2026 California New Laws: Key Updates & Practical Impacts – Housing Law
New Legislation in 2026 Related to California Housing Law
BBK’s 2026 New Laws series focused on Housing examines updates related to transit-oriented development, CEQA, housing accountability and state preemption, accessory dwelling unit (ADU) and junior accessory dwelling unit (JADU) regulations, permit processing and streamlining requirements and targeted clarifications to SB 9 and other housing related laws. These summaries include analyses and takeaways of SB 79, AB 130, SB 131, SB 9, SB 543, AB 462, AB 1154, AB 920, AB 1308, AB 253 and AB 1061.
Transit-Oriented Development
Effective July 1, 2026, Senate Bill 79 (SB 79) makes two substantial changes to the state’s existing legal framework for housing in an effort to facilitate transit-oriented development (TOD) projects. First, SB 79 generally overrides local ordinances and deems TOD projects meeting certain criteria an allowable use of sites near major transit stations. Second, SB 79 authorizes transit agencies to develop zoning standards for agency-owned property within TOD zones. The Department of Housing and Community Development (HCD) is responsible for overseeing compliance with these new requirements.
SB 79’s other major component is the authorization of transit agencies to implement zoning standards for agency-owned land near TOD stops. These standards can govern the height, density, floor area ratio and approved retail and commercial uses of certain SB 79 projects. SB 79 projects subject to a transit agency’s standards are otherwise entitled to the same benefits as any other SB 79 project and must comply with the same SB 79 requirements. Cities can still apply their objective development criteria to these projects, but if the criteria are inconsistent with a transit agency’s standards, the transit agency’s requirements will take precedence.
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CEQA, Housing Accountability and State Overrides
Assembly Bill 130 (AB 130) and Senate Bill 131 (SB 131) were two budget trailer bills that implemented several changes intended to continue the state’s efforts to speed up the time it takes to review housing projects in the state. Notably, AB 130 established a new statutory CEQA exemption for qualifying housing development projects that are 20 acres or less in size. Projects eligible for the exemption are subject to expedited approval timelines. This new CEQA exemption works in conjunction with SB 131, which addresses housing projects that narrowly fail to qualify for a CEQA exemption due to a single disqualifying condition. In such “near miss” instances, SB 131 limits CEQA review to those environmental effects caused solely by that condition. SB 131 also waives the need for analysis of project alternatives, cumulative impacts, and growth-inducing effects.
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ADU and JADU Law Updates
Senate Bill 9 (SB 9) deems any ADU ordinance that is not timely submitted or resubmitted to the California HCD for review as null and void. Local agencies are required to comply with state ADU standards until their ordinances meet applicable submission requirements.
Senate Bill 543 (SB 543) makes numerous tweaks to various portions of state ADU law. It amends state law to specify statutory references to the allowable square footage of an ADU or JADU, referring to square footage of “interior livable space.” It also clarifies that the square footage of interior livable space must be used to determine whether an ADU or JADU is exempt from impact fees based on its size. SB 543 also exempts ADUs or JADUs with 500 or fewer square feet of interior livable space from school impact fees.
Additionally, SB 543 now requires local agencies to review ADU and JADU applications for completeness and provide a list of incomplete items to the applicant within 15 business days of submission. Local agencies must also review any resubmitted applications for completeness within 15 business days and provide a written appeal process for any incompleteness determination or denial that results in a final written determination on the appeal within 60 business days of receiving the appeal.
Assembly Bill 462 (AB 462) was an urgency measure that took immediate effect when signed on October 10, 2025. It requires local agencies with a Certified Local Coastal Program (LCP) to approve or deny a completed Coastal Development Permit (CDP) application for an ADU within 60 days. AB 462 also eliminated the ability to appeal a CDP decision regarding an ADU to the California Coastal Commission (CCC). If a local agency does not have a certified LCP, then it must “immediately notify” the CCC when an ADU application is submitted, and the CCC’s ensuing review of the CDP application generally requires a determination within 60 days.
AB 462 authorizes local agencies to issue a certificate of occupancy for a detached ADU before one is issued for the primary dwelling during a state of emergency. This applies when the primary dwelling was damaged or destroyed by the emergency and the ADU has received construction permits and passed all required inspections.
Assembly Bill 1154 (AB 1154) narrowed the owner-occupancy requirements for JADUs to only apply when the JADU shares sanitation facilities with the single-family dwelling. AB 1154 also prohibits JADUs from being used as short-term rentals.
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Permit Processing and Streamlining
Assembly Bill 920 (AB 920) amends the Permit Streamlining Act (PSA). It requires cities or counties with populations of 150,000 or more to establish an online centralized application portal for housing development projects that displays application status.
Assembly Bill 1308 (AB 1308) requires building departments to conduct certain inspections for 100-percent residential buildings within 10 business days of receiving a notice of completion. The requirement applies where no dwelling exceeds 40 feet above grade. This new timeline only applies to new residential construction of a building with one to 10 units and additions to existing buildings with one to nine units to add more units (up to 10 total). Failure to inspect by the new deadline is deemed a violation of the Housing Accountability Act.
AB 1308 (cross-chaptered with SB 838) also modifies the definition of “mixed-use development” in the Housing Accountability Act to specifically exclude all transient lodging (e.g., hotel, motel, etc.) from being defined as a “housing development project.” Short-term rentals are prohibited as transient lodging unless they are allowed by local law. Residential hotels are expressly exempt from the transient lodging definition.
Assembly Bill 253 (AB 253) implements a new process for the review and issuance of post-entitlement building permits for residential projects containing up to 10 units that are less than 40 feet tall. It requires that, upon deeming a residential building permit complete, the local agency provide an estimated processing timeframe. If that estimated timeframe is longer than 30 days, or the local agency does not provide a timeframe within 30 days, the applicant is authorized to retain a private party, at the applicant’s sole cost, to perform plan-checking services. If a private party is retained for plan checking services, the applicant must then submit a report to the local agency that includes an affidavit from the private party stating that they performed the plan-checking functions and that the project does, or does not, comply with the applicable requirements. The local agency has 10 days to then issue the residential building permit or provide a written notice specifying what portions of the project or report are out of compliance. The applicant is required to indemnify the local agency for any damage or injury arising out of construction performed in accordance with plans checked by the private party.
Beginning April 1, 2027, AB 253 requires local agencies to make certain disclosures in their annual progress reports to HCD. Required disclosures include the number of residential building permits reviewed by the local agency, the number of residential building permits reviewed by private parties and the number of full-time staff the local agency has working processing residential building permits.
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Small Scale Housing Clarifications
Assembly Bill 1061 (AB 1061) amends the by-right second-primary-dwelling-unit and urban-lot-split statutes enacted by SB 9 (2021) to move the focus of the historic-protection exemption from broad districts to specific structures, sites, and landmarks. It authorizes cities to adopt objective historic-protection standards.
Disclaimer: BBK Legal Alerts are not intended as legal advice. Additional facts, facts specific to your situation, or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.
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