Legislation to Close Loophole in State’s Density Bonus Signed into Law by Governor

SB 92 will prevent developers from misusing housing incentives to supersede local restrictions for large projects with little housing

SACRAMENTO – Legislation by Sen. Catherine Blakespear, D-Encinitas, to stop the exploitation of the state’s housing density bonus law was signed on Friday by Gov. Gavin Newsom.

SB 92 prevents the density bonus law from being used to build large commercial projects that far exceed local zoning law and city ordinances. Specifically, the legislation would limit developers to increasing the commercial floor space included in their projects to no more than 2.5 times what is allowed by local zoning. 

The deficiency in present law has come to light with a mixed-use housing project proposed for the Pacific Beach neighborhood of San Diego in which the commercial space exceeded local zoning by more than 1,500%. Density bonus law was designed to allow developers to include commercial uses in their projects to supplement their residential components, as an enticement to build housing. 

The Pacific Beach 239-foot-high, 22-story mixed-use project, which exceeds the community’s three-story height limit, only contains 10 affordable housing units and primarily consists of luxury hotel rooms, subverting the law’s intent. SB 92 would not affect this project but would prevent similar projects proposed in the future from receiving density bonus allowances. 

“I thank Gov. Newsom for signing SB 92, which provides sensible guardrails to a law intended to generate more affordable housing for Californians, not luxury hotels,” Sen. Blakespear said. “SB 92 ensures that private projects receiving incentives through the state’s density bonus law are in fact primarily delivering housing.”  

SB 92 is sponsored by San Diego Mayor Todd Gloria and supported by U.S. Rep. Scott Peters, D-San Diego, San Diego City Council President Joe LaCava, the City of Alameda and the State Building and Construction Trades Council of California.

The new law takes effect on Jan. 1, 2026.

Blakespear represents Senate District 38, which covers coastal and northern San Diego County and south Orange County. To learn more about the district and Sen. Blakespear, visit her Senate website.