AB 1505, signed by Gov. Brown on September 29, 2017 and generally referred to as the “Palmer fix”, allows local jurisdictions to again require BMRs or inclusionary units in rental housing. Mountain View clarified in February 2018 that its BMR ordinance was in effect and that 15% of the total rental development should be BMRs targeted to those with an area median income of 65%. In addition, there are no longer Rental Housing Impact Fees collected in lieu of requiring BMR units to be built, as was allowed after the Palmer case. Los Altos also clarified in September 2018 that its BMR ordinance was once again in effect with regard to rental units, requiring 20% to be low-income or 15% very, low-income. Los Altos at that time revised its ownership BMR requirement slightly, requiring 15% to be BMRs, mostly at the moderate-income level, with some targeted to lower incomes. The latter was done because many condo developers have been using State Density Bonus Law. Per this law, developers prefer to build lower-income units as they receive more density bonus than with moderate-income units. Before this change, ownership BMRs were required to be at moderate-income levels. See “Below Market Rate” for more information.

Palmer fix
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