Affordable Housing Financing Guide

Transit-Oriented Communities (TOC) and Density Bonus Affordable Financing

Los Angeles TOC and the statewide Density Bonus Law reward affordable housing near transit with real entitlement value, 22.5% to 70%+ additional density above base zoning depending on tier, reduced or eliminated parking, and ministerial approval when layered with ED1 or SB 35. The density bonus itself doesn't finance anything, but it changes the unit count a site can support, which changes every number in the pro forma underneath it.

Typical Deal Size$12M to $60M total development cost
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The Capital Stack

Most TOC & Density Bonus deals layer several sources rather than a single loan:

Tier selection is a financing decision, not just a zoning one

TOC Tier 4 (within a quarter mile of high-quality rail) unlocks the largest density bonus, 70%+ above base FAR, but also the deepest affordable set-aside requirement. Sponsors sometimes assume the highest tier is automatically the best financial outcome; it isn't always. We model unit count, set-aside percentage, and the resulting capital stack across tiers before a sponsor commits to a site plan around one specific tier.

AHSC funding rewards exactly this kind of site

California's Affordable Housing and Sustainable Communities program specifically scores transit-adjacent projects well, since the whole program exists to fund affordable housing near transit and reduce vehicle miles traveled. A TOC-qualifying site is frequently a strong AHSC candidate, which is one of the more underused soft-debt sources we see sponsors leave on the table.

For the full program mechanics, see our deeper guide: Program Deep Dive →

Where We're Active

TOC & Density Bonus Financing, By Market

Local financing guides for the markets where we're actively tracking TOC & Density Bonus deal flow.

Los Angeles

Transit-Oriented Communities (TOC) and Density Bonus Affordable Financing in Los Angeles.

View local financing guide →

Frequently Asked Questions

Is TOC only available in the City of Los Angeles?

The TOC program itself is LA-specific, but the underlying California Density Bonus Law (Government Code 65915) that TOC layers on top of applies statewide, so similar density-bonus economics exist outside LA even without the TOC label.

What affordable set-aside does TOC require?

Typically 11% to 25% of base units at 30-80% AMI, depending on the tier and how much additional bonus the project requests.

Does TOC reduce parking requirements?

Significantly, often to zero for units within a half mile of qualifying transit, which materially changes construction cost per unit on urban infill sites where structured parking is expensive.

Can TOC projects still use LIHTC?

Yes, and most do. TOC's density bonus determines how many units a site can build; LIHTC (4% or 9%, depending on deal size) is still the primary equity source financing construction of those units.

Have a TOC & Density Bonus deal?

Send us the site, the program you're targeting, and where it stands today. We'll come back within 24 hours with the lenders who actually close this structure and the stack we'd recommend.

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