HomeMy WebLinkAbout02.16.22@600 SP CCWednesday, February 16, 2022
6:00 PM
City of South San Francisco
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, CA
TELECONFERENCE MEETING
Zoom Link: https://ssf-net.zoom.us/j/84173413469
Special City Council
Special Meeting Agenda
February 16, 2022Special City Council Special Meeting Agenda
TELECONFERENCE MEETING NOTICE
The purpose of conducting the meeting as described in this notice is to provide the safest environment for staff
and the public while allowing for public participation.
Councilmembers Coleman, Flores and Addiego, Vice Mayor Nicolas and Mayor Nagales and essential City
staff may participate via Teleconference.
Pursuant to Ralph M. Brown Act, Government Code Section 54953, all votes shall be by roll call due to
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The City Council may meet by teleconference, consistent with the Brown Act as amended by AB 361 (2021).
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Page 2 City of South San Francisco Printed on 3/16/2022
February 16, 2022Special City Council Special Meeting Agenda
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Page 3 City of South San Francisco Printed on 3/16/2022
February 16, 2022Special City Council Special Meeting Agenda
Call to Order.
Roll Call.
Agenda Review.
PUBLIC COMMENTS - Comments are limited to items on the Special Meeting Agenda.
ADMINISTRATIVE BUSINESS
Report regarding recommendation to establish Citywide Wireless Utility to address
Digital Equity (Tony Barrera, Director of Information Technology)
1.
Report regarding an analysis of the City of South San Francisco’s Inclusionary
Housing Ordinance and incentives to provide additional affordable housing units. (Julie
Barnard, Acting Deputy Director of Economic and Community Development)
2.
City Council study session to consider a potential ballot measure authorizing the City
of South San Francisco to develop, construct, or acquire affordable, low-rent housing
units pursuant to Article XXXIV of the California Constitution and to provide direction
to staff. (Sky Woodruff, City Attorney and Nell Selander, Director, Economic &
Community Development Department)
3.
Adjournment.
Page 4 City of South San Francisco Printed on 3/16/2022
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:22-73 Agenda Date:2/16/2022
Version:1 Item #:1.
Report Regarding Recommendation to Establish Citywide Wireless Utility to Address Digital Equity (Tony
Barrera, Director of Information Technology)
RECOMMENDATION
City staff recommends the City Council provide comments and direction regarding the recommendations from
the Broadband and Wireless Feasibility Study.
BACKGROUND/DISCUSSION
As a City initiative to help bridge the digital divide,the Information Technology Department released a Request
For Proposals (RFP)to conduct a Broadband and Wireless Feasibility Study.The scope of work of the RFP was
to Review Technology and Trends,Policy Analysis,Service and Infrastructure Analysis,Site and Market
Analysis,Needs Assessment and Outreach and Utility Formation Study.Based on their findings,the selected
Consultant would develop a broadband and public Wi-Fi infrastructure strategic technology implementation
plan.The plan would determine demand and need among key groups for gigabit broadband services in South
San Francisco.The Consultant would also provide a recommendation as to whether the City of South San
Francisco should build infrastructure to become a city-owned Internet Service Provider (ISP)and/or build a
Public Wi-Fi network in South San Francisco which would be based on comprehensive cost-benefit analysis
and study findings.
The City hired Magellan Advisors to perform the Broadband Feasibility Study.Over the past year Magellan has
interviewed City staff,members of the City Council,local internet service providers and neighborhood
advocates.They also reviewed City broadband policies such as Dig-Once and Small Cell Facilities and
evaluated the market needs and assessment.Magellan Advisors compiled all the information into one report
(Attachment 1 - Broadband and Wireless Feasibility Study).
FISCAL IMPACT
Depending on the direction of the City Council,staff recommends using the American Rescue Plan Act (ARPA)
2021 funding to build the public Wi-Fi network.
CONCLUSION
Staff recommends the City Council review Broadband and Wireless Feasibility Study report and provide any
additional comments and direction.
Attachment 1 - Broadband and Wireless Feasibility Study
City of South San Francisco Printed on 2/15/2022Page 1 of 1
powered by Legistar™
CITY OF SOUTH SAN FRANCISCO , CA
Broadband &
Wireless Feasibility
Study
FINAL: FEBRUARY 2022
WWW.MAGELLAN -ADVISORS . C O M 2
TABLE OF CONTENTS
1. Executive Summary ............................................................................................................... 5
1.1 Overview of Project ....................................................................................................................... 5
1.2 Recommendations ....................................................................................................................... 11
2. Technology & Trends Review ................................................................................................ 13
2.1 Overview of Broadband Technologies ........................................................................................... 13
2.2 Municipal Broadband Trends ........................................................................................................ 15
3. Policy Analysis ..................................................................................................................... 20
3.1 California Broadband Policy ......................................................................................................... 20
3.2 State and Federal Regulatory Policy ............................................................................................. 22
3.3 Review of City Wireless Policies ................................................................................................... 24
4. Service, Infrastru cture, and Market Analysis ........................................................................ 26
4.1 Broadband Availability ................................................................................................................ 26
4.2 Broadband Infrastructure in South San Francisco .......................................................................... 30
4.3 Conclusions ................................................................................................................................. 34
5. Needs Assessment ............................................................................................................... 35
5.1 Current Connectivity .................................................................................................................... 35
5.2 Goals and Issues .......................................................................................................................... 37
5.3 Broadband Survey ....................................................................................................................... 39
5.4 Conclusions ................................................................................................................................. 51
6. Utility Formation Study ....................................................................................................... 52
6.1 Conceputal Network Design ......................................................................................................... 53
6.2 Governance Structure .................................................................................................................. 59
7. Programming & Finance Evaluati on ..................................................................................... 61
7.1 Wireless Deployment Plan ........................................................................................................... 62
7.2 Estimated Costs ........................................................................................................................... 63
7.3 FUnding options .......................................................................................................................... 69
8. Recommendations & Next Steps ........................................................................................... 71
Appendix A: Additional Technologies and Trends ........................................................................ 74
Appendix B: Wi -Fi Streetlight Location Photos ............................................................................. 79
WWW.MAGELLAN -ADVISORS . C O M 3
TABLE OF FIGURES
Figure 1 -1. Broadband & Wire less Feasibility Study Process .......................................................................... 5
Figure 1 -2. SSFBU Conceptual Network Design ............................................................................................... 8
Figure 1 -3. Network Map .................................................................................................................................. 9
Figure 2 -1. Speeds Associated with Internet Technologies .......................................................................... 14
Figure 2 -2. Continuum of Municipal Broadband Business Models ............................................................... 18
Figure 3 -1. State of California Proposed Middle Mile Open Network Segments ......................................... 21
Figure 4 -1. Map of Locations Analyzed for Market Assessment ................................................................... 27
4 -2 City Owned Fiber Cables .......................................................................................................................... 31
Figure 4 -3 Caltrans Smart Corridor 288 Fiber Cable ..................................................................................... 32
Figure 5 -1. Organizational Respondents’ Industry Sectors ........................................................................... 40
Figure 5 -2. Respondents’ Type of Connection ............................................................................................... 41
Figure 5 -3. Respondents’ Internet Service Provider ...................................................................................... 42
Figure 5 -4. Respondents’ Internet Service Provider by Location .................................................................. 43
Figure 5 -5. Respondents’ Willingness to Pay for Broadband Services ......................................................... 45
Figure 5 -6. Respondents’ Assessment of Current Internet Service Performance ........................................ 46
Figure 5 -7. Respondents’ Assessment of Internet Service Outages and Slow Downs ................................. 47
Figure 5 -8. Household Respondents’ Internet Use ....................................................................................... 48
Figure 5 -9. Importance of Intern et Among Household Respondents ........................................................... 49
Figure 5 -10. Usefulness of Digital Technologies for Organizational Respondents ...................................... 50
Figure 5 -11. Organizational Respondents’ Willingness to Move for Broadband .......................................... 51
Figure 6 -1. SSFBU Conceptual Network Design ............................................................................................. 53
Figure 6 -2. CBRS Equipment .......................................................................................................................... 54
Figure 6 -3. CBRS User Tiers ........................................................................................................................... 55
Figure 6 -4. CBRS Coverage Estimates from Three Cells —City Hall, Sign Hill, and Skyline Blvd ................... 56
Figure 6 -5. Point -to-Point (PtP) Equip ment ................................................................................................... 57
Figure 6 -6. Examples of integrated CBRS Wi -Fi hotspots for residential (TelRad and Zyxel), enterprise
(Ruckus), and industri al (MultiTech) settings; each of which is approximately 6 inches in size. ................ 58
Figure 7 -1. Wi -Fi Zone Coverage Areas .......................................................................................................... 62
Figure 7 -2. Network Map ................................................................................................................................ 63
Figure 7 -3. Proposed Fiber at Sign Hill .......................................................................................................... 64
Figure 7 -4. Propos ed Fiber Westborough ...................................................................................................... 65
Figure A -2. Wi -Fi Streetlight Location Photos ................................................................................................ 79
TABLE OF TABLES
Table 1 -1. Total Network Deployment Costs ................................................................................................... 9
Table 1 -2. SSFBU Estimated Revenue Opportunities .................................................................................... 10
Table 2 -1. Average Data Usage by Application .............................................................................................. 13
Table 2 -2. Comparison of Municipal Broadband Business Models .............................................................. 19
Table 5 -1. Survey Responses by Type ............................................................................................................ 39
Table 5 -2. Descriptive Statistics for Broadband Cost and Performance Among Survey Respondents ....... 44
Table 5 -3. Survey Respondents Average Costs and Speeds by Provider ...................................................... 44
Table 7 -1. Costs for New Fiber Deployment .................................................................................................. 65
WWW.MAGELLAN -ADVISORS . C O M 4
Table 7 -2. SSFBU CBSR Distribution Network Capital Expense ..................................................................... 66
Table 7 -3. SSFBU Wi -Fi Access Network Capital Expense ............................................................................. 67
Table 7 -4. Total Network Deployment Costs ................................................................................................. 67
Table 7 -5. SSFBU Network Estimated Monthly Operating Expenses ............................................................ 68
Table 7 -6. SSFBU Estimated Revenue Opportunities .................................................................................... 69
WWW.MAGELLAN -ADVISORS . C O M 5
1. Executive Summary
1.1 OVERVIEW OF PROJECT
Technology is advancing at unprecedented rates. Cities are embracing new technologies
and platforms that require high bandwidth broadband internet connections . According
to the Federal Communication Commissions (FCC ), the definition of broadband internet is
a minimum of 25 Mbps download and 3 Mbps upload speeds. Broadband provides high -
speed internet access via multiple technologies including fiber optics, wireless, cable, DSL,
and satellite.
The way t he world interacts has changed, especially since the C OVID-19 lockdown, with
working, telehealth, distance learning, and even the economy shifting to online platforms .
Cities are also becoming more technologically advanced and have a higher need for fiber
networks to support the many departments, constituents , and businesses. I nvesting in
infrastructure and partnerships is becoming increasingly important and cities see the
need to plan, construct, and partner with the private sector to manage, operate, and
maintain networks that will support communities into t he future .
In April 2021, the City of South San Francisco hired Magellan Advisors to develop a
Broadband and Wireless Network Feasibility Study that explores the current state of
broadband and assess the feasibility of South San Francisco developing and implementing
a municipal broadband program . Over the course of approximately nine months, Magellan
Advisors studied the current state of broadband, need for additional service offerings,
policy and governance issues, and existing infrastructure to develop this Feasibility Study.
Figure 1 -1. Broadband & Wireless Feasibility Study Process
Magellan’s team interviewed the C ity’s departments and other stakeholders to gain an
understanding of the state of broadband within South San Francisco. These interviews
provided an insight of the current broadband infrastructure that could be used, how
broadband currently supports City operations , costs associated with leased services, and
Technology
and Trends
Infrastructure
A nalysis
Stakeholder
O utreach
Policy
Review
Site
Analysis Final
Report Market
Analysis
Utility
Formation
Study
WWW.MAGELLAN -ADVISORS . C O M 6
the need for additional bandwidth in the future . The discussions also included any policies
and practices that have been implemented to aid in the planning process.
Currently, the City of South San Francisco has a pproximately 9.22 miles of existing fiber,
another 2.33 miles of planned fiber on Westborough Blvd. The City intends to leverage
these assets to create a future proof network to meet the current needs and future
demand of its residents and businesses. The network also needs to hav e the capacity to
support Smart City applications such as intelligent traffic controls, a citywide Wi -F i
network, smart parking, 5G and 6G rollouts, Public Works functions, and many others.
Magellan also engaged with organizations outside of the C ity depar tments, including
South San Francisco Library System , schools, not -for -profit organizations, healthcare
institutions, chamber s of commerce , and internet service providers (ISPs). These
interviews provided additional understanding about current and future needs of
businesses, community organizations, and residents within South San Francisco. In
addition, an online broadband survey was conducted to collect sentiment about current
service offerings , overall satisfaction, and future plans that will require robust high -speed
internet connections. The survey collected real -time data about service levels and speeds
on a per address basis.
This outreach, along with Magellan’s market analysis, determined that South San
Franci sco’s current broadband coverage and offerings are sufficient to support the needs
of residents and businesses. Speeds that exceed those needed for remote learning,
working from home, telehealth, and daily connectivity are currently available to 99% of al l
residents through a variety of service providers . However, in some areas, such as
Westborough, choice of provider is limited , and throughout the City, affordability is an
issue since h igher bandwidth service offerings are cost -prohibitive for low -to-mode rate
income users .
There is also a prevalent digital literacy concern in South San Francisco. Community
organizations noted a need for additional devices and training for the public about using
the internet . Although the Library currently does a great dea l of training and provides
assistance for digital inclusion, their programs would benefit from additional resources to
increase their impact and sustain the level of need. The City has already partnered with a
number of organizations through various grant programs to develop digital inclusion
programs; however, these programs should be evaluated and supplemented to ensure
that they are sustainable for meeting the needs of all of South San Francisco’s population
into the future.
T he needs and goals of the City itself, its residents, businesses, and community groups
were assessed as inputs for developing a business model that will best serve the needs
WWW.MAGELLAN -ADVISORS . C O M 7
of South San Francisco into the future. Financial requirements were also considered,
since capital and operati onal costs are paramount for determining the feasibility of
supplementing broadband and wireless with a municipal broadband program. We
estimate that if the City of South San Francisco pursued a citywide fiber -to-the -home
utility, costs for construction would be approximately $38 million . Additional operating
expenses would also be applied to the program for additional staff and other resources
needed to operate and market such a network . To address the issues in the
Westborough neighborhood alone, the costs would be approximately $14 million.
Based on the needs of the community and the costs to deploy a municipal fiber utility as
well as the City’s current broadband market, it is infeas ible for the City to achieve an
adequate return on investment for such a program. Rather, South San Francisco should
use its existing and planned fiber assets to launch a program that will make fiber
available for use to enhance service in the Westborough neighborhood, as well as deploy
a wireless network to address the affordability barriers for low -to-moderate income
areas of the City.
South San Francisco should continue constructing its planned fiber assets in the
Westborough neighborhood and make them a vailable for use by providers who want to
serve the neighborhood to address the lack of choice there. The chief complaint of the
Westborough neighborhood is a lack of cellular/mobile coverage and a lack of choice for
broadband service. During talks with in ternet service providers, cost to build to
Westborough, especially crossing Highway 280, is too expensive to make it worth
expanding in the area. Therefore, City should use its fiber assets to alleviate this barrier
and bring better coverage in Westboroug h by allowing the use of City -owned fiber
through leases or other agreements.
Additionally , to address the digital equity and affordability issues in South San Francisco,
we recommend pursuing deployment of a wireless utility available to residents citywid e
by leveraging the City’s existing assets to create a flexible, low -cost utility. The City has
already deployed 11 access points on Linden Avenue providing free outdoor Wi -Fi with
great success. Additional areas need affordable broadband, and deploying fr ee Wi -Fi in
these zones will enhance the ability to access broadband and aid families. School -aged
children, teenagers, working parents, and anyone will have the ability to access
broadband without needing to go to community centers or libraries for inter net access .
The City should leverage its existing and planned fiber to support new wireless options
for service throughout the City, including in locations where residents struggle to get
affordable broadband. This network, envisioned as a South San Franci sco Broadband
Utility (SSFBU) is diagrammed in Figure 1 -2 .
WWW.MAGELLAN -ADVISORS . C O M 8
Figure 1 -2. SSFBU Conceptual Network Design
This system is designed to flexibly extend basic broadband throughout South San
Francisco, capitalizing on the City’s current assets, providing near -universal availability of
Wi-Fi-enabled devices, and on -radio spectrum that is available for use without a license.
SSFBU users will connect via Wi -Fi through access points connected via router (and
Ethernet cable) to a Citizens Broadband Radio Service (CBRS) distribution radio access
network.
The network requires deployment of some new infrastructure including three new access
points at Sign Hill, the intersection of Sharp Park Road and Skyline Boulevard, and City
Hall. Two new fiber routes are also included in the design , including a connection to Sign
Hill Tower and one crossing Skyline Boulevard. A map of the network d esign is shown in
the figure below.
WWW.MAGELLAN -ADVISORS . C O M 9
Figure 1 -3. Network Map
At approximately $634,000, the cost to build the network is relatively low, as shown in
the table below, and operating costs are about $3 ,000 per month. To avoid additional
staffing needs, we recommend that South San Francisco select a partner such as
Monkeybrains or a similar wireless operator to maintain the network wireless network
via a contract managed by IT.
Table 1 -1. Total Network Deployment Costs
Network Component Cost
New Fiber -Optic Cable $240,157
CBRS Deployment $234,600
Wi-Fi Deployment $159,476
Total $634,233
WWW.MAGELLAN -ADVISORS . C O M 10
The City should build the wireless network and partner with its chosen ISP to lease
equipment, provide services and maintain the network . This would keep the City from
becom ing an ISP, obtain ing CPUC registration and licensing , establishing service level
agreements (SLAs) and meeting other requirements to provide reliable connectivity and
services to customers. The City may also be able to negotiate a share of the revenue
from these services. There are three relatively small reve nue opportunities for SSFBU ,
described below . All of these opportunities are optional .
The first opportunity is for the City to lease network infrastructure to private entities.
Under this model , businesses and households could lease equipment that SSFBU ’s
partner would install and maintain. Baseline internet access via Wi -Fi would be included.
A second opportunity is to charg e for “enhanced access” via the captive portal. Exactly
what “enhanced access” means is to be determined, depending on policies for baseline
access. There could be caps on bandwidth, data quantity per month, or types of services
(e.g., no streaming video o r gaming). Users may pay a monthly fee to eliminate these
restrictions. We do not recommend establishing a full broadband operating system with
means to provision services and manage subscribers due to the substantial costs and
staffing requirements.
The third revenue opportunity is to provide value -adding content, including
advertisements, via the captive portal.
Reasonable estimates for revenue from these opportunities, as shown in Table 1-2 , are
less than $500k per year, and the revenue sharing details should be negotiated with the
City’s selected partner to determine how much will go to the City . Based on these
estimates, it would likely take a few years for the City to see a return on investment from
the capital costs to deploy the network.
Table 1 -2 . SSFBU Estimated Revenue Opportunities
Item
Monthly
Cost Quantity Amount
CPE lease $100 200 $20,000
Enhanced access $15 1000 $15,000
Portal content $100 10 $1,000
Monthly total $36,000
Annual Revenue Estimate $432,000
Our cost and revenue estimates are conservative so we believe SSFBU could generate
excess revenue if effectively governed. In that case, we recommend including digital
WWW.MAGELLAN -ADVISORS . C O M 11
inclusion programs and services in the SSFBU enterprise fund to maximize its economic
and social benefits to the community. The programming and governance considerations
should be overseen by either the Library’s Community Learning Center or the
Community Development in order to maximize impact on digital equity programs. SSFBU
should build u pon existing digital inclusion efforts that are ongoing in South San
Francisco. The City could also pursue additional digital inclusion efforts by getting
involved with groups with a track record of tackling this task 1.
T he City should establish an enterprise fund for SSFBU. It should be governed by a board
of departmental representatives supplemented by a community advisory committee. We
recommend the advisory committee be comprised of equal numbers of residential, small
business, non -p rofit, and major industry representatives, selected by City Council
members. The General Manager should be responsible for proposing an annual plan,
including budget, to the advisory committee and board.
1.2 RECOMMENDATIONS
1. While we do not recommend that the City of South San Francisco build a Citywide
fiber -to-the -home network or become an internet service provider due to the
saturation of the broadband market, the City should leverage its existing assets to
create a South San Francisco Broadband Utility that provides wireless connectivity
throughout the City. South San Francisco should partner with a qualified wireless
network operator to oversee the maintenance of the network and digital inclusion
programs should be integrated into the program ’s gove rnance structure.
2. Use existing C ity-owned fiber -optic cable , including the new fiber being placed
from the downtown area to Highway 35, Skyline Boulevard, to support better
broadband and cellular coverage i n the Westborough neighborhood. Encourage
and partner with the cellular providers to increase the coverage in the
Westborough neighborhood , leveraging the City -owned fiber cable on
Westborough Boulevard .
3. Deploy two new underground fiber routes at Sign Hill tower and crossing Skyline
Bou levard to support a CBRS system. These routes will cost approximately
1 Digital inclusion resources include the International Telecommunications Union
(https://www.itu.int/en/mediacentre/backgrounders/Pages/digital -inclusion -of-youth.aspx ) and the
Nation Digital Inclusion Alliance (https://www.digitalinclusion.org/).
WWW.MAGELLAN -ADVISORS . C O M 12
$240,000 and should be constructed as soon as possible to support the citywide
CBRS and Wi -Fi that will allow the City to offer services to the community.
4. Deploy three new CBRS access po ints, one in the Westborough area, one on Sign
Hill, and one at City Hall. These towers will be used for deploying high -speed
broadband to wireless devices including W i -F i antenna, fixed wireless, and mesh
networks requiring gigabit data transfer.
5. Provide for the expansion and deployment of wireless antennas in the low -to-
moderate income areas of the City to create a South San Francisco Broadband
Utility. The network as designed in this Study serves two zones, shown in Figure 7 -
1, which were identi fied as locations where residents struggle with affordability.
D eploying free Wi -Fi in these zones will enhance the ability to access broadband
and aid families.
6. E stablish an enterprise fund for operating the network and enter agreements with
qualified internet service providers for revenue sharing . Sharing revenue t hrough
a third party partner will not require the City to become an ISP, establish service
level agreements , or provide staffing . Conversely, p roviding services directly to
customers in exchange for revenue without a third party w ould require the City to
b ecome an IS P, requiring additional staffing and operational requirements to
obtain certifications and meet ensure service is provided as promised .
7. Support digital inclusion programs . The City should support ongoing digital
inclusion efforts by the Library’s Community Learning Center , as well as exploring
other digital literacy programs and groups such as National Digital Inclusion
Alliance, the International Telecommunications Union , makers sp aces, and other
successful programs . These programs should be integrated into the governance of
the Citywide Wi -Fi network, overseen by an advisory group, to ensure the most
community impact.
8. Continue existing Dig Once policies and practices and consider a dding a separate
fund for maintaining and expanding the City’s conduit and fiber systems as
opportunities arise. A good starting point for this fund is approximately $250,000,
to be replenished annually as needed. Should there be an increase in spending
needed in any one year, we recommend using unspent capital improvement funds
for street maintenance temporarily with repayment during mid -year or year -end
budget processes.
WWW.MAGELLAN -ADVISORS . C O M 13
2. Technology & Trends Review
2.1 OVERVIEW OF BROADBAND TECHNOLOGIES
“Broadband ” is a high -capacity transmission technique using a wide range of frequencies,
which enables many messages to be communicated simultaneously. There is no one
technology that can accomplish this task in a complete , affor dable way. It is accomplished
by combinations of technologies working together , including copper, fiber optics, wireless,
and satellite.
The Federal Communications Commission (FCC) defines broadband as high -speed internet
that reliably delivers speeds of at 25 mbps download and 3 mbps upload . However, as the
shift to virtual work, online learning, and telehealth during the COVID-19 pandemic
demonstrated, the number of users, devices, and type of internet usage will ultimately
define the broadband needs of the household. The more users and the types of activities
the internet is used for will increase the demand for higher bandwidth. For example, if
two people are working from home and need to connect to online conference calls in
combination with children d oing distance learning and streaming videos for classes, the
bandwidth needs would greatly surpass the 25/3 M bps definition and could easily require
at least 100 -200 Mbps. The table below displays average data usage for common
activities .
Table 2 -1. Aver age Data Usage by Application
Average Data Usage
Internet activity
Average
Streaming Data
Usage
Email 20KB
Email (with attachment) 300KB
Downloading a song 4MB
Browsing the web 15MB per hour
Instagram 100MB per hour
Facebook 156MB per hour
Twitter 360MB per hour
Streaming standard -definition (SD)
video
700MB per hour
Streaming high -definition (HD) video 2.5GB per hour
Streaming ultra -HD (4K) video 5.8GB per hour
Streaming music 72MB per hour
Online gaming 80MB per hour
WWW.MAGELLAN -ADVISORS . C O M 14
There are only a few ways to build networks capable of supporting these speeds. As shown
in the figure below, f iber optics is the only network technology that can support the ultra -
high broadband demands being placed on networks in the digital age . Fiber optics uses
pulsating light to transmit data through flexible glass “tubes.” This enables the
transmission of massive amounts of data moving at the speed of light. Fiber uses
technology that allows for symmetrical speeds, equal up load and download , allowi ng for
sufficient bandwidth to support users to both send and receive large amounts of data
needed for applications such as video conferencing .
Figure 2 -1. Speeds A ssociated with Internet Technologies
Other options available, such as wireless broadband, are subject to outside interferences
and sacrifice download for upload speed and vice versa. Wireless technologies have
limitations that preclude it from being used as an effective backhaul solution. Backhaul is
the connection between the intern et and the distribution points in a network. For this
reason, fiber must be used for nearly all wireless, mobile, and cellular networks. All
wireless networks, therefore, require a fiber back bone.
W ireless technology uses radio waves to transmit data an d connects computers, devices,
smart phones, etc. to the internet. The terms wireless and Wi -F i are often used
synonymously but shouldn’t be. Wi -F i refers to a wireless LAN (Local Area Network)
connecting to a router or gateway which has internet connecti vity. Wi -F i typically uses a
service set identifier (SSID ) and a password to connect to the network. The term wireless
refers to connecting to the internet through cell towers and the use of antennas. The
WWW.MAGELLAN -ADVISORS . C O M 15
antennas have internet connection supplied by an internet service provider (ISP ). Wireless
technology typically uses subscriber identification module (SIM ) cards for authenticating
and securing a connection. As antennas and technology progresses, the range for Wi -F i is
getting larger and larger. Wi -fi i s an emerging technology and is becoming an option for
deploying outside the residence on a neighborhood and even city -wide basis.
Wireless technology has come a long way in the past few years including the FCC releasing
more frequencies. Some of that fr equency , such as Citizens Band Radio Service (CBRS), is
open for use by cities and counties with low -cost registration. Wireless is limited to 1Gbps
symmetrical which is plenty of bandwidth for residential and small businesses use .
Citizens Band Radio Se rvice (CBRS)
Originally designated for the US Navy, regulating bodies around the world saw the
potential of releasing this band for use by all. To advance 5G, the FCC has been auctioning
off CBRS Spectrum. This spectrum is in the 3.5 GHz range , a band in t he 5G arena which
has all the benefits of 5G. A portion of the spectrum has been designated as lightly
licensed and not being sold to private incumbents ; rather it is open for use by municipal,
private, and other uses.
CBRS is also available for use on a s mall geographical basis. It is also known as a private
LTE 5G CBRS network. Anyone can use the lightly licensed portions of CBRS spectrum
without incurring the cap ital and op eration e xpenditures while being able to quickly
deploy this type of network. CBRS is intended to support fixed wireless options as well as
mobile devices. Using a SIM c ard (as opposed to W i -F i , which requires SSID and password )
makes CBRS far more secure and safe to use for sensitive data transfers.
The high data capabili ty coupled with the high -security features makes CBRS a front
runner in cost -effective quick deployment. The low maintenance and ease of monitoring
also make it a long -term cost -effective deployment method with a lower op erating
expense . For these reason s, CBRS has become a popular option for local governments
looking to provide wireless service options to their communities, especially when they can
capitalize on existing fiber assets to backhaul the connections. To use CBRS with high user
counts and high data transfer rates, the antennas must use fiber as the backhaul method.
The biggest drawback CBRS is that the equipment used requires unique configurations
that are not available on the current off -the -shelf models like cameras and routers.
2.2 MUNICIP AL BROADBAND TRENDS
Ensuring broadband connectivity to residents, businesses, government agencies, and
community anchor institutions has become a top priority for many municipalities. Ideally
the private sector would have a higher interest in providing bro adband to everyone but
WWW.MAGELLAN -ADVISORS . C O M 16
because internet service providers require a high return on investment s, many
neighborhoods are not well equipped with broadband . As many activities have moved to
online platforms due to the pandemic and the global digital economy, m unicipalities have
received an increasing amount of feedback about broadband from their constituents . At
the same time, governments themselves are becoming more and more reliant upon
broadband -enabled devices that allow for more efficient delivery of servi ces to their
communities. As a result, many local governments have implemented municipal
broadband programs to support a variety of needs.
Smart Cities
There is no one definition of what makes a S mart City. Commonly, to be a Smart C ity is to
use technology to improve services, reduce costs, be more efficient, and save resources.
Some S mart C ity technologies include smart traffic controls, traffic systems, public safety,
cameras, utility monitoring, and smart building monitoring. A co mprehensive way for
communities to accomplish this is to include broadband plans that facilitate fiber
networks throughout the area to support The Internet of Things.
The I nternet of T hings (IoT)
The internet of things, or IoT, is a system of interrelate d computing devices, mechanical
and digital machines, objects, animals , or people that are provided with unique identifiers
(UIDs ) and the ability to transfer da ta over a network without requiring human -to-human
or human -to-computer interaction. The network most commonly used to support IoT is
the internet , although it could also be supported by local networks where the devices are
connected. IoT is quickly becom ing such an integral part of communities , bringing
together various smart systems, frameworks, intelligent devices , and sensors meant to
make our lives better, more efficient, safer, longer , and easier. There are many areas of
development within IoT that pertain directly to communities such as:
• Smart Home Systems is the area of IoT that focuses on homes and building
monitoring. The use of sensors, appliances, and other measuring devices
make it so a building can monitor heat, AC, water usage, access, secu rity, and
even energy and power consumption. This monitoring takes place
automatically without human input and helps to streamline resources and
costs. Some private companies update and add monitoring systems that they
claim will pay for themselves in the savings of energy costs and personnel.
• Public Safety: There are many advancements in the public safety arena such
as cameras, streaming body cams, contact tracing, video data, and crime
prevention devices . Many local law enforcement agencies have implemented
WWW.MAGELLAN -ADVISORS . C O M 17
these digital technologies to solve and prevent crime, making communities
safer .
• Communication Infrastructure : Digital billboards, kiosks, splash pages, and
billboards all add to the ease of sharing informati on with constituents with
greater access and propagation. Cities are using these devices to enhance
community engagement, tourism, and economic development .
• Transportation and Parking : Intelligent transportation systems, connected
traffic signals, wayfind ing, and digitized parking applications allow for better
management of traffic flow. Increasing traffic efficiency cuts down on
greenhouse gases and commuter times, and providers autonomous vehicle
support.
• Smart Health Sensing Systems (SHSS): I ntelligent equipment and devices are
increasingly used to support the health of human beings. Devices can be used
to monitor many aspects of human health such as heart activity, blood
pressure, blood sugar, fitness levels, and many other aspects of health. SHSS
is transforming the health care system in every area by facilitating automatic,
independent, and constant monitoring with no human interaction outside of
placing the device. These systems are being developed to aid the disabled,
elderly, critically injured, a nd those in need of monitoring by allowing those
individuals to live better longer lives.
Municipal Broadband Business Model Options
Selecting the right broadband business model for local government is highly dependent
on several factors that will suggest the most appropriate option for the organization. For
example, understanding the community needs, knowing the competitive market fact ors
that define what infrastructure options fit well within the community, and determining
organizational and operational capabilities of the local government all play into the
selection process. Equally important is an understanding of the financial commi tments
and risk and reward that participating organizations are willing to support to fund and
sustain a successful broadband initiative.
The commonly implemented business models fall on a continuum that ranges from low
risk, low investment options to higher risk, high investment options. The figure below
illustrates this continuum. Moving along the continuum of business model options
involves increasing degrees of risk and reward: risks in terms of financial, operational,
WWW.MAGELLAN -ADVISORS . C O M 18
and regulatory risk; rewards i n terms of community benefits, revenue generation, and
over potential for profit. Moving “up” the continuum generally requires increasing levels
of investment and implies greater local government participation in the delivery of
broadband services. Public policy and infrastructure only options are considered
“passive” business models, where the government does not operate a broadband
network as compared to “active” models such as Government Services Providers, Open
Access Providers, and Retail Provider Opti ons, where the government operates a
broadband network. Public -private partnerships are not classified as a specific business
model but instead fall along the continuum because these partnerships take many
forms. Local governments must determine which busi ness models meet their
organization’s risk/reward tolerance to achieve the community’s broadband goals.
Figure 2 -2. Continuum of Municipal Broadband Business Models
In many cases, multiple options may be selected by an organization; however, in some
cases, a local government will not utilize multiple models, as they may conflict with one
another. For example, local governments generally implement broadband -friendly public
policy with any of the business models, as these policies will complement all othe r
business model options. Conversely, a local government would not likely implement a
retail model and public -private partnerships together, as these would lead to
competition between the local government and one or more private partners. The table
below i llustrates the differences among the business models that can be utilized to
achieve municipal broadband goals.
WWW.MAGELLAN -ADVISORS . C O M 19
Table 2 -2 . Comparison of Municipal Broadband Business Models
COMPARISON OF BROADBAND BUSINESS MODELS
Government Passive Models Government Active Models
Public
Policy Only
Infrastructure
Only
Public -Private
Partnerships
(P3)
Public Services
Provider
Open
Access
Wholesale
Retail
Provider
Business -
Only
Retail Provider
Residential &
Business
Services
Provided None Dark Fiber
Only None
Dark Fiber,
Transport,
Internet,
Phone
Transport Internet &
Phone
Internet, TV,
Phone &
Value -Added
Services
Customers None Broadband
Providers None
Public
Organizations
Only
Broadban
d
Providers
Businesses Businesses &
Residents
Funding
Required Low Moderate Low to High Moderate Moderate High High
Competing
with
Broadband
Providers
No No No No No Yes Yes
Operational
Requirements Low Low Low Low Moderate High Very High
Regulatory
Requirements Low Low Low Low Moderate High Very High
Revenue
Generation Low Low Low to High Low Moderate High Very High
Operational
Costs Low Low Low Low Moderate High Very High
Financial Risk Low Low Low Low Moderate High Very High
Execution Risk Low Low Moderate Low Moderate High Very High
WWW.MAGELLAN -ADVISORS . C O M 20
3. Policy Analysis
Magellan Advisors has reviewed state and federal policies and statutes to help the City
ensure that any broadband and wireless services it might provide are compliant with
regulations and take advantage of favorable policies pertaining to broadband services in
California.2
3 .1 CALIFORNIA BROADBAND POLICY
State of California broadband policy is very supportive of the City’s potential provision of
broadband services. There are no significant policy barriers to municipal provision of
broadband services – wired or wireless. Governor Newsom’s Executive Order on
broadband policy explicitly directs state agencies to seek to bridge the “Digital Divide”,
which includes direc tion to support local government broadband deployments 3.
California broadband policy recently took a further step to eliminate the digital divide by
promoting the construction of middle -mile networking. Just recently signed into law,
Senate Bill 156 co ntains provisions which support broadband infrastructure to be
provided by municipal authorities. National policy is in harmony with this direction as
evidenced by provision of funding through the American Recovery Plan Act (ARPA) for
broadband infrastruc ture .
As directed by SB 156 , s tate agencies including t he California Public Utility Commission
and California Department of Technology are taking necessary steps to plan and construct
the statewide middle -mile network including routes through and adjacent to South San
Francisco . The City c ould consider the st ate’s developing middle -mile network in its
planning for any cost efficiencies and opportunities it might offer . Figure 3 -1, below,
displays the portions of the network that are relevant to South San Francisco, as shown
on the California Public Utilities Commission (CPUC ) staff -proposed middle -mile network
map 4:
2 The following disc ussion does not constitute a legal opinion and should not be construed as such.
Questions about interpretation or applicability of these or other provisions of federal or California law
should be referred to legal counsel.
3 The Executive Order directed t he California Broadband Council to create a new State Broadband Action
Plan, which contains numerous provisions supporting local governments in their efforts to bring faster,
cheaper, better broadband service to their residents. See, Broadband Action Plan 2020: Ca lifornia
Broadband for All, at https://www.gov.ca.gov/2020/08/14/38666/
4
https://www.arcgis.com/home/webmap/viewer.html?webmap=e17e4e1c88b04792ab0a2c50aa1a19a3&ex
tent=-126.1445,34.5234,-113.5981,41.1113
WWW.MAGELLAN -ADVISORS . C O M 21
Figure 3 -1. State of California Proposed Middle Mile Open Network Segments
Furthermore, t he Broadband Loan Loss Reserve Fund authorized by SB 156 could support
necessary borrowing by the City to construct broadband infrastructure , although the fund
is not yet operational (SB 156 was just recently signed into law and the CPUC has not yet
developed the required rules and regulations ).
Additional legislation relevant to broadband was enacted into law in October 2021:
• Senate Bill 37 8 (the “Broadband Deployment Acceleration Best Practices Act”)
require s local agenc ies to allow, except as provided, micro -trenching for the
installation of underground fiber if the installation in the micro -trench is limited to
fiber. It also require s , to the extent necessary, a local agency with jurisdiction to
approve excavations to adopt or amend existing policies, ordinances, codes, or
construction rules to allow for micro -trenching. SB 378 defines “Micro -trench” as a
narrow open excavation trench that is less than or equal to 4 inches in width and
not less than 12 inches in depth and not more than 26 inches in depth and that is
created for the purpose of installing a subsurface pipe or conduit.
• Assembly Bill 41 requires the Department of Tra nsportation, as part of those
projects that are funded by a specified item of the Budget Act of 2021 and that are
located in priority areas, to use the project planning phase to ensure that
construction projects include the installation of conduits capable of supporting fiber
optic communication cables. It also require s the CPUC , in collaboration with other
relevant state agencies and stakeholders, to maintain and update a statewide,
WWW.MAGELLAN -ADVISORS . C O M 22
publicly accessible, and interactive map showing the accessibility of broa dband
service in the state.
• Senate Bill 28 repeals certain annual reporting requirement s pertaining to
broadband and video franchise holders and instead require s the CPUC to collect
granular data on the actual locations served by franchise holders (but without
disclosure of personally identifying information), adopt customer service
requirements for franchise holders, and adjudicate any customer complaints.
• Senate Bill 4 and Assembly Bill 14 pertain to the CASF authorizing an increased
surcharge and requiring reporting on remaining unserved areas in the state among
several items.
3.2 STATE AND FEDERAL REGULATORY POLICY
R egulatory jurisdiction over telecommunications servic es traditionally has been divided
between the federal and state authorities – primarily the FCC and (in this case) the CPUC.5
The FCC has from time to time preempted or attempted to preempt state and local
regulatory jurisdiction over wireline and wirele ss telecommunications. At present there
is some agreement on regulation of b roadband services ; wireless or wireline services are
not price or entry -regulated by the CPUC or the Federal Communications Commission.
The FCC’s brief period of classifying broadband internet services as a telecommunications
service regulated under Title II of the Communications Act – “Net Neutrality” regulations –
was reversed by the FCC in early 2018.6
FCC preemption of state and local regulation has been more prevalent in the wireless
sector (especially in recent years ). Under federal law , local authorities are allowed to
regulate the “placement, construction, and modification” of wire less communications
facilities but subject to certain limitations .7 These limitations and requirements on local
regulatory authority include:
• Local regulations may not “prohibit or have the effect of prohibiting the provision
of personal wireless services”8;
5 In one specific area – radio frequency (RF) emissions – the Federal Communications Commission (FCC)
has been assigned complete regulatory jurisdiction, under the 1996 Telecommunications Act which
preempted local regulation of RF safety standards in favor of a uniform national RF safety standard
under FCC jurisdiction . See , 47 U.S.C. § 332(c)(7).
6 In the Matter of Restoring Internet Freedom, WC Docket No. 17 -108, FCC 17 -166, Declaratory Ruling,
Report and Order, and Order; Released Janu ary 4, 2018.
7 47 U.S.C. § 332(c)(7)(A).
8 47 U.S.C. § 332(c)(7)(B)(i)(I).
WWW.MAGELLAN -ADVISORS . C O M 23
• L ocal regulations may not “unreasonably discriminate among providers of
functionally equivalent services”9;
• A local authority’s denial of an application to place, construct, or modify a personal
wireless facility must be based on “su bstantial evidence contained in a written
record”10; and,
• Local regulations may not “regulate the placement, construction, and modification
of personal wireless service facilities on the basis of the environmental effects of
radio frequency emissions to th e extent that such facilities comply with the
Commission's regulations concerning such emissions.”11
In 2014 the FCC adopted rules to implement the “Spectrum Act”12 which preempted state
and local authority over certain aspects of processing and approving modifications to
existing towers and base stations used for 3G and 4G wireless service , including
application of 60-day “shot clocks” for review and approval of modification applications .
More recently, the FCC adopted its “Small Cell Order” in September 2018 13 which sought
to limit and preempt local authority over placement of 5G “small cell ” facilities. The Small
Cell Order broadly interpreted the “effective prohibition” provisions of the
Telecommunications Act Sections 253(a) and 332(c)(7) to find that a state or local
government need only “materially inhibit” placement of “small wireless f acilities” to have
an effect of prohibiting the provision of wireless service. The Small Cell Order has many
provisions – the most discussed of which are limitations on fees and rates a local
jurisdiction may charge for small cell placements (e.g., $270 p er year cap on attachment
fees) and preemption of local authority over aesthetic requirements for small cell
installations. Numerous parties appealed the Small Cell Order and the Ninth Circuit Court
of Appeals opinion 14 largely upheld the FCC’s decision o n issues including limitations on
fees and rates but reversed the FCC ’s attempted preemption of local authority over
aesthetics.
9 47 U.S.C. § 332(c)(7)(B)(i)(II).
10 47 U.S.C. § 332(c)(7)(B)(iii).
11 47 U.S.C. § 332(c)(7)(B)(iv).
12 See Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. No. 112 -96, 126 Stat. 156, § 6409(a)
(2012) (Spectrum Act), codified at 47 U.S.C. § 1455(a).
13 Declaratory Ruling and Third Report and Order; In the Matter of Accelerating Wireless Broadband
Dep loyment by Removing Barriers to Infrastructure Investment; WT Docket No. 17 -79; In the Matter of
Accelerating Wireline Broadband Deployment by Removing Barriers to infrastructure Investment; WC
Docket No. 17 -84; Released by the Federal Communications Commi ssion, September 27, 2018. (“Small
Cell Order” or “Order”.) See Appendix C for further discussion.
14 City of Portland v. United States, 969 F.3d 1020, 1049 -1053 (9 th Cir., 2020).
WWW.MAGELLAN -ADVISORS . C O M 24
3.3 R EVIEW OF C ITY W IRELESS P OLICIES
Magellan Advisors also reviewed the City’s policies and practices on “small cell” wireless
facilities placement and found them to be aligned with good practices . The City was an
early adopter of small cell regulation (the City’s Small Cell Ordinance was adopted in
October 2017 which wa s nearly a year before the FCC’s “Small Cell Order”) and the City’s
policies and practices are in line with the Ninth Circuit Court of Appeals decision allowing
local authorities to maintain local control over aesthetic requirements for small cell
antenna siting and placement . The Small Cell Wireless Telecommunications Facilities
Ordinance (SCWF):
• provides for the use of Master License Agreements for small cell attachments to
City -owned infrastructure which is an approach now commonly used by cities for
managing small cell attachments.
• contains a robust set of regulations on where small cell facil ities can be placed and
on what types of structures, including design and location preferences for any
placements outside the public right -of-way – e.g., non -residential districts.
• contains a series of standard requirements which address the interplay of state
and federal rules, RF emissions standards, operations and maintenance standards,
and electrical metering and structural standards.
• lays out key design requirements to obtain a permit including general aesthetic
requirements for equipment to be scr eened to blend in with the natural or built
surroundings, concealed, “stealthed ” or otherwise incorporated into the design of
the pole, utilize poles engineered so that no additional supporting hardware is
required beyond the pole itself, use non -reflectiv e materials, and preserve design
and aesthetic features.
The Planning Department has developed a “requirements checklist” for use by applicants
for placement of small cell facilities to implement the Small Cell Wireless Facilities
ordinance . Among other things , the checklist makes clear the location and design
preferences for the City of South San Francisco and lays out the specific requirements for
SCWF applications and facilities placement .
The City also has implemented a “Dig Once” policy designed t o coordinate the installation
of telecommunications facilities for certain projects meeting specified conditions in the
“Open Trench Notification and Telecommunications Infrastructure Improvements”
ordinance. The open trench notification process is trigge red by :
• either an encroachment permit application for work in the public right -of-way or
approval of specifications for a public works project which will result in an
excavation that could reasonably include installation of broadband conduit, and,
WWW.MAGELLAN -ADVISORS . C O M 25
• spans 900 feet/three city blocks or more , or involves terrain that is
difficult/expensive to traverse or is an element of a larger project for utility
infrastructure.
Notifications are sent to telecommunications service providers and the City’s IT
Department , each of whom has the opportunity to indicate interest in collocating facilities.
The “Dig Once” policy is good practice and serves to achieve many goals including cost
effective expansion of broadband services in the City, preservati on of the public
investment in streets, sidewalks , and other infrastructure in the public right -of-way,
minimizing traffic congestion and safety issues from repeated excavations, providing
infrastructure for City operations, and other goals. In addition to practicing Dig Once
coordination, we recommend that the City create a separate fund for maintaining any
placed conduit and fiber as well as to fund future conduit and fiber deployment. A good
starting point for this fund is approximately $250,000 , to b e replenished annually as
needed . Should there be a n increase in spending needed in any one year, we recommend
using unspent capital improvement funds for street maintenance temporarily with
repayment during mid -year or year -end budget processes.
WWW.MAGELLAN -ADVISORS . C O M 26
4. Service, Infrastructure, and Market Analysis
4.1 BROADBAND AVAILABILITY
The major internet service providers in South San Francisco are AT&T and Comcast Xfinity.
There are also a handful of smaller wireline providers offering service including Earthlink,
Sonic, and Wave , as well as fixed wireless service offerings from Etheric.
Wireline Providers
AT&T is the incumbent local exchange carrier (ILEC) serving South San
Francisco . AT&T is one of the world's largest providers of IP -based
communications services for businesses, including Virtual Private
Network (VPN) and Voice over IP (VoIP), and is very well known for its
wireless network.6F
15 AT&T has recently acquired DirecTV, and the FCC
conditioned its approval of the transaction on AT&T extending fiber
connections to additional locations as well as offering gigabit connections to E -rate
eligible schools and libraries.7F
16 BroadbandNow.com states that AT&T provides services
to 98% of South San Francisco with speeds up to 940/1000 bps.
Xfinity is the broadband brand for Comcast. Comcast is the largest
cable internet provider in the US with and the incum bent cable
provider in the City of Fremont. BroadbandNow.com states that
Xfinity provides services to 9 9 % of South San Francisco with speeds up to 1200/35 Mbps.
Comcast has plans for overbuilding the Oyster Point Area with a new fiber network to
support th e high -tech, b iotech, and other high data usage businesses .17
Earthlink is a nationwide internet service provider
headquartered in Atlanta, Georgia and offering service in 36
states. Earthlink’s infrastructure is primarily DSL, although the company also offers fiber
services through Hyperlink in some markets. In South San Francisco , Earthlink offers
speeds up to 1gb symmetrical and reports service availability in 99% of the City .
15 http ://www.att.com/gen/investor -relations?pid=5711
16 In the Matter of Applications of AT&T Inc. and DIRECTV For Consent to Assign or Transfer Control of Licenses
and Authorizations; MB Docket No. 14 -90; Memorandum Opinion and Order; FCC 15 -94, Released July 28, 2015,
at page 148.
17 Comcast interview with Magellan Advisors - December 14th 2021: Dillon Auyoung
WWW.MAGELLAN -ADVISORS . C O M 27
Raw Bandwidth Communications is a California -based CLEC
serving communities in the Bay Area. Raw Bandwidth uses DSL
and copper infrastructure to deliver services and offers speeds
up to 100/10 mbps in about 56% of South San Francisco.
Sonic is a California based fiber and DSL intern et service provider
available to customers in many markets within the state. In South San
Francisco, Sonic provides DSL or fiber connectivity with speeds up to 1gb.
BroadbandNow reports service availability in about 40% of the City.
Wave Broadband is bas ed in Washington State and provides
service across areas of Washington, Oregon, and California.
Currently Wave only provides fiber to businesses in South San Francisco. Residential
services are provided via hybrid fiber/coax.
Service Provider Offerings fo r Residents
To gain an understanding of service offerings from the incumbents , six address locations
across various residentia l locations in South San Francisco were selected to investigate
coverage options. Each location was researched for availability an d service options at
that location. Below are a map of the locations and a summary of the service offerings
from each provider.
Figure 4 -1. Map of Locations Analyzed for Market Assessment
WWW.MAGELLAN -ADVISORS . C O M 28
Table 4 -1. Summary of Service Offering Analysis
Address Type Service Tiers and MRC
408 Beech Ave
Wave Coax
50
Mbps
$49.95
100
Mbps
$69.95
250
Mbps
$79.95
500
Mbps
$89.95
1 GB
$99.95
AT&T Fiber
300
Mbps
$35.00
500
Mbps
$45.00
1 GB
$60.00
Sonic Fiber
1GB
$39.99
Ear thlink Fiber
50
Mbps
$49.95
100
Mbps
$79.95
1GB
$99.95
Xfinity Fiber
50
Mbps
$19.95
100
Mbps
$34.99
200
Mbps
$49.99
400
Mbps
$64.99
600
Mbps
$60.00
1 GB
$70.00
2 GB
$299.95
828 Camaritas Cir
Wave Coax
50
Mbps
$49.95
100
Mbps
$69.95
250
Mbps
$79.95
500
Mbps
$89.95
1 GB
$99.95
AT&T Fiber
300
Mbps
$35.00
500
Mbps
$45.00
1GB
$60.00
Sonic Fiber
1 GB
$49.99
Earthlink Fiber
50
Mbps
$49.95
100
mbps
$79.95
1 GB
$99.95
Xfinity Fiber
50
Mbps
$19.99
800
Mbps
$60.00
1200
Mbps
$70.00
3649 Baldwin Hills Ct
Wave Not Available
WWW.MAGELLAN -ADVISORS . C O M 29
AT&T
DSL
300
Mbps
$35.00
500
Mbps
$45.00
1 GB
$60.00
Sonic DSL
50
mbps
$49.99
Earthlink DSL
12
Mbps
$49.95
24
Mbps
$59.95
50
Mbps
$69.95
Xfinity Coax
50
Mbps
$19.95
100
Mbps
$34.99
200
Mbps
$49.99
400
Mbps
$64.99
600
Mbps
$60.00
1200
Mbps
$70.00
2GB
$299.95
808 W Orange
Wave Coax
50
mbps
$49.95
100
mbps
$69.95
250
Mbps
$79.95
500
Mbps
$89.95
1 GB
$99.95
AT&T Fiber
300
Mbps
$35.00
500
Mbps
$45.00
1 GB
$60.00
Sonic Fiber
1 GB
$49.95
Earthlink Fiber
50
Mbps
$49.95
100
Mbps
$79.95
1 GB
$99.95
Xfinity Fiber
50
Mbps
$19.95
100
Mbps
$34.99
200
Mbps
$49.99
400
Mbps
$64.99
600
Mbps
$60.00
1200
Mbps
$70.00
2GB
$299.95
107 Springwood Way
Wave Coax
50
mbps
$49.95
100
mbps
$69.95
250
Mbps
$79.95
500
Mbps
$89.95
1 GB
$99.95
AT&T Fiber
300
Mbps
$35.00
500
Mbps
$45.00
1 GB
$60.00
Sonic Fiber
1 GB
$49.95
WWW.MAGELLAN -ADVISORS . C O M 30
Earthlink Fiber
50
Mbps
$49.95
100
Mbps
$79.95
1 GB
$99.95
Xfinity Fiber
50
Mbps
$19.95
100
Mbps
$34.99
200
Mbps
$49.99
400
Mbps
$64.99
600
Mbps
$60.00
1200
Mbps
$70.00
2GB
$299.95
100 Baden Ave
Wave
Coax
50
mbps
$49.95
100
mbps
$69.95
250
Mbps
$79.95
500
Mbps
$89.95
1 GB
$99.95
AT&T Not Available
Sonic
DSL
10
Mbps
$39.99
20
Mbps
$59.99
Earthlink DSL
3 Mbps
$49.95
Xfinity Fiber
50
Mbps
$19.95
100
Mbps
$34.99
200
Mbps
$49.99
400
Mbps
$64.99
600
Mbps
$60.00
1200
Mbps
$70.00
2GB
$299.95
Most of the addresses analyzed had an array of affordable service offerings from many
competing ISPs. There were two notable exceptions : 3649 Baldwin Hills C ourt and 100
Baden Avenue both show many fewer options for higher service tiers, although both
locations do have at least two high speed offerings from either Wave or AT&T and
Xfin i ty. The Baldwin Hills address is in the Westborough neighborhood of the City, w hile
Baden Avenue is on the eastern side of the City near downtown. Both of these locations
represent areas where additional investment in broadband infrastructure may be
needed in order to increase service offerings.
4 .2 BROADBAND INFRASTRUCTURE IN SOUTH SAN FRANCISCO
South San Francisco has several providers of fiber, including both long -haul routes that
connect the City to a national fiber network and more localized metro routes that
connect the different areas to each other and a ll of the market to the long -haul
networks.
WWW.MAGELLAN -ADVISORS . C O M 31
Existin g City Infrastructur e
South San Francisco owns fiber optic cables and has limited use of some other fiber.
Currently the C ity owns 38 ,550 feet of fiber optic cable , shown in the figure below . The
City al so plans to install additional fiber cable on Westborough Boulevard using $2
million of the City’s designated American Rescue Plan Act (ARPA) funds. This cable wi l l be
instrumental in creating P3 agreements to bolster the Westborough area as well as
connec ting a CBRS antenna at the Pacifica Water Storage Tank near the Westborough
neighborhood .
4 -2 City Owned Fiber Cables
South San Francisco Existing Fiber
WWW.MAGELLAN -ADVISORS . C O M 32
South San Francisco also has limited use of 27,620 feet of Caltrans fiber being placed on
the Caltrans Smart Corridor Expansion Project. The Caltrans fiber is a part of a large
county -wide project to help alleviate traffic build up on HWY 101 during accide nts and
large crisis incidents.
Figure 4 -3 Caltrans Smart Corridor 288 Fiber Cable
Long -Haul Routes
Long -haul fiber networks carry data to internet points of presence over long distances,
but do not provide local connections. Such fiber runs through ma ny communities such
a s South San Francisco , often along railway or major highway alignments, but because
these networks have no local connections, they do not offer services to the community.
The connections they offer are wholesale , transport, data cente r connections, and
backhaul services for local providers. Long -haul providers are crucial to smaller ISPs
being able to bring services to South San Francisco without the extreme expense of
WWW.MAGELLAN -ADVISORS . C O M 33
building private fiber to the C ity. L ong -haul providers are also used to connect to many
area data centers including 200 Paul in San Francisco and 11 Great Oaks in San Jose,
which can be used to connect to anywhere in the world . The cellular providers use these
networks to connect all cell traffic to region al Mobi le Switch Centers (MSCs) for routing
around the world.
South San Francisco has a reported 11 long haul providers using fiber running through
the C ity, as shown in the map below.
Figure 4 -4. Long -Haul Fiber Routes in South San Francisco
Metro Routes
Metro fiber networks consist of local connections that serve business, residential, or
government customers. Unlike long -haul fiber, this infrastructure is capable of serving
the community by providing connectivity to end users. The metro routes in South San
Francisco are primarily provided by W ave , Xfinity, AT&T, and Sonic. Although most will
not share a map of the ir infrastructure, W ave and Xfinity were able to provide general
footage s and what the plan for additional cable to the network is. W ave currently has
approximately 82 miles (432,500’) of fiber optic cable , all of it east of H igh w a y 280. Wave
would like to expand into the Westborough area, however, crossing Hwy 280 is cost -
prohibitive. Co mcast has fiber to all of the nodes for residential service and state that
they can offer 1G download sp eeds to all of South San Francisco , although survey data
WWW.MAGELLAN -ADVISORS . C O M 34
indicate that actual speeds are far less . Comcast is also engineering a new fiber optic
network in the Oyster Point area to provide better coverag e.
Figure 4 -5. Metro Fiber Routes in South San Francisco
4.3 CONCLUSIONS
South San Francisco has a robust network of fiber including both long -haul and local
metro networks. Discussions with some of the local providers also indicate plans for
upgrades to their infrastructure in South San Francisco to continue to support
residential needs and economic development. Internet service offerings are quite
abundant and most businesse s have several choices and ample broadband for any
needs they may have now or in the future. R esiden ts in most neighborhoods also have a
selection of options for high -speed broadband . The choice is not always symmetrical
with fiber, but it is fiber back -hauled nodes which can offer speeds of up to 1Gbps
download and 50Mbps download. Those speeds are sufficient for most residences with
typical activities such as email ing and streaming ; however , home -based businesses with
higher upload speed demands may su ffer slightly.
The Westborough neighborhood has fewer options , and r esults from the online
broadband survey , discussed in the next section, reveal some frustration with the lack of
options there. A larger issue is the affordability of service, which may be a challenge for
some residents throughout South San Francisco.
WWW.MAGELLAN -ADVISORS . C O M 35
5. Needs Assessmen t
Magellan Advisors interviewed over two dozen City staff members to determine needs
for connectivity. We asked about major trends, plans, and goals as well as current
conne ctivity to identify the full range of opportunities and future potential
requirements. General direction from C ity leadership was to focus on removing barriers
to providers and promoting investment in particular parts of the City to ensure equity.
We heard about requirements for additional infrastructure and service for Westborough,
digital inclusion programs focused on working families and small businesses, and
commute/transit for tech workforce. The City has key programs in Com munity Learning
Centers, Economic Development, and Public Works that could benefit from greater
connectivity but also could be leveraged to improve availability and benefits of
broadband. Emergency service s , first responders, and other public safety person nel
have evolving needs related to changes in how they monitor and respond to incidents.
The key broadband needs seem to be related to wireless connectivity for municipal
functions, including event and visitor connectivity at parks and other facilities. Field
access for City personnel was inconsistent, as was Wi -Fi coverage. Cellular coverage in
some areas is excellent —super -fast 5G —whil e other areas seem to have none. More
broadly, South San Francisco needs to balance tech industry development with housing
costs, retaining support industry, and traffic congestion.
5.1 CURRENT CONNECTIVITY
Broadband connectivity in South San Francisco app ears to be fast and robust in the
Oyster Point and surrounding areas, uneven in Downtown and urban core
neighborhoods, but less than adequate in Westborough. Anecdotal accounts are that
“Westborough feels it keeps getting left behind” and internet services are “terrible.” In
contrast, investments by Genetech, 230 other biotech companies, and related
development east of the 101 have driven commensurate investment in network
infrastructure. Core neighborhoods west of 101 have a lot of gig workers and
multigen erational households, many of which have their own small businesses.
The City of South San Francisco has an enterprise -wide area network (WAN) build of dark
fiber from Wave that connects all municipal sites. Key buildings are interconnected at 10
Gbps to form a core ring. Other buildings are spurs connected at 1 Gbps. Dense
wavelength division multiplexing is used to accommodate more sites and provide higher
bandwidth in the future. The Police Department uses the City’s primary 1 Gbps circuit
and has a bac kup circuit through Comcast, as well as a Hurricane Electric circuit that
WWW.MAGELLAN -ADVISORS . C O M 36
provides upstream connections for their applications, including backups, with secure
tunnels from cellular providers for mobile data and re mote devices. Radio
communications utilize a tower on 600 ft. Sign Hill, with point -to-point microwave links
to San Bruno and 100 Mbps backhaul to dispatch; the City’s fiber does not extend up the
hill.
The City has miles of conduit developed via dig once, including routes with 2 -2" conduits
alongside conduit and fiber owned Intermountain and other providers, signal
interconnect cable (SIC) with spare conduit and wireless devices, and a set of conduit
along the 1 01 for a Smart Corridors project that uses CCTV cameras, ITS devices, signal
controllers, and variable message signs for incident management.
The City recently updated its permitting standards for network construction. Micro -
trenching and rock -wheel insta llation must be above sewer laterals with additional
requirements in areas that require de -confliction. The Public Works staff would like to
have a road moratorium. The City’s small cell program includes PG&E poles, City
streetlights, and public buildings. Public Works has used Verizon LTE mifi hotspots or
internal WLAN SIM cards to communicate with street cleaning trucks and other vehicles
for field work, work orders, etc. It could also provide a redundant system for adaptive
traffic cont rol.
All cell carriers have cell sites in South San Francisco where they have deployed some 5G
with approximately 100 Mbps download speeds. But some areas of the City have poor
coverage, including critical facilities like fire stations . They have cons idered cellular
boosters a t fire stations to keep engines continuously connected when they move or are
stationary. Police have problems with mobile data connections in much of Westborough,
including Westborough Square.
South San Francisco Public Library i s a member of the Peninsula Library System (PLS)
with 34 libraries in 8 cities across San Mateo County. Cenic is their ISP using AT&T
circuits in a hub & spoke configuration with 10 Gbps central location, the main data
center at College of San Mateo, and 1 Gbps at libraries. The network is at about 10%
utilization. Public Wi -Fi is available at Main and Grand Library. Other branches
throughout the C i ty don't have outdoor space, although there is Grand Ave Outdoor Wi -
Fi.
Most of the City’s parks have Wi -Fi but it is inconsistent. A lot of folks use parks with
their iPad or phone. The City has numerous apps, including an internally developed
version of Pokemon Go that highlights various areas with proximity sensors, recreation
management software, a tree inventory, and EngageSSF, the City’s white -labelled version
of See -Click -Fix for submitting service requests. They also have automated building
WWW.MAGELLAN -ADVISORS . C O M 37
access, environmental controls, and irrigation systems. Mos t registration and facility
rentals are online . Parks Division were planning electronic point -of-sale and piloting
check -in with iPad for indoor events. These were not considered for outdoor events due
to cost of connectivity.
A new multi -sport field will be fitted with online electronic scoreboard t echnologies
support ed by fiber and wir eless . Live streaming events is an emerging trend, handled by
external production companies. Kids in childcare don’t get online but the Department’s
personnel need connectivity for coordination, registration, etc. Improved and additional
public safety video in general would be the number one thing for addressing vandalism
and safety issues .
5.2 GOALS AND ISSUES
Digital Literacy
Changes from the COVID -19 pandemic include virtual church and school, reduced
cong estion, and businesses doing more online. Availability of computers and other
devices is an issue as well as connectivity. Basic digital skills and language skills are
issues for some residents. The Community Learning Center provided digital literacy
progr ams to seniors before the pandemic and recently launch afterschool program with
distance learning, which increased connectivity requirements. They actively promote
current topics such as the Emergency Broadband Benefit. A group of Skyline College
Honor Soc iety students were helping seniors with cell phones and other basic tech prior
to COVID, and they plan to restart.
The libraries do a lot of digital literacy training. Patrons can make appointment s and get
assistance over the phone to use Zoom. Their after -school center has kids recommended
by teachers come in to do homework, while their parents come in to do training. There
are ma kerspaces at all three libraries that were heavily used prior to COVID. They did
hackathons and coding clubs for kids. Digital literacy programs were offered twice a
week on different subjects. The libraries offer programs on how to use Linked In or
databa ses to find customers for small businesses. That’s a harder audience to pull in,
usually consisting of fewer people who come back multiple times to get various skills.
The libraries offer a low -literacy program version with English or Spanish literacy skil ls,
funded by grants through the Community Learning Center. A lot of patrons can't afford
broadband or don't have a device. Lower income households only have one device with
multiple simultaneous uses. Facilities located in lower -income areas do a lot of
c ommunity outreach and advertising and work with a lot of seniors. Some patrons have
mobility issues and limited ability to get to a library.
WWW.MAGELLAN -ADVISORS . C O M 38
The libraries have been looking at adding Wi -Fi to “Learning Wheels” pre -school on
wheels with a childhood learning station that goes to WIC centers, events, and daycares ,
which sees a few thousand families a month. They have taken Wi -Fi hotspot and some
devices to senior centers. That requires a lot of staffing. They looked at lending hotspots
and ways to give or loan devices but could not commit to the upfront cost of devices or
regular charges for cellular Wi -Fi hot spots.
The libraries would like to provide some type of service in low -income neighborhoods,
downtown, Sunshine Gardens, Mayfair Village, Boys & Girls C lubs and a makerspace bus
to take tech to teens and seniors. They also need to replace equipment, such as laptops
that have died. Efforts to get big money for digital inclusion need coordination. There
are some sponsors that get hit a lot and others withou t established relationships.
Cybersecurity is a key issue. The libraries need to improve security profile s and help
patrons stay safe. Awareness training programs may be beneficial for this purpose.
Industrial D evelopment
According to ECD personnel, South San Francisco’s strategy is primarily to retain
industries, such as the logistics industry that is getting pushed to East Bay by lack of
housing and real estate. Businesses operating in old buildings need upgrades to expan d
or grow. As new developments come in, old businesses paying under market rates are
getting pushed out. It’s difficult for them to find additional space so the City is trying to
relocate them and keep them on this side of the bay. Major issues are cos t of rent and
cost of upgrading facilities. For example, some don’t have adequate security or are
having issues with loading/unloading docks. It goes beyond connectivity issues .
A lot of South San Francisco support industry connected to the airport (limousines,
shuttles , etc.) and large catering industry connected to offices s everely suffered from
pandemic. Many have moved to doing sales online. A lot of research & development
(R&D ) tenants have been moving into incubator spaces in large buildings that don’t have
connectivity issues. Lindenville, just south of downtown, has lots of warehouse space. It
is envisioned with housing and creative arts spaces that will need infrastructure. The
City is currently doing a General Plan that includes how to treat the utility issues.
Commuting and Traffic Management
The workforce for industry east of 101 consists primarily of commuters. All that changed
with the pandemic but commuting patterns are coming back. People aren’t using public
transit so traffic has been worse than normal times. East of the 101 the traffic is
particularly congested . Last -mile links from the transit station to corporate campus es is
the big issue. The City has some smart si gnalization east of 101 and is doing a feasibility
study for a people mover between the Caltrans station and the campus es.
WWW.MAGELLAN -ADVISORS . C O M 39
An planned adaptive traffic control project will eventually be citywide and will use
existing conduit to connect all signals east of 101 to a hub at the Corporate Yard. Areas
west of 101, particularly Westborough, don’t have communications but also have less
need for traffic control. Public Works would like to put new fiber from the Corp orate
Yard to Westborough in existing conduit. The re were multiple capital projects, including
a regional stormwater project at Orange Memorial Park and street rehabilitation, that
don’t appear to include network facilities.
Housing
Regionally , housing is an issue. The supply has been limited with high h ousing turnover
in the last several years. This seems related to not having people live and work in the
area. Almost no one who lives in South San Francisco works in biotech and almost no
one who works in biotech lives in the C ity. Broadband doesn’t seem t o be an is sue
developers discuss when they are looking at sites. In some instances, housing provider s
provide services for the entire building in a bundle but in other cases, it is up to the
household to purchase the service.
The City’s Community Developme nt Block Grant (CDBG) program provide d free laptops
and free internet to qualified participants. Other initiatives include expanding Wi -Fi at
public facilities by working with the Housing Authority and other affordable housing
providers. The intent was to provide students devices in perpetuity and to address
telehealth for seniors. It was mostly concentrated in the downtown area.
5 .3 BROADBAND SURVEY
To gain furth er insight into the current state of broadband and need for future
connectivity, Magellan Advisors and the City of South San Francisco conducted a
broadband survey among businesses and residents. The survey was open for
approximately eight weeks between Au gust and October 2021 and received a total of
379 valid responses. As shown in the table below, the majority of responses came from
households in South San Francisco.
Table 5 -1 . Survey Responses by Type
Response Type
Household: Location is primarily a residence 335
Organization: Location is a business, government, non -profit, etc. 44
Total 379
WWW.MAGELLAN -ADVISORS . C O M 40
Among residential respondents, the average household size was 3.07 people, close to
the 3.12 average size according to Census data. Thirty four percent (61) of respondents
indicated that they were retired or otherwise out of the workforce, which is relativ ely
quite high compared with Census data. About one quarter of respondents (44) worked in
Arts, Business, Management , or Science and about 15% (27) worked in Service including
H ospitality, E ducation, or H ealthcare . Almost half of respondents (43%) indicate d having
Bachelor’s degrees and 23% indicated having Masters degrees. R esidential respondents
had relatively higher levels of educational attainment and a higher number of retirees
than Census data.
Survey respondents from organizations were asked to identify their industry sectors.
Among the 18 responses, organizations came from a variety of sectors including Public
Administration and Healthcare and Social Assistance , as shown in the figure below .
Relative to the local economic base,18 the survey had relatively even responses from
these service -related sectors , although given the low number of responses, the data
cannot be said to be statistically reliable.
Figure 5 -1. Organizational Respondents’ Industry Sectors
18 Local industry data is for San Mateo County from the California Employment Development
Department, online at https://www.labormarketinfo.edd.ca.gov/LMID/Size_of_Business_Data.html . This
data does not include disaggregated service sectors.
Public
Administration, 3
Information, 1
Retail Trade, 2
Wholesale
Trade, 2
Health Care
and Social
Assistance, 3Other Servies (Except
Public Administration), 1
Educational Services, 1
Construction, 2
Manufacturing, 2
Professional, Technical,
and Scientific Services, 1
Organizational Respondents' Industry Sector
n=18
WWW.MAGELLAN -ADVISORS . C O M 41
Respondents tended to be better educated and older than South San Francisco ’s entire
population. Professionally, respondents roughly mirrored the C ity’s economy , although
those who were retired or otherwise out of the workforce were overrepresented . Given
the distribution methods, number of responses and respondent demographics, we
cannot say that the survey results are statistically reliable. We can say that the survey
results document the experience and perspective of close to 400 households and
organiza tions in South San Francisco.
The survey yielded useful empirical indicators of broadband in the C ity. Recognizing
results of survey analysis as indicators, we report statistics but use approximate
language in discussing the findings. Generally, these resu lts should be considered the
“best case” for the more affluent and informed residents of the community. Additional
effort will be required to determine the situation for younger, less educated residents.
The same applies to large, multi -location service an d wholesale companies.
Type of Broadband Connection
Most of the respondents (90%) had broadband connections, defined as high -speed,
always -on internet service , as shown in the figure below . Approximately 8% of
respondents had low -speed servi c e including ce llular, dial -up, or satellite service , while
2% did not know what kind of connection the ir locations use . None of the re s pondents
reported not having internet service.
Figure 5 -2. Respondents’ Type of Connection
High-speed,
always-on
broadband service
90%
Low-speed service,
including cellular, dial-
up, or satellite service
8%Unsure/don't know
2%
This location has no
internet service
0%
Respondents' Type of Connection
n=375
WWW.MAGELLAN -ADVISORS . C O M 42
Just over half of the survey respondents had internet through Xfinity/Comcast and about
one quarter of them had service through AT&T. As the two major incumbents in South
San Francisco, these results are as expected. A smaller amount of respondents (16%)
had service through Wave Broad band and a handful (6%) subscribed to services through
Sonic. The remaining 2% of respondents wrote in other service provider options
including San Bruno CityNet Services , Sprint, and Wiline.
Figure 5 -3. Respondents’ Internet Service Provider
These resul ts were also mapped to provide insight into which providers are available at
various locations throughout the City. As shown below, areas east of Interstate 280 seem
to have more options for service providers, while areas to the west of Interstate 280
have just one or two options (Comcast or AT&T).
Xfinity/Comcast
51%
AT&T
25%
Wave
16%
Sonic
6%
Other -Write In
2%
Respondents' Internet Service Provider
n=231
WWW.MAGELLAN -ADVISORS . C O M 43
Figure 5 -4. Respondents’ Internet Service Provider by Location
Performance
Respondents were asked how much they paid for broadband and related services and
what contracted speeds they paid for. These were “best guesses” by the person
responsible for choosing and paying for the service. Variance would diminish with a
large number of responses but should be assumed high in this situation. Actual
performance was recorded automatically via a speed test integrated into the survey but
performance will vary over time based on network congestion and other factors.
Therefore, we report a f ull set of descriptive statistics, including average, maximum,
median, and minimum speeds.
On average, survey respondents reported contracted -to-receive speeds of approximately
407 mbps download and 215 mbps upload. To get a better understanding of actual
performance, the survey contained an embedded speed test that respondents ran from
their locations. T he actual speed test results were much lower than contracted speeds,
with an average download speed of 157 mbps and an upload speed of 44 mbps.
WWW.MAGELLAN -ADVISORS . C O M 44
Table 5 -2 . Descriptive Statistics for Broadband Cost and Performance Among Survey Respondents
MRC
(Internet
Only)
Contracted Speed
(Mbps)
Actual Speed
(Mbp s)
Cost per Mbps
Download Upload Download Upload
Average $78.42 414.85 217.94 158.05 43.77 $0.39
Median $70.00 200 20 73.01 12.63 $0.82
Mode $50.00 1000 10 54 5.87 $0.84
Maximum $434.00 1412.8 1200 914.11 940.17 $3 .23
Minimum $1.00 1 1 0.12 0.19 $0 .23
On average, respondents who subscribed to services through Comcast were paying more
than double the cost of other s ($163.34 ) for internet services only , although their
average download speeds were also relatively higher. Overall, respondents who
identified Sonic as their provider were getting the best value, with an average cost of
$.10 per mbps per month.
Table 5 -3. Survey Respondents Average Costs and Speeds by Provider
Provider Responses Average Cost
(Broadband
Only)
A verage Actual
Download
(Mbps)
Average
Actual Upload
(Mbps)
Cost per Mbps
AT&T 57 $74.50 92.26 61.45 $0.48
Comcast/Xfinity 120 $163.34 194.60 18.44 $0.77
Wave 36 $72.92 108.44 13.41 $0.60
Sonic 14 $57.77 290.93 262.62 $0.10
T -Mobile
(Sprint )
1 NA 223.74 36.54 NA
WiL ine 1 $434.00 NA NA NA
Verizon 1 $95.00 5.8 27.98 $2.81
WWW.MAGELLAN -ADVISORS . C O M 45
Respondents were also asked to provide a range of pricing that they would be willing to
pay for broadband at various speed tiers. For super -fast 1gb connections, most were
willing to pay between $50 and $100 per month.
Figure 5 -5. Respondents’ Willingness to Pay for Broadband Services
WWW.MAGELLAN -ADVISORS . C O M 46
The survey also asked respondents to rank their current internet service on a variety of
factors, as shown below. Roughly half of respond ents (48.5%) ranked their overall
service as Good, while slightly fewer (42.7%) ranked their Performance/Speed as Good.
The area of most concern among respondents was Price, with 28.2% reporting that Price
was Bad and 8.7% ranking Price as Terrible.
Figure 5 -6. Respondents’ Assessment of Current Internet Service Performance
WWW.MAGELLAN -ADVISORS . C O M 47
Most respondents reported slowdowns and service outages, although they were
relatively infrequent , as shown in the figure below . Slowdowns appear to occur every
few months and service goes out for an hour or two about once a year. About 17% of
respondents did experience slow downs on a daily basis and about 6.2% of respondents
were seeing brief outages on every day.
Figure 5 -7. Respondents’ Assessment of Internet Service Outages and Slow Downs
Use
To better understand how internet is being used for critical services, we asked
household respondents to identify how frequently they used internet for telehealth,
online learning or training, operating a home -based business, and tel ecommuting.
Most respondents (64.8%) use internet a few times a year to consult a healthcare
professional. Just over half use internet more than once a week to telecommute, and
WWW.MAGELLAN -ADVISORS . C O M 48
close to half use it once a week to do online schoolwork or training. About 28 % of
respondents use internet more than once a week to run a home -based business.
Figure 5 -8. Household Respondents’ Internet Use
Based on the responses above , internet has become a critical tool for residents. To
collect further informat i on about these trends, r espondents were asked to rank how
important internet is for a variety of functions.
WWW.MAGELLAN -ADVISORS . C O M 49
Well over half said that internet is extermely important or essential for finding and
buying products and services, getting information for general purpos es, and getting
information for special interests or hobbies. Just over half of respondents said that
being connected is extremely important or essential for learning, making money, or
staying healthy and staying in touch with family and friends, while jus t under half said it
was extremely important or critical for playing games, watching video, or other
entertainment.
Figure 5 -9. Importance of Internet Among Household Respondents
WWW.MAGELLAN -ADVISORS . C O M 50
Among organizational respondents, digital technologies were most useful for managing
or operating their organizations and for supporting customers. More than half of
o rganizational respondents also said that digital technologies were critical for buying
materials and hiring employees and tracking inventory and work acti vities .
Figure 5 -1 0. Usefulness of Digital Technologies for Organizational Respondents
WWW.MAGELLAN -ADVISORS . C O M 51
To understand just how critical broadband is, we asked organizational respondents
whether they would be willing to move their business for much faster, less expensive
internet services. About 36% of respondents said they would definitely not move, while
the other 64% would either definitely move (36%), quite likely move (21%), or possibly
move (7%), indicating just how important affordable, reliable internet is for operations.
Figure 5 -11. Organizational Respondents’ Willingness to Move for Broadband
5.4 CONCLUSIONS
Generally, affluent consumers (relatively older and better educated) in South San
Francisco have reasonably fast broadband. Unfortunately, younger residents with lower
levels of educational achievement did not respond so we cannot draw any conc lusions
about their connectivity. Competition was the major issue for most respondents. While
respondents generally indicated low willingness to pay —many said they would not pay
more than $50 for 50 Mbps, which is common in non -competitive markets —they wer e
actually paying relatively high monthly bills for their internet. Although broadband
speeds were acceptable, the cost per capacity was rather high , especially for Comcast
customers who made up the majority of survey respondents .
Households recognize the importance of robust broadband , especially to do online
schoolwork and telecommuting . Connectivity was a critical issue for many organizational
respondents, particularly for management and customer service .
Definitely Would
36%
Definitely Would Not
36%
Quite Likely
21%
Possibly
7%
Organizational Respondents' Willingness to Move for Much Faster, Less
Expensive Internet Services
n=14
WWW.MAGELLAN -ADVISORS . C O M 52
6. Utility Formation Study
The formation of a utilit y generally involves a plant , the utility’s infrastructure, and
governance to ensure the utility is adequately financed and that spending is aligned with
the utility’s purpose. The nature and scale of both should be determined by the utility’s
customer base. The focus and scope of utility operations and maintenance should, in
turn, be based on the utility’s governance and plant. Utilities provide a basic commodity
service to an area, so t he simple question for any uti lity is “how do we benefit
everyone?”
The customer base for a broadband utility in South San Francisco is substantial but so is
the competition. While many residents , particularly older, more affluent ones, have
reasonably good broadband, they pay a premi um for it. Younger, less affluent residents
may face financial challenges getting broadband, especially larger households and
residents of multi -dwelling unit buildings. At the same time, the C ity has four facilities -
based retail broadband providers —AT&T , Comcast , Sonic, and Wave —as well as several
enterprise and/or wireless service providers.
Given this situation, the common area -wide sole source utility does not make sense. Any
broadband utility for South San Francisco would need to focus on digital equity, making
sure everyone ha s baseline connectivity. The purpose s would be to (1) ensure everyone
can participate in the digital economy and society , (2) accommodate guests and visitors
in the C ity , and (3) put some competitive pressure on private pro viders to exten d
services and improve pricing . As residents get greater value from internet and retail
prices moderate, customers of this utility can be expected to upgrade to private
providers. This model doesn’t justify a full broadband operating system, including billing,
customer service associates, and network operations center.
T he best general model for the South San Francisco Broadband Utility (SSFBU) is a highly
flexible and low -overhead community amenity and baseline internet service . If South
San Francisco were to establish such a utility, Magellan Advisors recommends wireless
service that uses Wi -Fi as the access technology , CBRS radio access network (RAN) for
backhaul , and a combination of fiber and microwave for the core network. Access
control would be via a captive portal with an integrated authentication and billing
system , governed by a community advisory committee. We recommend the utility be
integrated with prog rams to increase digital literacy and promote digital transformation
for small businesses.
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6.1 CONCEPUTAL NETWORK DESIGN
The conceptual design describes the components of a network , their functions, and their
general placement. It is used to estimate costs and coverage, which allows for revenue
projection. The overall purpose is to inform key decision makers and influencers about
options for achieving their goals by and for providing connectivity. The objective of the
design is t o provide abundant connectivity to the community in a n economically viable
and sustainable manner , to address the goals and issues identified above . As of the
writing of this report, the City is in the process of updating its General Plan. We
recommend this design be revisited to consider outputs of that plan .
Figure 6 -1. SSFBU Conceptual Network Design
The SSFBU network, diagrammed in Figure 6 -1 , is designed to flexibly extend basic
broadband throughout the C ity. It capitalizes on the City’s current assets, near -universal
availability of Wi -Fi-enabled devices, and on radio spectrum that is available for use
without a license. SSFBU users will connect via Wi -Fi, via a particular Wi -Fi service set
identifier (SSID) or logical network deployed over a variety of Wi -Fi access points. SSFBU
Wi-Fi access points will be connected via router (and Ethernet cable) to a Citizens
Broadband Radio Service (CBRS) distribution radio access network. Traffic will be
aggregated throu gh a few CBRS cells, which will connect to administrative systems and
bulk internet services via City -owned fiber and point -to-point microwave.
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Citizens’ Broadband Radio Service (CBRS)
CBRS is a point -to-multipoint system in which a single antenna -base st ation combination
connects multiple user devices or other equipment. Each antenna covers from 3 0° to
360° around it —with a trade -off between coverage and power —and each base station
can support a limited number of users. Therefore, more antennas and base s tations
equate to greater capacity and more users. The combination of CBRS/LTE antenna, base
station, and customer equipment, illustrated in Figure 6 -2 , comprises a radio access
network (RAN). A RAN has a network core that authenticates and authorizes user
equipment and manages connections to multiple base stations. This allows for mobile
roaming from base station to base station without loss of connectivity and makes RANs
very secure. The downside of a CBRS/LTE RAN is that some entity must operate to
netwo rk core and the Spectrum Access System (SAS ). These are relatively inexpensive
services that can be purchased from vendors or run -on private servers.
Figure 6 -2. CBRS E quipment
CBRS uses the 3550-3700 MHz (3.5 GHz) shared spectrum , also known as LTE band 48 .
There are three tiers of CBRS users , diagrammed in Figure 6 -3 . Current, incumbent, tier
1 spectrum users, which incl ude US military, fixed satellite stations, and, for a limited
WWW.MAGELLAN -ADVISORS . C O M 55
time, wireless internet services providers (WISPs) are protected from interference by
other users. Ten Priority Access Licenses (PAL) for 10 MHz channels between 3550 and
3650 MHz in a specific county were auctioned off by the FCC in July 2020. These
licensees are protected from interference by other users but may not interfere with
incumbent users. Any portion of the spectrum may be used without a license for General
Authorized Access (GAA), but this may n ot interfere with incumbent or PAL users. The
higher frequencies are not covered by PAL.
Figure 6 -3. CBRS User Tiers
Tier 3550 MHz 3600 MHz 3650 MHz 3700 MHz
1: Protected from
interference by
other users
Fixed Satellite Stations Incumbent
Access
U.S. Military radar Incumbent Access
2: Licensed 10 MHz
channels; must
not interfere
with tier 1
Priority Access License (PAL)
3: Must not cause
interference; gets
no protection
from
interference
General Authorized Access (GAA)
CBRS use is managed by a Spectrum Access System (SAS) with which all Citizen
Broadband Service Device (CBSD) base stations must be registered. There are two
classes of CBSD. Class A base station s , which can transmit at 1 watt of power, are meant
for smaller -scale ind oor, enterprise, or campus use. Class B base stations can transmit at
50 watts, giving them much greater range. Strategically placed radio signal sensors will
ensure that uses do not interfere with each other, particularly military radar.
Another important characteristic of CBRS is the Long Term Evolution (LTE) protocol is
commonly used with the spectrum. LTE is also used for 4G cellular data service, so it is
widely implemented in user equipment. CBRS involves different (band 48) equipment but
smartphones and tablets, as well as fixed outdoor and indoor CPE, with antenna that
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operate in the CBRS bands are becoming more common and less expensive . It is
reasonably easy and economical to add CBRS/LTE to devices without changing their
operating characteristics or systems. Therefore, there are few barriers to end user
adoption.
CBRS can be deployed very flexibly but generally requires a tower or other structure well
above ground level (50+ feet) to mount antennas. For South San Francisco we selected
three sites that exemplify deployment options but also provide reasonably good
coverage : City Hall, Sign Hill, and Skyline Blvd Water Tank . As shown in Figure 6 -4 , these
three cells with four 65° sectors each should provide good coverage for most of South
San Francisco (and a good bit of Colma, Daly City, and San Bruno ).
Figure 6 -4. CBRS Coverage Estimates from Three Cells —City Hall, Sign Hill, and Skyline Blvd
100Mbps or greater No Connection
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The network would accommodate 2,000 subscribe rs on each cell —500 subscribers per
base station —with 200 Mbps throughput per base station , which would be divided
among all users in that sector. Users should generally get 50 Mbps to 100 Mbps
throughput, depending on the number of other simultaneous user s. The design should
cover most of Oyster Point and could be extended to increase coverage.
Point -to-Point Connections
Point -to-point connections use two antennas (and base stations) pointed directly at each
communicating via radio spectrum. The spectrum may be in either licensed (i.e.,
microwave) or unlicensed (Wi -Fi) bands. Licensed connections have less interference , are
in the higher frequencies, and typically operate at higher power . Ther efore, they can b e
reasonably high -capacity and reliable. W hile their performance doesn’t approach that of
fiber, neither does their cost. Equipment , diagrammed in Figure 6 -5 , can be as little a
few hundred dollars, particularly for unlicensed spectrum. This design include s a single
Point -to-Point (PtP ) link —which requires two antenna/radio s, one at each end —between
City Hall and Sign Hill.
Figure 6 -5. Point -to-Point (PtP) Equipment
Wi-Fi
Wi-Fi, which was originally termed “Wireless Fidelity,” is an open standard that was
developed to connect computers to a local area network (LAN) via unlicensed radio
spectrum (the same frequencies used for cordless phones, garage door openers, and
other non -network wireless devices). Generally, Wi -Fi is a Point -to-MultiPoint (PtMP )
technology: Wi -Fi access points connect multiple devices within limited range, typically
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no more than 150 feet indoors and up to 1,500 feet outdoors. There are multiple
standards or versions of Wi -Fi. Some can provide up to 1 Gbps of throughput. Other new
Wi-Fi standard can cover large area with minimal power requirements.
Wi-Fi coverage and speed depends on multiple factors such as buildings, foliage, and
other physical barriers, interference from other spectrum users, radio spectrum used,
transmission powe r, type of antenna(s), and weather. New versions of the Wi -Fi protocol
operate at greater distances and/or speeds. It can be deployed PtP to interconnect sites
and is being adapted for Low Power Wide Area Network (LPWAN ) applications.
Figure 6 -6. Examples of integrated CBRS Wi -Fi hotspots for residential (TelRad and Zyxel), enterprise (Ruckus),
and industrial (MultiTech) settings; each of which is approximately 6 inches in size.
Wi-Fi access points are often integrated into routers that interconnect the Wi-Fi network
(also called a service set identifier or “SSID”) to other networks, specifically a CBRS
network connect ed to the internet in the present case . Each customer premises or user
location would have a CBRS antenna trans ceiver connec ted to router and Wi -Fi, a ll of
which are available in single devices (see examples in Figure 6 -6 ). Multiple access points
can be interconnected to each other as well as a router —forming a mesh network —to
cover a larger area. A Wi -Fi network can even be extended over multiple otherwi se
independent routers via a centralized server to create “community” Wi -Fi. The latest
version, Wi -Fi 6, improves these functions as well as expands the spectrum and
increases speeds for Wi -Fi connections.
A Wi -Fi component for two low -to-moderate income zones in South San Francisco is
included in the recommended program and is further described in Section 7.
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Administrative Systems and Captive Portal
Both CBRS and Wi -Fi can be very flexibly deployed and managed due in large part to the
software behind them. Most CBRS vendors provide sophisticated but usable software to
control access and monitor performance. This often includes ability to configure SSIDs
for connected Wi -Fi devices. The SSFBU will require a captive portal for public SSIDs. All
users of those networks are sent to the captive portal when they connect and must
authenticate through them to access the internet and other online resources. Captiv e
portals can be used to bill users, display ads, limit bandwidth or time online . They can
also create “walled gardens” containing specific services or web sites . For example, users
may be able to connect to the City website without authenticating. A libra ry SSID could
route through the library’s unfiltered internet access, where as a school SSID would
connect to student resources behind a firewall. Registered users may get more access or
faster speeds and may be able to get even more by paying s subscription fee. All of this
is possible with captive portals , depending on the vendor and configuration.
6.2 GOVERNANCE STRUCTURE
SSFBU is relatively low -cost infrastructure . The revenue opportunities are limite d. For
these reasons we do not recommend establish ing a separate entity. The potential
rewards and risks simply don’t justify it. As the purpose of the utility is to provide
baseline connectivity option s for everyone, we recommend incorporating SSFBU ’s
programming and governance into an existing department or program. The two prime
candi dates are the Library’s Community Learning Center —physically and virtually
extending it into the community —or the Community Development Program. The latter is
funded via HU D Community Development Block Grant , which re quires initiatives to be
formally included in local plans. The former is more flexible and more closely related to
SSFBU ’s purpose but may have less fiscal capacity. Alternately, SSFBU could be
established as a separate department in the C ity or as a division in the IT department.
Wherever it is in the C ity’s organization al structure , we recommend the City establish an
enterprise fund for SSFBU . Sharing revenue through a third -party partner will not
require the City to become an ISP, es tablish service level agreements or provide staffing
for the network, so it is recommended that the City partner with a qualified internet
service provider to provide services directly to end users .
The program should be governed by a board of departmental representatives
supplemented by a community advisory committee. We recommend the advisory
committee be comprised of equal numbers of residential, small business, non -profit,
and major industry representatives , selected by City Council members . The General
M anager should be responsible for proposing a n annual plan , including budget , to the
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advisory committee and board . The design and model presented here could effectively
achieve the goal of providing baseline connectivity to all of South San Francisco. Our
cost and revenue estimates are conservative so we believe SSFBU could generate excess
revenue if effectively governed. In that case, we recommend including digital inclusion
program s and services in the SSFBU enterprise fund to maximize its economic and social
benefits to the community.
SSFBU should build upon existing digital inclusion efforts that are ongoing in South San
Francisco. The City could also consider other programs that have been successful in
other communities i ncluding youth and elder programs , makers spaces, and more. Some
of these programs and resources include:
Self -Help for the Elder is a Comcast 10 -month program for youth ages 14-21. The
program teach es young people digital literacy skills and includes a community
service component. More information can be found at:
https://www.selfhelpelderly.org/our -services/digitallearning/youth -leadership -
technology -program
Mentorships are an ideal way for local companies to give back to the community.
The C ity should reach out and partner with local technology companies allowing
them the opportunity to teach and mentor local youth.
National Digital Inclusion Alliance (NDIA) is a n excellent r esource for programs
including low -cost internet, Digital Literacy 101, and Digital Navigators that help
assess, connect, and direct digital inclusion . More information and a Digital
Inclusion Startup Manual can be found at https://startup.digitalinclusion.org/.
The International Telecommunications Union
https://www.itu.int/en/mediacentre/backgrounders/Pages/digital -inclusion -of-
youth.aspx includes additional resour ces for youth digital inclusion programs.
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7. Programming & Finance Evaluation
The needs and goals of the City itself, its residents, businesses, and community groups
were assessed as inputs for developing a programming and finance evaluation to
determine the feasibility of building out and operating a Citywide broadband utility .
Financial requirements were also considered, since capital and operational costs are
paramount for determining the feasibility of supplementing broadband and wireless
with a munici pal broadband program.
We estimate that if the City of South San Francisco pursued a citywide fiber -to-the -home
utility, costs for construction would be approximately $38 million. Additional operating
expenses would also be applied to the program for addi tional staff and other resources
needed to operate and market such a network.
To address the issues in the Westborough neighborhood alone, the costs would be
approximately $14 million. Based on these estimates and conversations with service
providers, it is more feasible for the City to consider constructing public assets in the
Westborough neighborhood which could be made available for use by providers who
want to serve the neighborhood.
B ased on the needs of the community and the costs to deploy a municipal fiber utility as
well as the City’s current broadband market, it is infeasible for the City to achieve an
adequate return on investment for such a program. Therefore, to address the digital
equity and affordability issues in South San Francisco, we recommend pursuing
deployment of a wireless utility available to residents citywide by leveraging the City’s
existing assets to create a flexible, low -cost utility .
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7.1 WIRELESS DEPLOYMENT PLAN
Affordability is the glaring problem in the low -to-modera te income areas , especially in
Z ones 1 and 2 (see Figure 7 -1, below ). South San Francisco has offered free Wi -Fi,
through signup to the City network, on Linden Avenue with great success thus far. In
order to best support those areas lacking affordable internet, it is best for the City to
build out additional free Wi -Fi antennas and gain full coverage of low -to-moderate
income areas . The Wi-F i network is intended to deliver free Wi -Fi outside homes and
does not require installation or equipment deployment or provision of any other
offerings. Rather, the City’s existing network should be expanded to Zones 1 and 2 , as
shown in the figure below.
Figure 7 -1. Wi-Fi Zone Coverage Areas
The most cost -efficient network with high -bandwidth and wide coverage is a Wi -Fi
antenna network placed on streetlights and power poles. The antennas will connect to a
wireless CBRS backhaul network that will connect the whole network to the internet.
Depending on the number of users, this system can easily support 1Gb download
speeds.
The deployment of this network should happen via a phased approach starting with the
CBRS towers, equipment, and li censing. The CBRS will require two new underground
fiber paths on the north and southwest sides of the City (shown in Figure 7 -2) to connect
to the City’s existing fiber network. These are described in further detail below.
After the CBRS antennas are fun ctional , the next step is to deploy 45 new Wi -Fi antennas
in Z one 1 and Z one 2 which are within the cens us low -income area s of South San
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Francisco . Other areas will be future projects. Antennas that need to be on PG&E poles
will require approval from PG&E with an agreement for leasing the pole space yearly.
Once in place, the Wi -Fi apparatus can be linked to the CBRS network and the internet.
Figure 7 -2. Network Map
Costing for the new fiber routes as well as for the CBRS and Wi -Fi deployment is detailed
below.
7.2 ESTIMATED COSTS
Fiber Deployment
As a first step, the City should deploy two new fiber routes to connect t he CBRS
antennas to enabl e high -speed internet access. The wireless components of the network
can handle the network traffic from the end -users through the Wi -F i antennas ending
the wireless portion at the CBRS apparatus. CBRS antennas need to be backhauled with
fiber optics to connect to the interne t.
WWW.MAGELLAN -ADVISORS . C O M 64
T here are two new underground fiber sections that need to be constructed. The first is a
2600-foot bore connecting the Sign Hill tower to a fiber optic cable owned by Wave
Broadband. The other is a 411 -foot bore under Skyline Boulevard connecting C ity owned
fiber to the Pacifica Water Storage Tank . The City will need to coordinate with the
Westborough Water District, who owns the tank, to use the tanks for wireless
deployment . This route will connect to the City’s new fiber routes along Westborough .
Both routes are shown in the figures below.
Figure 7 -3. Proposed Fiber at Sign Hill
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Figure 7 -4. Proposed Fiber Westborough
The cost for these two new segments is approximately $240,157 , as shown in the table
below.
Table 7 -1. Costs for New Fiber Deployment
Segment Name Const r uction Type Footage $/ft Total
Westborough Water
Tower
New Underground 411 $82.50 $33,907.50
Sign Hill New Underground 2500 $82.50 $206,250.00
Total New Underground 2,911 $82.50 $240,157.50
CBRS Deployment Costs
The total estimated cost for CBRS distribution network, presuming SSFBU faces no costs
to put antenna on City -owned property, is less than $250k, as shown in Table 7 -2. Each
4 -sector cell requires four 65 -degree, 4 -port antennas and base stations, which may
come as an integrated unit, one per sector. The cost estimates are based on TelRad
equipment (CPE as well as cell). Microwave equipment is required for PtP between City
Hall and Sign Hill. The cost is an approximate average for this equipment, including state
license, at the writing of this report. Market trends generally show higher performance
e quipment for l ower cost s over time, so costs may be decrease d in the future . Similar
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trends hold true for the routers, one of which is required for each site. An equipment
cabinet may or may not be needed.
T able 7 -2 . SSFBU CBSR Distribution Network Capita l Expense
Item Cost Units Total Cost
Tower Cost (Existing Towers) - 1 -
County Owned Towers/Water Tanks - 2 -
Antenna and Base Station $15,000 12 $180,000
Base Station Installation $1,000 12 $12,000
Microwave Equipment $3,000 2 $6,000
Outdoor Router (1 per tower) $1,000 3 $3,000
Outdoor cabinet (1 per new Tower $1,000 3 $3,000
Subtotal $204,000
Engineering, Project & Construction Mgmt. 15% $30,600
Total Estimated Cost $234,600
Wi-Fi Deployment Costs
A total of 45 Wi -Fi access points is included in this conceptual design, meshed to 15 CBRS
CPE. Thirty of these 60 devices will be pole -mounted outdoors ; t he others would be
mounted on buildings, indoors, or other locations that involve no recurring cost. The
total cost for SSFBU’s access infrastructure including professional services is
approximately $160k. Additional access infrastructure can be added at a marginal cost.
Each CBRS CPE with integrated Wi -Fi hotspot costs about $360, and about that much to
install. CBRS CPE must register with an evolved packet core (EPC) to manage connections
and capacity across the RAN. The $1,200 Wi -Fi access point costs are typical for
commercial grade, outdoor units capable of mesh interconnections. The ratio of Wi -Fi
a ccess points to CBRS CPE is variable but three is a reasonable average. Each end -user
location would need at least one CBRS CPE.
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Table 7 -3 . SSFBU Wi-Fi Access Network Capital Expense
Item Cost Units Total Cost
CBRS CPE cost ($356 equipment, $350 labor) $706 15 $5,400
EPC Access Fee Per CPE (One Time Fee) $35 15 $525
CBRS CPE Installation $200 15 $5,250
Wi-Fi Access Points $1,200 45 $54,000
Wi-Fi installation $200 45 $9,000
Subtotal $74,175
Engineering, Project & Construction Mgmt. 15% $11,126
Total Estimated Cost $159,476
Total Deployment Costs
The total deployment costs for the new fiber, CBRS, and Wi -Fi deployment are
approximately $634,233 , as detailed in the table below.
Table 7 -4. Total Network Deployment Costs
Network Component Cost
New Fiber $240,157
CBRS $234,600
Wi-Fi $159,476
Total $634,233
Monthly Costs
Monthly operating expenses for this design are just over $3,000 , detailed in Table 7 -5 ,
including utilities for CBRS cell sites and pole attachments for CPE and access points.
CBRS CPE must be part of a spectrum access system (SAS), which are available as a
software service, to manage radio spectrum and ensure users do not interfere with each
other. Tower rental and utilities are approximat e. While tower rental is not included in
this design, it may be required to expand the SSFBU network.
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Table 7 -5 . SSFBU Network Estimated Monthly Operating Expenses
Item Cost Units Total Cost
Tower Rental for Commercial Towers $1,000 - $0
Utilities $100 3 $300
PG&E Pole Mount Costs $30 30 $900
CPE SAS cost $3 15 $45
Internet Data $1,500 1 $1,500
Subtotal $2,745
Contingency 15% $412
Total Estimated Cost $3,157
This design is for fixed wireless CPE . CPE could be moved reasonably easily, and the
network would accommodate temporary installations —Wi-Fi for a block party or
movable surveillance cameras, for examples. The CBRS network could, in concept,
support mobile connections with an enhanced, and quite a bit more costly , EPC. Wi -Fi
does not support fully mobile devices, but this design would allow users to stay on a
particular Wi -Fi SSID as they move between access points. As mentioned above, SSFBU
should have a captive portal and other administrative systems to deliver value -adding
content and manage Wi -Fi connections and users. The upfront and recurring costs of
such software are highly dependent on context and specific requirements, which are
beyond the scope of this study. We recommend budgeting $50k to establish and $2k for
monthly recurring costs.
Revenue Opportunities
There are three relatively small revenue opportunities for SSFBU. These opportunities
are optional and we note that in order to avoid additional staffing requirements and
certifications, the City should partner with a thi rd party ISP partner to directly provide
services in exchange for a negotiated revenue share with the City .
The first revenue opportunity is to lease n etwork infrastructure to private entities.
Under this model businesses and households could lease equipment that SSFBU would
install and maintain. Baseline internet access via Wi -Fi would be included.
A second opportunity is to charge for “enhanced access ” via the captive portal. Exactly
what “enhanced access” means is to be determined, depending on policies for baseline
access. There could be caps on bandwidth, data quantity per month, or types of services
(e.g., no streaming video or gaming). Users may p ay a monthly fee to eliminate these
restrictions. We do not recommend establishing a full broadband operating system with
WWW.MAGELLAN -ADVISORS . C O M 69
means to provision services and manage subscribers due to the substantial costs and
staffing requirements.
The third revenue opportun ity is to provide value -adding content, including
advertisements, via the captive portal. Reasonable estimates for revenue from these
opportunities, as shown in Table 7 -6 , are less than $500k per year , meaning that it would
likely take a few years for the City to see a return on investment from the capital costs to
deploy the network.
Table 7 -6 . SSFBU Estimated Revenue Opportunities
Item
Monthly
Cost Quantity Amount
CPE lease $100 200 $20,000
Enhanced access $15 1000 $15,000
Portal content $100 10 $1,000
Monthly total $36,000
Annual Revenue Estimate $432,000
Staffing
There are no additional staffing requirements for the implementation of this plan. We
recommend that South San Francisco develop a partnership with a wireless operator to
install and maintain the network wireless equipment via a contract managed by IT . As
previously stated, the programming and governance considerations for the community
Wi-Fi network could be overseen by the Library’s Community Learning Cent er or the
Community Development Program while IT continues to manage the contract with the
selected partner for equipment leasing and installation and operation and maintenance
of the network.
7.3 FUNDING OPTIONS
Because much of the available grant and loa n opportunities are targeted at rural
communities, t he funding options for South San Francisco using federal and/or state
programs are very limited.
The most promising option for funding is the use of American Rescue Plan Act (ARPA)
money , for which the fi nal rules , which are favorable toward broadband, have recently
been published. The rules, which should be reviewed by the City’s Finance team, provide
the City with broad discretion for using the funding for broadband infrastructure. South
San Francisco ha s already set aside $2 million of ARPA funds to be used for new fiber .
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Although no other Federal opportunities exist, the City should closely track funding
through the Coronavirus Capital Projects Fund, of which $540 million will be distributed
to the State of California . This money will be used by the state for a broad range of
infrastructure projects, including broadband, and we expect for state grant rules to be
released sometime in mid -2022.
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8. Recommendations & Next Steps
South San Francisco’s curr ent broadband coverage and offerings are enough to support
the needs of residents and businesses. S peeds that exceed those needed for remote
learning, working from home, telehealth, and daily connectivity are currently available to
99% of all residents thr ough a variety of service providers , although in some areas, such
as Westborough, choice of provider is limited . Businesses , especially those in Oyster
Point, have multiple options and are generally satisfied with the state of their
broadband. There are multiple long -haul fiber providers connecting South San Francisco
to data centers in San Francisco, San Jose, and Oakland. Through fiber routes, th ese data
centers connect South San Francisco to the world and any future applications that would
benefit the Ci ty.
Despite the sufficiency of the infrastructure and offerings in the City, however,
affordability is an issue. South San Francisco’s residents have sufficient offerings but
higher bandwidth service offerings are cost -prohibitive for low -to-moderate income
users . The COVID -19 pandemic highlighted this issue as multiple residents competed to
perform remote ac tivities at the same time , forc ing students to seek in ternet
connections at libraries, boys' and girls' clubs, and parking lots to comple te homework
and distance learning.
To address the lack of affordable broadband options, South San Francisco should take a
number of steps to ensure that its residents have the connectivity they need to thrive.
The City should leverage its existing infrastr ucture to deploy a relatively low cost South
San Francisco Broadband Utility as a community amenity that ensures equity of access .
The network, as described in this Plan, will requir e a minimal amount of new fiber and
wireless equipment , keeping costs low and providing a flexible option that fits within the
City’s current operational capacity.
This new utility should be operated through a partnership with a qualified wireless
internet service provider, eliminating the need for ongoing o perational expenses . This
partnership should include a revenue sharing agreement between the City and its
chosen partner and an enterprise fund should be established for the program.
Additionally, the SS F B U should include programming and governance conside rations
handled by an agency with roots in the community and integrated into existing digital
literacy and digital equity effort s, with oversight a board of departmental
representatives supplemented by a community advisory committee to ensure effective
com munity impact.
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NEXT STE PS
1. While we do not recommend that the City of South San Francisco build a Citywide
fiber -to-the -home network or become an internet service provider due to the
saturation of the broadband market, the City should leverage its existing assets to
create a South San Francisco Broadband Utility that provides wireless connectivity
throughout the City. South San Francisco should partner with a qualified wireless
network operator to oversee the maintenance of the network and digital inclusion
programs should be integrated into the City’s governance structure.
2. Use existing city -owned fiber optic cable , including the new fiber being placed
from the downtown area to Highway 35, Skyline Boulevard, to support better
broadband and cellular coverage i n the Westborough neighborhood. Encourage
and partner with the cellular providers to increase the coverage in the
Westborough neighborhood , leveraging the City -owned fiber cable on
Westborough Boulevard . The chief complaint of the Westborough neighborhood is
a lack of cellular/mobile coverage and a lack of choice for broadband service .
During talks with internet service providers, cost to build to Westborough,
especially crossing Highway 280, is too expensive to make it worth expanding in
the area. Therefore, City should use its fiber assets to alleviate this barrier and
bring better coverage in Westborough by al lowing the use of City -owned fiber
through leases or other agreements.
3. Deploy two new underground fiber routes at Sign Hill tower and crossing Skyline
Boulevard to support a CBRS system. These routes will cost approximately
$240,000 and should be construc ted as soon as possible to support the citywide
CBRS and Wi -Fi that will allow the City to offer services to the community.
4. Deploy three new CBRS access points, one in the Westborough area, one on Sign
Hill, and one at City Hall. These towers will be used for deploying high -speed
broadband to different types of apparatus including Wi -Fi antenna, fixed wireless,
and mesh networks requiring gigabit data transfer.
5. Provide for the expansion and deployment of wireless antennas in the low -
moderate income areas o f the City to create a South San Francisco Broadband
Utility. The C ity has deployed 11 access points on Linden Ave nue providing free
outdoor Wi -Fi with great success and is well received. These areas need affordable
broadband, and deploying free Wi -Fi in these zones will enhance the ability to
access broadband and aid families. S chool -aged children , teenagers , working
parents, and anyone will have the ability to access broadband without needing to
go to community centers or libraries for internet access.
6. Establish an enterprise fund for operating the network and enter agreements with
qualified internet service providers for revenue sharing. Sharing revenue through
WWW.MAGELLAN -ADVISORS . C O M 73
a third party partner will not require the City to become an ISP, become certified
with the CPUC , or provide staffing. The program should be governed by a board of
departmental representatives supplemented by a community advisory committee.
7. Support digital inclusion programs . The City should support ongoing digital
inclusion efforts by the Libra ry’s Community Learning Center , as well as exploring
other digital literacy programs and groups such as National Digital Inclusion
Alliance, the International Telecommunications Union , makers spaces, and other
successful programs . These programs should be integrated into the governance of
the Citywide Wi -Fi network, overseen by an advisory group, to ensure the most
community impact.
8. Continue existing Dig Once policies and practices and consider adding a separate
fund for maintaining and expanding the City’s conduit and fiber systems as
opportunities arise. A good starting point for this fund is approximately $250,000,
to be replenished annually as needed. Should there be an increase in spending
needed in any one year, we recommend using unspent capital impro vement funds
for street maintenance temporarily with repayment during mid -year or year -end
budget processes.
WWW.MAGELLAN -ADVISORS . C O M 74
Appendix A : Additional Technolog ies and Trends
The FCC currently defines broadband as a minimum of 25Mbps (megabits per second)
download and 3 Mbps upload, which can be delivered by any of the means above.
Underserved areas are those census blocks that are not supported by the minimum
speeds. To apply and receive federal monies and grants this is the 25/3 is the definition
that has to be met to be considered underserved. Some states are setting their own
standards and in California it is being set at 100 Mbps symmetrical, meaning up and
download speeds are the same.
The primary modes for delivering “wired” broadband services are DSL (digital subscriber
line), Cable (coax), and Fiber Optics (Fiber). Broadband over powerline (BPL) has been in
development for many years however, it has not yet been prove n as a viable option. It is
assumed that the demand for broadband will continue to increase, and the 25/3 FCC
definition will not be sufficient. Several communities are targeting a 1 gigabit per second
(Gbps) symmetrical and above to meet the demand.
DSL uses twisted pair, largest existing infrastructure, but it has been proven to be
inadequate. Coax can meet the download speeds but does not offer symmetrical speeds.
See chart below. Some wireless technologies are getting closer to meet the Gbps speeds
as long as it is being incorporated with the use of Fiber optics to provide the bandwidth
to each antenna.
Fiber is considered to be “future proof” infrastructure. Simply put, after fiber is placed
as the infrastructure medium it will not have to be replaced with a new one in the
future. Although the construction costs are substantial, in the long run fiber will be the
cheaper choice. The maintenance is comparatively easy and . Fiber networks are the
easiest to operate requiring a Network operations center (NOC) for monitoring the
system and provide troubleshooting and on demand system analysis. For future growth
and more high -speed ci rcuits, the only upgrades will simply be the electronics and
equipment on either end of the fiber.
The use of light makes the signal not affected by electrical services. All analogue and
digital (copper -based communications), are susceptible to errors from electronic
induction and must be constructed at least 4 feet away. Fiber, being light, is not affected
by and can be placed in the same conduits as even high -voltage electrical lines.
Wireless technology today is pervasive in our work, homes, and wide ar ea
geographical locations. We depend on it for voice, video, and data communications.
The foundation for wireless technologies are the governing bodies, FCC in USA and
WWW.MAGELLAN -ADVISORS . C O M 75
EU in Europe, and the standards bodies like 802.11 and 3GPP. The spectrum used for
wirel ess is divided into 3 different categories.
These are licensed, lightly licensed, and unlicensed bands.
Compared to the other deployment options wireless can be very economically
constructed. It does have a fair amount of equipment maintenance as well as line of
sight maintenance. Line of sight is dependent being able to “see” the antenna that is
being communicated with. From foliage growth, new construction, storm damage,
pole/tower damage, or even animal interference, the line of sight has to be
maintain ed.
LICENSED BANDS
The majority of todays licensed bands are the cellular 4G and 5G systems. Frequencies
are purchased at auction or allocated by the government and cellular carriers have
exclusive use of the frequency bands allocated to them. AT&T, Veri zon and T -mobile all
hold different bands. These licenses are granted on a wide geographical area, even
nationwide. The cellular carriers around the world have adopted the standards proposed
by the Third Generation Partnership Project (3GPP). This internat ional standards body
develops the standards for the way cell phones communicate with one another and the
internet. The standards committee is composed of cellular carrier representatives,
government bodies and equipment manufacturers.
3G was designed prima rily for voice communications and SMS (texting) service. It still
exists in many countries.
4G LTE is the predominant current standard. Its main use case is high speed mobile
data. It does support voice and text services, but primarily was designed to tra nsmit high
speed data to mobile users. The 4G system is widely adopted and today operates in
bands all over the world. These bands are lower than 6 GHz. With some of that spectrum
becoming fully utilized, the telecommunications industry developed new plans for a NR
(New Radio) band commonly called 5G.
The 5G system changed the architecture of the cellular networks. It had 3 primary use
cases driving the design. First was continuing and increasing the mobile broadband data
that 4G provides, second was a fixe d wireless use case where the cellular operators want
to challenge the cable operators providing internet data to homes today with a wireless
service and third is an ultra -low latency use case. This is to be used for self -driving cars
and other services th at require immediate response. 5G also utilizes frequencies up to
36GHz. These frequencies that are in the higher bands have short range but can carry
incredible amounts of data. 5G architecture also changed the way the cellular core
systems work. Previous ly all information was passed through a common core. In 5G the
WWW.MAGELLAN -ADVISORS . C O M 76
core is divided into “slices” and can have priority applications running on different slices.
This enables greater privacy, security and prioritization. Also the core can be run as a
web servic e “in the cloud”. Major vendors are implementing this service since most
everything today is more data and less voice. Also in 5G the number of users that can be
supported was greatly increased to target Internet of Things markets.
There are also licensed bands for public safety that usually employ narrow low speed
channels that are delivered with high power for long range and reliability. The latest
standard in these bands is P25. This is the band where Motorola, Harris and others run
Push to Talk radios (PTT). These frequencies are at 450 and 900 MHz bands. Utility
companies also use these licensed bands for controlling SCADA systems.
LIGHTLY LICENSED BANDS
The FCC has also created lightly licensed bands. The owner and location of equipment
operating in a lightly licensed band must be registered with the FCC. There may be
different requirements for installing them. The 4.9GHz spectrum that was originally
dedicated to public safety was a lightly licensed band. Citizens Broadband Radio Service
(CBRS) has port ions that are lightly licensed. CBRS has 15 10 MHz wide channels in each
county. The FCC auctioned off up to 7 channels in each county and left 8 as lightly
licensed. The location, power, antenna orientation and height along with owner
information must be registered with the FCC but entities do not have to pay for the
frequency usage. This band is for broadband data. Operators are not required to use
LTE in this band, but most equipment does adhere to that 3GPP standard. So, 7 channels
are exclusively licen sed to entities and eight are lightly licensed shared channels. Also,
the usage of channels is coordinated by an entity called the Spectrum Access System
(SAS). The lightly licensed users (Called GAA) can access any portion of the 15 channels
that are not in use at the time. The SAS helps GAA users share channels in any given
area where 2 entities want to deploy a network.
UNLICENSED CHANNELS
The FCC and other worldwide organizations set aside multiple bands to be completely
unlicensed. There is no notifi cation required to put up and operate a device in these
bands. They are unlicensed bands at 900 MHz, 2.4 GHz, 5.8 GHz, 24 GHz and 60 GHz. The
FCC and other organizations worldwide do specify the power output these devices can
transmit. All devices operatin g in these bands in the USA must be certified by an FCC
appointed test organization for power output and adjacent channel interference. The
802.11 standards organization, made up of wireless equipment manufacturers and
chipset vendors, creates the specific ations and protocols for the unlicensed bands. All
WWW.MAGELLAN -ADVISORS . C O M 77
the Wi -Fi access points are created to meet the various 802.11 standards. There were so
many that the group decided to go to 1 number like Wi -5 or Wi -6 rather than 802.11
a/b/g/n/ac/ad/ax. These devices ru n everything from our in -home Wi -Fi, Bluetooth
connections, Point to Point radio, and fixed wireless point to multipoint radio supplying
internet to remote areas. The 802.11 standards encourage and specify a “Listen before
talk” protocol to promote band s haring, but it is not required. In listen before talk a
device listens on a channel for a moment. If quiet, the device transmits. If someone else
talks at the same time and collides, both senders back off for different random intervals
and try to listen a nd talk again. This is effective unless there are lots of devices crowded
together all trying to talk. The 24 GHz band is mainly used for PTP narrowly pointed
channels to avoid interference. The 60 GHz bands are also very narrowly pointed
channels. Faceboo k Terragraph utilizes this band for backbone communications.
WI-FI
Wireless technology that is used to connect computers, tablets, smartphones and other devices
to the internet.
Wi-Fi is the radio signal sent from a wireless router to a nearby device, whic h translates the
signal into data you can see and use. The device transmits a radio signal back to the router,
which connects to the internet by wire or cable. Connections to Wi-Fi networks require the use
of a SSID and password.
One use of Wi -Fi is for i ndoor wireless deployment. Most homes have broadband to the
house in one of the various ways and goes into a wireless router and deployed without
the use of wires throughout the residence. The strength of the signal in the residence is
dependent upon the interferences (walls, roofs, concrete) between the router and the
device using it. The more the interference the weaker the signal.
SATELLITE BROADBAND
is network connectivity provided through low -earth -orbit (LEO) or geostationary
satellites, with the l atter providing much faster data rates. Satellite broadband enables
Internet access via satellite in two steps with similar requirements of wireless. There is a
transmit and receive unit at the end user’s location that sends and receives signals from
one of the LEO satellites.
Satellite communication has some technical limitations in comparison to the traditional
deployment methods. The most prevalent of these are: Signal latency, Rain Fade, and
Line of Sight. The latency, time delay, is due to the dis tance the signal has to travel,
from earth to space and back to earth. Emerging technologies are helping to make
WWW.MAGELLAN -ADVISORS . C O M 78
satellite communications a possibility. Rain Fade refers to the moisture in its various
forms that are in the signal path between the end use r and the satellite being used. The
faster bands, K u and K A are most affected by rain fade. The final main drawback is line
of sight. The end user must have a straight line without interference to the satellite.
From forested areas to mountains, there is a limited number of end users that can use
satellite broadband. Satellite communication offers a wide variety of features as well as
some technical limitations compared to traditional broadband Internet services.
Satellites placed in geostationary orbi t can deliver Internet speeds of about 0.5 Mbps.
However, the speed is limited to 80 Kbps on transmissions from the user. In rural areas,
this speed is typically more than what is available through other means. The greatest
advantage of satellite broadban d is that it can be quickly established on a mobile device
that is less prone to attacks or a natural disaster.
We enjoy the reliability of licensed channels that provide great coverage, low latency,
and throughput like 4G LTE. There is more and more demand for increased capacity and
speedier reaction time (latency) so 5G was planned and implementation has begun. It
would be difficult to imagine life without all our headsets, home networks, business
connections and outdoor gatherings without our unlicensed wireless connections.
WWW.MAGELLAN -ADVISORS . C O M 79
Appendix B : Wi-F i Streetlight Location P hoto s
Below are sample photos of W i -F i devices placed on C ity -owned streetlight structures .
These serve as examples of W i -F i antenna that blend nicely and does not detract from
the decorative nature of the streetlights.
Figure A -2. Wi -Fi Streetlight Location Photos
WWW.MAGELLAN -ADVISORS . C O M 80
1
City of South San Francisco, CA
Broadband & Wireless
Feasibility Study
Findings and Recommendations
Presented By:
Preston Young, Project Manager
Jory Wolf, Project Executive
February 16, 2022
- 2
PROJECT GOALS AND OBJECTIVES
$1B
•Feasibility to establish City provided Gigabit broadband and
wireless services in all neighborhoods.
•Analysis of building and supporting a public Wi-Fi network
specifically in the Uptown and Downtown areas
•Assessment of the opportunities for the neighborhoods, the most
viable business, financial, and operational models and the
deployment plan that will enable the City to take advantage of the
opportunities.
- 3
SERVICE & INFRASTRUCTURE ANALYSIS
Metro Fiber
- 4
MARKET & NEEDS ASSESSEMENT
•South San Francisco has a robust network of fiber including both long-haul and local metro networks.
•Internet service offerings are quite abundant, and most businesses have several choices and ample
broadband for any needs they may have now or in the future.
•Residents in most neighborhoods also have a selection of options for high-speed broadband.
•The Westborough neighborhood has fewer options and there is some frustration with the lack of options
there.
•A larger issue is the affordability of service, which may be a challenge for some residents throughout
South San Francisco.
- 5
UTILITY FORMATION STUDY
Magellan does NOT recommend that South San Francisco develop a traditional area-wide sole
source broadband utility (Municipal ISP).
Focus on digital equity, making sure everyone has baseline connectivity.
•Ensure everyone can participate in the digital economy and society
•Accommodate guests and visitors in the City
•Put some competitive pressure on private providers to extend services and improve pricing
Magellan Advisors recommends wireless service that uses Wi-Fi as the access technology
- 6
SSF Free Public Wi-Fi Pilot Network
Pilot Public Wi-Fi Network
in Up-Town and Downtown
area as shown as Zone 1
and Zone 2
- 7
PROJECT IDENTIFICATION
- 8
PROGRAMMING & FINANCE EVALUATION
Network Component Cost
New Fiber-Optic Cable $240,157
CBRS Deployment $234,600
Wi-Fi Deployment $159,476
Total $634,233
Deployment Costs:
Item Cost
Utilities $300
PG&E Pole Mount Cost $900
CPE SAS Cost $45
Internet Data/Service $1,500
Total with 15% Contigency $3,157
Monthly Costs:
- 9
PROGRAMMING & FINANCE EVALUATION
Revenue opportunities would require the City to guarantee service levels through agreements with end
users, effectively making South San Francisco similar to an ISP that requires appropriate staffing and
operating expenses. Rather, the City should partner with an experienced wireless ISP and arrange a
revenue sharing agreement.
- 10
RECOMMENDATIONS
1.The City should leverage its existing assets to create a South San Francisco
Wireless Network that provides connectivity throughout the City.
2.Use existing city-owned fiber optic cable, including the new fiber installation
to support better broadband and cellular coverage in the Westborough
neighborhood.
3.Deploy two new underground fiber routes at Sign Hill tower and crossing
Skyline Boulevard to support three new CBRS access points and system.
4.Provide for the expansion and deployment of wireless antennas in the low-
moderate income areas of the City to create a South San Francisco Broadband
Utility, specifically in the Uptown and Downtown area
- 11
RECOMMENDATIONS
5.Establish an enterprise fund for operating the network and enter
agreements with qualified internet service providers for revenue sharing.
6.Support digital inclusion programs.
7.Continue to build out City owned conduit as a potential revenue source.
8.Continue to expand City owned fiber optic network for City Use.
- 12
Council Direction and Feedback
•Direction to build a Pilot Public Wi-Fi network and focus initially in the
Uptown and Downtown areas.
•Direction to explore revenue opportunities for Public Wi-Fi.
•Direction to lease existing City owned conduit and fiber optic strands to
Internet Services Providers and Wireless Carriers in the Westborough
area.
QUESTIONS?
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:22-109 Agenda Date:2/16/2022
Version:1 Item #:2.
Report regarding an analysis of the City of South San Francisco’s Inclusionary Housing Ordinance and
incentives to provide additional affordable housing units.(Julie Barnard,Acting Deputy Director of Economic
and Community Development)
Staff recommends that the City Council receive a report regarding the analysis of the City’s Inclusionary
Housing Ordinance and incentives to increase the provision of affordable housing units within
inclusionary housing development.
BACKGROUND
Recently,City Council expressed an interest in updating the City’s inclusionary housing ordinance to
incentivize developers to provide a higher number of inclusionary units with a wider range of affordability
levels.Inextricably linked to the City’s inclusionary housing ordinance is the State density bonus,which affords
developers bonus market rate units in exchange for providing certain levels of affordable housing.While the
State Density Bonus is effective in delivering a greater number of housing units,its application results in a
development having a low proportion of affordable units than the City’s inclusionary requirement of 15%.
Council asked for staff to explore incentives that may encourage developers to achieve a higher proportion of
affordable units than is currently required.Specifically,Council requested reducing parking requirements and
waiving fees be explored.Staff retained a consultant,BAE Urban Economics,to provide the City with insight
into the advantages and disadvantages of providing incentives or concessions to increase the overall number of
inclusionary units.Staff is providing the City Council with an update on preliminary findings to obtain
feedback for the final recommendations which will be presented to City Council at a future study session.
Council has also expressed interest in an affordable housing overlay as a policy intervention to consider.
Affordable housing overlays essentially allow developers to more easily develop multi-family housing in
certain areas in exchange for providing a certain level of affordability.Given South San Francisco permits
medium and high-density housing in highly desirable locations -namely,near transit and job centers -and
already requires a base level of affordability in all residential developments over five units,a housing overlay
district would not substantially change how housing is currently permitted in South San Francisco.
Additionally,by creating exemptions that streamline project approvals,South San Francisco has encouraged the
development of affordable homes without additional costs to developers.South San Francisco,through its
General Plan update,has already identified housing opportunity sites throughout the City and is taking steps to
encourage affordable housing through its land use regulations.Maximum densities without required community
benefit contributions,reduced parking ratios,and fewer discretionary processes are all envisioned for new
housing to ensure consistency with state law requiring streamlined approval of housing projects.
While staff do not believe a traditional overlay is necessary in South San Francisco,the above-referenced
consultant analysis of incentives that could induce a developer to provide more affordable units as a percentage
of their total development citywide is,in essence,a type of affordable housing overlay.The intention of these
incentives is to maximize affordable housing,while providing developers flexibility to make housing
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development more feasible.
Mechanisms available to developers to increase densities in the City of South San Francisco,include the State
Density Bonus as well as the City’s existing Inclusionary Housing Ordinance.
State Density Bonus
The State Density Bonus is a valuable tool to developers seeking to maximize residential density.In exchange
for providing a base level of affordable units,the developer gets a bonus percentage of market rate units.State
law has been clarified to prevent cities from requiring their inclusionary housing ordinances be met prior to the
base level of affordability that’s required to trigger the State Density Bonus.As a result,if a developer meets
the City’s inclusionary housing ordinance,in many instances they meet the requirements of the State Density
Bonus and are entitled to additional market rate units,parking reductions,and consideration of waivers of
development standards and incentives and concessions,as defined in the Density Bonus law.These incentives
and concessions require City Council approval which increases a developer’s level of uncertainty and extends
their project schedule.
Attachment 1 is a white paper produced by Meyers Nave that details the State Density Bonus.Page 4 of
Attachment 1 is a chart of the percentages of affordable housing required to trigger bonus market rate units.
Attachment 2 is the San Mateo County’s household AMI (Area Median Income) limits for 2021.
Existing City Inclusionary Ordinance
Under the City’s existing Inclusionary Housing Ordinance, housing developers must provide the following:
·Rental:15%of all units affordable,with two-thirds designated for low income households and one-third
designated for very low-income households.
·For Sale:15%percent of all units affordable,with 50%designated for moderate income households and
50 % designated for low income households.
·In-Lieu Fee: $308,000 per required affordable unit.
·Developers may voluntarily elect to provide a deeper level of affordability,provided the overall number
of units required is satisfied.
Income Levels AMI levels
Extremely Low Under 30%
Very Low 30-50%
Low 50-80%
Median 80-100%
Moderate 100-120%
The table above represents the terminology as it relates to the income levels.
The in-lieu fee was set at the breakeven point,whereby a developer is no better off producing the market rate
unit instead of the required affordable unit.As a result,under the existing Ordinance adopted in 2018,
developers have only paid the in-lieu fee when a fractional unit of housing is required in smaller developments.
No larger multi-family developments have opted to use the in-lieu fee.Instead,they have proposed to build the
affordable units.
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The City,presently,offers no incentives to developers who exceed our current inclusionary housing ordinance
requirements.The City may offer developers some incentives to exceed these requirements through a revision
to the inclusionary housing ordinance.This would enable developers to increase the number of affordable
housing within their development but not require Council approval,providing the development meets or
exceeds the requirements.
Since the City’s basic requirements typically meet the baseline State Density Bonus requirements,which offer
discretionary incentives,the City has recently experienced a trend toward most developers invoking the State
Density Bonus in order to seek incentives and concessions.
The State Density Bonus also makes providing the affordable units rather than paying the in-lieu fee even more
attractive.For example,if a 100-unit rental development provides 15 affordable units,11 at very low income
and 4 at low income,the project can utilize a 35%density bonus,meaning they can build 35 additional market
rate units.The base project,100 units including 15 affordable units had an effective inclusionary housing rate
of 15%affordable units.After utilizing the State Density Bonus,the effective rate of inclusionary housing units
fell to 11%(135 total units,with 15 affordable units).This effective rate would fall even more if the developer
elected to provide 15 very low-income units,triggering a 50%density bonus.For the sake of consistency,this
report considers the most likely scenario that developers would elect to utilize,which is providing all affordable
units at the very-low income levels.The table below outlines the impact that the State Density Bonus has on the
balance of market rate to affordable units:
Base Units Under
Zoning
Affordable units Total Units Overall %
Affordable
City Ordinance 100 151 100 15%
State Bonus 100 152 150 10%
1 - 10 units at low income levels and 5 units at very-low income levels
2 - 15 units at the very-low income level
In reevaluating the City’s Inclusionary Housing Ordinance,staff and the City’s consultant have endeavored to
find ways to increase the effective rate of affordable housing being built,understanding that most developers
that meet the City’s Ordinance will also invoke the benefits of the State Density Bonus.In order to do so,the
incentives discussed in this report aim to encourage developers to increase the number of affordable housing
units that can be provided in an inclusionary context.
DISCUSSION
BAE Urban Economics has prepared a draft financial feasibility analysis to evaluate the ability of market rate
housing developments to incorporate inclusionary requirements that are greater than those currently required.
Their analysis also considered how State Density Bonus law interacts with local inclusionary requirements.The
goal of the study is to establish what changes the City could allow that may generate additional affordable units
in a development, without making the development less feasible.
BAE tested the impact of different types of incentives on the ability of prototype projects to incorporate higher
inclusionary percentages in exchange for receiving the incentives discussed below.However,their research has
so far proved that the incentives considered do little to move the needle in terms of project feasibility and
therefore the overall percentage of affordable housing that may be provided.That said,for some developers on
some sites,having a suite of incentives to take advantage of in exchange for slightly higher rates of
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some sites,having a suite of incentives to take advantage of in exchange for slightly higher rates of
inclusionary affordable housing units will be attractive and is therefore a legislative action worthy of Council
consideration.
Prototypes Used
BAE worked with City staff to define t residential project prototypes that are representative of the types of
market rate housing development that the City anticipates within the coming years. These include:
a.Rental apartments -wood framed over podium parking,with an approximate project size of 150 units
(100 units base density with 50% density bonus).
b.For-sale condominiums -stacked units,wood framed over podium parking,with an approximate project
size of 150 units (100 units base density with 50% density bonus).
c.Townhouses - rowhouses, wood framed with built-in garage/tuck-under parking.
Financial Feasibility Pro-Formas
After defining the project prototypes,BAE prepared a development feasibility pro-forma for each project
prototype,estimating development costs by component (e.g.,land,site improvements,vertical construction,
fees and other soft costs,financing,etc.)along with an appropriate level of developer profit and potential
developer returns based on net sales revenues or net rental income,as appropriate.BAE set the baseline
feasibility models up to estimate the financial feasibility of prototype projects under current regulations,
factoring in current inclusionary requirements and the effects of State Density Bonuses on overall project unit
counts and the split between affordable and market rate units.The pro-formas included a variable for
inclusionary percentages by income level,to enable testing of the impacts on feasibility from changes in
inclusionary requirements.
Evaluation of Incentives to Increase Inclusionary Percentages
Once the baseline feasibility models were complete,BAE utilized the models to test potential changes in
inclusionary requirements on development feasibility,with the goal of identifying how the inclusionary
requirements for each project prototype could be adjusted to simultaneously achieve higher percentages of
affordable units while still allowing developers to achieve a reasonable market-based rate of return on the
developments.
BAE tested the following types of incentives that may encourage developers to provide a higher proportion of
affordable units in a development:
1.Reduction in parking
2.Fee waivers
a.for affordable units only and
b.for all units
3.Adding alternative affordability options
4.Utilizing an up to 80% increase density bonus
The State Density bonus does provide for some parking waivers,however the incentives considered and
discussed in this report exceed what is provided for in the State Density Bonus.Incentives 1,2,and 3 above are
options developers could request under the State Density Bonus, but would require City Council’s approval.
Feasibility Findings and Conclusions
BAE found that the City’s existing Inclusionary Housing Ordinance -without any alterations -still produces an
infeasible project in a prototype pro forma.This is the same finding that staff shared with Council when the
Ordinance was considered for adoption in 2018.Despite this,some projects have moved forward.This is due to
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Ordinance was considered for adoption in 2018.Despite this,some projects have moved forward.This is due to
a variety of factors, including:
·Some projects recently entitled were deemed complete prior to the effective date of the Inclusionary
Ordinance,including the recently approved PS Office Parks,410 Noor,and 200 Airport.These projects
have all provided some amount of affordable housing,but none have met the specific requirements of
the Ordinance.
·Some projects that recently completed or are currently under construction likely locked in construction
costs and financing when market conditions were more favorable.This results in feasible projects,
whereas similar projects today are subject to higher construction costs due to labor shortages and high
cost of materials.
·Some projects in review now are likely assuming construction costs will stabilize and even decline
slightly, while rents and/or sale prices will fully rebound and continue to grow.
As in 2018,townhomes typically are more feasible than multi-family developments at the outset.The parking
reduction and density incentives considered had minimal impact on the townhome models.
The following incentives were tested and the results were similar or the same for the rental and for-sale
prototypes. These are explained in detail below:
1.Reduction in Parking Requirements
Feedback from the development community was that parking reductions beyond one parking space per unit are
not realistic or preferred in developments along the Peninsula.Reducing parking ratios from 1.2 spaces per unit
to 1.0 spaces per unit decreases development costs by only 2.3%for rentals or 1.7%for for-sale,or about $2
million dollars.This cost savings is not sufficient to yield a feasible project today.However,given developers
are progressing with similar projects assuming increases in rental rates and sale prices,this incentive could
support an additional 3 to 5 percentage point increase in inclusionary units,depending on the prototype and
affordability level of the affordable units.For sale housing could support an additional 3 percentage point
increase,while rental housing could support an additional 5 percentage point increase.Developers may bring a
proposal that further reduces parking requirements providing there is a corresponding increase in affordable
housing units provided.
This incentive would combine the City Inclusionary Housing Ordinance with the State Density Bonus.The City
could revise the Inclusionary Housing Ordinance to state that an administrative approval for parking reductions
(approved at the Planning Commission)would be provided to developers who provide a minimum of an
additional 3% increase on the base density for for sale product and 5% on rental products.
Base Units
Under Zoning
Affordable
Units
Total Units Overall %
Affordable
City Ordinance 100 151 100 15%
State Bonus 100 152 150 10%
Parking reduction (for sale)100 183 150 12%
Parking Reduction (rental)100 204 150 13%
1 - 10 units at low income levels and 5 units at very-low income levels
2 - 15 units at the very-low income level
3 - 15 units at the very-low income level and 3 units at AMI levels to the City’s discretion
4 - 15 units at the very-low income level and 5 units at AMI levels to the City’s discretion
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2.Impact Fee Waivers on total development or BMR units only.
The City Council may waive all City impact fees with the exception of Sewer and School District Fees.In a
rental project,the estimated fee burden is around $30,000 per unit of which $6,000 are sewer and school district
fees.A waiver of City impact fees (totaling $24,000 per unit)results in an 80%reduction of fee payment.If the
City waives impact fees on the affordable units within a project,the project can only support a one to two
percentage point increase in the number of inclusionary units,while the fee waiver would result in roughly
$400,000 in lost potential revenue to the City per prototype project,for two extra affordable units.Waiving the
impact fees for all units in a project,including both market rate and affordable units,allows the project to
support roughly 10 percentage points more inclusionary units (or 10 units),reaching a base of 25%affordable;
however,the City would lose roughly $3.6 million in funds per prototype project that are used to support
necessary infrastructure and city services,such as parks,childcare,library,public safety,and transportation
improvements.
This incentive would combine the City Inclusionary Housing Ordinance with the State Density Bonus.The City
could revise the Inclusionary Housing Ordinance to state that an administrative approval for impact fee waivers
(approved at the Planning Commission)would be provided to developers who provide a minimum of an
additional 3% increase in inclusionary units on the base density.
Base
Units
Affordable
Units
Total
Units
Overall %
Affordable
City Impact
Fees
Waived City
impact fees
City Ordinance 100 151 100 15%$2,400,000 -
State Bonus 100 152 150 10%$3,600,000 -
Waive BMR impact
fees
100 173 150 11%$3,192,000 $408,000
Waive all impact
fees
100 254 150 17%-$3,600,000
1 - 10 units at low income levels and 5 units at very-low income levels
2 - 15 units at the very-low income level
3 - 15 units at the very-low income level and 2 units at AMI levels to the City’s discretion
4 - 15 units at the very-low income level and 10 units at AMI levels to the City’s discretion
3.Adding Alternative Affordability Options
BAE’s preliminary findings align with the State Density Bonus provisions.That is that providing a greater
proportion of affordable units may be feasible at higher affordability levels (60%AMI and above),but the
provision of deeper affordability levels (50%AMI and below)requires a smaller proportion of affordable units
in order to be feasible.More specifically,BAE found that developers meet the City’s ordinance and leverage
the State Density Bonus by providing the 15%inclusionary at very low-income levels (50%AMI).These units
require a larger subsidy,so it is unlikely that developers would exceed the 15%inclusionary requirement at this
affordability level.
Allowing developers to meet the City’s inclusionary ordinance by delivering all units at low income levels,
rather than requiring a one-third designation for very low-income households,developments could likely
support a base inclusionary percentage of between 20 and 25%.Although the City would not receive one-third
of the units at very low income levels (50%AMI and below)more affordable units will be provided overall.
Fully-affordable housing developments,(the Grand and Linden and 428-432 Baden Avenue,for example)
provide a sufficient number of very-low and extremely-low income units which provide significant progress in
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provide a sufficient number of very-low and extremely-low income units which provide significant progress in
the City’s ability to meet the RHNA requirements.Presently,there are fewer 50-80%AMI units being provided
and the ordinance may encourage developers to meet this gap.In this scenario it is likely that developers would
utilize the City ordinance and provide all inclusionary units in the 50-80% AMI range.
This incentive would revise the City’s Inclusionary Housing Ordinance while still allowing developers to utilize
the State Density Bonus.The City could revise the Inclusionary Housing Ordinance provide for higher AMI
limits with the provision that the development meet higher overall numbers of affordable units.As discussed
above, in this scenario, the City would trade very low income units for a greater number of low income units.
Base Units Affordable
Units
Total Units Overall %
Affordable
City Ordinance 100 151 100 15%
State Bonus 100 152 150 10%
With low income levels 100 253 150 16.7%
1 - 10 units at low income levels and 5 units at very-low income levels
2 - 15 units at the very-low income level
3 - 25 units at low income levels
4.Density Bonus Increase
To further increase the number of affordable units delivered within developments,the City could provide up to
an 80%Density Bonus in return for a 15%affordable requirement on all units in the development,rather than
just the base density.Similar to the finding above,this does require that the units be restricted to low-income
households,rather than including some number of very low-income units.Under this scenario,seen below,the
affordable units would comprise 15%of the total project,which is well above the number of units delivered
under the baseline case which does not use a density bonus.
Base Units Affordable
Units
Total Units Overall %
Affordable
City Ordinance 100 151 100 15%
80% Bonus Density 100 272 180 15%
1 - 10 units at low income levels and 5 units at very-low income levels
2 - 27 units at low income levels
This scenario would provide densities that exceed the State Density Bonus in the context of inclusionary
development models Citywide,while currently the City offers an 80%density bonus just in the Downtown in
exchange for certain community benefits.It should be noted that fully affordable developments have no density
restrictions under the State Density Bonus,providing the development does not exceed the allowable building
envelope.
Council is requested to provide feedback on whether this scenario is acceptable and whether there is a
preference for the inclusion of very low incomes with fewer affordable units or whether to allow for higher
income limits 60%-80% AMI thus allowing developers to achieve a higher number of affordable units.
CONCLUSION
BAE’s preliminary findings establish that the parking reduction and fee waiver scenarios contemplated are not
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BAE’s preliminary findings establish that the parking reduction and fee waiver scenarios contemplated are not
likely to substantially incentivize developers to build multi-family housing with an increased proportion of
affordable housing.And while the density bonus increase scenario may be appealing for some projects,others
with significant site constraints will not be able to utilize the bonus density and therefore the benefits of the
incentive may not be realized.
However,with the exception of waiving all impact fees for a project,which are needed to fund the
infrastructure necessary for new development,there is no disadvantage to making these options available to the
development community should they determine that any of them fit their project.
Staff request the City Council provide preliminary feedback on the direction of the study.Staff recommend that
Council direct staff to amend the Inclusionary Housing Ordinance based on the feedback relating to the analysis
presented and to also proceed with Planning Commission and City Council for consideration and adoption.
Attachments:
1.State Density Bonus Primer
2.San Mateo County household AMI limits (2021)
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REVISED JANUARY 2022
Guide to the California Density Bonus Law
BY JON GOETZ AND TOM SAKAI
Table of Contents
INTRODUCTION AND OVERVIEW........................................................................................................
HOW THE DENSITY BONUS WORKS...................................................................................................
DENSITY BONUS CHART...........................................................................................................
HOW THE DENSITY BONUS CAN HELP IN A FRIENDLY JURISDICTION.......................................
HOW THE DENSITY BONUS CAN HELP IN A HOSTILE JURISDICTION..........................................
CEQA ISSUES IN DENSITY BONUS PROJECTS.................................................................................
USING THE DENSITY BONUS TO SATISFY INCLUSIONARY HOUSING REQUIREMENTS............
HOW THE DENSITY BONUS WORKS FOR SUPPORTIVE HOUSING PROJECTS............................
HOW THE DENSITY BONUS WORKS FOR LOW INCOME HOUSING TAX CREDIT.........................
DENSITY BONUS AND REPLACEMENT HOUSING...........................................................................
DENSITY BONUS IN THE COASTAL ZONE........................................................................................
DENSITY BONUS - A FLEXIBLE TOOL...............................................................................................
DENSITY BONUS STATUTES..............................................................................................................
MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022 1
JON GOETZ
E-mail: jgoetz@meyersnave.com
Direct: 800.464.3559
Jon Goetz is an attorney at Meyers Nave. He has over 35 years of experience in real estate, land
use, environmental, redevelopment, housing and municipal law. Jon represents private and public
entities in complex real estate development transactions, land use planning, public-private
development, infrastructure financing and affordable housing. He has advised on acquiring,
financing, leasing and disposing of all forms of improved and unimproved property.
ABOUT THE AUTHORS
TOM SAKAI
E-mail: tsakai@springbrookadvisors.com
Direct: 949.833.2599
Tom Sakai is the Principal of Springbrook Realty Advisors, Inc., a real estate consulting practice
located in Newport Beach. His practice specializes in consulting to land developers and
homebuilders, focusing on pro formas and feasibilities for master-planned communities, school
negotiations, assessment district and Mello-Roos financing, affordable housing issues, and other
services to the real estate industry.
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Introduction and Overview
Savvy housing developers are taking advantage of California’s Density Bonus Law, a mechanism which
allows them to obtain more favorable local development requirements in exchange for offering to build or
donate land for affordable or senior units. The Density Bonus Law (found in California Government Code
Sections 65915 – 65918) provides developers with powerful tools to encourage the development of
affordable and senior housing, including up to a 50% increase in project densities for most projects,
depending on the amount of affordable housing provided, and an 80% increase in density for projects which
are completely affordable. The Density Bonus Law is about more than the density bonus itself, however. It
is actually a larger package of incentives intended to help make the development of affordable and senior
housing economically feasible. Other tools include reduced parking requirements, and incentives and
concessions such as reduced setback and minimum square footage requirements. Often these other tools
are even more helpful to project economics than the density bonus itself, particularly the special parking
benefits. Sometimes these incentives are sufficient to make the project pencil out, but for other projects
financial assistance is necessary to make the project feasible.
In determining whether a development project would benefit from becoming a density bonus project,
developers also need to be aware that:
• The Density Bonus is a state mandate. A developer who meets the requirements of the state law is
entitled to receive the density bonus and other benefits as a matter of right. As with any state mandate,
some local governments will resist complying with the state requirement. But many local governments
favor the density bonus as a helpful tool to cut through their own land use requirements and local
political issues.
• Use of a density bonus may be particularly helpful in those jurisdictions that impose inclusionary
housing requirements for new developments.
• Special development bonuses are available for developers of commercial projects who partner with
affordable housing developers to provide onsite or offsite affordable housing. Special bonuses are also
available for condominium conversion projects and projects that include childcare facilities.
• The Legislature has adopted density bonuses for housing developments for foster youth, disabled
veterans, homeless persons and college students.
2 MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022
How the Density Bonus Works
PROJECTS ENTITLED TO A DENSITY BONUS
Cities and counties are required to grant a density bonus and other incentives or concessions to housing
projects which contain one of the following:
• At least 5% of the housing units are restricted to very low income residents.
• At least 10% of the housing units are restricted to lower income residents.
• At least 10% of the housing units in a for-sale common interest development are restricted to moderate
income residents.
• 100% of the housing units (other than manager’s units) are restricted to very low, lower and moderate
income residents (with a maximum of 20% moderate).
• At least 10% of the housing units are for transitional foster youth, disabled veterans or homeless
persons, with rents restricted at the very low income level.
• At least 20% of the housing units are for low income college students in housing dedicated for full-time
students at accredited colleges.
• The project donates at least one acre of land to the city or county for very low income units, and the
land has the appropriate general plan designation, zoning, permits and approvals, and access to public
facilities needed for such housing.
• The project is a senior citizen housing development (no affordable units required).
• The project is a mobilehome park age-restricted to senior citizens (no affordable units required).
DENSITY BONUS AMOUNT
The amount of the density bonus is set on a sliding scale, based upon the percentage of affordable units at
each income level, as shown in the chart on the following page. (Note that maximum density bonus amounts
for very low, lower and moderate income housing were increased by legislation approved in 2020.)
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DENSITY BONUS CHART*
*All density bonus calculations resulting in fractions are rounded up to the next whole number.
**Affordable unit percentage is calculated excluding units added by a density bonus.
***Moderate income density bonus applies to for sale units, not to rental units.
****No affordable units are required for senior units.
***** Applies when 100% of the total units (other than manager’s units) are restricted to very low, lower and moderate income (maximum 20% moderate).
4 MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022
5%20%---20%--
6%22.5%---20% --
7%25%---20%--
8%27.5%---20%--
9%30%---20%--
10%32.5%20%5%15%20%20%-
11%35%21.5%6%16%20%20%-
12%38.75%23%7%17%20%20%-
13%42.5%24.5%8%18%20%20%-
14%46.25%26%9%19%20%20%-
15%50%27.5%10%20%20%20%-
16%50%29%11%21%20%20%-
17%50%30.5%12%22%20%20%-
18%50%32%13%23%20%20%-
19%50%33.5%14%24%20% 20% -
20%50%35%15%25%20%20%35%
21%50%38.75%16%26%20%20%35%
22%50%42.5%17%27%20%20%35%
23%50%46.25%18%28%20%20%35%
24%50%50%19%29%20%20%35%
25%50%50%20%30%20%20%35%
26%50%50%21%31%20%20%35%
27%50%50%22%32%20%20%35%
28%50%50%23%33%20%20%35%
29%50%50%24%34%20%20%35%
30%50%50%25%35%20%20%35%
31%50%50%26%35%20%20%35%
32%50%50%27%35%20%20%35%
33%50%50%28%35%20%20%35%
34%50%50%29%35%20%20%35%
35%50%50%30%35%20%20%35%
36%50%50%31%35%20%20%35%
37%50%50%32%35%20%20%35%
38%50%50%33%35%20%20%35%
39%50%50%34%35%20%20%35%
40%50%50%35%35%20%20%35%
41%50%50%38.75%35%20%20%35%
42%50%50%42.5%35%20%20%35%
43%50%50%46.25%35%20%20%35%
44%50%50%50%35%20%20%35%
100%*****80%80%80%35%20%20%35%
AFFORDABLE UNIT
PERCENTAGE**
VERY LOW INCOME
DENSITY BONUS
LOW INCOME
DENSITY BONUS
MODERATE INCOME
DENSITY BONUS***
LAND DONATION
DENSITY BONUS SENIOR****
FOSTER YOUTH/
DISABLED VETS/
HOMELESS
COLLEGE
STUDENTS
REQUIRED INCENTIVES AND CONCESSIONS
In addition to the density bonus, the city or county is also required to provide one or more “incentives” or
“concessions” to each project which qualifies for a density bonus (except that market rate senior citizen
projects with no affordable units, and land donated for very low income housing, do not appear to be entitled
to incentives or concessions). A concession or incentive is defined as:
• A reduction in site development standards or a modification of zoning code or architectural design
requirements, such as a reduction in setback or minimum square footage requirements; or
• Approval of mixed use zoning; or
• Other regulatory incentives or concessions which actually result in identifiable and actual cost
reductions.
The number of required incentives or concessions is based on the percentage of affordable units in the
project:
1 5%10%*10%
2 10%17%20%
3 15%24%30%
4 100% Low/Very
Low/Mod
(20% Moderate allowed)
100% Low/Very
Low/Mod
(20% Moderate allowed)
100% Low/Very
Low/Mod
(20% Moderate allowed)
* One incentive or concession is also required for projects that include at least 20 percent of the total units
for lower income students in a student housing development.
The city or county is required to grant the concession or incentive proposed by the developer unless it
finds that the proposed concession or incentive does not result in identifiable and actual cost reductions to
provide for affordable housing costs or rents, would cause a public health or safety problem, would harm
historical property, or would be contrary to law. The Density Bonus Law restricts the types of information
and reports that a developer may be required to provide to the local jurisdiction in order to obtain the
requested incentive or concession. A 2021 appellate court case, Schreiber v. City of Los Angeles, held that a
local government may not require an applicant to submit a pro forma or other documentation to prove that a
requested incentive or concession is required in order to make the housing development economically
feasible. However, local agenices can require applicants to show that requested incentives and concessions
will result in cost reductions for the project to provide for affordable housing costs or rents. The local
jurisdiction has the burden of proof in the event it declines to grant a requested incentive or concession.
Financial incentives, fee waivers and reductions in dedication requirements may be, but are not required to
be, provided by the city or county. The developer may be entitled to the incentives and concessions even
without a request for a density bonus.
OTHER FORMS OF ASSISTANCE
A development qualifying for a density bonus also receives two additional forms of assistance which have
important benefits for a housing project:
• Waiver or Reduction of Development Standards. If any other city or county development standard
would physically prevent the project from being built at the permitted density and with the granted
concessions/incentives, the developer may propose to have those standards waived or reduced. The city
or county is not permitted to apply any development standard which physically precludes the
construction of the project at its permitted density and with the granted concessions/incentives. The
NO. OF INCENTIVES/
CONCESSIONS
VERY LOW INCOME
PERCENTAGE
LOWER INCOME
PERCENTAGE
MODERATE INCOME
PERCENTAGE
MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022 5
city or county is not required to waive or reduce development standards that would cause a public health
or safety problem, cause an environmental problem, harm historical property, or would be contrary to
law. The waiver or reduction of a development standard does not count as an incentive or concession,
and there is no limit on the number of development standard waivers that may be requested or granted.
Development standards which have been waived or reduced utilizing this section include setback, lot
coverage and open space requirements, and should apply to building height limits as well. This ability to
force the locality to modify its normal development standards is sometimes the most compelling reason
for the developer to structure a project to qualify for the density bonus.
• Maximum Parking Requirements. Upon the developer’s request, the city or county may not require
more than the following parking ratios for a density bonus project (inclusive of parking for persons
with disabilities):
Studio 1 space
1 Bedroom 1 space
2 Bedroom 1.5 spaces
3 Bedroom 1.5 spaces
4 Bedroom 2.5 spaces
• Special Parking Requirements. Lower parking ratios apply to specified projects (although local
jurisdictions can require higher parking ratios if supported by a specified parking study):
Rental/for sale projects with at least 11% very low income or 20% lower
income units, within 1/2 mile of accessible major transit stop
0.5 spaces per unit
Rental projects 100% affordable to lower income, within 1/2 mile of
accessible major transit stop
0 spaces per unit
Rental senior projects 100% affordable to lower income, either with
paratransit service or within 1/2-half mile of accessible bus route
(operating at least eight times per day)
0 spaces per unit
Rental special needs projects 100% affordable to lower income households,
either with paratransit service or within 1/2-half mile of accessible bus route
(operating at least eight times per day)
0 spaces per unit
Rental supportive housing developments 100% affordable to lower income
households
0 spaces per unit
For sale projects with at least 40% moderate income units, within ½
mile of accessible major transit stop
0.5 spaces per bedroom
Onsite spaces may be provided through tandem or uncovered
parking, but not onstreet parking. Requesting these parking
standards does not count as an incentive or concession, but
the developer may request further parking standard reductions
as an incentive or concession. This is one of the most important
benefits of the density bonus statute. In many cases, achieving
a reduction in parking requirements may be more valuable
than the additional permitted units. In higher density
developments requiring the use of structured parking, the
construction cost of structured parking is very expensive,
costing upwards of $20,000 per parking space. While this
provision of the density bonus statute can be used to reduce
excessive parking requirements, care must be taken not to
impact the project’s marketability by reducing parking to
6 MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022
minimum requirements which lead to parking shortages.
AFFORDABLE HOUSING RESTRICTIONS
• Rental Units. Affordable rental units must be restricted by an agreement which sets maximum incomes
and rents for those units. As of January 1, 2015, the income and rent restrictions must remain in place for
a 55 year term for very low or lower income units (formerly only a 30 year term was required).
Rents must be restricted as follows (continue to page 7):
• For very low income units, rents may not exceed 30% x 50% of the area median income for a
household size suitable for the unit.
• For lower income units, rents may not exceed 30% x 60% of the area median income for a household
size suitable for the unit.
• In 100% affordable housing developments, the rent for at least 20% of the units must meet the rent
standards of Health and Safety Code Section 50053, and the remaining units may instead meet Low
Income Housing Tax Credit rent standards.
• Area median income is determined annually by regulation of the California Department of Housing
and Community Development, based upon median income regulations adopted by the U.S.
Department of Housing and Urban Development.
• Rents must include a reasonable utility allowance.
• Household size appropriate to the unit means 1 for a studio unit, 2 for a one bedroom unit, 3 for a two
bedroom unit, 4 for a three bedroom unit, etc.
• For Sale Units. Affordable for sale units must be sold to the initial buyer at an affordable housing cost.
Housing related costs include mortgage loan payments, mortgage insurance payments, property taxes
and assessments, homeowner association fees, reasonable utilities allowance, insurance premiums,
maintenance costs, and space rent.
• For very low income units, housing costs may not exceed 30% x 50% of the area median income for
a household size suitable for the unit.
• For lower income units, housing costs may not exceed 30% x 70% of the area median income for a
household size suitable for the unit.
• For moderate income units, housing costs may not exceed 35% x 110% of the area median income
for a household size suitable for the unit.
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• Buyers must enter into an equity sharing agreement with the city or county, unless the equity
sharing requirements conflict with the requirements of another public funding source or law. The
equity sharing agreement does not restrict the resale price, but requires the original owner to pay
the city or county a portion of any appreciation received on resale.
• The city/county percentage of appreciation is the purchase price discount received by the original
buyer, plus any down payment assistance provided by the city/county. (For example, if the original
sales price is $300,000, and the original fair market value is $400,000, and there is no city/county
down payment assistance, the city/county subsidy is $100,000, and the city/county’s share of
appreciation is 25%).
• The seller is permitted to retain its original down payment, the value of any improvements made to
the home, and the remaining share of the appreciation.
• The income and affordability requirements are not binding on resale purchasers (but if other public
funding sources or programs are used, the requirements may apply to resales for a fixed number of
years).
As an alternative to the above requirements, developers of for-sale density bonus housing developments
may sell affordable units to nonprofit housing corporations rather than selling the units directly to a low
or moderate income homebuyer. The nonprofit housing corporation must then sell each home to a lower
income buyer subject to affordability requirements with a term of at least 45 years, an equity sharing
agreement, and a repurchase option in favor of the nonprofit corporation.
LOCAL GOVERNMENT PROCESSING OF DENSITY BONUS APPLICATIONS
Under new legislation effective in 2019, local governments are now required to notify developers what
information must be submitted for a complete density bonus application. Once a development application
is determined to be complete, the local government must notify the developer the level of density bonus
and parking ratio the development is eligible to receive. If the developer requests incentives, concessions,
waivers or reductions of development standards, the local jurisdiction is required to notify the developer if it
has submitted sufficient information necessary for the local government to make a determination on those
issues.
HOW THE DENSITY BONUS WORKS FOR 100% AFFORDABLE PROJECTS
2019 legislation requires local governments to grant an 80% density bonus to housing projects in which all
of the units (other than manager’s units) are restricted to very low, low and moderate income residents, with
a maximum of 20% restricted to moderate income units. If a 100% affordable project is located within a half
mile of a major transit stop, the local government may not impose any maximum density limits at all, and the
project is further entitled to receive a maximum height increase of up to three additional stories or 33 feet.
However, if the project receives a waiver from maximum controls on density, it is not eligible for the waiver or
reduction of any development standards which would otherwise be available. 100% affordable projects are
also entitled to a fourth incentive or concession.
HOW THE DENSITY BONUS WORKS FOR SENIOR PROJECTS
As shown in the Density Bonus Chart on page 4, a senior citizen housing development of at least 35 units
meeting the requirements of Section 51.3 or 51.12 of the Civil Code qualifies for a 20% density bonus. This
is a very desirable option for senior housing developments. In jurisdictions where the local ordinances do not
reduce the parking requirements for senior housing developments, the reduced parking requirements alone
may justify applying for a density bonus.
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HOW THE DENSITY BONUS WORKS FOR STUDENT HOUSING PROJECTS
New legislation taking effect in 2019 requires cities and counties to grant a 35% density bonus for housing
developments that will include at least 20% of the units for low income college students. The housing must
be used exclusively for full-time students at accredited colleges, and must be subject to an operating
agreement or master lease with one or more colleges. Unlike the maximum income requirements for other
forms of affordable housing, resident income levels are determined through the student’s eligibility for the
state’s Cal Grant financial aid program. Affordable rent levels are also specially tailored for a student
population, with maximum rents established per bed for individual residents, rather than for the entire
apartment unit. Homeless students receive priority for affordable units.
HOW THE DENSITY BONUS WORKS FOR COMMERCIAL PROJECTS
The Density Bonus Law requires that cities and counties provide a “development bonus” to commercial
developers who partner with affordable housing developers for the construction of affordable housing on
the commercial project site, or offsite within the jurisdiction located near schools, employment and a major
transit stop. The commercial developer may participate through the donation of land or funds for the
affordable housing, or direct construction of the housing units. The partnership between the commercial
developer and the affordable developer can occur through a newly formed legal entity such as a corporation,
LLC or partnership, or can take the shape of a contractual agreement between the parties. To be eligible for
the development bonus, at least 30% of the housing units must be restricted to lower income residents or
15% of the housing units must be restricted to very low income residents. Unlike the primary Density Bonus
Law, there is no fixed amount of increased density awarded to the developer. Instead, the development
bonus can be any mutually agreeable incentive, including up to a 20% increase in development intensity,
floor area ratio, or height limits, up to a 20% reduction in parking requirements, use of a limited use
elevator, or an exception to a zoning ordinance or land use requirement. Commercial developers who need
extra leverage to obtain more favorable development standards for their project may want to consider
providing affordable housing in order to take advantage of the benefits of the development bonus.
HOW THE DENSITY BONUS WORKS FOR CONDOMINIUM CONVERSION PROJECTS
The density bonus statute provides for a density bonus of up to 25% for condominium conversion projects
providing at least 33% for the total units to low or moderate income households or 15% of the units to lower
income households. Many condominium conversion projects are not designed in a manner that allows them
to take advantage of the opportunity to construct additional units, but some projects may find this helpful.
HOW THE DENSITY BONUS WORKS FOR CHILDCARE
Housing projects that provide childcare are eligible for a separate density bonus equal to the size of the
childcare facility. The childcare facility must remain in operation for at least the length of the affordability
covenants. A percentage of the childcare spaces must also be made available to low and moderate income
families. A separate statute permits cities and counties to grant density bonuses to commercial and
industrial projects of at least 50,000 square feet, when the developer sets aside at least 2,000 square feet
in the building and 3,000 square feet of outside space for a childcare facility.
HOW TO OBTAIN A DENSITY BONUS THROUGH LAND DONATION
Many market rate housing developers are uncomfortable with building and marketing affordable units
themselves, whether due to their lack of experience with the affordable housing process or because of their
desire to concentrate on their core market rate homes. Other developers may have sites that are
underutilized in terms of project density. The Density Bonus Law contains a special sliding scale bonus for
land donation which allows those developers to turn over the actual development of the affordable units to
local agencies or experienced low income developers. The density bonus is available for the donation of at
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least an acre of fully entitled land, with all needed public facilities and infrastructure, and large enough for
the construction of a high density very low income project containing 10% of the total homes in the
development. The parcel must be located within the boundary of the proposed development or, subject to
the approval of the jurisdiction, within one-fourth mile of the boundary of the proposed development. The
more units that can be built on the donated land, the larger the density bonus. Because of the parcel size
requirements, this option is only practical for larger developments. The land donation density bonus can be
combined with the regular density bonus provided for the development of affordable units, up to a maximum
35% density bonus. A master planned community developer needs to carefully evaluate the land donation
option as opposed to engaging an affordable housing developer to fulfill the project’s affordable housing
obligations. In many cases the master developer will prefer to control the affordable component of the
project through a direct agreement with the affordable housing developer, rather than allowing the local
government to control the project.
FLOOR AREA RATIO BONUSES
Under new legislation effective in 2019, a local jurisdiction is permitted to grant a floor area ratio bonus
rather than a traditional density bonus to certain high density affordable housing projects adjacent to public
transit. Eligible projects are also entitled to special parking ratios of one-tenth of a parking space per
affordable unit and one-half space per market rate unit. To be eligible for the floor area ratio bonus, the
project must restrict at least 20 percent of the units to very low income tenants, must be located within a
transit priority area or near a major transit stop, and must be in compliance with local height limits.
How the Density Bonus Can Help in a Friendly Jurisdiction
While the Density Bonus Law is often used by developers to obtain more housing than the local jurisdiction
would ordinarily permit, it can also be a helpful land use tool in jurisdictions which favor the proposed project
and want to provide support. Planners in many cities and counties may be disposed by personal ideology
or local policy to encourage the construction of higher density housing and mixed use developments near
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transit stops and downtown areas, but are hampered by existing general plan standards and zoning from
approving these sorts of projects. Elected officials often support these projects too, but may find it politically
difficult to oppose neighborhood and environmental groups over the necessary general plan amendments,
zoning changes and CEQA approvals.
The density bonus can provide a useful mechanism for increasing allowable density without requiring
local officials to approve general plan amendments and zoning changes. A project that satisfies the
requirements of the Density Bonus Law often can obtain the necessary land use approvals through the
award of the density bonus units and requested concessions and incentives, without having to amend the
underlying land use requirements. Friendly local officials may encourage the use of the density bonus to
“force” the jurisdiction to approve a desired project.
How the Density Bonus Law Can Help in a Hostile Jurisdiction
It is important to know that the density bonus is a state law requirement which is mandatory on cities and
counties, even charter cities which are free from many other state requirements. A developer who meets
the law’s requirements for affordable or senior units is entitled to the density bonus and other assistance
as of right, regardless of the locality’s desires (subject to limited health and safety exceptions). The density
bonus statute can be used to achieve reductions in development standards or the granting of concessions
or incentives from jurisdictions that otherwise would not be inclined to grant those items. Examples might
include a reduction in parking standards if those standards are deemed excessive by the developer, or other
reductions in development standards if needed to achieve the total density permitted by the density bonus.
Developers who nonetheless encounter hostility from local jurisdictions are provided several tools to ensure
that a required density bonus is actually granted. Developers are entitled to an informal meeting with a local
jurisdiction which fails to modify a requested development standard. If a developer successfully sues the
locality to enforce the density bonus requirements, it is entitled to an award of its attorneys’ fees. The
obligation to pay a developer’s attorneys’ fees is a powerful incentive for local jurisdictions to voluntarily
comply with the state law density bonus requirements, even when the jurisdiction is not in favor of its effects
on the project.
CEQA Issues in Density Bonus Projects
Although there is no specific density bonus exemption from the California Environmental Quality Act
(CEQA), many density bonus projects are likely candidates for urban infill and affordable housing
exemptions from CEQA. One commonly invoked exemption is the Class 32 urban infill exemption found in
CEQA Guidelines Section 15332. That exemption is available if the project is consistent with applicable
general plan designation and zoning, the site is five acres or less and surrounded by urban uses, is not
habitat for endangered, rare or threatened species, does not have any significant effects relating to traffic,
noise, air quality or water quality, and is adequately served by utilities and public services. Other exemptions
are available for high density housing projects near major transit stops (CEQA Guidelines Section 15195)
and affordable housing projects of up to 100 units (CEQA Guidelines Section 15194).
A 2011 case, Wollmer v. City of Berkeley, clarified the use of the CEQA infill exemption for density bonus
projects. In that case, an opponent of a Berkeley density bonus project challenged the City’s use of the
urban infill exemption on the grounds that the City’s modifications and waivers of development standards,
as required under the Density Bonus Law, meant that the project was not consistent with existing zoning.
The court rejected that argument, finding that the modifications required by the Density Bonus Law did not
disqualify the project from claiming the exemption.
Not all density bonus projects will qualify for one of these CEQA exemptions, however. Sometimes the
additional density provided to non-exempt projects may bring the project out of the coverage of an existing
CEQA approval for a general plan, specific plan or other larger project. For instance, if a previously approved
environmental impact report analyzed a 100 unit project as the largest allowed under existing zoning, but
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the developer is able to qualify for 120 units with a density bonus, the existing EIR may not cover the larger
project. The larger density bonus project may require additional CEQA analysis for approval.
Using the Density Bonus to Satisfy Inclusionary Housing Requirements
Many of California’s cities and counties have adopted inclusionary housing ordinances, which typically
require that a specified percentage of units in a new housing development be restricted as affordable units.
The inclusionary requirements significantly reduce income from rental units and sales prices of for-sale
homes. In today’s tight housing market, compliance with local inclusionary requirements may make many
projects economically infeasible. The density bonus provides one method for developers to improve the
economics of their project while still complying with the inclusionary A 2013 case, Latinos Unidos del Valle de
Napa y Solano v. County of Napa, held that inclusionary units qualify as affordable units for purposes of the
Density Bonus Law. The case confirmed that the density bonus is a financial tool available to help developers
achieve city and county inclusionary housing requirements. In 2021, the Legislature clarified that for
purposes of qualifying for a density bonus, the “total units” in a housing development include affordable
units that are designated to satisfy local inclusionary housing requirements.
How the Density Bonus Works for Supportive Housing Projects
The Legislature recently adopted legislation (AB 2162 of 2018) that is very helpful to developers of
“supportive housing projects” that are linked to services for residents. This legislation streamlines project
approvals for these developments, making supportive housing a use by right in zones where multifamily
housing is permitted, even in nonresidential zones. “Use by right” means that the local jurisdiction may
not require a discretionary approval for the project, such as a conditional use permit or planned unit
development permit, although it may apply written objective development standards to the project. As a use
by right, the project is also exempt from CEQA. In addition, special parking rules are available to supportive
housing projects within a half mile of a public transit stop.
There are a number of requirements that must be satisfied in order to qualify for the streamlined approval
process for supportive housing projects. All of the units in the project (other than manager’s units) must be
restricted to lower income residents at an affordable rent, for a 55 year period. A minimum number of those
units must also be made available to a target population that may include persons with disabilities or other
persons who are homeless or at risk of homelessness. The project must provide a plan for providing onsite
supportive services to residents, and must devote a minimum amount of space in the development that can
be used for providing those services.
The supportive housing legislation specifically allows applicants for these projects to also obtain the benefits
of the density bonus law. Supportive housing projects should generally qualify for a density bonus due to the
100% low income affordability requirement under the supportive housing law. The density bonus law can
be a helpful tool for supportive housing projects that require additional density, modifications or waivers of
development standards, or relaxed parking requirements.
How the Density Bonus Works for Low Income Housing Tax Credit Projects
The density bonus can be a very helpful tool for housing projects that qualify for federal and state low in-
come housing tax credits (LIHTC). These projects often need both density increases and changes in local
development requirements in order to be economically feasible. The Legislature’s recent adoption of the
80% density bonus for projects that are 100% affordable has made the density bonus law even more useful
for LIHTC housing projects.
In order to successfully compete for tax credits, most LIHTC projects in California restrict the income limits
of project residents at levels that also meet the density bonus law’s affordability requirements. While the
tenant income levels required under the two programs are generally compatible, the maximum rent levels
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for affordable units permitted under the state density bonus law can often be significantly lower than the
rents permitted for affordable units under the LIHTC standards. In some circumstances. this difference in
permitted rent levels can significantly impact the economics of a LIHTC project that obtains a density bonus.
However, the rent requirements for the 80% density bonus are specifically tailored to be compatible with the
LIHTC law, allowing up to 80% of the affordable units to meet the LIHTC affordable rent restrictions instead
of the affordable rent levels normally required under the density bonus law. This feature has made the
density bonus increasingly attractive for LIHTC projects.
While the density bonus law and LIHTC program are largely compatible, it is still necessary for LIHTC
projects to meet all of the requirements of the density bonus law for tenant incomes and affordable rents.
These requirements will be contained in separate regulatory agreements implementing the density bonus
requirements. Compliance with LIHTC requirements does not supersede or automatically satisfy all density
bonus law requirements.
Density Bonus and Replacement Housing
Developers obtaining a density bonus are required to replace existing units which were previously occupied
by very low or lower income households or subject to rent control, when those units have been demolished
or vacated prior to the density bonus application. The housing development must also meet the applicable
affordable housing standards, including the replacement units. As a result of uncertainty about how to apply
these standards when the income levels of prior residents is unknown, the Density Bonus Law establishes
a rebuttable presumption for the income level of the replacement unit when the income level of the actual
prior resident is unknown.
Density Bonus in the Coastal Zone
When affordable housing is proposed in the coastal zone, the Density Bonus Law’s focus on encouraging the
development of affordable housing could clash with the California Coastal Act’s focus on environmental
protection. Legislation effective in 2019 now requires the density bonus to be administered in the Coastal
Zone in a manner that is consistent and harmonized with the California Coastal Act. This legislation
overturns a 2016 appellate court ruling, Kalnel Gardens, LLC v. City of Los Angeles, which found that a
proposed housing project that violates the Coastal Act as a result of a density bonus could be denied on that
basis. The court in Kalnel Gardens held that the Density Bonus Law is subordinate to the Coastal Act, but the
new language attempts to strike a balance between the state goals of promoting housing and protecting the
coast.
Density Bonus – A Flexible Tool
The Density Bonus Law can be a powerful tool for different types of development projects, whether they
are traditional affordable housing projects, predominantly market rate housing developments, or senior
projects. Obtaining greater density can help the developer of any project bring costs and financing sources
into line by putting more homes on the land, reducing the per unit land costs. Use of the favorable parking
requirements can reduce the amount of costly land needed for parking. The incentives and concessions to
be provided by the local government can provide a helpful way to modify development requirements which
may stand in the way of a successful project. Of course there is a price to pay for these benefits—the
affordable units needed to earn the density bonus. Developers need to make a cost-benefit determination
whether the cost of compliance is worth the benefits. But the Density Bonus Law is unquestionably a useful
option for housing developers trying to make financial sense of projects in today’s economy.
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Density Bonus Statutes
Government Code Sections 65915 – 65918.
Effective as of January 1, 2022
65915.
(a) (1) When an applicant seeks a density
bonus for a housing development within, or for the
donation of land for housing within, the jurisdiction of
a city, county, or city and county, that local
government shall comply with this section. A city,
county, or city and county shall adopt an ordinance
that specifies how compliance with this section will be
implemented. Except as otherwise provided in
subdivision (s), failure to adopt an ordinance shall not
relieve a city, county, or city and county from complying
with this section.
(2) A local government shall not condition the
submission, review, or approval of an application
pursuant to this chapter on the preparation of an
additional report or study that is not otherwise required
by state law, including this section. This subdivision
does not prohibit a local government from requiring
an applicant to provide reasonable documentation
to establish eligibility for a requested density bonus,
incentives or concessions, as described in subdivision
(d), waivers or reductions of development standards,
as described in subdivision (e), and parking ratios, as
described in subdivision (p).
(3) In order to provide for the expeditious processing of
a density bonus application, the local government shall
do all of the following:
(A) Adopt procedures and timelines for processing a
density bonus application.
(B) Provide a list of all documents and information
required to be submitted with the density bonus
application in order for the density bonus application to
be deemed complete. This list shall be consistent with
this chapter.
(C) Notify the applicant for a density bonus whether
the application is complete in a manner consistent with
the timelines specified in Section 65943.
(D) (i) If the local government notifies the applicant
that the application is deemed complete pursuant to
subparagraph (C), provide the applicant with a
determination as to the following matters:
(I) The amount of density bonus, calculated pursuant
to subdivision (f), for which the applicant is eligible.
(II) If the applicant requests a parking ratio pursuant
to subdivision (p), the parking ratio for which the
applicant is eligible.
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(III) If the applicant requests incentives or concessions
pursuant to subdivision (d) or waivers or reductions of
development standards pursuant to subdivision (e),
whether the applicant has provided adequate
information for the local government to make a
determination as to those incentives, concessions, or
waivers or reductions of development standards.
(ii) Any determination required by this subparagraph
shall be based on the development project at the time
the application is deemed complete. The local
government shall adjust the amount of density bonus
and parking ratios awarded pursuant to this section
based on any changes to the project during the course
of development.
(b) (1) A city, county, or city and county shall grant one
density bonus, the amount of which shall be as
specified in subdivision (f), and, if requested by the
applicant and consistent with the applicable
requirements of this section, incentives or concessions,
as described in subdivision (d), waivers or reductions
of development standards, as described in subdivision
(e), and parking ratios, as described in subdivision (p),
if an applicant for a housing development seeks and
agrees to construct a housing development,
excluding any units permitted by the density bonus
awarded pursuant to this section, that will contain at
least any one of the following:
(A) Ten percent of the total units of a housing
development for rental or sale to lower income
households, as defined in Section 50079.5 of the
Health and Safety Code.
(B) Five percent of the total units of a housing
development for rental or sale to very low income
households, as defined in Section 50105 of the
Health and Safety Code.
(C) A senior citizen housing development, as defined
in Sections 51.3 and 51.12 of the Civil Code, or a
mobilehome park that limits residency based on age
requirements for housing for older persons pursuant to
Section 798.76 or 799.5 of the Civil Code.
(D) Ten percent of the total dwelling units of a
housing development are sold to persons and families
of moderate income, as defined in Section 50093 of
the Health and Safety Code, provided that all units in
the development are offered to the public for purchase.
(E) Ten percent of the total units of a housing
development for transitional foster youth, as defined
in Section 66025.9 of the Education Code, disabled
veterans, as defined in Section 18541, or homeless
persons, as defined in the federal McKinney-Vento
Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.).
The units described in this subparagraph shall be
subject to a recorded affordability restriction of 55
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50053 of the Health and Safety Code.
(2) For purposes of calculating the amount of the
density bonus pursuant to subdivision (f), an applicant
who requests a density bonus pursuant to this
subdivision shall elect whether the bonus shall be
awarded on the basis of subparagraph (A), (B), (C), (D),
(E), (F), or (G) of paragraph (1).
(c) (1) (A) An applicant shall agree to, and the city,
county, or city and county shall ensure, the continued
affordability of all very low and low-income rental units
that qualified the applicant for the award of the density
bonus for 55 years or a longer period of time if required
by the construction or mortgage financing assistance
program, mortgage insurance program, or rental
subsidy program.
(B) (i) Except as otherwise provided in clause (ii), rents
for the lower income density bonus units shall be set at
an affordable rent, as defined in Section 50053 of the
Health and Safety Code.
(ii) For housing developments meeting the criteria of
subparagraph (G) of paragraph (1) of subdivision (b),
rents for all units in the development, including both
base density and density bonus units, shall be as
follows:
(I) The rent for at least 20 percent of the units in the
development shall be set at an affordable rent, as
defined in Section 50053 of the Health and Safety
Code.
(II) The rent for the remaining units in the development
shall be set at an amount consistent with the maximum
rent levels for a housing development that receives an
allocation of state or federal low-income housing tax
credits from the California Tax Credit Allocation
Committee.
(2) (A) An applicant shall agree to ensure, and the city,
county, or city and county shall ensure, that a for-sale
unit that qualified the applicant for the award of the
density bonus meets either of the following conditions:
(i) The unit is initially occupied by a person or family of
very low, low, or moderate income, as required, and it is
offered at an affordable housing cost, as that cost is
defined in Section 50052.5 of the Health and Safety
Code and is subject to an equity sharing agreement.
(ii) The unit is purchased by a qualified nonprofit
housing corporation pursuant to a recorded contract
that satisfies all of the requirements specified in
paragraph (10) of subdivision (a) of Section 402.1 of
the Revenue and Taxation Code and that includes all of
the following:
(I) A repurchase option that requires a subsequent
purchaser of the property that desires to resell or
years and shall be provided at the same affordability
level as very low income units.
(F) (i) Twenty percent of the total units for lower
income students in a student housing development
that meets the following requirements:
(I) All units in the student housing development will be
used exclusively for undergraduate, graduate, or
professional students enrolled full time at an institution
of higher education accredited by the Western
Association of Schools and Colleges or the
Accrediting Commission for Community and Junior
Colleges. In order to be eligible under this subclause,
the developer shall, as a condition of receiving a
certificate of occupancy, provide evidence to the city,
county, or city and county that the developer has
entered into an operating agreement or master lease
with one or more institutions of higher education for
the institution or institutions to occupy all units of the
student housing development with students from that
institution or institutions. An operating agreement or
master lease entered into pursuant to this subclause
is not violated or breached if, in any subsequent year,
there are not sufficient students enrolled in an
institution of higher education to fill all units in the
student housing development.
(II) The applicable 20-percent units will be used for
lower income students.
(III) The rent provided in the applicable units of the
development for lower income students shall be
calculated at 30 percent of 65 percent of the area
median income for a single-room occupancy unit type.
(IV) The development will provide priority for the
applicable affordable units for lower income students
experiencing homelessness. A homeless service
provider, as defined in paragraph (3) of subdivision (e)
of Section 103577 of the Health and Safety Code, or
institution of higher education that has knowledge of a
person’s homeless status may verify a person’s status
as homeless for purposes of this subclause.
(ii) For purposes of calculating a density bonus granted
pursuant to this subparagraph, the term “unit” as used
in this section means one rental bed and its pro rata
share of associated common area facilities. The units
described in this subparagraph shall be subject to a
recorded affordability restriction of 55 years.
(G) One hundred percent of all units in the
development, including total units and density bonus
units, but exclusive of a manager’s unit or units, are
for lower income households, as defined by Section
50079.5 of the Health and Safety Code, except that up
to 20 percent of the units in the development, including
total units and density bonus units, may be for
moderate-income households, as defined in Section
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convey the property to offer the qualified nonprofit
corporation the right to repurchase the property prior
to selling or conveying that property to any other
purchaser.
(II) An equity sharing agreement.
(III) Affordability restrictions on the sale and
conveyance of the property that ensure that the
property will be preserved for lower income housing for
at least 45 years for owner-occupied housing units and
will be sold or resold only to persons or families of very
low, low, or moderate income, as defined in Section
50052.5 of the Health and Safety Code.
(B) For purposes of this paragraph, a “qualified
nonprofit housing corporation” is a nonprofit housing
corporation organized pursuant to Section 501(c)(3) of
the Internal Revenue Code that has received a welfare
exemption under Section 214.15 of the Revenue and
Taxation Code for properties intended to be sold to
low-income families who participate in a special
no-interest loan program.
(2) An applicant shall agree to, and the city, county, or
city and county shall ensure that, the initial occupant
of all for-sale units that qualified the applicant for the
award of the density bonus are persons and families
of very low, low, or moderate income, as required, and
that the units are offered at an affordable housing cost,
as that cost is defined in Section 50052.5 of the Health
and Safety Code.
(C) The local government shall enforce an equity
sharing agreement required pursuant to clause (i) or
(ii) of subparagraph (A), unless it is in conflict with the
requirements of another public funding source or law.
The following apply to the equity sharing agreement:
(i) Upon resale, the seller of the unit shall retain the
value of any improvements, the downpayment, and the
seller’s proportionate share of appreciation.
(ii) Except as provided in clause (v), the local
government shall recapture any initial subsidy, as
defined in clause (iii), and its proportionate share of
appreciation, as defined in clause (iv), which amount
shall be used within five years for any of the purposes
described in subdivision (e) of Section 33334.2 of the
Health and Safety Code that promote home ownership.
(iii) For purposes of this subdivision, the local
government’s initial subsidy shall be equal to the fair
market value of the home at the time of initial sale
minus the initial sale price to the moderate-income
household, plus the amount of any downpayment
assistance or mortgage assistance. If upon resale the
market value is lower than the initial market value, then
the value at the time of the resale shall be used as the
initial market value.
(iv) For purposes of this subdivision, the local
government’s proportionate share of appreciation shall
be equal to the ratio of the local government’s initial
subsidy to the fair market value of the home at the time
of initial sale.
(v) If the unit is purchased or developed by a qualified
nonprofit housing corporation pursuant to clause (ii) of
subparagraph (A) the local government may enter into
a contract with the qualified nonprofit housing
corporation under which the qualified nonprofit
housing corporation would recapture any initial subsidy
and its proportionate share of appreciation if the
qualified nonprofit housing corporation is required to
use 100 percent of the proceeds to promote
homeownership for lower income households as
defined by Health and Safety Code Section 50079.5
within the jurisdiction of the local government.
(3) (A) An applicant shall be ineligible for a density
bonus or any other incentives or concessions under
this section if the housing development is proposed on
any property that includes a parcel or parcels on which
rental dwelling units are or, if the dwelling units have
been vacated or demolished in the five-year period
preceding the application, have been subject to a
recorded covenant, ordinance, or law that restricts
rents to levels affordable to persons and families of
lower or very low income; subject to any other form of
rent or price control through a public entity’s valid
exercise of its police power; or occupied by lower or
very low income households, unless the proposed
housing development replaces those units, and either
of the following applies:
(i) The proposed housing development, inclusive of
the units replaced pursuant to this paragraph, contains
affordable units at the percentages set forth in
subdivision (b).
(ii) Each unit in the development, exclusive of a
manager’s unit or units, is affordable to, and occupied
by, either a lower or very low income household.
(B) For the purposes of this paragraph, “replace” shall
mean either of the following:
(i) If any dwelling units described in subparagraph (A)
are occupied on the date of application, the proposed
housing development shall provide at least the same
number of units of equivalent size to be made available
at affordable rent or affordable housing cost to, and
occupied by, persons and families in the same or lower
income category as those households in occupancy. If
the income category of the household in occupancy is
not known, it shall be rebuttably presumed that lower
income renter households occupied these units in the
same proportion of lower income renter households to
all renter households within the jurisdiction, as
determined by the most recently available data from
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power and that is or was occupied by persons or
families above lower income, the city, county, or city
and county may do either of the following:
(i) Require that the replacement units be made
available at affordable rent or affordable housing cost
to, and occupied by, low-income persons or families.
If the replacement units will be rental dwelling units,
these units shall be subject to a recorded affordability
restriction for at least 55 years. If the proposed
development is for-sale units, the units replaced shall
be subject to paragraph (2).
(ii) Require that the units be replaced in compliance
with the jurisdiction’s rent or price control ordinance,
provided that each unit described in subparagraph (A)
is replaced. Unless otherwise required by the jurisdic-
tion’s rent or price control ordinance, these units shall
not be subject to a recorded affordability restriction.
(D) For purposes of this paragraph, “equivalent size”
means that the replacement units contain at least the
same total number of bedrooms as the units being
replaced.
(E) Subparagraph (A) does not apply to an applicant
seeking a density bonus for a proposed housing
development if the applicant’s application was
submitted to, or processed by, a city, county, or city and
county before January 1, 2015.
(d) (1) An applicant for a density bonus pursuant to
subdivision (b) may submit to a city, county, or city and
county a proposal for the specific incentives or
concessions that the applicant requests pursuant to
this section, and may request a meeting with the city,
county, or city and county. The city, county, or city and
county shall grant the concession or incentive
requested by the applicant unless the city, county, or
city and county makes a written finding, based upon
substantial evidence, of any of the following:
(A) The concession or incentive does not result in
identifiable and actual cost reductions, consistent with
subdivision (k), to provide for affordable housing costs,
as defined in Section 50052.5 of the Health and Safety
Code, or for rents for the targeted units to be set as
specified in subdivision (c).
(B) The concession or incentive would have a specific,
adverse impact, as defined in paragraph (2) of
subdivision (d) of Section 65589.5, upon public health
and safety or on any real property that is listed in the
California Register of Historical Resources and for
which there is no feasible method to satisfactorily
mitigate or avoid the specific, adverse impact without
rendering the development unaffordable to low-income
and moderate-income households.
(C) The concession or incentive would be contrary to
state or federal law.
the United States Department of Housing and Urban
Development’s Comprehensive Housing Affordability
Strategy database. For unoccupied dwelling units
described in subparagraph (A) in a development with
occupied units, the proposed housing development
shall provide units of equivalent size to be made
available at affordable rent or affordable housing cost
to, and occupied by, persons and families in the same
or lower income category as the last household in
occupancy. If the income category of the last
household in occupancy is not known, it shall be
rebuttably presumed that lower income renter
households occupied these units in the same
proportion of lower income renter households to all
renter households within the jurisdiction, as
determined by the most recently available data from
the United States Department of Housing and Urban
Development’s Comprehensive Housing
Affordability Strategy database. All replacement
calculations resulting in fractional units shall be
rounded up to the next whole number. If the
replacement units will be rental dwelling units, these
units shall be subject to a recorded affordability
restriction for at least 55 years. If the proposed
development is for-sale units, the units replaced shall
be subject to paragraph (2).
(ii) If all dwelling units described in subparagraph (A)
have been vacated or demolished within the five-year
period preceding the application, the proposed housing
development shall provide at least the same number
of units of equivalent size as existed at the highpoint
of those units in the five-year period preceding the
application to be made available at affordable rent or
affordable housing cost to, and occupied by, persons
and families in the same or lower income category as
those persons and families in occupancy at that time, if
known. If the incomes of the persons and families in
occupancy at the highpoint is not known, it shall be
rebuttably presumed that low-income and very low
income renter households occupied these units in the
same proportion of low-income and very low income
renter households to all renter households within the
jurisdiction, as determined by the most recently
available data from the United States Department of
Housing and Urban Development’s Comprehensive
Housing Affordability Strategy database. All replace-
ment calculations resulting in fractional units shall be
rounded up to the next whole number. If the
replacement units will be rental dwelling units, these
units shall be subject to a recorded affordability
restriction for at least 55 years. If the proposed
development is for-sale units, the units replaced shall
be subject to paragraph (2).
(C) Notwithstanding subparagraph (B), for any
dwelling unit described in subparagraph (A) that is or
was, within the five-year period preceding the
application, subject to a form of rent or price control
through a local government’s valid exercise of its police
18 MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022
(2) The applicant shall receive the following number of
incentives or concessions:
(A) One incentive or concession for projects that
include at least 10 percent of the total units for lower
income households, at least 5 percent for very low
income households, or at least 10 percent for persons
and families of moderate income in a development in
which the units are for sale.
(B) Two incentives or concessions for projects that
include at least 17 percent of the total units for lower
income households, at least 10 percent for very low
income households, or at least 20 percent for persons
and families of moderate income in a development in
which the units are for sale.
(C) Three incentives or concessions for projects that
include at least 24 percent of the total units for lower
income households, at least 15 percent for very low
income households, or at least 30 percent for persons
and families of moderate income in a development in
which the units are for sale.
(D) Four incentives or concessions for a project
meeting the criteria of subparagraph (G) of paragraph
(1) of subdivision (b). If the project is located within
one-half mile of a major transit stop, the applicant shall
also receive a height increase of up to three additional
stories, or 33 feet.
(E) One incentive or concession for projects that
include at least 20 percent of the total units for lower
income students in a student housing development.
(3) The applicant may initiate judicial proceedings if
the city, county, or city and county refuses to grant a
requested density bonus, incentive, or concession. If a
court finds that the refusal to grant a requested density
bonus, incentive, or concession is in violation of this
section, the court shall award the plaintiff reasonable
attorney’s fees and costs of suit. This subdivision shall
not be interpreted to require a local government to
grant an incentive or concession that has a specific,
adverse impact, as defined in paragraph (2) of
subdivision (d) of Section 65589.5, upon health or
safety, and for which there is no feasible method to
satisfactorily mitigate or avoid the specific adverse
impact. This subdivision shall not be interpreted to
require a local government to grant an incentive or
concession that would have an adverse impact on any
real property that is listed in the California Register
of Historical Resources. The city, county, or city and
county shall establish procedures for carrying out this
section that shall include legislative body approval of
the means of compliance with this section.
(4) The city, county, or city and county shall bear the
burden of proof for the denial of a requested
concession or incentive.
(e) (1) In no case may a city, county, or city and county
apply any development standard that will have the ef-
fect of physically precluding the construction of a
development meeting the criteria of subdivision (b) at
the densities or with the concessions or incentives
permitted by this section. Subject to paragraph (3),
an applicant may submit to a city, county, or city and
county a proposal for the waiver or reduction of devel-
opment standards that will have the effect of physically
precluding the construction of a development meeting
the criteria of subdivision (b) at the densities or with the
concessions or incentives permitted under this section,
and may request a meeting with the city, county, or
city and county. If a court finds that the refusal to grant
a waiver or reduction of development standards is in
violation of this section, the court shall award the
plaintiff reasonable attorney’s fees and costs of suit.
This subdivision shall not be interpreted to require a
local government to waive or reduce development
standards if the waiver or reduction would have a
specific, adverse impact, as defined in paragraph (2) of
subdivision (d) of Section 65589.5, upon health or
safety, and for which there is no feasible method to
satisfactorily mitigate or avoid the specific adverse
impact. This subdivision shall not be interpreted to
require a local government to waive or reduce
development standards that would have an adverse
impact on any real property that is listed in the
California Register of Historical Resources, or to grant
any waiver or reduction that would be contrary to state
or federal law.
(2) A proposal for the waiver or reduction of
development standards pursuant to this subdivision
shall neither reduce nor increase the number of
incentives or concessions to which the applicant is
entitled pursuant to subdivision (d).
(3) A housing development that receives a waiver from
any maximum controls on density pursuant to clause
(ii) of subparagraph (D) of paragraph (3) of
subdivision (f) shall only be eligible for a waiver or
reduction of development standards as provided in
subparagraph (D) of paragraph (2) of subdivision (d)
and clause (ii) of subparagraph (D) of paragraph (3)
of subdivision (f), unless the city, county, or city and
county agrees to additional waivers or reductions of
development standards.
(f) For the purposes of this chapter, “density bonus”
means a density increase over the otherwise maximum
allowable gross residential density as of the date of
application by the applicant to the city, county, or city
and county, or, if elected by the applicant, a lesser
percentage of density increase, including, but not
limited to, no increase in density. The amount of density
increase to which the applicant is entitled shall vary
according to the amount by which the percentage of
affordable housing units exceeds the percentage
established in subdivision (b).
MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022 19
(C) For housing developments meeting the criteria of
subparagraph (F) of paragraph (1) of subdivision (b),
the density bonus shall be 35 percent of the student
housing units.
(D) For housing developments meeting the criteria of
subparagraph (G) of paragraph (1) of subdivision (b),
the following shall apply:
(i) Except as otherwise provided in clause (ii), the den-
sity bonus shall be 80 percent of the number of units
for lower income households.
(ii) If the housing development is located within one-
half mile of a major transit stop, the city, county, or city
and county shall not impose any maximum controls on
density.
(4) For housing developments meeting the criteria of
subparagraph (D) of paragraph (1) of subdivision (b),
the density bonus shall be calculated as follows:
10 5
11 6
12 7
13 8
14 9
15 10
16 11
17 12
18 13
19 14
20 15
21 16
22 17
23 18
24 19
25 20
26 21
27 22
28 23
29 24
30 25
31 26
32 27
33 28
34 29
35 30
36 31
(1) For housing developments meeting the criteria of
subparagraph (A) of paragraph (1) of subdivision (b),
the density bonus shall be calculated as follows:
10 20
11 21.5
12 23
13 24.5
14 26
15 27.5
16 29
17 30.5
18 32
19 33.5
20 35
21 38.75
22 42.5
23 46.25
24 50
(2) For housing developments meeting the criteria of
subparagraph (B) of paragraph (1) of subdivision (b),
the density bonus shall be calculated as follows:
5 20
6 22.5
7 25
8 27.5
9 30
10 32.5
11 35
12 38.75
13 42.5
14 46.25
15 50
(3) (A) For housing developments meeting the criteria
of subparagraph (C) of paragraph (1) of subdivision (b),
the density bonus shall be 20 percent of the number of
senior housing units.
(B) For housing developments meeting the criteria of
subparagraph (E) of paragraph (1) of subdivision (b),
the density bonus shall be 20 percent of the number
of the type of units giving rise to a density bonus under
that subparagraph.
PERCENTAGE
LOW-INCOME
UNITS
PERCENTAGE
DENSITY
BONUS
PERCENTAGE
VERY LOW-INCOME
UNITS
PERCENTAGE
DENSITY
BONUS
PERCENTAGE
MODERATE-INCOME
UNITS
PERCENTAGE
DENSITY
BONUS
20 MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022
37 32
38 33
39 34
40 35
41 38.75
42 42.5
43 46.25
44 50
(5) All density calculations resulting in fractional units
shall be rounded up to the next whole number. The
granting of a density bonus shall not require, or be
interpreted, in and of itself, to require a general plan
amendment, local coastal plan amendment, zoning
change, or other discretionary approval.
(g) (1) When an applicant for a tentative subdivision
map, parcel map, or other residential development
approval donates land to a city, county, or city and
county in accordance with this subdivision, the
applicant shall be entitled to a 15-percent increase
above the otherwise maximum allowable residential
density for the entire development, as follows:
10 15
11 16
12 17
13 18
14 19
15 20
16 21
17 22
18 23
19 24
20 25
21 26
22 27
23 28
24 29
25 30
26 31
27 32
28 33
29 34
30 35
(2) This increase shall be in addition to any increase in
density mandated by subdivision (b), up to a maximum
combined mandated density increase of 35 percent if
an applicant seeks an increase pursuant to both this
subdivision and subdivision (b). All density calculations
resulting in fractional units shall be rounded up to the
next whole number. Nothing in this subdivision shall
be construed to enlarge or diminish the authority of a
city, county, or city and county to require a developer to
donate land as a condition of development. An
applicant shall be eligible for the increased density
bonus described in this subdivision if all of the following
conditions are met:
(A) The applicant donates and transfers the land no
later than the date of approval of the final subdivision
map, parcel map, or residential development
application.
(B) The developable acreage and zoning classification
of the land being transferred are sufficient to permit
construction of units affordable to very low income
households in an amount not less than 10 percent of
the number of residential units of the proposed
development.
(C) The transferred land is at least one acre in size or
of sufficient size to permit development of at least 40
units, has the appropriate general plan designation,
is appropriately zoned with appropriate development
standards for development at the density described
in paragraph (3) of subdivision (c) of Section 65583.2,
and is or will be served by adequate public facilities and
infrastructure.
(D) The transferred land shall have all of the permits
and approvals, other than building permits, necessary
for the development of the very low income housing
units on the transferred land, not later than the date of
approval of the final subdivision map, parcel map, or
residential development application, except that the
local government may subject the proposed
development to subsequent design review to the extent
authorized by subdivision (i) of Section 65583.2 if the
design is not reviewed by the local government before
the time of transfer.
(E) The transferred land and the affordable units shall
be subject to a deed restriction ensuring continued
affordability of the units consistent with paragraphs (1)
and (2) of subdivision (c), which shall be recorded on
the property at the time of the transfer.
(F) The land is transferred to the local agency or to a
housing developer approved by the local agency. The
local agency may require the applicant to identify and
transfer the land to the developer.
(G) The transferred land shall be within the boundary
of the proposed development or, if the local agency
agrees, within one-quarter mile of the boundary of the
proposed development.
PERCENTAGE
VERY LOW-INCOME
PERCENTAGE
DENSITY
BONUS
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county and consists of residential units or unimproved
residential lots and either a project to substantially
rehabilitate and convert an existing commercial
building to residential use or the substantial
rehabilitation of an existing multifamily dwelling, as
defined in subdivision (d) of Section 65863.4, where
the result of the rehabilitation would be a net increase
in available residential units. For the purpose of
calculating a density bonus, the residential units shall
be on contiguous sites that are the subject of one
development application, but do not have to be based
upon individual subdivision maps or parcels. The
density bonus shall be permitted in geographic areas of
the housing development other than the areas where
the units for the lower income households are located.
(j) (1) The granting of a concession or incentive shall
not require or be interpreted, in and of itself, to require
a general plan amendment, local coastal plan
amendment, zoning change, study, or other
discretionary approval. For purposes of this
subdivision, “study” does not include reasonable
documentation to establish eligibility for the
concession or incentive or to demonstrate that the
incentive or concession meets the definition set forth in
subdivision (k). This provision is declaratory of existing
law.
(2) Except as provided in subdivisions (d) and (e), the
granting of a density bonus shall not require or be
interpreted to require the waiver of a local ordinance or
provisions of a local ordinance unrelated to
development standards.
(k) For the purposes of this chapter, concession or
incentive means any of the following:
(1) A reduction in site development standards or a
modification of zoning code requirements or
architectural design requirements that exceed the
minimum building standards approved by the California
Building Standards Commission as provided in Part 2.5
(commencing with Section 18901) of Division 13 of the
Health and Safety Code, including, but not limited to, a
reduction in setback and square footage requirements
and in the ratio of vehicular parking spaces that would
otherwise be required that results in identifiable and
actual cost reductions, to provide for affordable
housing costs, as defined in Section 50052.5 of the
Health and Safety Code, or for rents for the targeted
units to be set as specified in subdivision (c).
(2) Approval of mixed-use zoning in conjunction with
the housing project if commercial, office, industrial,
or other land uses will reduce the cost of the housing
development and if the commercial, office, industrial, or
other land uses are compatible with the housing project
and the existing or planned development in the area
where the proposed housing project will be located.
(H) A proposed source of funding for the very low
income units shall be identified not later than the date
of approval of the final subdivision map, parcel map, or
residential development application.
(h) (1) When an applicant proposes to construct a
housing development that conforms to the
requirements of subdivision (b) and includes a
childcare facility that will be located on the premises of,
as part of, or adjacent to, the project, the city, county, or
city and county shall grant either of the following:
(A) An additional density bonus that is an amount
of square feet of residential space that is equal to or
greater than the amount of square feet in the childcare
facility.
(B) An additional concession or incentive that
contributes significantly to the economic feasibility of
the construction of the childcare facility.
(2) The city, county, or city and county shall require, as
a condition of approving the housing development, that
the following occur:
(A) The childcare facility shall remain in operation for
a period of time that is as long as or longer than the
period of time during which the density bonus units are
required to remain affordable pursuant to subdivision
(c).
(B) Of the children who attend the childcare facility, the
children of very low income households, lower income
households, or families of moderate income shall equal
a percentage that is equal to or greater than the
percentage of dwelling units that are required for very
low income households, lower income households, or
families of moderate income pursuant to subdivision
(b).
(3) Notwithstanding any requirement of this
subdivision, a city, county, or city and county shall not
be required to provide a density bonus or concession
for a childcare facility if it finds, based upon substantial
evidence, that the community has adequate childcare
facilities.
(4) “Childcare facility,” as used in this section, means a
child daycare facility other than a family daycare home,
including, but not limited to, infant centers, preschools,
extended daycare facilities, and schoolage childcare
centers.
(i) “Housing development,” as used in this section,
means a development project for five or more
residential units, including mixed-use developments.
For the purposes of this section, “housing
development” also includes a subdivision or common
interest development, as defined in Section 4100 of
the Civil Code, approved by a city, county, or city and
22 MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022
(3) Other regulatory incentives or concessions
proposed by the developer or the city, county, or city
and county that result in identifiable and actual cost
reductions to provide for affordable housing costs, as
defined in Section 50052.5 of the Health and Safety
Code, or for rents for the targeted units to be set as
specified in subdivision (c).
(l) Subdivision (k) does not limit or require the
provision of direct financial incentives for the housing
development, including the provision of publicly owned
land, by the city, county, or city and county, or the
waiver of fees or dedication requirements.
(m) This section does not supersede or in any way
alter or lessen the effect or application of the California
Coastal Act of 1976 (Division 20 (commencing with
Section 30000) of the Public Resources Code). Any
density bonus, concessions, incentives, waivers or
reductions of development standards, and parking
ratios to which the applicant is entitled under this
section shall be permitted in a manner that is
consistent with this section and Division 20
(commencing with Section 30000) of the Public
Resources Code.
(n) If permitted by local ordinance, nothing in this
section shall be construed to prohibit a city, county, or
city and county from granting a density bonus greater
than what is described in this section for a
development that meets the requirements of this
section or from granting a proportionately lower
density bonus than what is required by this section for
developments that do not meet the requirements of
this section.
(o) For purposes of this section, the following
definitions shall apply:
(1) “Development standard” includes a site or
construction condition, including, but not limited to, a
height limitation, a setback requirement, a floor area
ratio, an onsite open-space requirement, or a parking
ratio that applies to a residential development pursuant
to any ordinance, general plan element, specific plan,
charter, or other local condition, law, policy, resolution,
or regulation.
(2) “Located within one-half mile of a major transit
stop” means that any point on a proposed
development, for which an applicant seeks a density
bonus, other incentives or concessions, waivers or
reductions of development standards, or a vehicular
parking ratio pursuant to this section, is within one-half
mile of any point on the property on which a major
transit stop is located, including any parking lot owned
by the transit authority or other local agency operating
the major transit stop.
(3) “Lower income student” means a student who has a
household income and asset level that does not exceed
the level for Cal Grant A or Cal Grant B award recipients
as set forth in paragraph (1) of subdivision (k) of
Section 69432.7 of the Education Code. The eligibility
of a student to occupy a unit for lower income
students under this section shall be verified by an
affidavit, award letter, or letter of eligibility provided by
the institution of higher education in which the student
is enrolled or by the California Student Aid Commission
that the student receives or is eligible for financial aid,
including an institutional grant or fee waiver from the
college or university, the California Student Aid
Commission, or the federal government.
(4) “Major transit stop” has the same meaning as
defined in subdivision (b) of Section 21155 of the Public
Resources Code.
(5) “Maximum allowable residential density” means the
density allowed under the zoning ordinance and land
use element of the general plan, or, if a range of density
is permitted, means the maximum allowable density
for the specific zoning range and land use element of
the general plan applicable to the project. If the density
allowed under the zoning ordinance is inconsistent with
the density allowed under the land use element of the
general plan, the general plan density shall prevail.
(6) “Total units” or “total dwelling units” means a
calculation of the number of units that:
(A) Excludes a unit added by a density bonus awarded
pursuant to this section or any local law granting a
greater density bonus.
(B) Includes a unit designated to satisfy an inclusionary
zoning requirement of a city, county, or city and county.
(p) (1) Except as provided in paragraphs (2), (3), and
(4), upon the request of the developer, a city, county, or
city and county shall not require a vehicular parking
ratio, inclusive of parking for persons with a disability
and guests, of a development meeting the criteria of
subdivisions (b) and (c), that exceeds the following
ratios:
(A) Zero to one bedroom: one onsite parking space.
(B) Two to three bedrooms: one and one-half onsite
parking spaces.
(C) Four and more bedrooms: two and one-half parking
spaces.
(2) (A) Notwithstanding paragraph (1), if a
development includes at least 20 percent low-income
units for housing developments meeting the criteria of
subparagraph (A) of paragraph (1) of subdivision (b)
or at least 11 percent very low income units for housing
developments meeting the criteria of subparagraph
MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022 23
Health and Safety Code, then, upon the request of the
developer, a city, county, or city and county shall not
impose any minimum vehicular parking requirement.
A development that is a special needs housing
development shall have either paratransit service or
unobstructed access, within one-half mile, to fixed bus
route service that operates at least eight times per day.
(5) If the total number of parking spaces required for a
development is other than a whole number, the number
shall be rounded up to the next whole number. For
purposes of this subdivision, a development may
provide onsite parking through tandem parking or
uncovered parking, but not through onstreet parking.
(6) This subdivision shall apply to a development that
meets the requirements of subdivisions (b) and (c),
but only at the request of the applicant. An applicant
may request parking incentives or concessions beyond
those provided in this subdivision pursuant to
subdivision (d).
(7) This subdivision does not preclude a city, county, or
city and county from reducing or eliminating a parking
requirement for development projects of any type in
any location.
(8) Notwithstanding paragraphs (2) and (3), if a city,
county, city and county, or an independent consultant
has conducted an areawide or jurisdictionwide parking
study in the last seven years, then the city, county, or
city and county may impose a higher vehicular parking
ratio not to exceed the ratio described in paragraph (1),
based upon substantial evidence found in the parking
study, that includes, but is not limited to, an analysis
of parking availability, differing levels of transit access,
walkability access to transit services, the potential for
shared parking, the effect of parking requirements on
the cost of market-rate and subsidized developments,
and the lower rates of car ownership for low-income
and very low income individuals, including seniors and
special needs individuals. The city, county, or city and
county shall pay the costs of any new study. The city,
county, or city and county shall make findings, based
on a parking study completed in conformity with this
paragraph, supporting the need for the higher parking
ratio.
(9) A request pursuant to this subdivision shall neither
reduce nor increase the number of incentives or
concessions to which the applicant is entitled pursuant
to subdivision (d).
(q) Each component of any density calculation,
including base density and bonus density, resulting in
fractional units shall be separately rounded up to the
next whole number. The Legislature finds and declares
that this provision is declaratory of existing law.
(r) This chapter shall be interpreted liberally in favor of
(B) of paragraph (1) of subdivision (b), is located within
one-half mile of a major transit stop, and there is
unobstructed access to the major transit stop from the
development, then, upon the request of the developer,
a city, county, or city and county shall not impose a
vehicular parking ratio, inclusive of parking for persons
with a disability and guests, that exceeds 0.5 spaces
per unit. Notwithstanding paragraph (1), if a
development includes at least 40 percent
moderate-income units for housing developments
meeting the criteria of subparagraph (D) of paragraph
(1) of subdivision (b), is located within one-half mile
of a major transit stop, as defined in subdivision (b)
of Section 21155 of the Public Resources Code, and
the residents of the development have unobstructed
access to the major transit stop from the development
then, upon the request of the developer, a city, county,
or city and county shall not impose a vehicular parking
ratio, inclusive of parking for persons with a disability
and guests, that exceeds 0.5 spaces per bedroom.
(B) For purposes of this subdivision, “unobstructed
access to the major transit stop” means a resident is
able to access the major transit stop without
encountering natural or constructed impediments. For
purposes of this subparagraph, “natural or constructed
impediments” includes, but is not limited to, freeways,
rivers, mountains, and bodies of water, but does not
include residential structures, shopping centers,
parking lots, or rails used for transit.
(3) Notwithstanding paragraph (1), if a development
consists solely of rental units, exclusive of a manager’s
unit or units, with an affordable housing cost to lower
income families, as provided in Section 50052.5 of the
Health and Safety Code, then, upon the request of the
developer, a city, county, or city and county shall not
impose vehicular parking standards if the development
meets either of the following criteria:
(A) The development is located within one-half mile of a
major transit stop and there is unobstructed access to
the major transit stop from the development.
(B) The development is a for-rent housing development
for individuals who are 62 years of age or older that
complies with Sections 51.2 and 51.3 of the Civil Code
and the development has either paratransit service or
unobstructed access, within one-half mile, to fixed bus
route service that operates at least eight times per day.
(4) Notwithstanding paragraphs (1) and (8), if a
development consists solely of rental units, exclusive
of a manager’s unit or units, with an affordable housing
cost to lower income families, as provided in Section
50052.5 of the Health and Safety Code, and the
development is either a special needs housing
development, as defined in Section 51312 of the Health
and Safety Code, or a supportive housing
development, as defined in Section 50675.14 of the
24 MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022
producing the maximum number of total housing units.
(s) Notwithstanding any other law, if a city, including a
charter city, county, or city and county has adopted an
ordinance or a housing program, or both an ordinance
and a housing program, that incentivizes the
development of affordable housing that allows for
density bonuses that exceed the density bonuses
required by the version of this section effective through
December 31, 2020, that city, county, or city and
county is not required to amend or otherwise update its
ordinance or corresponding affordable housing incen-
tive program to comply with the amendments made to
this section by the act adding this subdivision, and is
exempt from complying with the incentive and
concession calculation amendments made to this
section by the act adding this subdivision as set forth in
subdivision (d), particularly subparagraphs (B) and (C)
of paragraph (2) of that subdivision, and the
amendments made to the density tables under
subdivision (f).
(t) (1) The Legislature finds and declares that the intent
behind the Density Bonus Law is to allow public entities
to reduce or even eliminate subsidies for a particular
project by allowing a developer to include more total
units in a project than would otherwise be allowed by
the local zoning ordinance in exchange for affordable
units. It further reaffirms that the intent is to cover at
least some of the financing gap of affordable housing
with regulatory incentives, rather than additional public
subsidy.
(2) It is therefore the intent of the Legislature to make
modifications to the Density Bonus Law by the act
adding this subdivision to further incentivize the
construction of very low, low-, and moderate-income
housing units. It is further the intent of the Legislature
in making these modifications to the Density Bonus
Law to ensure that any additional benefits conferred
upon a developer are balanced with the receipt of a
public benefit in the form of adequate levels of
affordable housing. The Legislature further intends that
these modifications will ensure that the Density Bonus
Law creates incentives for the construction of more
housing across all areas of the state.
65915.1
For purposes of Section 65915, affordable housing
impact fees, including inclusionary zoning fees and
in-lieu fees, shall not be imposed on a housing
development’s affordable units.
65915.2
If permitted by local ordinance, nothing in Section
65915 shall be construed to prohibit a city, county, or
city and county from requiring an affordability period
longer than 55 years for any units that qualified the
applicant for the award of the density bonus developed
in compliance with a local ordinance that requires, as a
condition of the development of residential units, that
the development include a certain percentage of units
that are affordable to, and occupied by, low-income,
lower income, very low income, or extremely low
income households and that will be financed without
low-income housing tax credits.
65915.5
(a) When an applicant for approval to convert
apartments to a condominium project agrees to
provide at least 33 percent of the total units of the
proposed condominium project to persons and families
of low or moderate income as defined in Section 50093
of the Health and Safety Code, or 15 percent of the total
units of the proposed condominium project to lower
income households as defined in Section 50079.5 of
the Health and Safety Code, and agrees to pay for the
reasonably necessary administrative costs incurred by
a city, county, or city and county pursuant to this sec-
tion, the city, county, or city and county shall either (1)
grant a density bonus or (2) provide other incentives
of equivalent financial value. A city, county, or city and
county may place such reasonable conditions on the
granting of a density bonus or other incentives of equiv-
alent financial value as it finds appropriate, including,
but not limited to, conditions which assure continued
affordability of units to subsequent purchasers who are
persons and families of low and moderate income or
lower income households.
(b) For purposes of this section, “density bonus” means
an increase in units of 25 percent over the number of
apartments, to be provided within the existing structure
or structures proposed for conversion.
(c) For purposes of this section, “other incentives of
equivalent financial value” shall not be construed to
require a city, county, or city and county to provide cash
transfer payments or other monetary compensation
but may include the reduction or waiver of
requirements which the city, county, or city and county
might otherwise apply as conditions of conversion
approval.
(d) An applicant for approval to convert apartments to
a condominium project may submit to a city, county, or
city and county a preliminary proposal pursuant to this
section prior to the submittal of any formal requests for
subdivision map approvals. The city, county, or city and
county shall, within 90 days of receipt of a written
proposal, notify the applicant in writing of the
manner in which it will comply with this section. The
city, county, or city and county shall establish
procedures for carrying out this section, which shall
include legislative body approval of the means of
compliance with this section.
(e) Nothing in this section shall be construed to require
a city, county, or city and county to approve a proposal
to convert apartments to condominiums.
other incentive that would undermine the intent of this
chapter.
65917.2
(a) As used in this section, the following terms shall
have the following meanings:
(1) “Eligible housing development” means a
development that satisfies all of the following criteria:
(A) The development is a multifamily housing
development that contains five or more residential
units, exclusive of any other floor area ratio bonus
or incentive or concession awarded pursuant to this
chapter.
(B) The development is located within one of the
following:
(i) An urban infill site that is within a transit priority
area.
(ii) One-half mile of a major transit stop.
(C) The site of the development is zoned to allow
residential use or mixed-use with a minimum planned
density of at least 20 dwelling units per acre and does
not include any land zoned for low density residential
use or for exclusive nonresidential use.
(D) The applicant and the development satisfy the
replacement requirements specified in subdivision (c)
of Section 65915.
(E) The development includes at least 20 percent of the
units, excluding any additional units allowed under a
floor area ratio bonus or other incentives or
concessions provided pursuant to this chapter, with an
affordable housing cost or affordable rent to, and
occupied by, persons with a household income equal to
or less than 50 percent of the area median income, as
determined pursuant to Section 50093 of the Health
and Safety Code, and subject to an affordability
restriction for a minimum of 55 years.
(F) The development complies with the height
requirements applicable to the underlying zone. A
development shall not be eligible to use a floor area
ratio bonus or other incentives or concessions provided
pursuant to this chapter to relieve the development
from a maximum height limitation.
(2) “Floor area ratio” means the ratio of gross
building area of the eligible housing development,
excluding structured parking areas, proposed for the
project divided by the net lot area. For purposes of this
paragraph, “gross building area” means the sum of all
finished areas of all floors of a building included within
the outside faces of its exterior walls.
MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022 25
(f) An applicant shall be ineligible for a density bonus
or other incentives under this section if the apartments
proposed for conversion constitute a housing
development for which a density bonus or other
incentives were provided under Section 65915.
(g) An applicant shall be ineligible for a density bonus
or any other incentives or concessions under this
section if the condominium project is proposed on any
property that includes a parcel or parcels on which
rental dwelling units are or, if the dwelling units have
been vacated or demolished in the five-year period
preceding the application, have been subject to a
recorded covenant, ordinance, or law that restricts
rents to levels affordable to persons and families of
lower or very low income; subject to any other form of
rent or price control through a public entity’s valid
exercise of its police power; or occupied by lower or
very low income households, unless the proposed
condominium project replaces those units, as defined
in subparagraph (B) of paragraph (3) of subdivision (c)
of Section 65915, and either of the following applies:
(1) The proposed condominium project, inclusive of the
units replaced pursuant to subparagraph (B) of
paragraph (3) of subdivision (c) of Section 65915,
contains affordable units at the percentages set forth in
subdivision (a).
(2) Each unit in the development, exclusive of a
manager’s unit or units, is affordable to, and occupied
by, either a lower or very low income household.
(h) Subdivision (g) does not apply to an applicant
seeking a density bonus for a proposed housing
development if their application was submitted to, or
processed by, a city, county, or city and county before
January 1, 2015.
65916.
Where there is a direct financial contribution to a
housing development pursuant to Section 65915
through participation in cost of infrastructure,
write-down of land costs, or subsidizing the cost of
construction, the city, county, or city and county shall
assure continued availability for low- and moderate-
income units for 30 years. When appropriate, the
agreement provided for in Section 65915 shall specify
the mechanisms and procedures necessary to carry
out this section.
65917.
In enacting this chapter it is the intent of the
Legislature that the density bonus or other incentives
offered by the city, county, or city and county pursuant
to this chapter shall contribute significantly to the
economic feasibility of lower income housing in
proposed housing developments. In the absence of an
agreement by a developer in accordance with Section
65915, a locality shall not offer a density bonus or any
(3) “Floor area ratio bonus” means an allowance for an
eligible housing development to utilize a floor area ratio
over the otherwise maximum allowable density
permitted under the applicable zoning ordinance
and land use elements of the general plan of a city or
county, calculated pursuant to paragraph (2) of
subdivision (b).
(4) “Major transit stop” has the same meaning as
defined in Section 21155 of the Public Resources Code.
(5) “Transit priority area” has the same meaning as
defined in Section 21099 of the Public Resources Code.
(b) (1) A city council, including a charter city council or
the board of supervisors of a city and county, or county
board of supervisors may establish a procedure by
ordinance to grant a developer of an eligible housing
development, upon the request of the developer, a floor
area ratio bonus, calculated as provided in paragraph
(2), in lieu of a density bonus awarded on the basis of
dwelling units per acre.
(2) In calculating the floor area ratio bonus pursuant to
this section, the allowable gross residential floor area
in square feet shall be the product of all of the following
amounts:
(A) The allowable residential base density in dwelling
units per acre.
(B) The site area in square feet, divided by 43,560.
(C) 2,250.
(c) The city council or county board of supervisors
shall not impose any parking requirement on an eligible
housing development in excess of 0.1 parking spaces
per unit that is affordable to persons and families with
a household income equal to or less than 120 percent
of the area median income and 0.5 parking spaces per
unit that is offered at market rate.
(d) A city or county that adopts a floor area ratio bonus
ordinance pursuant to this section shall allow an
applicant seeking to develop an eligible residential
development to calculate impact fees based on square
feet, instead of on a per unit basis.
(e) In the case of an eligible housing development that
is zoned for mixed-use purposes, any floor area ratio
requirement under a zoning ordinance or land use
element of the general plan of the city or county
applicable to the nonresidential portion of the eligible
housing development shall continue to apply
notwithstanding the award of a floor area ratio bonus in
accordance with this section.
(f) An applicant for a floor area ratio bonus pursuant to
this section may also submit to the city, county, or city
and county a proposal for specific incentives or
concessions pursuant to subdivision (d) of Section
65915.
(g) (1) This section shall not be interpreted to do either
of the following:
(A) Supersede or preempt any other section within this
chapter.
(B) Prohibit a city, county, or city and county from
providing a floor area ratio bonus under terms that are
different from those set forth in this section.
(2) The adoption of an ordinance pursuant to this
section shall not be interpreted to relieve a city, county,
or city and county from complying with Section 65915.
65917.5
(a) As used in this section, the following terms shall
have the following meanings:
(1) “Child care facility” means a facility installed,
operated, and maintained under this section for the
nonresidential care of children as defined under
applicable state licensing requirements for the facility.
(2) “Density bonus” means a floor area ratio bonus over
the otherwise maximum allowable density permitted
under the applicable zoning ordinance and land use
elements of the general plan of a city, including a
charter city, city and county, or county of:
(A) A maximum of five square feet of floor area for each
one square foot of floor area contained in the child care
facility for existing structures.
(B) A maximum of 10 square feet of floor area for each
one square foot of floor area contained in the child care
facility for new structures.
For purposes of calculating the density bonus under
this section, both indoor and outdoor square footage
requirements for the child care facility as set forth in
applicable state child care licensing requirements shall
be included in the floor area of the child care facility.
(3) “Developer” means the owner or other person,
including a lessee, having the right under the applicable
zoning ordinance of a city council, including a charter
city council, city and county board of supervisors, or
county board of supervisors to make an application for
development approvals for the development or
redevelopment of a commercial or industrial project.
(4) “Floor area” means as to a commercial or industrial
project, the floor area as calculated under the
applicable zoning ordinance of a city council, including
a charter city council, city and county board of
supervisors, or county board of supervisors and as to a
26 MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022
board of supervisors in accordance with procedures to
be developed by the legislative body of the city council,
including a charter city council, city and county board
of supervisors, or county board of supervisors. The
assessment shall be consistent with the market value
of the space. A penalty levied against a consortium of
developers shall be charged to each developer in an
amount equal to the developer’s percentage square
feet participation. Funds collected pursuant to this
subdivision shall be deposited by the city council,
including a charter city council, city and county board
of supervisors, or county board of supervisors into a
special account to be used for child care services or
child care facilities.
(e) Once the child care facility has been established,
prior to the closure, change in use, or reduction in the
physical size of, the facility, the city, city council,
including a charter city council, city and county board
of supervisors, or county board of supervisors shall be
required to make a finding that the need for child care
is no longer present, or is not present to the same de-
gree as it was at the time the facility was established.
(f) The requirements of Chapter 5 (commencing with
Section 66000) and of the amendments made to
Sections 53077, 54997, and 54998 by Chapter 1002 of
the Statutes of 1987 shall not apply to actions taken in
accordance with this section.
(g) This section shall not apply to a voter-approved
ordinance adopted by referendum or initiative.
65918.
The provisions of this chapter shall apply to charter
cities.
child care facility, the total area contained within the
exterior walls of the facility and all outdoor areas
devoted to the use of the facility in accordance with
applicable state child care licensing requirements.
(b) A city council, including a charter city council, city
and county board of supervisors, or county board of
supervisors may establish a procedure by ordinance to
grant a developer of a commercial or industrial project,
containing at least 50,000 square feet of floor area,
a density bonus when that developer has set aside at
least 2,000 square feet of floor area and 3,000
outdoor square feet to be used for a child care
facility. The granting of a bonus shall not preclude a city
council, including a charter city council, city and county
board of supervisors, or county board of supervisors
from imposing necessary conditions on the project or
on the additional square footage. Projects constructed
under this section shall conform to height, setback, lot
coverage, architectural review, site plan review, fees,
charges, and other health, safety, and zoning
requirements generally applicable to construction in
the zone in which the property is located. A consortium
with more than one developer may be permitted to
achieve the threshold amount for the available density
bonus with each developer’s density bonus equal to the
percentage participation of the developer. This facility
may be located on the project site or may be located
offsite as agreed upon by the developer and local
agency. If the child care facility is not located on the site
of the project, the local agency shall determine whether
the location of the child care facility is appropriate and
whether it conforms with the intent of this section. The
child care facility shall be of a size to comply with all
state licensing requirements in order to accommodate
at least 40 children.
(c) The developer may operate the child care facility
itself or may contract with a licensed child care
provider to operate the facility. In all cases, the
developer shall show ongoing coordination with a local
child care resource and referral network or local
governmental child care coordinator in order to qualify
for the density bonus.
(d) If the developer uses space allocated for child care
facility purposes, in accordance with subdivision (b), for
purposes other than for a child care facility, an
assessment based on the square footage of the
project may be levied and collected by the city council,
including a charter city council, city and county board
of supervisors, or county board of supervisors. The
assessment shall be consistent with the market value
of the space. If the developer fails to have the space
allocated for the child care facility within three years,
from the date upon which the first temporary certifi-
cate of occupancy is granted, an assessment based
on the square footage of the project may be levied and
collected by the city council, including a charter city
council, city and county board of supervisors, or county
MEYERS NAVE A professional law corporation | CALIFORNIA DENSITY BONUS LAW 2022 27
revised 04/30/2021
For HUD-funded programs, use the Federal Income Schedule. For State or locally-funded programs, you may use
the State Income Schedule. For programs funded with both federal and state funds, use the more stringent income levels.
Please verify the income and rent figures in use for specific programs.
San Mateo County Income Limits (based on Federal Income Limits for SMC)
Effective 4/30/2021 - Area median Income $149,600 (based on household of 4)
Income Category 1 2 3 4 5 6 7 8
Extremely Low (30% AMI) *38,400$ 43,850$ 49,350$ 54,800$ 59,200$ 63,600$ 68,000$ 72,350$
Very Low (50% AMI) *63,950$ 73,100$ 82,250$ 91,350$ 98,700$ 106,000$ 113,300$ 120,600$
Low (80% AMI) *102,450$ 117,100$ 131,750$ 146,350$ 158,100$ 169,800$ 181,500$ 193,200$
Median (100% AMI)104,700$ 119,700$ 134,650$ 149,600$ 161,550$ 173,550$ 185,500$ 197,450$
Moderate (120% AMI)125,650$ 143,600$ 161,550$ 179,500$ 193,850$ 208,200$ 222,600$ 236,950$
NOTES
*2021 State Income limits provided by State of California Department of Housing and Community Development
2021 San Mateo County Income Limits
as determined by HUD - effective June 28, 2021
Income Limits by Family Size ($)
Income limits effective 04/01/2021.
Please verify the income and rent figures in use for specific programs.
NOTES
Income Category 1 2 3 4 5 6 7 8
Extremely Low (30% AMI) *38,400$ 43,850$ 49,350$ 54,800$ 59,200$ 63,600$ 68,000$ 72,350$
Very Low (50% AMI) *63,950$ 73,100$ 82,250$ 91,350$ 98,700$ 106,000$ 113,300$ 120,600$
HOME Limit (60% AMI) *76,740$ 87,720$ 98,700$ 109,620$ 118,440$ 127,200$ 135,960$ 144,720$
HERA Special VLI (50% AMI) ***63,950$ 73,100$ 82,250$ 91,350$ 98,700$ 106,000$ 113,300$ 120,600$ See Note regarding HERA for FY2021***
HERA Special Limit (60% AMI) ***76,740$ 87,720$ 98,700$ 109,620$ 118,440$ 127,200$ 135,960$ 144,720$ See Note regarding HERA for FY2021***
Low (80% AMI) *102,450$ 117,100$ 131,750$ 146,350$ 158,100$ 169,800$ 181,500$ 193,200$
State Median (100% AMI) 104,700$ 119,700$ 134,650$ 149,600$ 161,550$ 173,550$ 185,500$ 197,450$
Income CategorySRO *+Studio 1-BR 2-BR 3-BR 4-BR
Extremely Low *959$ 1,027$ 1,233$ 1,425$ 1,590$
Very Low *1,598$ 1,713$ 2,056$ 2,375$ 2,650$
Low HOME Limit*1,598$ 1,713$ 2,056$ 2,375$ 2,650$ effective 6/01/2021; 2021 HOME Limit
High HOME Limit (65%)*2,078$ 2,227$ 2,673$ 3,088$ 3,445$ effective 6/01/2021; 2021 HOME Limit
HERA Special VLI (50% AMI) ***1,598$ 1,713$ 2,056$ 2,375$ 2,650$
HERA Special Limit (60% AMI) ***1,918$ 2,055$ 2,467$ 2,850$ 3,180$
Low**2,558$ 2,741$ 3,290$ 3,801$ 4,240$ CA Tax Credit Rent limits: Low & Med Income Group
HUD Fair Market Rent (FMR)2,350$ 2,923$ 3,553$ 4,567$ 4,970$ HUD-published Fair Market Rents
Median **3,196$ 3,426$ 4,112$ 4,750$ 5,300$ CA Tax Credit Rent limits: Low & Med Income Group
NOTES
CA Tax Credit Rent Limits for Low and Median Income Group
Income figures provided by HUD for following San Mateo County federal entitlement programs: CDBG, HOME, ESG.
For San Mateo County, the Housing & Economic Recovery Act of 2008 (HERA) & the HUD 2010 HOME hold-harmless provision permit multifamily tax
SROs with -0- or 1 of the following - sanitary or food preparation facility in unit; if 5+ SRO HOME-assisted units, then at least 20% of units to be
2021 San Mateo County Income Limits
as determined by HUD, State of CA HCD, and County of San Mateo
HUD-defined Area Median Income $149,600 (based on householdof 4). State defined median $149,600 (household of 4) due to hold harmless policy.
Income Limits by Family Size ($)
Maximum Affordable Rent Payment ($)
OTHER NOTES (generic)
High HOME Limit rent set at lower of: (a) 30% of 60% AMI,or (b) FMR (HUD Fair Market Rent).
For 2011, the FMR for Studio is the lower rent.
Table below provides rent guidance on appropriate income schedule to use:
Rent schedules at https://www.huduser.gov/portal/pdrdatas_landing.html for additional information as well as the various income schedules. Please also refer to
4/01/2019 to 4/01/2020 2019
4/01/2020 to 4/01/2021 2020
4/01/2021 to present 2021
03/28/2016 - 4/14/2017 2016
04/14/2017 to 3/31/18 2017
4/01/2018 - 3/31/2019 to present 2018
12/01/2012 - 12/17/2013 2013
12/18/2013 - 03/05/2015 2014
03/06/2015 - 03/27/16 2015
5/14/2010 - 5/31/2011 2012
6/1/2011 - 11/30/2011 2012
12/01/2011 - 11/30/2012 2012
Placed in Service Date Maximum Inc. Limits Schedule
On or before 12/31/2008 2018 HERA Special
1/1/2009 to 5/13/2010 2009
Maximum affordable rent based on 30% of monthly income and all utlilites paid by landlord unless further adjusted by HUD. Utliity allowances for tenant-
Rent Calcuations - The following is the assumed family size for each unit: Studio:1 person 1-BR:1.5 persons 2-BR:3 3-BR: 4.5 4-BR:6
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:22-110 Agenda Date:2/16/2022
Version:1 Item #:3.
City Council study session to consider a potential ballot measure authorizing the City of South San Francisco to
develop, construct, or acquire affordable, low-rent housing units pursuant to Article XXXIV of the California
Constitution and to provide direction to staff.(Sky Woodruff, City Attorney and Nell Selander, Director,
Economic & Community Development Department)
RECOMMENDATION
It is recommended that the City Council receive the following report regarding a potential ballot
measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-
rent housing units pursuant to Article XXXIV of the California Constitution and provide direction to
staff.
BACKGROUND
Historical Context and Scope
Article XXXIV of the California Constitution (“Article 34”) was approved in 1950 as Proposition 10, and was
implemented by statute in 1976 under Health & Safety Code section 37000 et seq. It requires that a city’s
voters grant prior approval before any federal, state, or local public entity can develop, construct, or acquire
certain types of low rent housing projects in that city.
Under the statute, “low rent housing project” means any urban or rural dwellings, apartments, or other living
accommodations for low income residents, financed in whole or in part by a federal, state, or local government.
“Low income” is defined as households earning 80% or less of area median income. In San Mateo County that
is a single individual earning less than $102,450 a year, or a household of four earning less than $146,350.
“Financed in whole or in part by a federal, state, or local government” includes supplying labor, guaranteeing
payment of liens, or other forms of financing. A public entity may not develop, construct, or acquire low rent
housing projects until the voters have authorized the public entity to do so.
While the scope of Article 34 is broad, statutory exemptions exist that exclude certain types of projects from
Article 34’s voter approval requirements, and that specify that certain public entity actions are not considered as
developing, constructing, or acquiring a low rent housing project.
Projects Exempt from Article 34
In 1976, the Legislature enacted the Public Housing Election Implementation Law (the “Public Housing Law”),
California Health & Safety Code §§ 37000 et seq., to clarify ambiguities relating to the scope of the
applicability of Article 34. The statute exempts eight (8) types of development from the voter approval
requirement. These exemptions were most recently amended on July 19, 2021 in response to the COVID-19
pandemic, and include:
1)Privately owned housing that is (1) subject to property tax or exempt from property tax under a limited
set of exemptions, and (2) not required by a public entity to reserve more than 49% of units for low-
income households.
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2)Privately owned housing not exempt from property taxes by reason of any public ownership, and not
financed with direct long-term financing from a public entity;
3)Units intended for owner-occupancy, which may include a limited equity housing cooperative,
cooperative or condominiums;
4)Privately owned, newly constructed one-to-four family dwellings not located on adjoining sites;
5)Existing dwelling units leased by the public entity from a private owner;
6)Rehabilitation, reconstruction, improvement or addition to, or replacement of an existing low-rent
housing project or a project previously or currently occupied by lower income households;
7)Acquisition, rehabilitation, reconstruction or improvement of a rental housing development which was
subject to a federal or state public entity contract for assistance to provide affordable housing for low-
income households and maintains, or enters into, a contract for federal or state public entity assistance
for the same purpose; and
8)Acquisition, rehabilitation, reconstruction, alterations work or new construction of lodging facilities or
dwelling units using any of the following sources of funds:
a.the Coronavirus Aid, Relief, and Economic Security (“CARES Act”)
b.the American Rescue Plan Act of 2021 (“ARPA”)
c.Funds appropriated pursuant to various provisions of the Health and Safety Code relating to
affordable housing preservation, loans and grants to qualified rental housing developments, and
multifamily housing programs.
Public Entity Actions Exempt from Article 34
The California Supreme Court has held that if a public entity is sufficiently involved in a privately owned
project (i.e. provides funds conditioned upon review and approval of plans, financing, operation and
maintenance and occupancy), this project may be treated as a “co-development” and Article 34 likely will be
triggered under that concept. (California Housing Finance Agency v. Elliot, 17 Cal.3rd 575 (1976).)
However, the public entity is still able to take certain actions with respect to housing projects that would not be
considered as the public entity developing, constructing, or acquiring the project. The Public Housing Law
exempts the following activities from the meaning of “develop, construct or acquire” by a public entity:
1.Providing financing, secured by a deed of trust or other security instrument to a private owner of
existing housing; or acquiring a development, for which financing previously has been provided, as a
temporary measure to protect its security and with an intention to change the ownership so that it will
not continue to be the owner of a low-rent housing project;
2.Acquiring or making improvements to land which is anticipated to be sold, ground leased, or otherwise
transferred to a private owner prior to its development as a low-rent housing project, provided (1) the
land and improvements thereon are not subject to an exemption from property taxation by reason of
public ownership for more than five years following acquisition or improvement by the state public
body, or (2) such an exemption from property taxation persists beyond the five-year period and no
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alternative use is designated for the land or improvements, but any property tax revenues lost by
affected taxing agencies on account of the exemption of land or improvements from property taxes by
reason of public ownership of the property, or any interest in the property after the five-year period, are
fully reimbursed by payments in lieu of taxes following the expiration of the five-year period;
3.Leasing existing dwelling units from the private owner of such units, provided the lease or a subtenancy
thereunder does not result in a decrease of property tax revenues with respect to the dwelling units
leased;
4.Providing assistance to the private owner or occupant of existing housing which enables an occupant to
live in decent, safe, and sanitary housing at a rent he or she can afford to pay;
5.Providing assistance to a low-rent housing project and monitoring construction or rehabilitation of that
project and compliance with conditions of that assistance to the extent of:
a.Carrying out routine governmental functions.
b.Performing conventional activities of a lender.
c.Imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of
assistance.
6.Providing assistance to a development prior to its becoming a low-rent housing project without
intending or expecting that the development will become a low-rent housing project, as defined.
7.Providing financing for a low-rent housing project pursuant to Chapter 6.7 (commencing with Section
51325) of Part 3 of Division 31.
8.Providing financing for a low-rent housing project pursuant to Article 3.2 (commencing with Section
987.001) and Article 5y (commencing with Section 998.540) of Chapter 6 of Division 4 of the Military
and Veterans Code.
Article 34 Voter Approval Process
The City Council may submit a ballot measure for voters to approve the City developing, constructing or
acquiring low rent housing. The California Supreme Court has held that a local entity does not have to seek
approval for a specific development or project, but may instead seek approval from its voters to develop,
construct, or acquire a certain amount of low income housing units. (Davis v. City of Berkeley, 51 Cal.3d 227
(1990).)
Additionally, the California Supreme Court held in Davis that “article XXXIV does not prescribe a single form
of ballot measure.” Therefore, an Article 34 ballot measure may be submitted for voter approval without a
petition under Election Code Section 9222 and may be approved by a majority vote of voters pursuant to
Election Code section 9217.
DISCUSSION
Text of Proposed Ballot Question
Based on feedback from the City Council at previous study sessions, staff has developed an approach to a
potential Article 34 measure and prepared a draft ballot measure question which, if approved by the voters,
would authorize the City to develop, construct, or acquire low-rent housing for a period of thirty (30) years.
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Instead of providing authorization for a set number of units which could be developed each year, the draft ballot
measure would authorize the City to develop, construct, or acquire an amount of units equal to 1% of the total
number of units existing in the City from year to year over the course of a thirty (30) year period. The measure
would include an ordinance addressing the details of the approach. The ballot question is limited by state law to
75 words. The draft ballot measure question reads as follows:
Without increasing local taxes, shall the City of South San Francisco be authorized to develop,
construct, and/or acquire affordable, decent, and safe rental housing for low-income persons, including
families, seniors, people with disabilities, and veterans, in an amount up to 1% of the total number of
existing housing units in the City of South San Francisco annually for a thirty (30) year period, with any
year’s unused units being carried over each year?
If approved by the voters, the draft ballot measure would only provide authorization for the City to develop,
construct, or acquire the designated number of units - the authorization is purely permissive. If approved by the
voters, the City would be under no obligation to take any action pursuant to the granted authorization.
Potential Volume of Authorized Units
The approach that staff is suggesting for the potential ballot measure would authorize the City to develop,
construct, or acquire up to 1% of the total number of existing housing units in the City annually for a thirty (30)
year period. The total number of existing housing units in the City would be the number of existing housing
units per year as determined by annual data from the State of California Department of Finance (“Department
of Finance”).
The Department of Finance currently lists the total number of housing units in the City as 22,495. Using this
number as a starting point, Table 1 below provides an example of the number of units that the City would be
authorized to develop, construct, or acquire over a five year period if the ballot measure as written were to be
submitted to and approved by the voters. The figures in Table 1 assume that each year’s allotment of units is
used and that the prior years’ number of units is capitalized into the total number of housing units which exist in
the City for the purposes of calculating 1% of existing housing units in the City.
Table 1
2022 2023 2024 2025 2026
Est. Total
Units
Authorized
Per Year
225 227 229 232 234
*Numbers have been rounded to their next whole unit.
As previously mentioned, there is no requirement that each year’s allotment be used - in that case, the units
authorized in the previous year would roll over to the next year. For example, if 225 units are authorized in
2022 but no units are developed, constructed, or acquired, then the number of units in 2023 that could be
developed, constructed, or acquired would be 450 units.
General Plan
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The first goal set out in the Housing Plan of the City’s Housing Element is to promote the provision of housing
by both the private and public sectors for all income groups in the community. This goal includes promoting the
development of housing for extremely low-, very low-, and lower-income households. Submission of an Article
34 ballot measure question to the voters has the potential to contribute to this goal and would be consistent with
the City’s General Plan, including its Housing Element.
FISCAL IMPACT
This report is submitted for discussion purposes only and does not impact the City financially.
Ballot Measure Costs
San Mateo County Elections Office has provided a high/low estimate of the costs of placing the proposed
measure on the ballot for the June 2022 Statewide Election. These estimates appear in Table 2 below.
Table 2
Total Cost Low $/Register Voters Low Total Cost High $/Registered Voters
High
$172,200 $4.53 $206,600 $5.44
Based on these estimates, if the City Council decides to submit an Article 34 ballot measure to the people for
consideration at the upcoming June 2022 election, the City Council will need to approve a budget amendment
to the City Clerk’s Fiscal Year 2022-23 Operating Budget.
CONCLUSION
It is recommended that the City Council receive the foregoing report regarding a potential ballot measure
authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-rent housing units
pursuant to Article XXXIV of the California Constitution and provide direction to staff.
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Agenda Item
3. 22-110 City Council study session to consider a potential ballot measure authorizing the City of South
San Francisco to develop, construct, or acquire affordable, low-rent housing units pursuant to Article
XXXIV of the California Constitution and to provide direction to staff. (Sky Woodruff, City Attorney and
Nell Selander, Director, Economic & Community Development Department)
Legislation Text
1 Public Comment
Roderick Bovee at February 15, 2022 at 1:08pm PST
Support
I wholeheartedly support this, but there should be more units on the ballot measure. Despite having a
population over five times larger than Emeryville, South City is only requesting twice as many units in its
Article 34 ballot measure. We have a responsibility to improve the lives of our neighbors, especially those
not being served by the current affordable housing system, and the more units the city is able to build or
purchase, the greater its ability to do so.