The Legislature has adopted three state laws – the Density Bonus Law, Housing Element law, and the Housing Crisis Act of 2019 -- to ensure that new housing developments do not reduce the total number of existing dwellings and do not reduce the number of dwellings housing lower income persons. In most communities, a housing project must create at least as many housing units as will be demolished. Projects must also replace units rented by lower income households with units affordable to lower income tenants and, in most communities, must provide relocation and other benefits to lower income tenants who are displaced by the new construction.
Replacement housing requirements have applied to projects requesting a density bonus since 2015, and those requirements also apply to any site listed in a jurisdiction’s sixth cycle Housing Element. The Housing Crisis Act of 2019 and amendments effective January 1, 2022 expanded that requirement, in most communities, to any housing development containing one or more units that proposed to demolish any existing units.
The purpose of the replacement requirements is to prevent the loss of housing units and the displacement of lower income households. State law does not allow local agencies to approve housing unless the proposed development complies with the applicable replacement housing requirements described below.