Magnolias (Monterey-First Community Housing)

Project No. SR2021-0005, UP2021-0006, EA2021-0005

Magnolias is 100 percent affordable and is processing under State Density Bonus Law and SB330. The project is comprised of 66-units deed-restricted units to be developed along Monterey Road west of the Morgan Hill Community Adult School. The project would include 16 studios, 16 one-bedroom units, 17 two-bedroom units, and 17 three-bedroom units. There will be one three-bedroom unit reserved for on-site staff.

First Community Housing plans the following unit mix: 

  1. Twenty-five percent rapid rehousing (RRH) (10 units) and permanent supportive housing (PSH) (7 units);
  2. Twenty-five percent extremely low-income units (families earning up to 30% Area Median Income (AMI)) (17 units);
  3. Fifty percent reserved for very low-income households earning up to 50 percent AMI (31 units); and, 
  4. One unit reserved for on-site manager.

The seven PSH units and ten of the ELI units will serve veterans.

Density Bonus law provides for increased density of projects depending on the number and affordability level of housing units. As with all projects that process under Density Bonus laws, concessions and waivers to code requirements are included as part of a project entitlement.  These projects are 100% affordable and are entitled to the maximum number of concessions available. Under state law, the City has extremely limited authority to require changes to development standards or design elements - this includes height and parking. 

State law identifies specific density bonus levels applicable to a housing development project that includes affordable housing units. Under Government Code Section 65915, a housing development project which includes affordable units is eligible for a sliding scale of percentage bonus based on the number of affordable units proposed in the development and the level of affordability (from moderate to extremely low income). Until January of 2021, the maximum percentage of density bonus a proposed project could achieve was 35%. However, AB 1763 substantially increased the maximum bonus which certain affordable projects could achieve. In accordance with AB 1763, a project proposed as a 100% affordable project is entitled to a density bonus of 80%. Both of these projects utilize the full 80% density bonus. 

SB330 is a new law that went into effect in 2020 and provides eligible housing development projects enhanced streamlining. This law also suspended Morgan Hill's Residential Growth Control System (RDCS), which limited the number of housing units that could be built each year. It's important to note that even if RDCS was still in effect, these projects would be moving forward outside of the growth control program because they are 100% affordable. 

The project requires a Design Permit and a Conditional Use Permit for a “Green Parking Exemption”.  


The project site is approximately 1.5 acres. The site is located at 17965 Monterey Road, west of the Morgan Hill Community Adult School. The land use of the site is Mixed Use Flex (7-24 du/ac) and the zoning is Mixed Use Flex (MU-F).


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City Council Hearing

The City Council conducted a public hearing on April 21, 2021, to consider an 80 percent density bonus and four concessions for the project pursuant to Government Code Sections 65915(f)(3)(D)(i) and 65915(d)(2)(D). The City Council approved the density bonus and concessions to the City's Residential Development Design and Development Standards No.'s 26, 30, 31, and 39.

Planning Commission Public Hearing

The Morgan Hill Planning Commission conducted a Public Hearing on the Design Permit and Conditional Use Permit on November 23, 2021. The Planning Commission approved the project as proposed. 

Project Plans and Specifications

Environmental Review

As demonstrated in the Initial Study prepared for the project, it has been determined that the proposed project qualifies for exemption pursuant to CEQA Guidelines Section 15332, Class 32 (In-fill Development).