After months of high drama, California Senate Bill 79 (“SB 79”) was signed by Governor Newsom on October 10—the latest salvo in a year of ambitious legislation to increase housing supply in California. Effective July 1, 2026 (within incorporated cities[1]), the new law opens new residential building opportunities near existing rail and bus stations in California’s most populous metropolitan areas.

Application and Key Provisions for Local Governments

SB 79 applies to and upzones “urban transit counties”—those with 15 or more passenger rail stations. Currently, only eight California counties meet this description – Alameda, San Francisco, San Mateo, Santa Clara, and Sacramento in Northern California; and Los Angeles, Orange, and San Diego Counties in the Southern half of the state.

Within these counties, the bill creates a tiered structure of rules to preempt locally imposed height and density limits, based on the proximity a given development site has to “transit-oriented development stops.” These are “major transit stops” (as defined by Pub. Resources Code § 21064.3) with an existing rail or bus rapid transit station, ferry terminals served by bus or rail transit service, and intersections of two or more major bus routes with a frequency of service interval of 20 or fewer minutes during morning and afternoon peak commute periods. In addition, this includes stops on a route for which a “preferred alternative” has been selected or which are identified in a regional transportation improvement program when served by “heavy rail transit,” “very high frequency commuter rail” (72 trains per day), “high frequency commuter rail” (48 trains per day), “light rail transit,” or bus service. Notably, “commuter rail” does not include Amtrak Long Distance Service. “Tier 1” transit oriented development stops are those served by heavy rail transit and very high frequency commuter rail. “Tier 2” transit-oriented development stops are those served by light-rail transit, high-frequency commuter rail, or bus rapid transit service.

On sites zoned for commercial, residential, or mixed uses within the requisite distance of these stops, as summarized on the table below, a proposed housing project with least five dwelling units and a minimum density of 30 dwelling units per acre (or a higher minimum if required by local zoning) will qualify as a “transit-oriented housing development project,” and is allowed by-right, subject to the standards summarized below. Distances are measured in a straight line from the edge of the development site parcel to a pedestrian access point for the transit stop.

Alternative Plans and Exemptions

While SB 79 asserts strong state preemption over local land use, it does permit local governments to propose alternative plans. To qualify, these plans must offer at least equal net capacity (by units and floor area) to the default SB 79 standards. This alternative can be implemented through housing element amendments, specific plans, overlays, or compliant zoning ordinances, subject to review and approval by the Department of Housing and Community Development (HCD).

The alternative plan may not reduce the maximum allowed density for any individual site by more than 50% below the applicable state minimum, except in special circumstances (e.g., very high fire hazard zones, sites vulnerable to one foot or more of sea level rise, or those containing designated historic resources). For Tier 2 TOD zones, density may not fall below 30 units per acre, and floor area ratio below 1.0, except for specified exempted sites.

The bill allows local governments to exempt certain industrial lands and areas not accessible to transit by walking paths. Areas within one-half mile of straight-line distance but not walkable by a less-than one-mile pedestrian path can be excluded from SB 79 upzoning. “Industrial Employment Hubs” of 250 or more contiguous acres which have been designated as such as of January 1, 2025 and which already prohibit residential uses can similarly be excluded.

The ability for local governments to use exemptions and alternative plans is time-limited, extending until 2032 for Bay Area counties, and January 1, 2027 for the remaining counties.

Agency Transit-Oriented Development Projects

The bill also envisions residential or mixed-use projects on transit-adjacent public property. On infill sites owned by the transit agency and within 200 feet of a transit-oriented development stops, or on sites where 75 percent of the project area would exist within one half-mile of the stop. The bill requires:

at least 50% of the project’s total square footage dedicated to residential purposes,
at least 20% of units reserved for lower-income households, with long-term affordability covenants (minimum 55 years for rentals, 45 years for ownership),
average unit size not exceeding 1,750 net habitable square feet,
sites must not be recent acquisitions by eminent domain (post-July 1, 2025), and
objective development and labor standards, including prevailing wage requirements for tall buildings and phased affordability for mixed-use developments.

Transit agencies may adopt minimum zoning standards (height, density, FAR, and permitted uses) for district-owned TOD properties. If local governments do not update their zoning to match these standards within two years, the agency standards become the default zoning for agency-owned property.

Key Provisions For Private Developers

SB 79’s upzoning provisions come with requirements and standards for developers of transit-oriented housing projects, but also with eligibility for streamlined ministerial approval and protections under the Housing Accountability Act, along with density bonuses and intensifiers.

Standards

With respect to standards, proposed units within these transit-oriented housing projects may not exceed an average total area floor space of 1,750 net habitable square feet. In addition, no portion of the project can be designated for use as a hotel, motel, bed and breakfast or other transient lodging. Development must also meet the requirements of an applicable airport land use compatibility plan.

An inclusionary provision in the bill requires projects of more than ten dwelling units to dedicate 7 percent, 10 percent, or 13 percent of the total units to extremely low income, very low income, or lower income households. The affordability requirement remains in place for 55 years for owned units and 45 years for rental units. If a local government’s inclusionary zoning ordinance contains stricter affordability than SB 79, the local ordinance applies. The bill also strictly prohibits demolition of certain rent-controlled or recently occupied housing and mandates compliance with all local anti-demolition and anti-displacement ordinances.

For buildings over 85 feet, SB 79 imposes labor standards requiring payment of prevailing wages and additional project-specific certifications. Agency-owned sites developed under TOD standards must also meet similar labor requirements, unless governed by an existing project labor agreement.

Eligibility for Streamlined Ministerial Approval and Housing Accountability Act

A housing development project proposed pursuant to SB-79 is eligible for the streamlined ministerial approval process pursuant to Government Code section 65913.4 (originally adopted by SB 35 in 2017 and amended by SB 423 in 2023) if it provides a minimum of 10% very low (rental) or 10% low income (for-sale) affordable units. Projects may also qualify for other exemptions from CEQA (including Assembly Bill 130, which went into effect earlier this year).

Additionally, SB 79 provides that a housing development project will be considered consistent with the Housing Accountability Act’s requirements as long as its own standards and applicable objective local standards that do not prevent it from meeting the law’s requirements. By establishing such alignment with the Housing Accountability Act, new housing projects are more likely to avoid disapproval under the Act’s strict rules.

Density Bonuses

SB 79 expands access to state Density Bonus Law benefits by calculating base density from the higher density allowed by SB 79, unlocking significant additional units, incentives, and parking reductions. Additional concessions may be accessed for deeper affordability or higher project minimum densities as noted in the table above. However, SB 79 does not require a local agency to grant an incentive or waiver to exceed its statutory height limits.

Oversight, Enforcement and Penalties

HCD is charged with overseeing compliance with SB 79, including promulgating standards to allow density to be counted in local agencies’ housing element sites inventory. Each metropolitan planning organization (“MPO”) is charged with creating a map of eligible sites, with HCD’s guidance which, once created, provides a rebuttable presumption of eligibility.

A local government that denies a housing development project under SB 79’s structure and is located in a high-resource area shall be presumed to violate the Housing Accountability Act, unless it can demonstrate a health, life, or safety reason for denying the project. This provision is effective beginning on January 1, 2027.

FOOTNOTES

[1] The law will take effect in unincorporated county areas as of the 7th Cycle Housing Element Update under the Housing Element Law.