SB 79: Myths & Facts

SB 79 expands housing options in high-cost, high-demand areas while also applying a baseline of affordability to new homes built under its provisions. 

• SB 79 eases housing costs. Research from the Legislative Analyst’s Office and others shows that adding new homes to constrained housing markets helps lower rents. Recent research from the Pew Charitable Trusts further confirms that when metropolitan areas expanded their housing stock, rent growth slowed overall, with the most significant slowdowns occurring for older, less expensive apartments.
• SB 79 creates statewide standards for subsidized homes near transit. If a city requires 10–20 percent of new homes to be subsidized for lower-income occupants, those provisions still apply under SB 79. Otherwise, SB 79 establishes a new, statewide “floor” for subsidized affordable housing.

California cannot meet its climate targets without reducing pollution from cars and trucks, which is worsening due to the housing shortage. Transportation is the state’s largest source of climate pollution. SB 79 can help reduce pollution in the transportation sector by legalizing more homes near transit. 

• SB 79 will reduce transportation pollution by allowing Californians to drive fewer miles each day (“vehicle miles travelled”).
• SB 79 focuses growth near existing infrastructure, reducing demand for more highways, concrete, and other pollution-intensive projects.
• SB 79 helps preserve farmland and open space by reducing pressures to convert farmland to tract housing and subdivisions.

Some groups have claimed SB 79 “exempts projects from environmental review” (referring to CEQA). This is false. All projects still undergo CEQA review when legally required, or qualify under a separate state law, SB 423, which has its own environmental safeguards.

Urban transit counties: LA, Orange, San Francisco, Alameda, Santa Clara, San Mateo, Sacramento, San Diego → Go to Step 2A

All other counties → Go to Step 2B

Note: Cities can opt to designate additional major transit stops through local housing plans that may qualify for the SB 79 application. This would be accomplished through a locally-driven process.

More homes naturally decrease pressure on lower-income renters

SB 79 reduces pressure on lower-income renters by legalizing new homes in areas that have blocked growth. A 2023 UCSF study found that new housing:

• Reduces displacement risk by 17 percent
• Lowers surrounding rents by ~2 percent

While some worry that new construction causes gentrification, the evidence demonstrates that housing abundance provides the strongest protection against displacement while enhancing economic mobility and opportunity for workers and families.

SB 79 prohibits demolishing rent-controlled buildings where:

• Renters have lived any time in the past 5 years

In the rare case that housing is replaced, tenants receive comprehensive assistance:

• Moving costs plus 3 months’ rent
• Right to return at a rent affordable to the tenant
• Subsidized rent while the new homes are being built
• New units that exceed the quality of demolished housing

Cities retain the authority to apply tenant protections beyond the state minimums outlined in SB 79. San Francisco, Los Angeles, Berkeley, and other cities can continue their stronger local policies. Taken together, this means that building on vacant land is significantly cheaper than displacing tenants, which will encourage the development of empty lots. Nonetheless, when advocates focus on protecting every existing unit while blocking new homes, they inadvertently harm the families most hurt by California’s housing shortage – young people, renters, and working families priced out of their communities.

Every development must include one of these affordable housing options:

Notes:

• Where local zoning policies require higher affordability requirements, those will take precedence. This balanced approach encourages more housing while maintaining affordability – higher requirements that prevent all development benefit no one.
• SB 79 can be combined with state density bonus law, a proven framework to make it feasible to provide dedicated affordable housing in private mixed-income developments.
• If developers do tear down affordable housing, they must build the same number of affordable units to replace what they demolished (this was already required by existing state law, SB 330, not just SB 79).

Cities cannot reject apartment projects solely because they exceed the newly proposed height limits near qualifying transit stations.

Projects still undergo normal city review processes. This means cities maintain control over:

• Building design: Architecture, materials, colors
• Historic preservation: Which buildings get protected, and what design standards
• Safety codes: Fire, earthquake, accessibility standards
• Environmental review: CEQA analysis—SB 79 does not remove CEQA requirements that would otherwise apply to development in that location
• Development fees: Charges for schools, parks, and infrastructure
• Enhanced requirements: Can require more affordable housing or stronger tenant protections
• Development on transit agency land: Transit agencies are required to work collaboratively with local governments to plan development on their properties.

Some projects may qualify for existing streamlined approval if they meet requirements under a separate state law, SB 423. 

With that said, many of these discretionary review processes favor those with time, resources, and political connections—typically wealthy, white homeowners. These processes have been weaponized to block housing in high-opportunity areas, forcing development pressure into communities with less political power.

• Alternative plans: Cities can develop alternative plans to direct housing towards wealthier areas, as long as they still allow for sufficient total housing. Example: Cities could allow eight stories near a subway stop, but only 3 near a ferry. This will enable cities to honor local planning while ensuring California meets its housing goals.
• Building on local success: Cities like Los Angeles designed programs (i.e. CHIP) to direct mixed-income housing in wealthier areas. SB 79’s alternative plan allows cities to continue directing more housing in these areas, but sets minimum standards statewide. Most importantly, most local programs, including CHIP, do not apply to wealthy suburban areas in cities near transit that ban apartments, but SB 79 does. 
• Phased implementation: Cities with existing transit plans can apply SB 79 during their next 8-year housing planning cycle.
• Exemptions: Cities can exempt areas if there’s no safe walking path to the transit stop.