The Homework Newsletter

The Homework: August 12, 2026

August 12, 2026

Welcome to the August 12, 2026 edition of The Homework, the official newsletter of California YIMBY — legislative updates, news clips, housing research and analysis, and the latest writings from the California YIMBY team.

News from Sacramento

We’re in the final weeks of the legislative session. and the Appropriations Committee is the next hurdle for any bill with a fiscal cost.

The Appropriations Committees in both the Senate and Assembly either advance their bills to their chamber’s floor, or hold it on the “suspense file” for further consideration and analysis. Bills with no or low cost can skip appropriations review and go straight to the floor.

Our four Senate-origin bills cleared Assembly Appropriations this week and are headed to the Assembly floor. Two of our Assembly-origin bills will go before Senate Appropriations, where they’ll either advance to the floor or be held on suspense; a decision is expected by August 14th.

Two more Assembly-origin bills await a Senate floor vote because they bypassed Appropriations review entirely (details below).

In other news, California Assembly Republicans have selected Assemblymember Alexandra Macedo (R-Tulare) to serve as the new Minority Leader of the Assembly Republican Caucus. California YIMBY congratulates Assemblymember Macedo on her new leadership role. We look forward to continuing to work with Republicans and Democrats to make California an affordable place to live, work, and raise a family.

Passed Assembly Appropriations Committee (heading to Assembly Floor):

SB 1014 (Grayson): Requires cities to disclose all infrastructure requirements — sidewalks, sewers, etc. — within 30 days of a housing application, and prohibits adding new requirements after permit application.
SB 1117 (Cervantes): Removes the financial penalty many jurisdictions impose on ADUs over 750 sq ft, lowering the cost to build them.
SB 677 (Wiener): Protects approved housing projects from local delay tactics over the creation of subdivisions and approval of federal financing for affordable housing.
SB 1116 (Caballero): Makes improvements to state housing law to lower costs and speed construction of smaller, lower-cost starter homes.

Skipping Appropriations, Straight to Senate Floor:

AB 1903 (Wicks): Allows builders to fix problems in newly constructed homes before costly legal fees and court proceedings are triggered, reducing housing costs and increasing homeownership opportunities.
AB 956 (Quirk-Silva): Allows homeowners to build up to two detached ADUs on a single-family lot.

Heading to Senate Appropriations Committee:

AB 2074 (Haney): Streamlines construction of high-rise residential and mixed-use buildings near regional transit hubs in California’s largest cities.
AB 1070 (Ward): Directs state agencies to study whether applying the residential building code to small multi-family projects could accelerate construction of “missing middle” housing.

Be sure to follow California YIMBY’s Twitter and Bluesky to get more up-to-date news on housing policy, legislation, and research. If you find this newsletter valuable, forward it to a friend.

Housing Research & Analysis

California Cities Wanted Free Affordable Housing. Turns Out There’s a Huge Cost.

More than a third of California cities and counties, including San Francisco, Los Angeles, San Diego and fast-growing suburbs like Dublin and Irvine, require private home builders to set aside a portion of the homes they build at below-market rents for lower-income residents.

This practice, known as “inclusionary zoning,” has a straightforward, populist appeal: Cities get affordable housing for lower-income residents without having to contribute – or, importantly, raise – any of their own tax or bond revenues.

But a new study finds inclusionary zoning, or “IZ,” comes with harsh tradeoffs. Cities with IZ policies build nearly one-third fewer homes each year than they would if IZ policies were not in place – thereby contributing to the higher housing costs that result from restricted supply.

In Inclusionary Zoning and Housing Supply: Evidence from California’s Palmer Fix, Noah Kouchekinia of the University of California, Irvine studies how these mandates affect construction statewide.

Key Takeaways:

Higher IZ percentage = fewer homes. Cities with IZ build 31.8% less housing per year, on average. But almost all of the drop in housing construction comes from cities with strict rules – either high IZ requirements (imposed as a percentage of total homes), and/or lower income limits on those homes – that lower rental income in the building. Cities with lower IZ requirements, or higher income limits, show no statistically detectable drop in construction.
Building moves to cheaper neighborhoods. Under IZ, the required rent discount is based on local rents, so the discount is larger in pricier neighborhoods. For every 1% loss in total rental revenue, apartment projects built in a neighborhood drop about 9%. When comparing neighborhoods within the same city, the pricier ones — where IZ costs landlords more — see a statistically significant drop in apartment building approvals compared to cheaper neighborhoods nearby.
Almost Double the Cost. Producing one affordable home through inclusionary zoning costs about $775,000, ultimately paid by market-rate tenants in the same building through higher rent. A tax-credit-funded affordable home costs about $441,000.

**Lower Fees Lead to More Homes and More Revenues**

One of the many levers that California cities control that directly influence housing production is the one-time fee they charge builders to help cover roads, parks, and other public infrastructure.

A new RAND Corporation study by Lizhong Liu and Jason M. Ward, Understanding How Impact Fees Shape Housing Development Feasibility and Local Fiscal Revenue, finds that modest cuts to these fees could spur thousands of additional homes in the state’s priciest cities – and the lost revenue would be recovered within a few years, thanks to the higher revenues that result from housing growth.

Key Takeaways:

Legal, yet Unprofitable to Build. Los Angeles, San Diego, San Francisco, and Palo Alto have nearly 133,000 parcels zoned for denser housing than currently exists on that parcel. Yet, building homes only makes financial sense on a fraction of those parcels: high fees mean only 10% of LA’s parcels would see homes get built, versus 35% in SF and San Diego, and 45% in Palo Alto.
LA and San Diego Gain Most. According to the study, a 25% fee cut would spur developers to build 277 projects in LA and 55 in San Diego, but just 20 in San Francisco and 1 in Palo Alto. Those latter two cities have fewer large parcels that would benefit from fee cuts.
Revenue Recovery Time Varies. A 25% fee cut pays back fastest in San Diego (4 years) and slowest in Palo Alto (7), because San Diego’s cut creates more feasible homes that can bring in new tax revenue.

California YIMBY partners with IMN’s ADUs Forum

We’re partnering with IMN for their Accessory Dwelling Units Forum, September 15-16 in San Diego. Our Senior Policy Advisor Muhammad Alameldin will speak on how California’s latest ADU legislation is reshaping what homeowners can build.

[Register here] if you work in ADU development, finance, or policy.

Houser Headlines

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