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California lawmakers just laid the groundwork for a highly targeted building boom.
Senate Bill 79, authored by San Francisco Democrat Sen. Scott Wiener, would “upzone” neighborhoods immediately surrounding train, light rail and subway stations in many of the state’s most populous metro areas. That means apartment developers will be able to construct residential buildings — some as tall as 75 feet — regardless of what local zoning maps, elected officials or density-averse neighbors say.
In a legislative year teeming with controversial housing bills designed to kick-start more construction in California, SB 79 has been among the most controversial. Because it would override the planning decisions of local governments, the bill had to overcome opposition from a host of city governments and their defenders in the Legislature, while fracturing the Capitol’s reigning Democratic Party over questions of affordability, labor standards and who ultimately has the final say over what gets built where.
The bill now heads to Gov. Gavin Newsom who supporters expect will sign it.
Wiener’s bill is meant to address two crises at once: The state’s long-term housing shortage and the financial precarity of its public transit agencies. By allowing taller and denser development, the legislation is meant to pave the way for more apartment developments in areas closest to jobs and services. By centering that development around public transit stations, it’s meant to steer more people away from cars and towards buses and trains.
“Decades of overly restrictive policies have driven housing costs to astronomical levels, forcing millions of people away from jobs and transit and into long commutes from the suburbs,” Wiener said in a statement after Friday’s vote. “Today’s vote is a dramatic step forward to undo these decades of harm, reduce our most severe costs, and slash traffic congestion and air pollution in our state.”
SB 79 would also give transit agencies the ability to develop their own land, giving them another potential revenue source — a financial model common across East Asian metros.
Making it easier to build on and around public transit stops has been a career-spanning effort for Wiener, who first introduced a version of the idea in 2018. That measure died in its first committee hearing. Wiener tried again in 2019 and 2020, but was never able to push the idea out of the Senate.
That’s all helped to bestow the proposal with a kind of mythic status in California’s legislative housing wars. Its success at last slaps a symbolic bow on a year marked by the state Legislature’s unprecedented appetite for pro-development bills. Earlier this year lawmakers made national news in exempting most urban apartment projects from the state’s premier environmental review law.
California YIMBY, one of the sponsors of the bill and a vocal force in the Capitol for pro-construction legislation, was quick to take a victory lap after the final vote in the Senate this afternoon.
“Today, California YIMBY achieved one of its founding goals — legalizing apartments and condos near train stations,” said the organization’s CEO Brian Hanlon in a written statement. “We won many victories over the past eight years, but the dream of passing a robust, transit-oriented development program has long eluded us, until now.”
For opponents of state-imposed density measures, the vote marks an equally weighty defeat.
Susan Kirsch, founder of Catalysts for Local Control, a nonprofit that advocates for the preservation of municipal authority over housing policy, predicted that the legislation would have a “devastating impact” on California’s low-rise neighborhoods, describing “extreme seven-story buildings next to single-family homes with nothing that the community can do about it.”
Amended to victory
The secret to Wiener’s success this year after so many past failures may be his willingness to whittle the bill down.
Over the course of the year, the proposal underwent 13 rounds of amendments — more than any other policy bill. Many of those changes were made to convince powerful interest groups to drop their opposition. That often meant reducing the bill’s scope.
The legislation would only apply to counties with at least 15 passenger rail stations. According to its sponsors, just eight counties fit the bill: Los Angeles, San Diego, Orange, Santa Clara, Alameda, Sacramento, San Francisco and San Mateo.
That’s a concession that likely softened opposition from rural and suburban legislators.
Rather than applying to every major bus line in the state, as the 2018 iteration did, SB 79 only targets homes within a half mile of train stations, subway stops, “high-frequency” light rail and commuter rail stops and fixed-route “bus rapid transit” lines. Buildings within the nearest quarter mile of Amtrak stations, Bay Area Rapid Transit stops and Los Angeles subway stations can top out at roughly seven stories. But parcels further out or surrounding less-trafficked light rail stations would be capped at more modest heights.
The legislation also comes with asterisks about the kinds of projects that can make use of its provisions. Developers, in select cases, must hire unionized construction workers — a provision that convinced the powerful State Building and Construction Trades Council to drop its opposition.
Projects must also set aside a modest share of homes for lower-income residents (at least 7%) and replace any rent-controlled units that are destroyed during construction. Lower-income neighborhoods also have more time to plan for the rezoning with the new rules not taking effect until at least 2032. That compromise led a number of tenant rights,“housing justice” advocacy groups and other affordability advocates to stand down earlier this week.
Case in point: Sen. Aisha Wahab, a Fremont Democrat who, as chair of the Senate’s Housing committee, nearly killed the bill earlier this year, was the second to speak in favor of it on Friday.
In a fig leaf to ticked off local governments, the bill also allows cities that are already planning for transit-oriented apartment buildings at a significant scale, such as San Francisco and Sacramento, to stick with those plans rather than abide by the full scope of the new law.
“If you look at the bill and you read the bill, I actually view it as a thoughtful, relatively narrow-in-scope bill,” Oakland Democratic Assemblymember Buffy Wicks, a Democrat from Oakland and frequent political ally of Wiener’s on housing matters, said on the Assembly floor Thursday.
Reshaping the American Dream
Many of her fellow legislators, Democratic and Republican alike, disagreed.
The Senate ultimately passed the bill by the narrowest possible margin, with Wiener only claiming his final vote from Bakersfield GOP Sen. Shannon Grove after a few tense minutes. The Assembly vote was equally close, with just 43 of the chamber’s 80 members supporting it.
“This blunt, one-size-fits-all bill will not work for a district like mine,” said Assemblymember Rick Chavez-Zbur, a Los Angeles Democrat who represents portions of Santa Monica, Beverly Hills and Hollywood. “For many Californians, living in a single-family neighborhood fulfills a lifelong dream — the American Dream.”
Placing apartment blocks in those neighborhoods “has the potential to fundamentally reshape my district without the benefit of careful land-use planning,’ he said.
Zbur was partially channeling opposition from his counterparts in local government. Last month, a narrow majority on the Los Angeles City Council voted to oppose SB 79, which members characterized as a Sacramento power grab and a giveaway to real estate developers. The city is one of dozens of municipalities that came out against the measure.
Supporters counter that deferring to local governments on land use decisions has resulted in a chronic undersupply of new housing, as local elected officials have historically catered to the interests of change-averse homeowners.
Marc Vukcevich, a policy director for the LA-based transit and pedestrian advocacy group Streets For All, a co-sponsor of the bill, said he didn’t think the city of Los Angeles’ opposition to the measure carried much weight.
“The Legislature knows that LA is a deeply unserious actor when it comes to housing,” he said.
Most significant housing bill ever?
For all the concessions Wiener made along the way, backers of the bill are still calling the proposal historic.
“It’s by far the biggest housing bill the California Legislature has passed,” said Matthew Lewis, a spokesperson for California YIMBY. “There’s more to do, but it’s a major, major step. And honestly, I feel like as people start to see what is actually going to happen, the politics will start to change too.”
“The fear is Hong Kong. I think the reality is going to be something closer to Copenhagen — not everyone is going to build the maximum demand,” he said.
Whether homeowners in Palo Alto, mid-city San Diego and the San Fernando Valley ultimately come to appreciate the new apartment developments in their communities will depend on whether any get built in the first place.
Past upzoning efforts in California have proven to be more ambitious on paper than in practice. In 2021, state lawmakers passed Senate Bill 9, a measure that both supporters and opponents said would end single-family zoning in California by allowing homeowners to build up to four units on their property. Four years in, the law has resulted in precious few units. Housing advocates point to costly requirements and loopholes that made the law difficult for property owners to actually use.
Simon Büchler, an economist at the Miami University in Ohio who has studied the results of different upzoning policies, said developers are generally keen to build around public transportation stations, making SB 79 a promising approach.
“The success of upzoning depends crucially on where it happens,” he said in an email. “Ideally, you want to upzone in high-demand areas with strong transit connections, since those are the places where added density will translate into meaningful increases in supply.”
In any case, the changes will be gradual. “Supply increases take time (often many years) to materialize, even in the right places, so these policies are far from an overnight solution,” he said.
Cobbling together enough single-family homes in a desirable transit-adjacent neighborhood is easier said than done, said Mott Smith, a developer and board member of the California Infill Builders Association. Land values are steep. Finding enough sufficiently large land all in one place requires a fair bit of luck. Both make it hard to profitably build a six-story apartment building.
“We will probably see in the next five years 20 to 30 SB 79 projects around the state, that’s my wild guess,” he said. “Both the opponents and the proponents of the bill are probably overstating how much this is going to change the built environment in California.”
That could be especially true in the current economic climate. Tariffs on building goods, immigration crackdowns targeting construction workers and high interest rates show no sign of abating, factors that make it hard to build — close to a train station or not.