §65915; Schreiber v. City of Los Angeles (2021) 69 Cal.App.5th 549; Wollmer v. City of Berkeley (2011) 193 Cal.App.4th 1329; Bankers Hill 150 v. City of San Diego (2022) 74 Cal.App.5th 755.