Governor Signs SB 79, A Landmark Housing Bill to Upzone and Streamline Housing Near Urban Transit Stops
Introduction
Signed by the Governor on Friday October 10th, Senate Bill 79 will upzone and accelerate development of transit-oriented housing projects in specified urban counties starting in July 2026. The bill is the culmination of more than eight years of legislative attempts led by Senator Scott Weiner to increase density in transit rich areas. SB 79 narrowly tailors upzoning in “urban transit counties,” such as San Francisco, San Mateo, Santa Clara, Alameda, Sacramento, Los Angeles, San Diego, and Orange Counties.
Permitted Development
SB 79 can be used for projects that are at least 2/3 residential by square footage on sites zoned for residential, mixed use, or commercial development within one-half or one-quarter mile of a qualifying transit stop if the following requirements are met:
- The project has a minimum of 5 dwelling units and meets the greater of a minimum density of at least 30 du/acre or the minimum density required under local zoning if applicable.
- The average total area of floor space for the project’s proposed units must not exceed 1,750 net habitable square feet.
Projects where any portion is a hotel, motel, bed and breakfast inn, or other transient lodging are excluded.
Development Standards
SB 79’s tiered development standards are tied to the type of transit stop (Tier 1 or Tier 2) and the project’s proximity to the transit stop. These standards can be combined with other housing laws that apply to areas near transit, such as Assembly Bill 2097, to unlock additional benefits.
- Tier 1 Stop: A stop within an “urban transit county” served by heavy rail transit or very high frequency commuter rail.
- Tier 2 Stop: A stop in an urban transit county other than a Tier 1 stop that is served by light rail transit, high-frequency commuter rail, or by bus service operating on dedicated bus lanes or separate rights-of-way dedicated for public transportation with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.
SB 79 establishes development standards for eligible projects that override inconsistent local standards. Local governments can choose to enact and enforce standards that do not prevent achieving the height, density, and residential floor-area-ratio (“FAR”) provisions in SB 79.
Affordability Requirements
Any project with more than 10 units must meet at least one of the following minimum affordability requirements:
- 7% extremely low income
- 10% very low income
- 13% lower income households.
These are the same affordability percentages for Builder’s Remedy Projects. If a local inclusionary requirement mandates a higher percentage or deeper level of affordability, the local inclusionary requirement applies instead.
Other Standards
An SB 79 project must be consistent with height, noise, and safety standards of an adopted airport plan, and must be consistent with applicable objective fire standards.
In addition, several anti-displacement State laws apply. If there are existing housing units on a qualifying site, applicants should carefully review anti-displacement requirements. In some cases, projects can be disqualified from SB 79.
Labor Standards
Notably, SB 79 projects that are under 85 feet in height do not have to meet labor standards like prevailing wage or apprenticeship programs in order to take advantage of the bill’s benefits.
Streamlined Processing for Certain Projects
While SB 79 does not itself created a ministerial approval process, it authorizes projects meeting specified requirements of SB 35 to be processed ministerially. For details of those requirements, please see our client alert HERE. SB 79 projects that do not qualify for or seek ministerial approval under SB 35 are reviewed according to the jurisdiction’s development review process and the Housing Accountability Act, except that any local zoning standards conflicting with SB 79 are inapplicable.
Local Alternatives
SB 79 offers two “outs” for jurisdictions that want to avoid SB 79’s default statutory density increases.
First, jurisdictions can adopt ordinances that bring their local standards into consistency with SB 79, and if desired, exempt certain otherwise SB 79-eligible sites under certain circumstances. This process requires consultation with the California Department of Housing and Community Development (“HCD”), which must also approve the local ordinance.
Second, a jurisdiction can avoid SB 79 by adopting a “TOD Alternative Plan” through its Housing Element. A TOD Alternative Plan must maintain the same total capacity as provided through SB 79’s density across SB 79-eligible areas within one-half mile from qualifying TOD stops. SB 79 has several requirements regarding these plans.
Effective Date
SB 79's provisions allowing greater density near transit take effect on July 1, 2026, unless the city, prior to that date, adopts an HCD-approved ordinance or local TOD alternative plan. SB 79 will not apply to unincorporated county areas until the seventh regional housing needs allocation cycle. Beginning January 1, 2027, a local government that denies an SB 79 project located in a high-resource area will be presumed to have violated the Housing Accountability Act and will be liable for penalties.
Conclusion
Projects that check all of SB 79’s boxes have a new, streamlined entitlement pathway to upzone property near transit. SB 79 reflects the Legislature’s commitment to increasing housing production in transit-rich areas, but perhaps more importantly, reflects the Legislature’s recognition that labor standards in many landmark pre-2025 housing bills have made it difficult for most infill housing projects to pencil and have therefore not moved the needle much. We anticipate that the Bill’s pragmatic approach could potentially result in additional units being entitled and built near transit, but the continuing difficult economic conditions for dense multifamily housing may temper SB 79’s results.
Please contact an author of this alert or any member of our Land Use & Natural Resources Team should you have questions about SB 79.
