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Legal Alert
Various state housing bills are currently making their way through the California State Legislature that are expected to benefit mixed-income multifamily housing developers. The following summaries reflect the status of the pending legislation as of June 6, 2025. Future amendments are expected. Important upcoming dates in the legislative process include:
AB 609 (Wicks, Alvarez, Carrillo, Flora, Quirk-Silva, Wilson, and Wiener) would create a new categorical exemption under CEQA for qualifying urban multifamily housing development projects.
As currently proposed, AB 609 would exempt multifamily housing development projects from CEQA where all of the following requirements are met:
AB 609 would provide a useful alternative to the Class 32 urban infill exemption for multifamily housing development projects, and would be particularly relevant for larger projects not eligible for the Class 32 exemption (i.e., over five acres). AB 609 should also expedite the processing of categorical exemptions for urban infill housing development projects (as compared to the Class 32 exemption) because AB 609 would not require an analysis of potential impacts related to traffic, noise, air quality, or water quality. Rather, AB 609 projects would be required to meet stringent SB 35 siting criteria (as specified above). AB 609 also specifies that housing development projects falling under this new categorical exemption would be eligible for the benefits set forth under the State Density Bonus Law.
AB 609 was passed by the Assembly on May 19, 2025, and has been ordered to the Senate.
As currently proposed, SB 79 (Wiener) would create a new CEQA exemption for a private project or public project (i.e., a project ultimately operated by a public agency) that proposes residential, commercial or mixed-uses and meets the following requirements:
If the project requires the construction of new passenger rail storage and maintenance facilities at an offsite location distinct from the principal project site, the new CEQA exemption would not apply to that component of the project.
SB 79 was passed by the Senate on June 3, 2025, and has been ordered to the Assembly. Please see our separate article titled “Pending State Housing Law: High-Density Transit-Oriented Development Projects” for more information about the other amendments proposed under SB 79.
SB 607 (Wiener, Wicks, and Ahrens) was ordered to the inactive file at the request of Senator Wiener on June 5, 2025. The bill was gutted by the Senate Appropriations Committee and replaced with placeholder language for continued negotiations after backlash from environmental justice and conservation organizations and labor unions, notwithstanding Governor Newsom’s declared support for the bill. SB 607 now provides that the Legislature “intends to enact legislation as part of the 2025 state budget process that expedites projects such as those that provide housing, clean energy jobs, and critical transportation and lead to economic development for hardworking California families” to “ensure that critical projects are not delayed or impeded by the numerous outdated requirements in the California Environmental Quality Act, without compromising environmental protections.”
As previously proposed, SB 607 would have amended CEQA in several significant ways. The proposed amendments to render the “unusual circumstances” exception inapplicable to the Class 32 urban infill exemption and to revise the standard of review to be more deferential to the local agency on its decision to adopt a Mitigated Negative Declaration or Negative Declaration would have created greater legal certainty and helped expedite CEQA review. Under current law, it is not uncommon for a lead agency to prepare an EIR for legal defensibility purposes even if the project would not result in any significant unavoidable impacts. Limiting the scope of CEQA review for a project that narrowly misses qualifying for a statutory or categorical exemption would have served a similar purpose.
SB 607 would have also expanded the applicability of the Class 32 exemptions pursuant to mapped urban infill sites. The objective and measurable “safe harbor” thresholds for significant traffic, noise, air quality, and water quality impacts would have also expanded the applicability and defensibility of the Class 32 exemptions.
SB 677 (Wiener and Wicks) failed to advance by a vote of 4 to 3 at the Senate Housing Committee meeting on April 22, 2025, but reconsideration was granted. SB 677 would have amended SB 35/SB 423 and SB 9 in significant ways to expand opportunities for the streamlined ministerial approval of qualifying housing development projects.
For example, the bill would have required more frequent Regional Housing Needs Allocation (RHNA) progress reporting and would have reduced the current 50% project affordability requirement (where applicable) to 20%, which would have expanded opportunities for SB 35/SB 423 projects pursuant to the most recent (and forthcoming) HCD statewide RHNA compliance determinations.
It is not uncommon for a housing development project to be disqualified from SB 35/SB 423 due to required compliance with SB 35 siting criteria. SB 677 would have shifted the burden of proof to the local agency, which would have been required to demonstrate with a preponderance of the evidence that the project does not qualify with SB 35 siting criteria, which would have created a high threshold for the local agency.
The proposed exception to the housing demolition and alteration prohibitions under SB 9 and SB 35/SB 423 in the event of involuntary damage or destruction by “an earthquake, other catastrophic event, or the public enemy” would have also been an important change to accommodate redevelopment after natural disasters and other destructive events.
AB 1206 (Harabedian and Haney) would provide for the streamlined ministerial (i.e., no CEQA) approval of qualifying housing projects. AB 1206 would require local agencies to develop a program for the preapproval of single-family and multifamily housing plans by July 1, 2026. The local agency would thereafter be required to approve a qualifying project within 30 days of receipt of a “completed” application without discretionary review.
As currently proposed, the following requirements would need to be met to qualify under AB 1206:
Local agencies would be authorized to voluntarily accept additional plans at higher densities in additional zoning districts into the pre-approved housing plan program.
AB 1206 was passed by the Assembly on May 8, 2025, and has been ordered to the Senate.
AB 507 (Haney and Stefani) would provide for streamlined ministerial (i.e., no CEQA) approval of qualifying projects that propose to adapt nonresidential buildings for residential or mixed uses. The residential component of a qualifying adaptive reuse project would be deemed a use “by right” regardless of existing zoning.
As currently proposed, the following requirements must be met for a project to qualify as an “adaptive reuse project” under AB 507:
As currently proposed, AB 507 provides that:
As currently proposed, AB 507 provides that:
As currently proposed, AB 507 provides that:
As detailed in our prior legal alert, a substantially similar adaptive reuse bill, AB 3068, was proposed during the previous legislative cycle. However, that bill was ultimately vetoed by the Governor on the basis that certain provisions regarding labor standards lacked clarity or were written too broadly. The primary difference between AB 507 and AB 3068 is that labor requirements have been removed, except for new construction (where applicable). The absence of labor requirements would make an adaptive reuse project more financially feasible.
As currently proposed, AB 507 would also authorize local agencies to establish an adaptive reuse incentive program, whereby specified funds would be set aside to subsidize affordable housing units in qualifying adaptive reuse projects up to 30 years. Local incentive programs would help offset the cost of adaptive reuse projects.
AB 507 was passed by the Assembly on May 23, 2025, and has been ordered to the Senate.
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