Housing development: density bonus: incentives or concessions: labor standards.

The bill now amends Section 65915 of the Government Code (the Density Bonus Law) in addition to its original amendments to Section 65913.3 (postentitlement phase permits). This significantly broadens the bill from a single permitting-streamlining topic to also cover density bonus incentives and concessions.

Excludes from the definition of 'incentives or concessions' any reduction in site development standards, modification of zoning code or architectural design requirements, and other regulatory incentives or concessions that include or relate to a labor standard. This prevents local agencies from granting density bonus concessions that would allow developers to avoid prevailing wage or other labor requirements.

Adds equity sharing agreement requirements for for-sale units that qualify a developer for a density bonus. Upon resale, the seller retains the value of improvements, downpayment, and proportionate share of appreciation, while the local government recaptures its initial subsidy and proportionate share of appreciation for use promoting home ownership within five years.

Adds a provision that if a for-sale unit is not purchased by an income-qualified person within 180 days of the certificate of occupancy, it must be purchased by a qualified nonprofit housing corporation (a California-based 501(c)(3) with all board members residing in California) that incorporates a repurchase option and affordability restrictions ensuring the property is preserved for lower income housing for at least 45 years.

Adds a new category for student housing developments: 20 percent of total units must be for lower income students, with rent set at 30 percent of 65 percent of area median income for a single-room occupancy unit type. Units must be occupied by students enrolled in WASC or ACCJC-accredited institutions, and the development must provide priority for lower income students experiencing homelessness. A 55-year recorded affordability restriction applies.

Makes an applicant ineligible for a density bonus if the project is on property containing existing affordable rental units (subject to rent restrictions, covenants, or occupied by lower/very low income households) unless the proposed development replaces those units with equivalent affordable units subject to 55-year affordability restrictions.

The fiscal committee determination changed from 'yes' to 'no,' and the state-mandated local program designation changed from 'yes' to 'no.' This suggests the amended bill no longer triggers state reimbursement obligations for local agencies, likely because the density bonus provisions do not impose new reimbursable costs.

All amendments to Section 65913.3 of the Government Code were removed. This eliminates the requirement for local agencies to post examples for junior accessory dwelling units and ministerially approved housing projects by January 1, 2028, and removes the associated state-mandated local program and fiscal committee findings.

The labor standards exclusion from 'incentives or concessions' was narrowed to apply only to buildings over 85 feet in height above grade. Previously it applied to all buildings regardless of height.

A temporal limitation was added specifying that the applicable labor standards are those that do not exceed certain statutory requirements as they existed on December 31, 2025, effectively freezing the baseline for what qualifies as a permissible labor standard in the exclusion.

The fiscal committee finding changed from 'yes' to 'no' and the state-mandated local program designation changed from 'yes' to 'no', reflecting the removal of the new duties imposed on local agencies under the deleted Section 65913.3 provisions.

Senator Cortese was added as a coauthor of the bill.

A new provision was added to the digest stating that the bill would incorporate additional changes to Section 65915 of the Government Code proposed by AB 2433, AB 2480, or both, operative only if this bill and those bills are all enacted and SB 1383 is enacted last. This creates a conditional mechanism for consolidating related housing legislation into a single operative text.

The amendment date was updated from August 19, 2026 to August 21, 2026, with the prior date retained as a secondary line indicating an earlier amendment.

A duplicated word in the legislative counsel's digest was corrected: 'This bill would exclude exclude' was changed to 'This bill would exclude.'