Tool 6: Calculating the Contribution of Density Bonusing and Inclusionary
6A: Potential Contribution of Density Bonusing
This tool allows you to calculate the impact of density bonusing on a
project’s total number of affordable units. A density bonus is an
authorization given by a municipal government to a developer to build at a
higher density than specified in official density plans. In exchange for a
density bonus, some municipalities require developers to include affordable
housing units in their housing developments. Thus, density bonusing is a
strategy to increase the affordable housing stock.
Please note that the blue cells below are calculation cells and thus, do
not require entered information.
- In column A, enter the name for the proposed residential project.
- In column B, enter the number of housing units the proposed residential
project will include.
- In column C, consider if there is demand for additional density. (High
housing prices, for example, could be an indication of such demand.)
- In column D, determine the density contribution that will be given to
the developer (that is, the number of additional units that the developer
will be permitted to build on the lot). This figure will be based primarily
on the density rate that the municipality deems desirable (e.g. if the
project calls for 25 units but the municipality believes that 40 units would
be desirable, the latter may allow an additional 15 units).
- In column E, enter the original amount of profit expected (pre-density
bonusing) per housing unit (based on the original pro forma).
- For column F, click the "calculate" button to determine the original amount of profit expected
(pre-density bonusing) for the total housing development.
- For column G, click the "calculate" button to determine the increase in profit that will be achieved
through density bonusing.
- In column H, enter the cost per affordable housing unit.
- For column I, click the "calculate" button to determine the number of affordable units that density
bonusing will contribute to the housing development.