Gov. Gavin Newsom signed numerous housing laws recently that may speed up residential construction in Southern California.
Many of the laws are aimed at areas where building can be the most difficult.
However, it is often hard to predict how new housing laws may work until put into practice. In 2021, the governor signed Senate Bill 9, which made it legal to build up to four homes on properties that had previously only permitted one. Many experts said some of the bill’s requirements, and financial constraints of demolition and construction, would make the new law useless.
The year after passage, just 300 people in the state had taken advantage of the law, which is now considered a policy failure.
On the flip side, many of the laws designed to speed up construction of accessory dwelling units, or ADUs, have exceeded authors’ expectations. One developer in San Diego was responsible for spearheading two separate projects that each put more than 100 ADUs on a single site. City officials later scaled back the incentives.
Here’s a look at laws recently signed by the governor …
Lowered ADU fees (SB 1117)
This law will lower the fees, perhaps by thousands of dollars, for an ADU if it is larger than 750 square feet.
Under a previous statewide law, builders (from large developers to individuals) would not be charged impact fees on an ADU that did not exceed 750 square feet. Impact fees are expenses a city requires to improve infrastructure needed for a new property, such as updates to roads, water and sewer systems.
To encourage more ADUs, the previous law prevented cities from charging impact fees — but there was a catch. If a builder went over 750 square feet, they would be charged all the impact fees for the original structure plus whatever they went over.
The new law now means that a builder will not have to pay anything on the first 750 square feet, even if they go over. Instead, they must only pay for anything more than 750 square feet.
One thing the law won’t do is create massive ADUs the size of high-rises because most jurisdictions have size limitations to begin with. Many communities limit the size of ADUs, still it is possible the average size of ADUs could creep up.
It is difficult to say across the whole region what cost savings the new law will bring because impact fees are different from city to city. Also, some cities have a host of exemptions for fees that further complicate an estimate.
Saad Asad, communications manager for pro-housing group California YIMBY, said it’s fair to say the law would likely save a builder “thousands of dollars” in fees.
Townhouses in single-family neighborhoods (SB 1116, AB 1751)
Senate Bill 1116 is designed to make it easier for owners of residential lots to build for-sale townhouses or condos on smaller vacant lots. However, the rules for who qualifies are very narrow.
A single-family home would qualify if no one has lived there in the last five years. That seems unlikely in expensive, coastal communities where rents are higher than the national average and even selling the home as a fixer-upper seems more plausible.
There’s no time specified for how long land has to be vacant — with no home on it — to qualify but a vacant lot is rare and usually is that way for a reason, such as geographic challenges.
The intent of the law is to create starter homes, like townhouses, on single-family lots that are vacant in urban areas. If a lot has been vacant for years in an area zoned for single-family housing (or multifamily), the idea is that builders should be able to easily put up townhouses. The law has various tools to require cities to speed up approvals.
Asad said previous state laws already allowed this, but the update is mainly focused on requiring jurisdictions to automatically approve projects if they meet the requirements. This law is merely an update to the Starter Home Revitalization Act passed in 2021, which had amendments in 2023 and 2024.
“They are all tiny, incremental changes to this existing law,” Asad said, “that just makes it easier to use.”
One thing that makes the law unique: It allows a builder to construct multiple townhouses in an area zoned for single-family homes. Roughly 74% of the Los Angeles metro area is zoned only for single-family homes, according to a UC Berkeley study, so this law is a small way that state law can supersede local zoning.
Bo Peterson, a San Diego-based land use attorney at Allen Matkins, said this law differs from most new California housing laws because it encourages for-sale housing, as opposed to rentals.
He noted another law was signed at the same time, Assembly Bill 1751, which allows some townhouse projects to be automatically approved if they meet strict requirements, such as leaving 10% of the project for low-income housing. That’s different than current law, which only allows automatic approval for some rental projects.
Similar to the Senate bill, the Assembly bill seems to face some hurdles in implementation.
To use it, a developer would likely face financial challenges in dedicating housing to low-income buyers; municipalities can still deny projects if they deem it a public safety risk; and it cannot be used in high or very high fire hazard severity zones.
Housing near transit (AB 2074)
This one only applies to cities that have populations of more than 400,000 people.
Under this legislation, such cities must designate at least a 1-square-mile area as a “transit-hub district.” In the district, cities must speed up approvals and allow for building heights of 450 feet in 25% of the area.
Peterson said this law was mainly aimed at the San Francisco Bay Area and its lack of housing around its rail system, the Bay Area Rapid Transit, or BART.
“A lot of these laws are coming out to take the bat out of the hands of jurisdictions,” Peterson said, “where there have been local fights to stop densification around those BART stations.”
The law originally created a $500 million state loan fund that would have given low-interest loans for high-rise developments. However, that provision was removed before passage.
Making fees more transparent (SB 1014)
This law asks cities to provide developers with cost estimates for infrastructure, like upgrades to sidewalks, new traffic signals or utility upgrades, before construction begins.
Builders already pay infrastructure fees, but Asad said this law is a reaction to surprise costs after construction starts. He said it’s not unheard of in the state for a builder to pay all the permits and fees, and start putting a structure up, only to get a new request from a city to make a major infrastructure improvement.
Asad said unexpected infrastructure costs can torpedo a project, leaving a half-complete building in the middle of a downtown.
The law is not as strict as one might imagine. Municipalities must come up with non-binding “good faith” estimates in the first 30 days after an application, but there’s no penalty in the law if the estimate is wrong. Also, there is a fairly large carve-out.
Cities can still come up with new infrastructure requirements if they deem they are needed for public safety, if something changes with the project design or scope and for environmental reasons.
Peterson said the law will probably have a bigger impact in smaller communities that are more prone to passing significant infrastructure demands on to a developer.
He said he has seen smaller governments require something extensive later in the process, like substantial sewer and stormwater improvements, that would benefit much more than, say, a 12-unit apartment building. If a developer knew that up front, there is a good chance the project would not move forward.