Key points:
- California lawmakers pass two major housing bills, SB 79 and CEQA reform.
- State faces 2.5 to 3.5 million home shortfall, with high costs and homelessness worsening.
- Local political resistance and financing issues may limit the impact of the reforms.
California lawmakers just passed what many are calling the two biggest housing bills in years: Senate Bill 79, the Abundant & Affordable Homes Near Transit Act, and sweeping CEQA reform through Assembly Bill 130 and Senate Bill 131. Both represent significant victories for housing advocates who have fought for years to loosen restrictive zoning rules and remove environmental review barriers that can delay projects for years.
Yet the real question remains: will these landmark reforms actually move the needle on California’s housing crisis, or will their impact be muted by structural realities on the ground?
The state faces an enormous shortfall, with estimates ranging from 2.5 to 3.5 million homes needed to bring housing supply back in line with demand. Governor Gavin Newsom, who campaigned in 2018 on a pledge to build 3.5 million new units by 2025, has seen only a fraction of that number materialize. With costs continuing to rise and homelessness at crisis levels, the pressure to deliver meaningful results is intense.
SB 79 seeks to tackle the problem by legalizing midrise housing near transit. The law sets statewide zoning standards within a half mile of major rail and bus rapid transit stops. In Tier 1 areas, such as heavy rail lines like BART, Caltrain, and LA Metro’s B and D subway lines, developers could build up to nine stories adjacent to stations, seven stories within a quarter mile, and six stories within a half mile. Tier 2 stops — light rail systems like SacRT and SF Muni, or qualifying bus rapid transit corridors — allow eight, six, and five stories respectively at the same distances.
In theory, this is a dramatic step forward. California YIMBY’s Brian Hanlon called it the realization of the group’s founding dream: legalizing apartments and condos near train stations. Senator Scott Wiener declared that the vote “undoes decades of harm” by rolling back restrictive local zoning that forced millions of residents into long commutes or out of the state altogether.
But not every city will see immediate effects. Davis, for example, is largely untouched by SB 79’s provisions. The city does not have heavy rail service like BART or Caltrain. Its Amtrak Capitol Corridor station is considered intercity passenger rail, not the kind of commuter or metro rail the bill covers. Davis also lacks light rail or bus rapid transit with dedicated 24-hour lanes. Yolobus and Unitrans provide service, but not at the frequency or infrastructure standard required to qualify.
That means Davis will not be automatically upzoned under SB 79. No parcels within city limits fall under the Tier 1 or Tier 2 rules. The only pathway would be through the bill’s alternative TOD (Transit-Oriented Development) plan option, where a city can voluntarily craft its own transit-oriented plan, submit it to the Department of Housing and Community Development, and demonstrate that it meets or exceeds state housing capacity standards.
Meanwhile, nearby jurisdictions will feel a bigger impact. Sacramento, Rancho Cordova, and Folsom, all served by SacRT light rail, will see parcels within a half mile of stations eligible for SB 79 zoning standards. The Bay Area will be even more deeply affected: nearly every city with a BART or Caltrain stop now has parcels automatically rezoned for midrise development. That includes Oakland, Berkeley, San Francisco, Daly City, San Mateo, Redwood City, Palo Alto, Mountain View, San Jose, and many others.
This is why supporters call the bill transformational. For the first time, the state is stepping in to create baseline zoning standards around transit. In practice, however, the gains may be uneven. Cities like Davis, which face their own affordability challenges, may see little or no direct benefit.
The same questions surround CEQA reform. Earlier this year, the Legislature passed AB 130 and SB 131 to exempt most urban infill housing from the state’s lengthy environmental review process. For decades, CEQA has been weaponized to block projects, often by groups more interested in stopping housing than protecting the environment. Developers and housing advocates hailed the reforms as long overdue.
But again, the effect could be more modest than headlines suggest. As CalMatters reported, CEQA reform “is going to make development that is already happening a little easier.” In other words, it may reduce costs and delays for projects already in the pipeline, but it won’t, by itself, create new pipelines of housing where financing, labor shortages, or local political resistance remain barriers.
That tension highlights the broader challenge: California is changing the rules, but not necessarily addressing the underlying economics of housing development. Construction costs are sky-high. Skilled labor is in short supply. Financing for multifamily projects has tightened as interest rates remain elevated. And, despite state mandates, many local governments still resist approving new development, even under streamlined rules.
As one Sacramento Observer analysis put it, SB 79 “fails to fix those underlying problems” and may even deepen inequities if not paired with stronger affordability requirements. Critics warn that upzoning without robust tenant protections risks accelerating displacement in communities already under pressure.
It is also telling that SB 79 was amended repeatedly to address concerns about affordability, workers’ rights, displacement, demolition, low-resource areas, historic preservation, wildfire risk, and sea level rise. Those amendments provided greater flexibility and safeguards, but they also underscore the bill’s limitations. For every safeguard added, the number of parcels truly available for new development shrinks.
So, what does this mean for the state’s housing crisis?
One way to frame it is “big on paper, small in practice.” Both CEQA reform and SB 79 are genuinely significant legislative achievements. They show the state is serious about using its power to override local restrictions and streamline approvals. They represent a clear cultural and political shift in Sacramento, where for decades housing advocates were stymied.
But whether they produce a meaningful increase in housing remains to be seen. CEQA reform could shave months off timelines and reduce litigation risks, but it won’t make building in expensive markets any cheaper. SB 79 could unlock thousands of parcels near transit, but if financing doesn’t materialize, labor isn’t available, or developers calculate that projects still don’t pencil out, the law will sit on the books with little to show.
Cities like Davis illustrate another challenge. Even as the state mandates new housing capacity, not every city has the transit infrastructure to benefit. Davis will continue to struggle with its own growth controls, limited land, and political divisions over housing. Local fights over projects like Village Farms or Palomino Place will matter more in shaping the city’s housing future than sweeping state reforms like SB 79.
Ultimately, these reforms are best seen as necessary but insufficient steps. They tackle real barriers — outdated zoning near transit, abuse of CEQA in urban infill — but they don’t address the full range of structural issues. Without major investments in affordable housing subsidies, tenant protections, public transit funding, and workforce development, the dream of solving California’s housing crisis will remain elusive.
For now, the Legislature can rightly claim progress. But the gap between legislative victory and housing production remains vast. For millions of Californians still struggling to pay rent or buy a home, the question isn’t whether Sacramento passed the biggest housing bills in years. The question is whether those bills will actually deliver roofs over their heads.
Much of the real test now shifts to the will of the state. Passing laws is one thing, but enforcing them against resistant local governments is another. The Newsom administration, the Department of Housing and Community Development, and ultimately the Attorney General will need to decide how aggressively to push cities into compliance. Without strong follow-through, the promise of SB 79 and CEQA reform could fade into symbolic victories rather than concrete change.
At the same time, zoning reform and CEQA streamlining do not replace the need for real funding. California has slashed some barriers, but the state has not solved how to finance the tens of billions of dollars needed to build deeply affordable housing. Without subsidies and long-term investment, the private market will not produce units at the income levels most at risk of displacement or homelessness. Advocates argue that any comprehensive solution must marry regulatory reform with major public funding.
Finally, places like Davis show that the obstacles are not only structural but also local. Growth controls, citizen-initiated ballot measures, and political resistance continue to shape housing decisions here in ways that blunt the impact of state laws. Unless the state is willing to confront those local barriers directly, either by legal challenge or legislative preemption, California’s broader housing goals will continue to collide with local politics. For Davis and many other cities, that may prove the decisive battle.
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From article: That tension highlights the broader challenge: California is changing the rules, but not necessarily addressing the underlying economics of housing development.”
They’re also not changing “minds” in the communities that state officials have declared war upon.
But I do agree that there probably won’t be very many drastic changes, partly for the reasons you put forth. Another factor is declining birthrates, the exodus from California, immigration restrictions and deportations, etc. (In other words, there is no housing shortage in the first place – since demand itself is not a fixed number. And demand DROPS, as prices rise – the law of demand.)
I have noticed that by the time these laws make their way through the legislature, they usually have significant stipulations that were inserted during the negotiation process. (Not sure about this one, though. This one seems more-extreme and unbridled than most of what’s come out of Sacramento, lately.)