SACRAMENTO, Calif. — The California Department of Housing and Community Development has found that measures adopted by four cities to implement Senate Bill 79 do not comply with state law, raising disputes over density bonuses, housing capacity calculations and the exclusion of certain properties from transit-oriented housing requirements.
Beverly Hills, Burlingame, Pasadena and Oceanside have received findings of noncompliance from HCD, while San Francisco has received approval for its alternative housing plan, according to a report by William Fulton in California Planning & Development Report.
The disagreements involve how cities are implementing SB 79, which took effect July 1, 2026, and establishes minimum residential development standards near qualifying major transit stops in urban counties.
Signed by Gov. Gavin Newsom in October 2025, SB 79 allows qualifying housing developments near designated transit stations to exceed certain local zoning restrictions, including limits on residential density and building height.
The law generally establishes standards allowing buildings of four to eight stories, depending on the classification of the transit stop and the property’s location.
According to HCD’s SB 79 implementation guidance, cities may adopt alternative transit-oriented development plans that modify how the law’s density requirements apply to individual properties, provided those plans satisfy statutory requirements.
Cities may also exclude certain properties permanently or temporarily under provisions involving industrial employment areas, pedestrian access, existing zoning capacity, environmental conditions and other specified circumstances.
HCD is responsible for reviewing local implementing ordinances and alternative plans to determine whether they substantially comply with the law.
One of the principal disagreements involves the application of California’s Density Bonus Law to properties covered by SB 79.
The Density Bonus Law allows qualifying housing developments, including projects providing affordable housing, to receive additional residential density and other development incentives beyond what would otherwise be permitted under local zoning.
San Francisco, Beverly Hills and Burlingame sought to prohibit additional density bonuses under their SB 79 alternative plans.
HCD concluded that state density bonus requirements continue to apply independently of locally adopted alternative plans.
Under the agency’s interpretation, qualifying developments may seek density bonuses in addition to the development capacity established through SB 79.
The agency, however, treated the three cities differently when reviewing their local ordinances.
San Francisco became the first city to receive HCD approval of an SB 79 alternative plan, despite including a municipal code provision restricting density bonuses.
HCD determined that San Francisco could not enforce the restriction but did not require its removal as a condition of approving the alternative plan.
In letters issued in September, HCD directed Beverly Hills and Burlingame to remove comparable restrictions from their municipal codes.
Beverly Hills planning staff disputed HCD’s treatment of the issue, arguing in a staff report that the agency had changed its interpretation of how density bonuses apply to alternative plans.
The disagreement was among the reasons Beverly Hills officials moved toward rescinding the city’s alternative plan.
On Oct. 20, the Beverly Hills City Council directed staff to prepare the necessary actions to repeal the plan, according to an Oct. 21 report in the Beverly Press.
The alternative plan had sought to reduce the additional development capacity required by SB 79 in certain single-family neighborhoods and redistribute that capacity to mixed-use properties near the Wilshire/La Cienega Metro station.
Beverly Hills officials said they had participated in at least 14 meetings with HCD between late 2025 and July 2026 while developing and revising the plan.
The city’s planning staff maintained that HCD had previously agreed with some of its interpretations before subsequently raising objections.
HCD also disputed Beverly Hills’ calculations of the housing capacity provided by its alternative plan.
According to CP&DR, the city calculated that its plan would accommodate approximately 18,000 to 22,000 residential units, compared with approximately 16,000 existing units.
HCD objected to the city’s accounting of existing housing units when calculating the capacity provided under the alternative plan.
Burlingame faces a separate disagreement concerning its decision to exclude properties zoned for parks and public institutions from SB 79 requirements.
HCD determined that certain properties could not be excluded because the underlying zoning permitted uses covered by the state law.
A similar dispute has arisen in Pasadena, where city officials excluded several nonresidential properties, including an open-space area near the Sierra Madre Villa light-rail station.
The disputed area includes a Southern California Edison right-of-way and a wash, with zoning provisions that permit certain commercial uses.
Although Pasadena’s general plan identifies the property for nonresidential purposes, HCD examined the uses allowed under the applicable zoning district.
In a Sept. 25 letter, HCD concluded that SB 79 applies to qualifying properties within transit-oriented development zones when their zoning permits residential, mixed-use or commercial development.
The agency’s determination placed the Edison property within the scope of its review despite the property’s open-space designation in the general plan.
Pasadena has until late November to respond to HCD’s findings, according to CP&DR.
Oceanside has also received objections involving its housing capacity calculations and exclusions for parks and institutional properties.
An additional disagreement concerns the Oceanside Transit Center, a major transportation hub in North County San Diego.
Oceanside sought to exclude the transit center area from SB 79 requirements based on its designation as a low-resource area.
In an Oct. 15 letter, HCD said it could not determine from the information provided whether the area qualified for the exclusion.
The city has an existing development plan for the transit center area that limits residential density to 86 units per acre. That plan has received approval from the California Coastal Commission, according to CP&DR.
The city’s proposed exclusion would affect how the new state density requirements apply within the transit center area.
Separate lawsuits filed by pro-housing organizations have challenged aspects of SB 79 implementation in the San Diego region.
Those lawsuits include disputes over how the San Diego Association of Governments identified transit-oriented development areas and how San Diego and Oceanside determined qualifying pedestrian routes to transit stations.
The litigation is separate from HCD’s administrative findings concerning local implementation measures.
Under SB 79, cities that receive findings of noncompliance have an opportunity to amend their ordinances or provide additional findings supporting their interpretation of the law.
According to CP&DR, Beverly Hills and Burlingame face response deadlines during the first week of November, Pasadena’s deadline falls in late November and Oceanside’s deadline is in mid-December.
Beverly Hills has already directed staff to prepare the repeal of its alternative plan, although formal rescission requires additional city action.
HCD maintains a public database of technical assistance and enforcement letters, including correspondence concerning SB 79 implementation, local ordinances and alternative development plans.
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