California is expanding its housing development options through a new package of laws signed by Gov. Gavin Newsom, aimed at reducing regulatory barriers, accelerating construction, and improving affordability. The reforms create opportunities for a broader mix of housing types, including townhomes, starter homes, accessory dwelling units (ADUs), and high-rise residential buildings near public transportation.
The Missing Middle Townhome Act (AB 1751) establishes by-right approval for qualifying townhome projects of up to 150 units, with eligible developments potentially benefiting from a 60-day approval process and exemptions from California Environmental Quality Act reviews. Meanwhile, SB 1116 streamlines approvals for starter homes, including townhomes and condominiums, while limiting certain local zoning restrictions.
The legislation also reduces costs for larger ADUs by restructuring impact fees for units exceeding 750 square feet. The revised approach limits fees to the additional square footage above that threshold for the first two ADUs on a property, potentially encouraging the development of larger, family-friendly housing options.
Additionally, AB 2074 requires seven major California cities with significant transit infrastructure to establish regional transit hub districts with expanded building-height allowances, supporting higher-density residential development near public transportation.
For the single-family rental (SFR), build-to-rent (BTR), and multifamily sectors, these reforms could create new development opportunities by expanding permitted housing formats and streamlining project approvals. As California continues to address its housing affordability challenges, the legislation signals a broader effort to diversify supply and make residential development more flexible across the state.
Source: Multifamily Dive
