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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

  1. Enter base allowable units.
  2. Enter bonus units.
  3. Enter affordable set-aside %.
  4. Enter market rent per unit.
  5. Enter affordable rent per unit.
  6. Enter cap rate %.
  7. 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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