Accessory Dwelling Unit, Density Bonus, and Inclusionary Housing Ordinance Update
Waive first reading, read by title only, and adopt an Ordinance to amend the American Canyon Municipal Code to update Chapter 19.27 (Density Bonus), Chapter 19.28 (Inclusionary Housing), and Chapter 19.39 (Accessory Dwelling Units) consistent with current State laws and Housing Element Implementation Measures.
Brent Cooper, AICP, Community Development Director
The proposed amendments update the City's Inclusionary Housing, Density Bonus, and Accessory Dwelling Unit (ADU) ordinances to reflect changes in State law, clarify administrative procedures, and support the production of new housing. Together, these regulations help implement the Housing Element and support the City's efforts to meet its Regional Housing Needs Allocation (RHNA), which requires planning for housing across all income levels.
The RHNA is supported by a range of policies and programs designed to reduce barriers to housing development. Because affordable housing is often the most difficult type of housing to finance and construct, State and local policies provide additional incentives and requirements to encourage the development of housing affordable to lower-income households.
A copy of the revised Inclusionary Housing, Density Bonus, and ADU ordinances is included as Attachment 1. The Planning Commission held public hearings on April 23, 2026, June 23, 2026, and July 30, 2026, and unanimously recommended approval of all three ordinances, with no opposition expressed.
1. Density Bonus Ordinance (ACMC Chapter 19.27)
Per California law, every city and county must provide a density bonus and other incentives or development standard concessions to a developer that proposes lower income housing units or donates land for affordable housing. Last updated in 2019, the California Legislature since that time has adopted at least fifteen separate bills modifying the State Density Bonus Law. These amendments expanded affordability categories, increased available incentives and concessions, added new density bonus programs, strengthened affordable housing replacement requirements, revised parking standards, created commercial density bonus opportunities, and imposed additional procedural requirements on local agencies.
The proposed amendments to Chapter 19.27 are intended to bring the City's Density Bonus Ordinance into conformance with these legislative changes which is required by law. A redline copy of the revised Density Bonus Ordinance showing all changes is included as Attachment 2.
2. Inclusionary Ordinance Update (ACMC Chapter 19.28)
State law authorizes local governments to adopt inclusionary housing ordinances requiring a percentage of new housing units to be affordable to households at specified income levels. Cities and counties may establish their own requirements, such as American Canyon's current inclusionary housing requirements of 10% for ownership units and 15% for rental units.
Although the City's Inclusionary Housing Ordinance remains consistent with State law, staff has identified opportunities to improve its organization and clarity. Key revisions include updated definitions, clearer applicability standards, retention of existing affordability requirements, strengthened standards for inclusionary units, clarification of housing agreement requirements, streamlined inclusionary credit provisions, revisions to alternatives for providing on-site inclusionary units, removal of ADUs as a stand-alone compliance option, and clarification that affordable housing nexus fees are established by City Council resolution. A redline version of the revised Inclusionary Housing Ordinance is included as Attachment 3.
3. Accessory Dwelling Unit Ordinance Update (ACMC Chapter 19.39)
The proposed ADU ordinance amendments are largely administrative updates intended to align the City's Municipal Code with current State ADU laws and recent guidance from the California Department of Housing and Community Development (HCD). A copy of HCD's review letter is included as Attachment 4.
The California Housing Defense Fund (Cal HDF) also reviewed the draft ordinance and identified additional changes needed to ensure full compliance with State law. A copy of Cal HDF's comment letter is included as Attachment 5. Staff revised the ordinance in response to those comments and subsequently received confirmation from Cal HDF that the necessary changes had been made. See Attachment 6.
As revised, the ordinance includes updated definitions, greater reliance on State development standards, revised fire sprinkler requirements, removal of most owner-occupancy requirements, clarification of impact fee provisions, updated parking standards, streamlined ministerial review procedures, revised appeal processes, clarified code enforcement provisions, and a section expressly recognizing State law preemption where applicable. A redline copy of the revised ADU Ordinance is included as Attachment 7.
Stacked ADUs
At a recent ADU workshop featuring panelists from Napa County, the City of American Canyon, and the Napa Sonoma ADU Center, a member of the public asked whether ADUs could be "stacked." A stacked ADU is a two-story structure containing one ADU on each floor, with each unit having its own separate entrance.
Staff reviewed both the City's ADU Ordinance and State ADU law and determined that stacked ADUs are not currently permitted. However, this housing type could potentially be allowed through an amendment to the City's ADU Ordinance.
Because stacked ADUs are not specifically addressed in State law, the City has flexibility to establish its own development standards. Staff presented the concept to the Planning Commission during an informal discussion. The Commission responded favorably and provided preliminary input on potential ordinance provisions.
If the City Council wishes to pursue this concept, staff will further develop the proposed standards and return with a formal ordinance amendment for consideration by both the Planning Commission and City Council at a future meeting. A graphic illustrating a prototype stacked ADU is included as Attachment 8.
General Plan Consistency
The proposed amendments are consistent with the Housing Element of the American Canyon General Plan and support implementation of the City's housing goals, policies, and programs. The amendments help remove constraints to housing production, facilitate the development of housing affordable to lower-income households, and ensure continued compliance with State housing law. Specifically, the amendments further:
- Goal H-1 (Housing Supply) by updating local regulations to remove regulatory barriers and maintain a framework that supports housing production for all income levels, consistent with Policies H-1.2 (Zoning Capacity) and H-1.6 (Constraints to Housing Production).
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Goal H-2 (Balance of Housing Types) by maintaining and clarifying provisions that support a variety of housing types, including affordable housing, density bonus projects, and accessory dwelling units, consistent with Policies H-2.1 (Diversity of Housing Types), H-2.3 (Housing Incentives), and H-2.7 (Accessory Dwelling Units).
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Goal H-5 (Affordable Housing) by preserving the City's inclusionary housing requirements, continuing implementation of the Affordable Housing Nexus Fee program, and updating density bonus provisions that encourage the production of affordable housing. These amendments directly advance Policies H-5.1 (Inclusionary Housing), H-5.8 (Affordable Housing Incentives), H-5.13 (Inclusionary Housing Ordinance), and H-5.14 (Affordable Housing Nexus Fee).
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Goal H-6 (Preservation of Affordability) by strengthening affordability requirements, housing agreement provisions, and long-term affordability standards for inclusionary units, consistent with Policies H-6.3 and H-6.6.
In addition, the amendments implement several Housing Element programs, including Program C (Municipal Code Updates), Program F (Accessory Dwelling Units), Program P (Density Bonus Program), and Program V (Inclusionary Housing Program), all of which call for updates to the Municipal Code to ensure compliance with State law and facilitate the production of housing affordable to a range of income levels.
Organizational Effectiveness: "Deliver exemplary government services."
N/A
The City Council finds the municipal code amendments are exempt from environmental review under CEQA because the amendments are consistent with State law that preempt any inconsistent local ordinance. Thus, the City’s action is not creating a new land use regulation and it can be seen with certainty that no environmental impacts will result from the City’s action. Consequently, and in accordance with CEQA Section 21084(a) and both Section 15002(i)(1) – lack of Local Jurisdictional Discretion – and Section 15061(b)(3) – General Rule of Exemption – of the CEQA Guidelines, the ordinance adoption is exempt from CEQA review and a Notice of Exemption has been prepared for this proposed amendment. Further, Public Resources Codes Section 21080.17 exempts the adoption of an ordinance implementing state law governing accessory dwelling units and junior accessory dwelling units from review under the California Environmental Quality Act.
Level 0: No Further Public Communication Needed