California Gov. Gavin Newsom Signs SB 79, Unlocking Higher Residential Density Near Transit

Highlights

• Signed into law by California Gov. Gavin Newsom on Oct. 10, 2025, Senate Bill (SB) 79 overrides local zoning limitations to allow greater heights and densities for residential development near transit stops.
• The legislation allows dense residential development along established transit corridors, primarily in the Bay Area, Sacramento County and Southern California urban counties.
• Although SB 79 does not itself create a new California Environmental Quality Act (CEQA)-exempt approval pathway, it does create new opportunities to be paired with SB 35 at a lower level of affordability and can also be paired with other streamlining laws such as SB 330, the Housing Accountability Act, and the State Density Bonus Law.

California Gov. Gavin Newsom signed Senate Bill (SB) 79 into law on Oct. 10, 2025, with a strong statement of support. Of SB 79, which in part addresses local limits with regard to high-density housing development, the governor said that "far from limiting local control, the bill strengthens it" because it "gives local governments the tools to take ownership of outcomes with state law serving as a backstop" and further emphasized that the bill does not impact the ability of residents to rebuild homes damaged or destroyed in the January 2025 wildfires. The governor concluded that "[t]he world looks to California for leadership – it's time to build modern, connected communities that fulfill California's promise, meeting the needs of today and the next generation. The cost of inaction is simply too high."

SB 79 overrides local density limits to allow high-density housing development within one-half mile of qualifying transit stops (including Caltrain, Los Angeles County Metropolitan Transportation Authority (LA Metro), Bay Area Rapid Transit (BART), Sacramento Regional Transit (SacRT) and Santa Clara Valley Transportation Authority (VTA) stops) in counties with significant existing transit infrastructure such as Los Angeles, San Bernardino, Orange, San Diego, Santa Clara, San Mateo, San Francisco, Alameda, Contra Costa and Sacramento. SB 79 is Sen. Scott Wiener's third attempt at the "greater density near transit" concept – a key priority of the Yes in My Backyard (YIMBY) movement – and comes on the heels of two prior failed efforts: 2018's SB 827 and 2020's SB 50.

Overview of SB 79

SB 79 adopts a tiered approach to its density and height provisions, with greater benefits for projects that are closer to heavy rail transit or commuter rail with 72 or more trains per day, and lesser benefits for projects close to light rail, commuter rail with 48 to 71 trains per day or bus rapid transit (BRT) lines. The law requires certain affordability commitments, and some projects of more than 85 feet must meet heightened labor requirements. SB 79 does not itself provide a California Environmental Quality Act (CEQA)-exempt or by-right pathway for qualifying projects, although such projects may benefit from other streamlining laws.

To allow for local flexibility in implementation, SB 79 includes provisions allowing local governments to exempt certain sites from SB 79 or bypass SB 79 by adopting alternative transit-oriented development (TOD) plans that allow at least as much overall development. However, these measures must be approved by California's Department of Housing and Community Development (HCD), which is charged with enforcing SB 79 and providing guidance for implementation.

SB 79's principal upzoning provisions are generally effective July 1, 2026, with some exceptions.

SB 79 qualification requires a detailed analysis of the project and project site and, to maximize opportunities, it should be carefully analyzed in concert with other streamlining laws and with the State Density Bonus Law (SDBL). Holland & Knight can help navigate the interplay between these and other housing laws to tailor project designs to maximize development opportunities. Please reach out to Holland & Knight's West Coast Land Use and Environment Group for assistance.

SB 79's Increased Density Provisions

SB 79 establishes a framework for multifamily housing upzoning based on a housing project's distance to one of two tiers of qualifying TOD stops. Housing projects are eligible for SB 79's increased density, height and floor area standards if they are within one-half mile of a qualifying transit stop, with additional benefits for projects within one-quarter mile. Benefits also escalate based on the quality and frequency of service at the transit stop.

SB 79 defines two tiers of TOD stops:

• Tier 1 TOD stops are stops served by heavy rail transit or commuter rail with 72 or more trains per day. Tier 1 TOD stops include Caltrain, BART and certain LA Metro lines.
• Tier 2 TOD stops are stops served by light rail, commuter rail with 48 to 71 trains per day or BRT lines. Tier 2 TOD stops include San Francisco Municipal Railway (SF Muni Metro), VTA, SacRT, LA Metro light rail lines, San Diego Trolley and several other light rail and BRT lines across the state.

The following chart provides a breakdown of SB 79's specified heights, densities and floor area ratios (FAR) based on proximity to a Tier 1 or Tier 2 TOD stop.

These standards supersede any contrary local zoning standards. In addition, SB 79 projects that are immediately adjacent to a Tier 1 or Tier 2 TOD stop are eligible for an intensifier, increasing allowable height by an additional 20 feet, maximum density by 40 du/ac and residential FAR by one.

SB 79 applies only in counties with 16 or more passenger rail stations. In addition, the statutory standards for projects within one-half mile of a TOD stop apply only in cities with populations of more than 35,000 people.

Qualifying Criteria

Following the approach of other recent housing production legislation, SB 79 imposes numerous qualifying requirements for projects that wish to access greater density near transit. To qualify for SB 79, a project must:

• be in a county with at least 16 passenger rail stations
• be within one-half mile of a TOD stop (or, in cities with populations of less than 35,000, be within one-quarter mile of a TOD stop)
• include at least five residential units
• meet the definition of a "housing development project" under the Housing Accountability Act (HAA) ( Code § 65589.5), which typically requires that two-thirds of the project's square footage is used for residential uses
• meet the statutory affordability requirements (7 percent extremely low income, 10 percent very low income or 13 percent lower income) or the local affordability requirements, whichever is higher; projects with 10 or fewer housing units are exempt from the statutory affordability requirements but may still be required to comply with any local affordability requirements
• be located on a site locally zoned for residential, mixed-use or commercial uses
• meet a minimum density of 30 du/ac or comply with the minimum density set by applicable local zoning, whichever is greater
• limit the average total floor space for units to 1,750 net habitable square feet

In addition, SB 79 provides several restrictions:

• SB 79 projects may not include any hotel or similar uses.
• SB 79 projects that would require demolition of rent-controlled units or are located on sites where rent-controlled units have been demolished are heavily restricted.
• Projects near airports must meet additional requirements.

Finally, SB 79 projects that exceed 85 feet in height must meet SB 35/SB 423's prevailing wage requirements, with additional "skilled and trained workforce" requirements applicable if a prime contractor receives at least three bids for construction work that can meet the "skilled and trained workforce" requirement. This 85-foot threshold for heightened labor requirements, which also appeared in this year's AB 130, is understood to represent the transition point from wood-frame construction to steel-frame construction.

Additional Benefits and Interaction with Density Bonus Law and Streamlining Laws

In addition to accessing the statutory height, density and FAR standards, SB 79 affords qualifying projects several additional benefits.

First, projects that qualify for SB 79 upzoning may use the density allowed under SB 79 as the project's base density to receive a density bonus, waiver or concession under SDBL. SB 79 projects that meet heightened density standards will receive one or more additional incentives and concessions under SDBL, depending on the levels of affordable housing provided. However, SB 79's interaction with SDBL comes with a major caveat: Unlike regular SDBL projects, local governments are not required to grant SDBL waivers or concessions of height limits for SB 79 projects seeking to exceed SB 79's statutory height limits.

In addition, a project meeting the requirements of SB 79, as well as applicable local standards that do not alone or in concert prevent achieving SB 79's standards, is deemed consistent with local standards, policies, plans and ordinances applicable to the project for purposes of the HAA, notwithstanding any contrary local standards. Beginning Jan. 1, 2027, a local government that denies a SB 79 project located in defined "high-resource" areas would be presumed in violation of the HAA and liable for penalties pursuant to the HAA.

Finally, although SB 79 does not itself create a specific CEQA-exempt ministerial approval duty for agencies, SB 79 projects may qualify for ministerial streamlining under Gov. Code § 65913.4 (commonly referred to as SB 35).¹ Notably, a SB 79 project may qualify for CEQA-exempt ministerial processing under SB 35 with only 10 percent very low income units (for rental project) or 10 percent low income units (for-sale projects). This is a significant reduction from SB 35's affordable obligations in most instances. Even where SB 79 projects do not qualify for SB 35's CEQA-exempt ministerial process, other CEQA exemptions may apply.

Flexibility for Local Governments

SB 79 provides two avenues for flexible implementation by local governments that wish to avoid the default statutory density increases.

First, SB 79 allows but does not require local governments to adopt ordinances that bring their local standards into consistency with the statute. This local implementing ordinance may exempt certain otherwise-covered sites from SB 79 if the local government supplies substantial evidence that there is no walking path between the TOD stop location and site. This process requires HCD consultation, and HCD must ultimately approve the implementing ordinance.

Second, SB 79 allows local governments to avoid SB 79 by adopting TOD "alternative plans." A TOD alternative plan must maintain the same total increase in zoned capacity as provided in SB 79 across all eligible areas within one-half mile from qualifying TOD stops. Within these constraints, cities with approved alternative plans may reduce a site's maximum allowable density under SB 79 by up to 50 percent, with narrow exceptions for historic sites and those vulnerable to wildfires and sea level rise. Alternative plans may also be used to reduce allowable units and residential floor area by 50 percent. TOD alternative plans may be adopted as part of the adoption of a housing element, specific plan, zoning overlay or through an ordinance and must be approved by HCD.

When SB 79 Takes Effect

SB 79's primary operative provisions – those allowing greater density near transit – will not apply to cities until July 1, 2026, unless the city, prior to that date, adopts an HCD-approved ordinance or local TOD alternative plan. SB 79's operative provisions will not apply to unincorporated county areas until the seventh regional housing needs allocation cycle.

Other Provisions

SB 79 also authorizes transit agencies to adopt TOD zoning standards for commercial or mixed-use projects on infill sites owned by the transit agency and within one-half mile of a TOD stop, thereby expanding transit agencies' authority to develop infill residential projects. Holland & Knight has substantial experience advising with respect to AB 2923 of 2018, a similar law applicable to land owned by BART, and is well positioned to advise with respect to these new provisions in SB 79.

In addition, HCD must promulgate standards for implementing SB 79 by July 1, 2026, and metropolitan planning organizations must create maps of TOD stops and coverage zones to ease implementation.

Conclusion

SB 79 may unlock significant additional height and density near high-traffic transit stops in major urban areas. Determining whether a project and project site qualifies for SB 79 – and developing the best entitlement pathway to combine SB 79 with other state housing laws – requires nuanced and detailed analysis. Please reach out to the authors or another member of Holland & Knight's West Coast Land Use and Environment Group for assistance.

Footnote

1. As amended by SB 423 (2023).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.