What is a TOC tier, what replaced it, and what is it worth to my LA property?
Since February 11, 2025, the City of Los Angeles has granted transit density bonuses through the Citywide Housing Incentive Program (CHIP), adopted as Ordinances 188477 and 188478. Its Transit Oriented Incentive Areas, part of the Mixed Income Incentive Program in LAMC 12.22 A.38(e), add 100% to the allowed density in subarea T-1, 110% in T-2 and 120% in T-3 in moderate and lower opportunity areas. The older Transit Oriented Communities (TOC) program added 50% in Tier 1 rising to 80% in Tier 4. City Planning reports that projects near transit now file under CHIP instead of TOC. On a lot near a rail station or a frequent-bus intersection, the bonus can make the land worth more than the building on it.
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Answered by Shaya Lowenstein, a Los Angeles multifamily broker at Lyon Stahl Investment Real Estate, CA DRE 01942326, with 15 years in apartment buildings and land across Los Angeles County. His closed sales are published with addresses and recording dates, so anything claimed here can be checked against the county record.
| Subarea | Density bonus, moderate and lower opportunity areas | Density bonus, higher opportunity areas | Height |
|---|---|---|---|
| T-1 | 100% | 120% | One additional story, up to 11 additional feet |
| T-2 | 110% | Limited by floor area | Two additional stories, up to 22 additional feet |
| T-3 | 120% | Limited by floor area | Three additional stories, up to 33 additional feet |
Source: City of Los Angeles Ordinance No. 188477 (CHIP, Chapter 1), effective February 11, 2025
| Type of major transit stop | T-1 | T-2 | T-3 |
|---|---|---|---|
| Two regular bus lines, each at 20-minute or better average peak headways | Under 2,640 feet | Not eligible | Not eligible |
| A regular bus plus a Rapid Bus line | 750 to 2,640 feet | Under 750 feet | Not eligible |
| Two Rapid Bus lines | 1,500 to 2,640 feet | Under 1,500 feet | Not eligible |
| Metrolink rail station | 750 to 2,640 feet | Under 750 feet | Not eligible |
| Metro Rail or Bus Rapid Transit station | Not eligible | Under 2,640 feet | Under 750 feet from an intersection with another rail line or a Rapid Bus |
Source: City of Los Angeles Ordinance No. 188477 (CHIP, Chapter 1), effective February 11, 2025
| Subarea and market tier | Extremely low income | Very low income | Lower income |
|---|---|---|---|
| T-1, low and medium market tiers | 9% | 12% | 21% |
| T-2, low and medium market tiers | 10% | 14% | 23% |
| T-3, low and medium market tiers | 11% | 15% | 25% |
| T-1, high medium and high market tiers | 11% | 14% | 23% |
| T-2, high medium and high market tiers | 12% | 16% | 25% |
| T-3, high medium and high market tiers | 13% | 17% | 27% |
Source: City of Los Angeles Ordinance No. 188477 (CHIP, Chapter 1), effective February 11, 2025
| TOC tier | Increase in allowed dwelling units |
|---|---|
| Tier 1 | 50% |
| Tier 2 | 60% |
| Tier 3 | 70% |
| Tier 4 | 80% |
Source: LA City Planning, TOC Guidelines (LAMC 12.22 A.31), revised February 26, 2018
TOC, and what replaced it.
TOC was created by Measure JJJ in 2016 and written into LAMC 12.22 A.31. It sorted sites near transit into four tiers and traded extra units for affordable ones. The City Council passed the CHIP ordinance on February 7, 2025, and it took effect on February 11, 2025. CHIP offers three programs: the State Density Bonus Program, the Affordable Housing Incentive Program (AHIP) for 80% to 100% affordable developments, and the Mixed Income Incentive Program (MIIP). MIIP's Transit Oriented Incentive Areas are the successor to the TOC tiers. City Planning's TOC page and forms are still published. Its one-year CHIP report says that from August 2025, CHIP made up 97% of the proposed homes it compared, with AHIP and MIIP replacing ED 1 and TOC as the programs projects used. A buyer pricing your lot today prices it under CHIP.
How a lot is placed in a subarea.
Each half-mile radius around a major transit stop is its own Transit Oriented Incentive Area. A lot's subarea depends on the type of stop and the shortest distance from any point on the lot to it, per the table above. A project must have five or more units to use these incentives. A site whose zoning allows fewer than five units gets a smaller bonus instead, 60% in T-1, 70% in T-2 and 80% in T-3. Inside a Transit Oriented Incentive Area no parking minimum applies. City Planning publishes the incentive-area map, and ZIMAS shows the parcel record.
The land-value math.
Take a lot whose zoning allows 10 units. In subarea T-2 in a moderate or lower opportunity area, the base incentive adds 110%, which is 11 more units, before the ordinance's own rounding and floor-area rules. That changes the buyer from an operator pricing income to a developer pricing buildable units. When I value RSO buildings on high-tier lots, I price them both ways: as an income stream and as dirt. The higher number sets the strategy. An occupied building is not a clean site. LAHD treats every RSO unit as a Protected Unit, and demolishing one for new construction triggers the city's Resident Protections Ordinance, with larger relocation payments for lower-income tenants set out in LAHD's Bulletin B. The affordable units also carry 99-year covenants under that ordinance, with limited exceptions.
State density bonus law, the other path.
California's density bonus law, Government Code 65915, is the statewide version of the same trade, and CHIP's State Density Bonus Program is how Los Angeles applies it. Reserving 15% of units for very low income households earns a 50% density bonus. A project that already qualifies can earn a second, stacked bonus for additional very low or moderate income units, as long as no more than 50% of the total units end up restricted. Projects also earn incentives or concessions, from one up to four depending on the set-aside, and five for a qualifying 100% affordable project. A city may not apply any development standard that would physically preclude building the bonus units, and the applicant can ask for that standard to be waived. Which path pencils is a parcel-by-parcel answer, and developers bid on the scheme that yields the most buildable units.
Ministerial approval under SB 35 and SB 423.
Government Code 65913.4, the statute SB 35 created and SB 423 extended, gives qualifying infill housing a ministerial approval with no discretionary hearing. A planning department that finds a conflict with an objective standard must say which one in writing within 60 days for a project of 150 or fewer units, or 90 days above that, or the project is deemed consistent. The affordability requirement depends on the city's housing production. Where a city is short on above-moderate-income permits, a rental project of more than 10 units qualifies with 10% of units at 50% of area median income or below. Where the city has instead permitted too few very low or low income units, the usual requirement is 50% of units at 80% of area median income or below. The statute excludes projects that would demolish rent-controlled housing or housing occupied by tenants in the past 10 years, so an occupied RSO building is not a candidate. The section is repealed on January 1, 2036.
Parking near transit (AB 2097).
Government Code 65863.2, added by AB 2097 and effective January 1, 2023, bars a city from imposing any minimum parking requirement on a project within one-half mile of a major transit stop. For this statute a major transit stop is the Public Resources Code 21064.3 definition plus stops in a regional transportation plan. Since AB 2553 took effect on January 1, 2025, 21064.3 counts an intersection of two or more major bus routes at a 20-minute or better peak frequency, along with rail, bus rapid transit and ferry terminals. A city can still require parking only by written findings of a substantially negative impact, and it cannot do even that for a housing project of fewer than 20 units or one that dedicates 20% of its units to lower-income, moderate-income, student, elderly or disabled households. A developer can still build parking. The city just cannot force it.
EDUCATIONAL ONLY, NOT LEGAL OR TAX ADVICE. RATES, THRESHOLDS AND ORDINANCES CHANGE, AND SEVERAL OF THE FIGURES HERE DEPEND ON FACTS SPECIFIC TO YOU. CONFIRM ANYTHING YOU PLAN TO ACT ON WITH YOUR OWN ATTORNEY OR CPA, OR WITH THE AGENCY THAT SETS IT.
/// SOURCES
- LA City Planning, Citywide Housing Incentive Program
- City of Los Angeles Ordinance No. 188477 (CHIP, Chapter 1), effective February 11, 2025
- LA City Planning, CHIP One-Year Report, February 2025 to 2026
- LA City Planning, Transit Oriented Communities Incentive Program
- LA City Planning, TOC Guidelines (LAMC 12.22 A.31), revised February 26, 2018
- LAHD, Relocation Assistance Bulletins A and B combined (Rev 07.01.2026)
- California Government Code section 65915 (state density bonus law)
- California Government Code section 65913.4 (SB 35 and SB 423 ministerial approval)
- California Government Code section 65863.2 (AB 2097 parking)
- California Public Resources Code section 21155 (major transit stop for AB 2097)
- California Public Resources Code section 21064.3 (major transit stop)
Does CHIP require affordable units?
Yes. A Transit Oriented Incentive Area project must restrict a minimum share of its total units for extremely low, very low or lower income households, and the share rises with the subarea and the market tier, as the table above shows. The bonus applies only to housing projects that include them.
Was TOC repealed?
No repeal of LAMC 12.22 A.31 was found, and City Planning still publishes the TOC page and its application forms. Its own CHIP one-year report says projects interested in affordable housing near transit moved to CHIP's AHIP and MIIP programs instead of TOC and ED 1.
What happened to ED1?
ED 1 was Mayor Bass's Executive Directive 1, a fast approval path for 100% affordable projects. CHIP's Affordable Housing Incentive Program now covers 80% to 100% affordable developments, and City Planning's one-year report says AHIP replaced ED 1 as the program those projects used.
Does an occupied RSO building qualify for these bonuses?
Its lot can, but the tenancies come with it. Every RSO unit is a Protected Unit, demolition for new construction triggers the Resident Protections Ordinance and larger relocation payments for lower-income tenants, and SB 423's ministerial path is closed to sites that would demolish rent-controlled or recently tenant-occupied housing.
SHAYA LOWENSTEIN · LYON STAHL INVESTMENT REAL ESTATE · DRE #01942326 · (323) 944-2221