Governor Newsom Signs Key Housing Bills Into Law

On September 29 and September 30, 2026, Governor Gavin Newsom signed multiple state housing bills into law, which will take effect on January 1, 2027. The following is a summary of the notable bills that are intended to facilitate the construction of housing development projects, including multi-family, townhome, starter-home, and factory-built housing. Several legislative initiatives fell short this year, including efforts to reform California’s construction defect laws and reforming building codes for missing middle housing.

Regional “Transit Hub” Projects in Cities with Populations Over 400,000

AB 2074 (Haney) requires every “major transit city”—any city with a population of at least 400,000 that contains at least two SB-79 eligible transit stops—to designate at least one regional transit hub district by July 1, 2027, as specified. Those cities include Los Angeles, San Diego, San Jose, San Francisco, Sacramento, Oakland, and Long Beach.

Qualifying housing development projects within a regional transit hub district will be subject to streamlined ministerial review and approval (i.e., no CEQA). Specified building height, floor area ratio (FAR), and density maximums will apply:

• The maximum height limit cannot be lower than 150 feet, and at least 25% of the total transit hub district area must allow a maximum height limit of at least 450 feet.
• The maximum FAR cannot be lower than 6:1, and at least 25% of the total transit hub district area must allow a maximum FAR of at least 12:1.
• The maximum density cannot be less than 200 dwelling units per acre, and at least 25% of the total transit hub district area shall not have a maximum density limit.

Among other requirements, including labor requirements, regional transit hub district projects will need to propose a density of at least 60 dwelling units per acre and meet SB 79 affordable housing requirements (e.g., if lower income units would be provided, at least 13% of the “base” units prior to any density bonus under the State Density Bonus Law must be designated as lower income, as defined). The bill also establishes that the average total floor area for units cannot exceed 1,750 net habitable square feet.

AB 2074 also requires the California Housing Finance Agency to conduct a housing construction loan and financing study, to be delivered by March 1, 2028.

Ministerial Approval of Townhome Development Projects

AB 1751 (Quirk-Silva), titled the Missing Middle Townhome Ownership Act, requires local jurisdictions to process qualifying townhome projects ministerially (i.e., no CEQA), including the parcel map or tentative and final map for the project. Qualifying townhome projects with more than 10 units must meet specified affordability requirements, along with meeting at least 75% of the density requirements under Government Code § 65583.2(c)(3)(B) (a.k.a. Mullin densities), which vary depending on a jurisdiction’s location in an urban, suburban, or lower-density region. For example, a minimum density of 22.5 dwelling units per acre will apply in a jurisdiction in a metropolitan county. Projects must also comply with certain development standards, such as limiting townhomes to three stories of occupiable square footage and requiring that townhomes share at least one common wall with another single-family dwelling unit. AB 1751 will not apply to the City and County of San Francisco, to projects with more than 150 total units, or to certain environmentally-sensitive properties, among other restrictions.

Factory-Built Housing Projects

AB 1815 (Wicks) standardizes development standards applicable to factory-built housing statewide. Specifically, it restricts local jurisdictions from imposing building standards that exceed the minimum standards in the California Building Standards Code on housing development projects that include factory-built housing. Factory-built housing is defined as a residential building where at least two-thirds of the new or converted square footage is designed for residential use and at least 30% of that portion is built in a factory.

AB 2058 (Harabedian) authorizes a quality assurance agency, as defined, to perform an installation inspection of factory-built housing after related regulations are adopted by January 1, 2029. The bill sets the maximum fees that a local enforcement agency is authorized to impose for the inspection or permitting of factory-built housing, and prohibits the imposition of fees under specified circumstances. The bill also prohibits the disassembly, damage, or destruction of factory-built housing during the inspection process.

Accessory Dwelling Units

AB 956 (Quirk-Silva) provides for the streamlined ministerial (i.e., no CEQA) review and approval of up to two detached newly-constructed ADUs on a lot with an existing or proposed single-family dwelling, versus one ADU under existing law.

SB 1117 (Cervantes) recalibrates ADU impact fees so that such fees can only be imposed on the portion of livable space over 750 square feet for the first two ADUs on a lot. Under existing law, under that scenario, impact fees are charged proportionately in relation to the square footage of the primary dwelling unit. SB 1117 also clarifies when ADUs are exempt from utility connection fees.

Permit Processing

SB 1014 (Grayson) requires local jurisdictions to provide a nonbinding, good-faith estimate of all required onsite and offsite improvements (as defined) and associated cost estimates within 30 business days of submittal of a SB 330 preliminary application (or, if not filed, the project application) that includes all required information and a request from the applicant for the foregoing estimates.

SB 1014 further requires local jurisdictions to provide an itemized list of all onsite and offsite improvements associated with a post-entitlement phase permit (as defined) for a housing development project (i.e., at least two-thirds residential) within 30 days after deeming the application for the post-entitlement phase permit complete, and prohibits local jurisdictions from requiring additional improvements not included on the list, except under limited circumstances necessary to mitigate impacts to public health and safety or environmental impacts under CEQA, or to accommodate applicant-requested changes to the project scope.

AB 1621 (Wilson) prohibits local jurisdictions from requesting more than two plan checks in connection with a building permit application for a housing development project unless the jurisdiction makes written findings, supported by substantial evidence in the record, that additional review is necessary to address a specific adverse impact on public health or safety. This limit does not apply to permits pursuant to the Clean Water Act and Safe Drinking Water Act, authorizing discharges of waste to waters of the state, or issued by the California Coastal Commission, special districts, or certain utilities. The bill will also change the process for appealing a post-entitlement phase permit determination and will toll applicable time limits for approval of a post-entitlement phase permit during periods when the housing development project is undergoing review by other public agencies if the review is required by state or federal law.

State Density Bonus Law Amendments

AB 2433 (Alvarez) makes numerous changes to the State Density Bonus Law, including:

• Providing for additional incentives for projects that include homeownership units.
• Providing that deeper levels of affordability count towards the moderate-income category.
• Requiring local agencies to proactively apply the State Density Bonus Law even absent a request from an applicant.
• Clarifying that a density bonus includes an increase in FAR where FAR is used to calculate the base density of a project.
• Specifying that the density bonus, incentives/concessions, and waivers or reductions of development standards shall be on sites that are in the same housing development (versus contiguous sites) and may be permitted anywhere in that area, including areas outside of where housing units are located.
• Specifying that the granting of a density bonus, incentive/concession, or waiver or reduction of development standards shall not be discretionary and may be applied to the nonresidential components of a housing development project.

SB 1383 (Arreguín) separately amends the State Density Bonus Law to specify that concessions and incentives for buildings over 85 feet in height cannot include or relate to labor standards (as defined in California Labor Code § 1205) that have been adopted by the local government entity.

Starter Home Revitalization Act Amendments

SB 1116 (Caballero) strengthens the Starter Home Revitalization Act (SHRA), which provides a ministerial, CEQA-exempt pathway for small lot subdivisions. The law was established by SB 684 (2023) and expanded by SB 1123 (2024). SB 1116 expands site eligibility and limits local objective standards while retaining the SHRA’s 60-day ministerial timeline and strict health-and-safety denial thresholds. Key statutory amendments and practical impacts for housing developers and lenders are analyzed in our companion legal alert.

CEQA Compliance for Increased Building Heights

SB 958 (Weber Pierson) provides that for CEQA compliance purposes, the environmental impacts of a project that are solely associated with increased building height (including but not limited to air circulation, noise, and light refraction or reflection, shadow, or the potential to attract wildlife) shall not be considered significant impacts on the environment under CEQA if the project meets all of the following criteria: (i) the use and density of the project is otherwise analyzed in a certified environmental impact report (EIR), (ii) the project is on a previously graded infill site, (iii) there are no sensitive biological resources physically present on the site, (iv) the project is not an industrial use project, and (v) the project is consistent with local airport land use plans.

According to the legislative analysis for SB 958, the bill is intended to facilitate the proposed Midway Rising project in the City of San Diego, which will cover 49 acres of City-owned land at the San Diego Sports Arena site in the Midway-Pacific Highway community.

Previously Approved Legislation

The following bills were previously signed into law by Governor Newsom:

• SB 722 (Wahab) newly disqualifies project sites governed under the Mobilehome Residency Law, the Recreational Vehicle Park Occupancy Law, the Mobilehome Parks Act, or the Special Occupancy Parks Act from SB 79. Governor Newsom signed SB 722 into law on July 16, 2026 and the bill took effect immediately. Please see our prior legal alert for more information about high-density transit-oriented housing development projects that will be facilitated by SB 79.
• SB 1036 (Grayson) requires local agencies to calculate development impact fees for redevelopment and conversion projects to account only for the incremental impact associated with the new use. Governor Newsom signed SB 1036 into law on June 30, 2026.
• AB 1738 (Carrillo) requires local jurisdictions to allow homeowners in a single- or two-family dwelling unit to request remote building inspections for certain structural components. Governor Newsom signed AB 1738 into law on September 18, 2026.
• AB 2118 (Hoover) amends AB 2011 to provide that objective standards imposed by the local agency cannot prohibit or otherwise limit mixed-use development in a qualifying housing development project, require the development to reduce unit size to meet objective standards, or preclude the development from being built at the required residential density. The bill also clarifies that AB 2011-specific development standards apply to the development project versus the property. Governor Newsom signed AB 2118 into law on September 27, 2026. Please see our prior legal alert for more information about AB 2011.