What is the Folsom density bonus ordinance update and how does it affect buyers?
Folsom's density bonus ordinance update revises Chapter 17.102 of the Folsom Municipal Code to track California's State Density Bonus Law, which allows qualifying residential projects to receive additional units, development incentives, and waivers of certain zoning standards in exchange for including affordable or senior housing. For buyers and investors, this means new subdivisions and infill projects in Folsom may look and feel different from what the underlying zoning would normally produce, more units per site, different building heights, and potentially reduced on-site parking.
Key Takeaways
- California's State Density Bonus Law, codified in Government Code §§ 65915–65918, controls when a local ordinance conflicts with state requirements, Folsom's update must track that statute.
- Projects generally need more than five units and a qualifying affordable or senior set-aside to be eligible; common thresholds are 5% very-low-income, 10% low-income, or 10% moderate-income for for-sale condominiums and planned developments.
- Qualifying projects can request waivers of development standards, including height and parking, when those standards would physically prevent building at the permitted density.
- Folsom council materials identify Ordinance No. 1374 as the relevant action on Chapter 17.102; the final text, adoption date, and effective date should be confirmed against the current Folsom Municipal Code before drawing project-specific conclusions.
- A density bonus does not make every unit in a development income-restricted, market-rate and deed-restricted units coexist in the same project, and buyers should review approved plans carefully.
Why this ordinance matters right now
California has been tightening its housing production rules for years, and 2026 brought another round of changes. HCD's current State Density Bonus Law materials identify changes affecting mixed-use projects and the treatment of nonresidential components for applications submitted on or after January 1, 2026. Because state law is controlling when it conflicts with a local ordinance, Folsom's update is essentially the city catching its local code up to what state law already requires.
HCD also published a State Density Bonus Law Sample Ordinance Template in March 2026, which gives cities a current implementation reference. That template is not Folsom law, but it signals the direction the state expects local ordinances to follow.
How the state density bonus framework works, and what Folsom's update changes
The state law baseline
Under Government Code § 65915, the amount of density bonus a project receives, and the number of incentives or concessions it can request, depends on the type and percentage of qualifying affordable or senior units included. The bonus is calculated from the otherwise maximum allowable residential density at the time the application is submitted.
Common eligibility paths, per HCD's requisite analysis guidance, include:
- At least 5% of units for very-low-income households
- At least 10% of units for low-income households
- At least 10% for moderate-income households in qualifying for-sale condominium or planned-development projects
- Senior housing, subject to statutory requirements
The project must contain more than five units to qualify. That threshold matters in Folsom because it means small infill duplexes and triplexes generally fall outside this framework, density bonus projects tend to be mid-size to larger subdivisions or multifamily buildings.
Incentives, concessions, and waivers of development standards
This is the part of the law that most visibly changes what gets built. HCD's enforcement guidance confirms that qualifying projects may receive waivers or reductions of development standards, including height and parking requirements, when those standards would physically prevent construction at the permitted density, subject to statutory exceptions.
In practical terms: a density-bonus project in Folsom could be taller than surrounding zoning would normally allow, or could have fewer parking spaces per unit than a conventional project would require. Those are not hypotheticals, they are the statutory tools the law makes available, and they are among the most consequential design decisions buyers and neighbors notice.
Folsom's local ordinance, what we know and what to verify
Folsom's relevant local regulation is Chapter 17.102 of the Folsom Municipal Code. Council meeting materials from the City of Folsom identify Ordinance No. 1374 as a repeal-and-reenactment of that chapter. The available materials do not confirm whether a final 2026 replacement ordinance has been formally adopted, what its effective date is, or what project-specific provisions it contains.
That matters for a practical reason: the version of state law that governs a project is generally the version in effect when the application is submitted. If you are evaluating a project that is already in the pipeline, the rules that apply may differ from those that govern a project submitted today. Before drawing any project-specific conclusion, verify the current text of Chapter 17.102 directly against Folsom's published municipal code and the relevant council action.
One important geographic note: El Dorado Hills is an unincorporated community in El Dorado County, not within Folsom's city limits. A Folsom ordinance does not automatically extend there. If you are looking at development activity in El Dorado Hills, those proposals are evaluated under El Dorado County rules and the same state density-bonus law, but through a separate local process.
What the current Folsom market looks like near density-bonus activity
Density-bonus feasibility is project-specific. Land costs, achievable sale prices, and infrastructure obligations all feed into whether the additional units a bonus provides actually make a project viable. For investors, the financial value of the ordinance depends entirely on the site, the set-aside structure, and the concessions the city approves. I walk clients through exactly this kind of analysis before they commit to a new-construction purchase or investment site, because the approved plans tell a story the marketing brochure often doesn't.
For a broader look at how Folsom's market is positioned heading into late 2026, my Folsom single-family home values and 2026 market outlook covers price trends and inventory context. And if you are evaluating where to invest specifically, the Folsom real estate investment guide goes deeper on neighborhood-level dynamics.
What buyers and investors should actually do with this information
If you are buying in a new Folsom subdivision
Start by asking whether the project used a density bonus to get approved. If it did, you want to know the unit count, parking ratio, building height, common-area commitments, and phasing schedule, all of which may differ from what a conventional project on the same site would have looked like. A density bonus does not mean every unit is income-restricted; market-rate and deed-restricted units coexist in the same development. Knowing which type you are buying, and what your neighbors' deed restrictions are, matters for resale.
In a wildfire-aware county like El Dorado, careful review of the project's disclosure package and approved conditions of approval is also worth the time. Higher-density projects can have infrastructure and access conditions that affect the property long after you close.
If you are looking at Folsom Ranch new construction specifically, that area's development pipeline is worth understanding in detail before you sign a purchase agreement.
If you are an investor or developer evaluating a site
The state density-bonus framework under Government Code §§ 65915–65918 does not guarantee that every proposed concession or waiver will be granted. The project must satisfy the statutory criteria, and the city can invoke statutory exceptions. Additional units may improve land-use efficiency, but affordability restrictions, construction requirements, infrastructure obligations, and approval conditions all affect feasibility. Your pro forma needs to account for all of them, not just the bonus unit count.
The HCD enforcement authority page is worth bookmarking, it outlines when a local ordinance can and cannot deviate from state requirements, which becomes relevant if Folsom's adopted ordinance language differs from what you expected.
Every situation is different, and the only way to know whether a specific site or project makes sense is to run the numbers with someone who knows this market and has worked through the Folsom entitlement process. That is exactly the kind of conversation I have with investors before they make an offer.
If you want to see how Folsom's pricing compares to nearby cities as you evaluate investment locations, my post on Folsom home prices compared to nearby cities in 2026 gives useful context.
If you want an honest read on what this ordinance means for a property you are considering, reach out for a free home valuation and market consultation. I'll tell you what the approved plans actually show and what questions to ask before you commit.
You can read what past clients have said about working with me on Google and Zillow.
FAQ: Folsom Density Bonus Ordinance
What exactly is changing in Folsom's density bonus ordinance?
Folsom's update revises Chapter 17.102 of the Folsom Municipal Code to align with current California State Density Bonus Law requirements. Council materials identify Ordinance No. 1374 as the relevant action, but the final adopted text, effective date, and specific provisions should be confirmed directly against the current Folsom Municipal Code, the available research does not establish that a 2026 replacement ordinance has been formally adopted. Because state law controls when a local ordinance conflicts with it, the practical effect on any given project depends on the application date and the enacted statutory language.
Does the Folsom update allow developers to build more units than zoning normally permits?
Yes, that is the core purpose of the density bonus framework. A qualifying project can receive additional units beyond the maximum otherwise allowed by the site's base zoning, with the bonus amount tied to the type and percentage of affordable or senior units included. The bonus is calculated from the maximum allowable density at the time the application is submitted, per Government Code § 65915.
Which Folsom projects qualify for density-bonus treatment?
Projects generally need more than five units and a qualifying affordable or senior set-aside to be eligible. Common thresholds under HCD guidance are 5% of units for very-low-income households, 10% for low-income households, or 10% for moderate-income households in qualifying for-sale condominium or planned-development projects. Senior housing is a separate eligibility category. The exact submittal requirements for Folsom should be taken from the adopted ordinance and current city planning materials.
Can a density-bonus project reduce parking or exceed normal height limits?
Yes, under the state framework. HCD's enforcement guidance confirms that qualifying projects may receive waivers or reductions of development standards, including height and parking, when those standards would physically prevent construction at the permitted density, subject to statutory exceptions. The city can invoke those exceptions, so a waiver request is not automatically granted; the project must satisfy the statutory criteria.
Will density bonuses make new homes in Folsom more affordable?
Not necessarily for market-rate buyers. A density-bonus project includes both deed-restricted affordable units and market-rate units, the bonus does not make every home in the development income-restricted. The affordable units are targeted to qualifying households at defined income levels. Market-rate buyers in the same project purchase at prevailing prices; the presence of deed-restricted neighbors does not reduce a market-rate unit's purchase price.
What should buyers look for when purchasing near a density-bonus project?
Ask whether the project used a density bonus, and if so, review the approved plans for unit count, parking ratios, building height, phasing, and any conditions of approval tied to infrastructure or common areas. Distinguish between market-rate and deed-restricted units, and understand what your specific unit's deed restrictions (if any) say about resale. In El Dorado County, I also recommend a careful review of the full disclosure package, higher-density projects can carry infrastructure and access conditions that affect ownership well after closing.
