California's 2026 Housing Laws: What You Need to Know

As in previous years, California saw a significant volume of new housing legislation emerge from Sacramento in 2025. (See Holland & Knight's previous annual recaps of California Housing Laws in the final section below.) This Holland & Knight alert takes a closer look at some of the most significant housing laws that the California Legislature passed and Gov. Gavin Newsom has signed into law, grouped into following categories:

California Environmental Quality Act (CEQA)

• AB 130 – made numerous changes to state housing law; see Holland & Knight's alert series summarizing the various aspects of AB 130
• SB 131 – made numerous changes to state environmental law; see Holland & Knight's alert series summarizing the various aspects of SB 131
• SB 158 – clarifies "shot-clock" approval deadline for AB 130 CEQA-exempt projects

Enforcement and Litigation

• AB 712 – enhances fines and penalties against local governments for violating housing reform laws
• SB 808 – expedites judicial review of housing development project denials
• SB 786 – reforms housing element law litigation

Permitting Reform

• AB 920 – creates centralized online application portals for housing projects
• SB 489 – requires agencies and local agency formation commissions (LAFCOs) to publish lists of information required of housing projects online
• AB 1007 – shortens responsible agency shot-clock for housing approvals
• AB 253 – establishes a post-entitlement permit approval shot-clock and authorizes applicants to retain private plan checkers for small residential projects
• AB 301 – imposes shot-clock for state agency post-entitlement permits
• AB 1308 – imposes residential permit inspection timelines

Density

• SB 79 – requires high-density transit upzoning
• AB 87 – makes state density bonus law benefits inapplicable to hotel portions of mixed-use projects
• SB 92 – imposes state density bonus law limits on commercial floor area increases for commercial portions of mixed-use projects

Streamlining

• AB 507 – expands streamlining for adaptive reuse projects
• AB 1021 – expands streamlining for educational agency projects
• AB 457 – expands streamlining for farmworker housing
• SB 838 – makes Housing Accountability Act (HAA) protections inapplicable to hotel portions of mixed-use projects
• AB 893 – extends AB 2011 (of 2022) to student campus development zones
• AB 357 – creates California Coastal Commission streamlining for student housing

Planning and Housing Element

• AB 507 – requires the California Department of Housing and Community Development (HCD) to provide more specific information on housing element deficiencies
• AB 610 – enhances requirements for housing element constraints analysis
• SB 340 – imposes additional processing protections for onsite emergency shelter services
• SB 507 – creates Regional Housing Needs Allocation (RHNA) credit for Tribal housing development
• AB 1275 – improves alignment between RHNA and regional transit plan/sustainable communities strategy (RTP/SCS) planning
• SB 262 – expands "prohousing" designation for "policies that keep people housed"
• AB 670 – enhances reporting requirements for demolished units

Constraints and Costs

• AB 1050 – expands the ability of developers to eliminate restrictive covenants that prohibit converting commercial property to residential use
• SB 358 – expands limits on vehicular traffic impact fees for housing projects that limit parking and are near transit and amenities

Affordable Housing

• AB 1529 – redefines "affordable rent" in affordable housing programs
• AB 480 – amends the processing for selling low-income housing tax credits (LIHTCs)

ADUs, Duplexes and Lot Splits

• SB 543 – enacts a series of important state accessory dwelling unit (ADU) processing laws
• AB 1061 – expands SB 9's eligibility to allow projects located within historic districts
• AB 1154 – limits applicability of "owner-occupancy" conditions on junior accessory dwelling units (JADUs)
• SB 9 (2025) – requires local laws to be consistent with state laws for ADU construction
• AB 462 – streamlines coastal development permit approvals for ADUs located in the coastal zone

Wildfire and Disaster Recovery

• AB 226 – makes new liquidity available for California FAIR Plan Association
• AB 818 – requires 10-day approvals for temporary structures
• SB 625 – streamlined redevelopment of structures destroyed in a disaster

Notable Vetoes

• AB 650 – would have required HCD to provide specific analysis and draft text to localities when finding housing elements deficient
• AB 1026 – would have required electric utilities to create standardized customer connection and energization procedures for housing projects
• AB 255 – would have created a new category of "supportive recovery residences" and allowed state homelessness funds to support them

Except where noted, the new laws take effect on Jan. 1, 2026.

California Environmental Quality Act (CEQA)

AB 130 (Assembly Member Buffy Wicks). AB 130 made numerous changes to state housing law, including the adoption of a powerful new infill CEQA exemption. See Holland & Knight's alert series summarizing the various aspects of AB 130.

SB 131 (Sen. Scott Wiener). SB 131 made numerous changes to state environmental law, including the adoption of the "near miss" CEQA streamlining. See Holland & Knight's alert series summarizing the various aspects of SB 131.

SB 158 (Committee on Budget and Fiscal Review) – Clarifies Shot-Clock Approval Deadline for AB 130 CEQA-Exempt Projects. SB 158 amends the Permit Streamlining Act deadlines related to final action on projects that are CEQA-exempt pursuant to AB 130. AB 130 required local governments to take final action on such projects within 30 days of the conclusion of the AB 130 Tribal consultation process. This provision created the possibility that local governments would be required to approve or disapprove a project before concluding their review of the project's consistency with objective local standards, pursuant to HAA deadlines. SB 158 clarifies that the local government's deadline for final action is 30 days after the later of 1) conclusion of the Tribal consultation process or 2) the deadline for providing consistency comments under the HAA. The law also decreased the size of Builder's Remedy project sites that are eligible for the AB 130 CEQA exemption and SB 131 "near miss" CEQA streamlining from 5 acres to 4 acres. This law became effective upon the governor's signature on Oct. 11, 2025.

Enforcement and Litigation

AB 712 (Assembly Member Wicks) – Enhances Fines and Penalties Against Local Governments for Violating Housing Reform Laws. This law provides a wide range of remedies when housing applicants successfully sue to enforce any "housing reform law," broadly defined as any law that provides legal benefits to housing applicants or limits a local government's authority over a housing approval – which should include the HAA, SB 330, state density bonus law, SB 79, and streamlining laws such as SB 35 and AB 2011.

First, the law provides that courts are required to award reasonable attorney's fees to housing developers who successfully sue agencies to enforce a housing reform law. Until AB 712, housing applicants generally faced difficulty asserting a right to recover attorney's fees except for HAA violations. The new attorney's fees provided by AB 712 are broadly applicable to any housing reform law.

Second, the law imposes fines of $10,000 per housing unit – or a minimum fine of $50,000 per violation for projects with four or fewer units – when, after providing a specified notice to the agency, the applicant prevails in litigation after the agency had previously been warned in writing by the attorney general (AG) or HCD that their actions would violate the law and failed to correct the issue within 60 days. If the agency violates the same statute more than once in the same housing element cycle (or in the following housing element cycle, unless it has adopted a compliant housing element), the court must multiply the HAA fine by five.

Finally, the law addresses the common practice of localities requiring applicants to indemnify a locality for costs and fees the locality may incur related to the project approval. Some localities have asserted that this indemnity obligation requires a housing applicant to indemnify the locality against claims the applicant or housing organizations bring against the locality to enforce a housing law. AB 712 expressly prohibits this already-dubious practice.

SB 808 (Sen. Anna Caballero) – Expedites Judicial Review of Housing Development Project Denials. Typically, when localities disapprove a housing development, it can take a year or more to litigate in the trial court – which is then followed by another year or more in the Court of Appeal. To respond to this, SB 808 enacts a dramatically expedited judicial process to challenge housing development disapprovals.

When a local agency's disapproval of a housing development project is litigated, SB 808 provides that 1) the local agency is required to certify the administrative record no later than 15 days after the petition is served and 2) the court is required to set the matter for hearing no later than 45 days from the date the petition is filed and render its decision 30 days after submittal or 75 days after the petition is filed, whichever comes first. Actions challenging housing disapprovals are entitled to calendar preference in the trial court and in the Court of Appeal. The law also provides for a process in which the administrative record is prepared concurrently with the agency's action on the project.

Needless to say, this is a dramatic change in judicial practice. Notably, courts are provided one "out": If the presiding judge of the court determines the court cannot meet the timelines, it may appoint a temporary judicial officer.

SB 786 (Sen. Jesse Arreguín and AG Rob Bonta) – Reforms Housing Element Law Litigation. For many housing entitlement pathways – most notably, Builder's Remedy – it is critically important to determine to establish whether a locality is in compliance with state planning requirements, especially housing element law. This law strengthens procedures and remedies for judicial challenges regarding whether a local jurisdiction's general plan or any of its elements – including the housing element – complies with state law. Most notably, SB 786 addresses conflicts between quantified development standards (such as density, height limits, setbacks and floor area ratios) in different elements of a general plan. The law provides that in the event of inconsistency, the most recently adopted element's standards will control. This may assist housing development in situations in which a city has recently adopted a housing element to facilitate housing but failed to concurrently revise potentially inconsistent provisions in other elements of the General Plan.

SB 786 also establishes a series of reforms intended to shorten the timelines and simplify the procedures for requesting and granting temporary judicial relief in actions challenging a locality's compliance with its general plan (including its housing element). Any order or judgment resolving whether a general plan or element complies with planning and zoning laws is made immediately appealable, regardless of whether a final judgment has been issued. Importantly, relief granted to petitioners (such as suspending permitting authority or mandating permit approvals) is not stayed during appeal unless the local government demonstrates irreparable harm. Although these new procedures are not nearly as accelerated as SB 808, they were opposed by the Judicial Council ofCalifornia, and it remains to be seen how nimbly the courts of California will be to adapt to the reforms enacted through this statute.

SB 786 states that its provisions are intended to apply to charter cities and clarifies that challenges to general plans or housing elements are governed by the enforcement provisions in Article 14 of the Planning and Zoning Law, which impose strict deadlines and development restrictions upon cities found out of compliance. For recent case law regarding the applicability of Article 14 to charter cities, see Holland & Knight's previous alert, "California Courts Reemphasize That State Housing Laws Prevail Over City Codes," Nov. 7, 2025.

Permitting Reform

AB 920 (Assembly Member Jessica Caloza) – Creates Centralized Online Application Portals for Housing Projects. AB 920 requires cities and counties with populations of 150,000 or more to create centralized online portals for housing development project applications, which must allow for online submittal of application materials and status tracking. AB 920 generally requires covered jurisdictions to make their centralized portals available by Jan. 1, 2028. However, jurisdictions have the option of making their centralized portals available by Jan. 1, 2030, if by Jan. 1, 2028, they begin a formal procurement process and make written findings that meeting the earlier deadline would substantially increase permitting fees. AB 920 centralized portals are required for "housing development projects" as defined in the HAA, including housing projects consisting of a single dwelling unit, as well as housing projects involving no discretionary approvals or a combination of discretionary and nondiscretionary approvals.

SB 489 (Assembly Member Arreguín) – Requires Agencies and LAFCOs to Publish Lists of Information Required of Housing Projects Online. Existing law under the Permit Streamlining Act requires public agencies to compile lists of information required from project applicants and make such lists available upon request. SB 489 now requires public agencies to publish these lists online for each type of approval issued in connection with housing development projects, including the criteria the public agency will apply to determine application completeness. Notably, in one of the first attempts to bring LAFCOs within the sphere of the Permit Streamlining Act's influence, SB 489 also requires LAFCOs to post their policies and procedures online and, specifically, disclose online any forms necessary for a complete application for a change of organization or reorganization.

AB 1007 (Assembly Member Blanca Rubio) – Shortens Responsible Agency Shot-Clocks for Housing Approvals. "Responsible agencies" are agencies with responsibility for carrying out a limited aspect of a project (such as issuing wildlife, water or air permits) but are not the "lead agency" responsible for conducting the project's primary environmental review. Existing law under the Permit Streamlining Act requires responsible agencies to approve or disapprove housing development projects within 90 days of either the lead agency's approval or the date the responsible agency accepts a project application as complete, whichever is later. This 90-day deadline became effective Jan. 1, 2017, pursuant to AB 2180 of 2016 but, in practice, is often not met by responsible agencies. AB 1007 generally shortens this time limit further – from 90 days to 45 days. Under AB 1007, the responsible agencies now have 45 days to act from the later date the lead agency approved the project or the date the responsible agency accepts a project application as complete. AB 1007 applies to housing projects as defined under the HAA and includes housing projects consisting of a single dwelling unit, as well as housing projects involving no discretionary approvals or a combination of discretionary and nondiscretionary approvals. An AB 1007 housing project also includes projects with 49 percent set-asides for low- or very low-income households where the applicant applies for public financing and complies with notice requirements to the lead agency. Importantly, as a component of the Permit Streamlining Act, AB 1007's deadline does not apply to post-entitlement permits.

There are exceptions to AB 1007's new 45-day shot-clock for housing projects: 1) where the California Coastal Commission or San Francisco Bay Conservation and Development Commission act as a project's responsible agency, and 2) where the responsible agency is the State Water Resources Control Board or a California Regional Water Quality Control Board and the approval being sought is either an individual waste discharge requirement or a certificate or statement required by a federal agency pursuant to any federal water quality control law. In these situations, these responsible agencies must disapprove or approve the project 90 days from the later of the lead agency's approval or the date the responsible agency accepts the project application as complete.

AB 253 (Assembly Member Christopher Ward) – Establishes a Post-Entitlement Permit Shot-Clock and Authorizes Applicants to Retain Private Plan Checks for Small Residential Projects. AB 253 brings several reforms to the post-entitlement permitting process for residential buildings with no more than 10 units. First, AB 253 requires jurisdictions that charge permit fees for such projects to prepare and post a fee schedule on their websites. Second, AB 253 replaces existing law requiring jurisdictions to temporarily hire private plan checkers with new provisions that now allow permit applicants to retain certified private plan checkers at their own expense if a jurisdiction's estimated review time exceeds 30 business days or if a jurisdiction's review is not completed within 30 days. This new scheme for private plan checks remains in effect until Jan. 1, 2036. AB 253 outlines procedures for private plan checks, including a 10-day window for jurisdictions to act on a private plan checker's report by issuing the permit or notifying applicants of noncompliance. If the agency fails to respond within the 10-day window and the private plan checker's report affirms plan compliance, the permit is deemed approved. Notably, from April 1, 2027, until Jan. 1, 2036, AB 253 also requires jurisdictions to include the number of residential building permits reviewed by public staff and private providers in their annual housing element progress reports, along with a breakdown of full-time staff involved in permit processing. AB 253's new provisions apply to residential building permits for residential construction containing no more than 10 units. AB 253 took effect immediately upon the governor's signature on Oct. 10, 2025.

AB 301 (Assembly Member Pilar Schiavo) – Imposes Shot-Clock for State Agency Post-Entitlement Permits. AB 301 expands the state's existing regulation of nondiscretionary post-entitlement permits for housing development projects. In particular, AB 301 expands the state's existing regulation to include state agencies, not just local agencies. (See Holland & Knight's previous alert, "California's 2023 Housing Laws: What You Need to Know," Oct. 10, 2022.) State agencies are now subject to timelines for reviewing and approving post-entitlement permits that were previously limited to local agencies. Namely, state agencies have 15 days to determine application completeness and 30 days to 60 days to approve or deny a post-entitlement permit, depending on the housing project's number of units. Failure to adhere to these timelines renders the permit application automatically deemed complete and approved, respectively. By Jan. 1, 2026, state agencies must also post lists of required post-entitlement permit application materials for such housing projects, as well as examples of complete applications and final permits on their websites. Note that permits relating to safe drinking water issued by a state agency with authority under the federal Clean Water Act or Safe Drinking Water Act are exempt from AB 301, as are permits authorizing waste discharges into state waters. AB 301 took effect upon the governor's signature on Oct. 10, 2025.

AB 1308 (Assembly Member Josh Hoover) – Imposes Residential Permit Inspection Timelines. AB 1308 introduces measures to streamline the residential building inspection process. First, AB 1308 requires local building departments to complete final inspections of permitted work within 10 business days after being notified that permitted construction is completed. The law applies to new residential projects with 10 or fewer units and no taller than 40 feet. AB 1308 also applies to additions to existing residential buildings with nine or fewer units, which additions must contain 10 or fewer units. Notably, AB 1308 makes a building department's violation of the new 10-day deadline a violation of the HAA.

Density

SB 79 (Sen. Wiener) – Requires High Density Transit Upzoning. SB 79 overrides local density limits to allow high-density residential development along established transit corridors, primarily in the Bay Area, Sacramento County and Southern California urban counties. (See Holland & Knight's previous alert, "California Gov. Gavin Newsom Signs SB 79, Unlocking Higher Residential Density Near Transit," Oct. 10, 2025.)

AB 87 (Assembly Member Tasha Boerner) – Makes State Density Bonus Law Benefits Inapplicable to Hotel Portions of Mixed-Use Projects. The state density bonus law is a powerful tool that provides a range of benefits (e.g., bonuses, incentives/concessions, waivers and parking reductions) to projects with affordable housing. This law clarifies that the state density bonus law does not require a local jurisdiction to grant an incentive/concession or waiver to a hotel, motel or other transient lodging, other than a residential hotel as part of a mixed-use project.

SB 92 (Sen. Catherine Blakespear) – Imposes State Density Bonus Law Limits on Commercial Floor Area Increases for Commercial Portions of Mixed-Use Projects. This law also amends the state density bonus law to clarify that an incentive or concession shall not result in a project with a commercial floor area ratio that is greater than two and a half times the commercial floor area ratio allowed by the base zoning. Both AB 87 and SB 92 were sponsored to address a project in San Diego that proposed a 238-foot tower adding 139 hotel rooms and 10 affordable units. Though the law is intended to limit the application of the state density bonus law to commercial floor area ratio increases, it is actually helpful that SB 92 acknowledges the existing practice of seeking reasonable state density bonus law benefits for the commercial portions of mixed-use projects in order to support the affordable housing portions of the project.

Streamlining

AB 507 (Assembly Member Matt Haney) – Expands Streamlining for Adaptive Reuse Projects. AB 507 builds on prior efforts to streamline "adaptive reuse" projects; that is, retrofitting and repurposing an existing building to create new residential units. AB 1490 of 2023 made 100 percent affordable adaptive reuse projects an allowable use. AB 507 now provides for a streamlined process for projects with reduced affordability. Specifically, AB 507 qualifies projects with the following affordability: rental projects containing either 1) 8 percent very low-income and 5 percent extremely low-income, 2) 15 percent low-income units or 3) owner-occupied housing with 30 percent moderate or 15 percent low-income units. It also requires that at least half of the square footage is dedicated to residential use. The law includes thoughtful detail on how buildings that are older than 50 years may be processed depending on historic status and also allows for additional units to be built on undeveloped and parking areas located on the same parcel as the adaptive reuse parcel. It further provides for ministerial, CEQA-exempt processing, as well as helpful processing provisions related to expiration, modifications, subsequent permit processing and impact fees. However, the law also imposes a range of prevailing wage, apprenticeship, skilled and trained workforce, and healthcare expenditure requirements, depending on the size and other characteristics of the project. To incentivize adaptive reuse projects, the law authorizes local jurisdictions to establish an adaptive reuse investment incentive program to generate funds for adaptive reuse projects. AB 507 will go into effect on July 1, 2026.

AB 1021 (Assembly Member Wicks) – Expands Streamlining for Educational Agency Projects. AB 1021 first revises and recasts existing planning and zoning law that deems a housing development project on property owned by a local educational agency an allowable use. For example, it clarifies that such projects are eligible for state density bonus law benefits and clarifies that an agency's review of such project's consistency with objective standards is subject to the requirements of the HAA. Finally, it amends a powerful CEQA exemption for 100 percent affordable housing projects so that it includes affordable housing projects on property owned by a local educational agency.

AB 457 (Assembly Member Esmeralda Soria) – Expands Streamlining for Farmworker Housing. AB 457 expands eligibility for the streamlined, ministerial process for farmworker housing that is currently only available in Santa Clara and Santa Cruz counties to Fresno, Madera and Merced. The streamlined approval process is available for sites that are located within 15 miles of an area designated as farmland or grazing by the Department of Conservation and cannot be located on a site where more than one-third of the site is dedicated to industrial use.

SB 838 (Sen. María Elena Durazo) – Makes Housing Accountability Act Protections Inapplicable to Hotel Portion of Mixed-Use Projects. In another blow to mixed-use projects that include hotels, SB 838 now states that no portion of a mixed-use project that is designated for a hotel, motel, bed and breakfast, or other transit lodging may be considered a "housing development project." The significance of this definition extends beyond the HAA, as it is also incorporated by reference into numerous other laws, including SB 330. The amendments are further nuanced, however, by stating that the portions of a mixed-use project that do not include hotels are considered a housing development project and that a local agency may still separately approve the portion of the project that includes a hotel without the state housing law benefits.

AB 893 (Assembly Member Mike Fong) – Extends AB 2011 (of 2022) to Student Campus Development Zones. AB 893 amends the Affordable Housing and High Road Jobs Act of 2022 (often referred to as AB 2011), which allows for ministerial processing of residential uses in commercially designated zones, to be applicable in "campus development zones." Those zones are defined to mean parcels that are wholly or partially within a one-half mile of a "main campus" of the University of California, California State University or California Community Colleges. Additionally, the law provides distinct affordability requirements for qualifying projects located within campus development zones. The law also contains a few unrelated cleanup changes to AB 2011, including a provision that states that a local government's review of a project's consistency with objective standards must be limited to the areas that are being disturbed by construction and shall not include other contiguous areas under the same ownership or control.

AB 357 (Assembly Member David Alvarez) – Creates Coastal Commission Streamlining for Student Housing. AB 357 addresses issues related to the development of student housing in the Coastal Zone. Currently, colleges and universities in the Coastal Zone may submit a long-range development plan (LRDP) to the Coastal Commission "as an alternative to project-by-project review." AB 357 provides limits on the Coastal Commission's review and oversight of LRDPs.

First, AB 357 requires the Coastal Commission to "prioritize the provision of active transportation and public transportation facilities over vehicle parking spaces" when considering new or amended LRDP and, specifically, to "defer to" the college or university "in determining the number of vehicle parking spaces necessary for residents of those facilities." These amendments are specifically addressed to the University of California, Santa Barbara San Clemente Villages project, which experienced a multiyear delay driven in part by increased parking requirements.

Second, AB 357 allows the Coastal Commission to designate proposed LRDP amendments as de minimis if they would have no impact on coastal resources. The de minimis determination must be made within 10 days of submittal of the proposed LRDP amendment. LRDP amendments designated de minimis are automatically approved at the following Coastal Commission meeting, unless three Coastal Commissioners object to the de minimis designation, in which case the amendment must be set for public hearing. This change is intended to reduce bureaucratic delays associated with Coastal Commission consideration and approval.

Planning and Housing Element

AB 507 (Assembly Member Haney) – Requires HCD to Provide More Specific Information on Housing Element Deficiencies. Tucked into a bill that is otherwise about streamlining for adaptive reuse projects, there are new obligations for HCD to provide more specific input when finding a draft housing element does not substantially comply with Housing Element Law, including specific deficiencies and citations for noncompliant components as well as provide specific analysis or text that HCD expects to see to remedy the deficiencies. Local agencies, in turn, must adopt the suggested revisions or explain how the housing element complies without HCD's suggestions. This portion of AB 507 will go into effect on July 1, 2026.

AB 610 (Assembly Member Alvarez) – Enhances Requirements for Housing Element Constraints Analysis. Housing element law requires that local governments, when drafting housing elements, identify and analyze "potential and actual governmental constraints" that will impact housing development and remove those governmental constraints as needed to meet the RHNA. AB 610 addresses the issue of local governments adopting new barriers to housing after securing housing element certification. Beginning in the seventh RHNA cycle, local governments will be required to identify 1) any newly adopted or strengthened governmental constraints on housing adopted since the previous housing element and 2) any governmental constraints on housing that the local government is considering adopting within three years of housing element certification.

SB 340 (Sen. John Laird) – Imposes Additional Processing Protections for Onsite Emergency Shelter Services. SB 340 builds on SB 2 of 2007, which required local governments to adopt a zoning designation that allows emergency shelters as a use by right, without requiring a conditional use permit or other discretionary permit. SB 340 expands the definition of "emergency shelters" to include any supportive services provided on site, including expansions of or additions to on-site services. This change combats the local practice of requiring conditional use permits for emergency shelter services, ensuring that permits for such services are also available by right.

SB 507 (Sen. Monique Limón) – Creates RHNA Credit for Tribal Housing Development. SB 507 provides a mechanism for counting housing developed on Tribal land toward the RHNA requirement of a nearby local government. The law allows local governments to enter into voluntarily agreements with federally recognized Native American Tribes to count a housing development on Tribal land toward the local government's RHNA requirement. The development must occur on a project site held in fee simple by the Tribe or held in trust by the U.S. for the benefit of the Tribe. Additionally, the local government must be within the same county as the Tribe, and the project site must be located within the boundaries of or contiguous to the local government.

AB 1275 (Assembly Member Sade Elhawary) – Improved Alignment Between RHNA and RTP/SCS Planning. AB 1275 amends housing element law to implement two recommendations provided in HCD's report, "California's Housing Future 2040: The Next Regional Housing Needs Allocation," both of which seek to improve alignment between the RHNA allocation process and the RTP/SCS process. Existing law requires the RTP/SCS to be consistent with the RHNA, but such alignment has proved difficult in practice. AB 1275 provides two changes that seek to ease these challenges.

First, AB 1275 moves up the regional housing needs determination (RHND) – HCD's measure of each region's existing and projected housing need for the next housing element cycle – by one year. Under current law, HCD is required to provide the RHND to the various regional councils of governments (COGs) two years prior to the deadline for housing element adoption. AB 1275 extends this timeframe to three years. This additional year is intended to allow more time to include the RHND in concurrent RTP/SCS updates and, thus, to promote consistency between the two planning regimes.

Second, AB 1275 eases the requirement of consistency between the RHNA and the RTP/SCS, in acknowledgement that the two processes are based on different projections of housing growth. Whereas the RHNA process accounts for both projected population growth as well as unmet existing housing needs (as measured by factors such as cost burden, overcrowding, homelessness and jobs/housing imbalance), RTP/SCS often consider only projected population growth. Current law requires that each COG, in developing its RHNA allocation plan, establishes consistency with the development patterns included in the RTP/SCS. AB 1275 eliminates this requirement, instead merely requiring that the RHNA allocation plans be "informed by" the RTP/SCS.

SB 262 (Sen. Aisha Wahab) – Prohousing Designation for "Policies That Keep People Housed." Current law allows HCD to designate certain local governments as "prohousing" in recognition of their adoption of policies that facilitate housing development. The prohousing designation affords local governments with priority access to state affordable housing and infrastructure funding. SB 262 expands the definition of prohousing to encompass not just policies that facilitate housing construction but also "policies that keep people housed," including safe parking programs, safe camping programs and programs that expedite low-barrier navigation centers, emergency shelters and supportive housing. SB 262 does provide, however, that a local government may not secure the prohousing designation solely through the adoption of "policies that keep people housed."

AB 670 (Assembly Member Sharon Quirk-Silva) – Enhanced Reporting Requirements for Demolished Units. Current law requires local governments to provide an Annual Progress Report (APR) to HCD that includes detailed information to allow HCD to track the local government's housing progress, including the number of units applied for, number of units approved or disapproved, and income category of each unit approved. AB 670 enhances the detail required for demolished housing units. Specifically, starting in 2027, AB 670 will require the APR to 1) state the number of units approved for demolition, 2) specify whether the demolition of those units trigger replacement requirements under the Housing Crisis Act (often referred to as SB 330) and 3) identify the developer who will construct the replacement units and the anticipated completion date of the replacement units, among other details.

Constraints and Costs

AB 1050 (Assembly Member Nick Schultz). This law expands the ability of developers to eliminate restrictive covenants that prohibit converting commercial property to residential use. For a summary of this new law, see Holland & Knight's previous alert, "New California Law Expands Clearance of Restrictive Covenants on Commercial Property," Oct. 16, 2025.

SB 358 (Sen. Josh Becker) – Expands Limits on Vehicular Traffic Impact Fees for Housing Projects that Limit Parking and Are Near Transit and Amenities. Current law requires local governments to reduce vehicle/traffic mitigation fees for housing projects located in transit-focused zones that limit on-site parking to no more than one space for zero- to two-bedroom units and two spaces for each three-plus-bedroom unit and are one-half mile from specified neighborhood amenities. For such projects, governments must set the fees at a level that corresponds to the anticipated decrease in car trips compared to developments that do not meet these criteria. Currently, sites must be within one-half mile from convenience retail uses to qualify, but SB 358 expands eligibility to include any project within one-half mile of three or more of the following: supermarket or grocery store, public park, community center, pharmacy or drugstore, medical clinic or hospital, public library, school, licensed child care or restaurant. There remains an exception for cases where the agency determines – based on substantial evidence in the official record – that the project is unlikely to result in fewer automobile trips.

Affordable Housing

AB 1529 (Committee on Housing and Community Development) – Redefines "Affordable Rent" in Affordable Housing Programs. This housing omnibus bill made numerous changes but is particularly notable for affordable housing developers because it further refines how "affordable rent" is defined in affordable housing programs. Housing streamlining laws have long defined "affordable rent" with reference to certain percentages of area median income, which did not necessarily correspond to the terms of the financing programs for affordable housing. In recent years, the Legislature amended this definition to provide that projects with at least 80 percent of units dedicated to lower-income households could set rents at the amount set by the terms of the public financing assistance if the program receives an award on or after Jan. 1, 2025, for tax credits, tax-exempt bonds or local, state, or federal loans and grants. AB 1529 now provides that for such projects, "affordable rent" is the amount consistent with the maximum rent for lower-income households as determined by the California Tax Credit Allocation Committee.

AB 480 (Assembly Member Quirk-Silva) – Amends the Process for Selling LIHTCs. This law aims to increase the impact of LIHTCs for affordable housing by permitting affordable developers to switch from "allocated" to "certificated" state credits after award. Tax credits are the leading financing vehicle for affordable rental housing, and California has long supplemented the federal tax credit with its own state tax credit program. "Certificated credits" let investors purchase tax credits directly without owning part of the property. In contrast, "allocated credits" lower state tax bills, which increase federal taxes since state taxes are deductible. Because certificated credits avoid this federal tax effect, they are often valued more by investors. However, current law does not allow developers to switch from allocated to certificated credits after the award. After AB 480, affordable developers will be able to do so, which the supporters of the law hope will increase investment in California affordable housing.

ADUs, Duplexes and Lot Splits

SB 543 (Sen. Jerry McNerney) – Enacts Series of Important Amendments to State ADU Processing Laws. SB 543 builds on a series of ADU laws and primarily focuses on application processing protections that mirror the Permit Streamlining Act. Notably, SB 543 requires local agencies to now determine whether an application to construct an ADU is complete within 15 days of receipt. Additionally, local agencies must also 1) provide applicants a list of incomplete items to make the application complete and 2) review resubmittals only for items identified in an incompleteness determination. If a local agency fails to issue a completeness determination within 15 days, ADU applications are deemed complete. ADU applicants are now provided a statutory right to appeal incompleteness determinations to a local agency's planning commission or governing body. SB 543 also clarifies that statutory references to "square footage" relate to an ADU's "interior livable space." To illustrate, an 800-square-foot detached ADU that complies with 4-foot rear and side yard setbacks is one of the four categories of "state exempt" ADUs (subject to building permit applications). Now, the interior livable space of such an ADU can be 800 square feet, while exterior walls and stairs (if any) are appropriately excluded from the calculation. Lastly, SB 543 provides that ADUs or JADUs with less than 500 square feet of livable space are exempt from school impact fees on the basis that they constitute "other residential construction" under the Education Code.

AB 1061 (Assembly Member Quirk-Silva) – Expands SB 9's Eligibility to Allow Projects Located Within Historic Districts. Enacted in 2021, SB 9 created a novel ministerial approval process for "urban lot splits" and two-unit developments in single-family residential zones. Properties that were either 1) designated as historic resources in the State Historic Resources Inventory or 2) located in a "historic district" were ineligible under SB 9. AB 1061 modifies the latter criteria, now disqualifying properties only with a "contributing structure within a historic district." Stated differently, properties that are merely located within – but do not contribute to the historical, architectural or cultural character of – a historic district can now utilize SB 9's ministerial approval process for two-unit projects and urban lot splits as long as the properties themselves are not designated historic resources. Examples of larger historic districts include the Old Pasadena Historic District, the Main Street Historic District in Redwood City and numerous areas within San Francisco.

AB 1154 (Assembly Member Juan Carillo) – Limits Applicability of "Owner-Occupancy" Conditions on JADUs. JADUs are units that are 500 square feet or less in size and located wholly within an existing or proposed single-family home. Previously, state ADU law provided that local agencies are legally precluded from adopting "owner-occupancy" requirements on ADU projects but must adopt such requirements on JADUs. An owner-occupancy condition mandates that the property owner principally resides in either the primary dwelling (i.e., the single-family home) or the ADU. AB 1154 now provides that local agencies can only impose owner-occupancy requirements on JADUs that share sanitation facilities (i.e., bathrooms) with the primary dwelling. If a JADU is designed to have a separate bathroom, local agencies can no longer require the property owner to reside in either the primary dwelling or JADU.

SB 9 (2025)¹ (Sen. Arreguín) – Requires Local Laws to be Consistent with State Laws for ADU Construction. Under State ADU law, local agencies are permitted to adopt local ordinances that, among other things, establish objective development standards for ADUs that are not inconsistent with state mandates. Local agencies are required to submit ADU ordinances to HCD for review and comment within 60 days of adoption; thereafter, HCD is authorized to review and prepare written findings regarding whether the ordinance complies with state law. If HCD determines that the ADU ordinance does not comply with state law, a local agency must either 1) amend the ordinance or 2) adopt the ordinance without revisions, accompanied with written findings as to why the agency believes the ordinance complies with state law. If a local agency does neither, HCD may notify the state AG's office for further consultation and/or potential legal action. Pursuant to SB 9 (2025), if a local agency fails to provide HCD a copy of a new or amended ADU ordinance within 60 days or respond to HCD's deficiencies within 30 days, the ordinance is deemed "null and void" as a matter of law.

AB 462 (Assembly Member Josh Lowenthal) – Streamlines Coastal Development Permit (CDP) Approvals for ADUs Located in the Coastal Zone. Under existing law, local agencies cannot issue a certificate of occupancy for ADU before the agency issues one for the primary dwelling. Under AB 462, if a detached ADU is located in a county that has been subject to a state emergency proclamation on or after Feb. 1, 2025, local agencies must issue a certificate of occupancy for the ADU (even if the primary dwelling as not yet been reconstructed) if 1) the primary dwelling was substantially damaged or destroyed in the emergency, and 2) the ADU has been issued building permits and passed inspection. AB 462 also streamlines the issuance of CDP approvals for ADUs located in coastal zones. Local agencies with a certified local coastal program (LCP) must now approve or deny CDPs for ADUs within 60 days of receiving a completed application, which must run concurrently with its ministerial land use review. Agencies without an LCP must immediately notify the Coastal Commission of the CDP application, which then has 60 days to approve or deny the CDP. If the local agency or Coastal Commission, as applicable, does not approve or deny the ADU within this 60-day period, the ADU project is deemed approved as a matter of law. AB 462 took effect upon the governor's signature on Oct. 15, 2025.

Wildfire and Disaster Recovery

AB 226 (Assembly Member Lisa Calderon) – New Liquidity Available to the California FAIR Plan Association. The California FAIR Plan Association (Association) is a joint reinsurance entity composed of all property insurers licensed in California. AB 226 authorizes the Association to access new financial tools to bolster its claims-paying capacity. Specifically, this bill allows the FAIR Plan, with prior approval from the insurance commissioner, to request that the California Infrastructure and Economic Development Bank issue bonds to finance the costs of insurance claims, increase liquidity and refund previously issued bonds. The bank may loan bond proceeds to the FAIR Plan, which is also empowered to enter into loan agreements, lines of credit or other financial arrangements to support its obligations.

If the FAIR Plan is unable to meet its repayment obligations on these bonds or related agreements, AB 226 requires the Association to assess its member insurers as needed to ensure timely and full repayment. The bill further authorizes the FAIR Plan to secure these financial instruments with a statutory lien. Any additional revenue generated and deposited into the bank as a result of these transactions are appropriated for the bank's objectives. AB 226 was enacted as an urgency statute and became effective immediately upon the governor's signature on Oct. 9, 2025.

AB 818 (Assembly Member Anamarie Avila Farias) – Requires 10-Day Approval for Temporary Structures. AB 818 amends the Permit Streamlining Act by expediting the approval process to construct temporary structures needed following local emergencies. When a local emergency (as defined by the California Emergency Services Act) is declared, AB 818 requires cities and counties to approve or deny a complete application to construct 1) a state- or federally approved modular home, 2) a state- or federally approved prefabricated home or 3) a detached AUD within 10 calendar days if that structure is "intended to be used by a person until the rebuilding or repairing of an affected property is complete." Additionally, if a local agency approves a permit necessary to rebuild an affected property, AB 818 also requires utility providers to set forth in writing "the next steps in the approval process for a connection request" within 30 days of receiving a connection request, unless utility connection remains infeasible due to the disaster.

SB 625 (Sen. Wahab) – Streamlined Redevelopment of Structures Destroyed in a Disaster. SB 625 establishes a new chapter in the California Government Code, "Housing Developments Following the 2025 Los Angeles Wildfires," creating a new streamlined, ministerial approval process for housing developments on parcels where a residential structure was destroyed or damaged by a disaster. Under this process, qualifying projects are exempt from local objective zoning, subdivision and design review standards unless the proposed development exceeds 110 percent of the parcel's pre-disaster residential square footage. However, applicants must meet enhanced labor requirements and other specified criteria. Projects that qualify for this pathway are entitled to a decision within 90 days of application submission. If a proposed development is found inconsistent with any applicable standard, the local government must approve the project within 60 days of the first application resubmission and within 30 days of each subsequent resubmission.

SB 625 also restricts common interest developments by voiding any covenant, condition or restriction that prohibits a "substantially similar reconstruction of a residential structure" destroyed or damaged in a disaster. To qualify, the reconstruction must 1) be located on a separate interest within the common interest development, 2) not exceed 110 percent of the pre-disaster square footage, 3) not exceed the greater of 110 percent of the pre-disaster height or 100 percent of the height allowed by the governing documents, 4) include 4-foot side and rear setbacks, 5) be built in the same location and to the same exterior dimensions as the previous structure, and 6) satisfy all applicable objective design standards in effect at the time of the disaster, unless implementation of those standards would unreasonably increase the cost of construction or effectively prohibit the construction of the proposed housing development. Under SB 625, qualifying reconstruction projects are entitled to application completeness review within 30 days, and complete applications must render a decision on the application within 45 days.

Notable Vetoes

Also notable were the following bills passed by the Legislature that the governor vetoed:

• AB 1026 (Assembly Member Lori Wilson) would have required electric utilities to create standardized customer connection and energization procedures for housing projects. The governor objected that this would duplicate existing efforts and risks disrupting current processes at the California Public Utilities Commission.
• AB 255 (Assembly Member Haney) would have created a new category of "supportive recovery residences" and allowed state homelessness funds to support them. The governor expressed support for recovery-first housing opportunities but objected that having a separate category for such housing would impose unnecessary costs and suggest incompatibility with the state's "Housing First" framework.

For more information about how to maximize these and other state housing laws to advance the approval of your project, contact the authors or your Holland & Knight West Coast Land Use & Environment Practice Group attorney.

Previous California Housing Law Alerts

• A Closer Look at California's New Housing Production Laws, Dec. 6, 2017
• California's 2019 Housing Laws: What You Need to Know, Oct. 8, 2018
• California's 2020 Housing Laws: What You Need to Know, Oct. 18, 2019
• California's 2021 Housing Laws: What You Need to Know, Nov. 4, 2020
• California's 2022 Housing Laws: What You Need to Know, Oct. 13, 2021
• California's 2023 Housing Laws: What You Need to Know, Oct. 10, 2022
• California's 2024 Housing Laws: What You Need to Know, Oct. 31, 2023
• California's 2025 Housing Laws: What You Need to Know, Nov. 5, 2024

Notes

¹ To avoid confusion with the 2021 urban lot split/two-unit development law known as "SB 9," the authors are referring to this legislation as "SB 9 (2025)."

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.