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Density Bonus Economic Value Calculator
Density bonuses trade affordability for units. This calculator sizes.
Density bonus value
$8,290,909
Total NOI with bonus
$4,056,000
Affordable units
22
How the math works
Total units = base + bonus. Affordable count = total × %. NOI = market units × market rent + affordable × affordable rent.
120 base + 24 bonus = 144 total, 22 affordable. NOI with bonus $3.7M vs $3.6M without. Value +$1.8M. Density bonus typically accretive on strong-market sites.
How to Use
- Enter base allowable units.
- Enter bonus units.
- Enter affordable set-aside %.
- Enter market rent per unit.
- Enter affordable rent per unit.
- Enter cap rate %.
- Read bonus value.
Frequently Asked Questions
Program basics?
State density bonus laws (California SB 330, others) reward affordable housing inclusion with additional market-rate units. Typical: 10-35% bonus units for 5-20% affordable set-aside. Economics hinge on market rent premium and affordable rent gap.
Typical value?
Density bonus commonly adds 5-15% to net unit value despite affordable burden. Reason: market units cross-subsidize affordable through higher count. Particularly powerful in high-rent markets where affordable rent gap is wide.
Design implications?
Affordable units: similar quality to market (can't build junior product). Location mix within building. Income verification rules. Rent restrictions through term (15-55 years typical). Compliance cost: $50-150/unit/year ongoing.
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