California SB 79: What Developers Need to Know About the State's Biggest TOD Opportunity
On October 10, 2025, Governor Gavin Newsom signed Senate Bill 79 into law, marking what housing advocates are calling the most significant land use reform in California history. The bill—officially named the "Abundant and Affordable Homes Near Transit Act"—takes effect July 1, 2026 and fundamentally changes what developers can build near transit in California's largest urban markets.
For developers, SB 79 isn't just policy news. It's a map rewrite. Sites that yesterday allowed two stories and 20 units per acre may tomorrow allow seven stories and 120 units per acre. That kind of overnight capacity change creates opportunities—and risks—that require immediate attention.
This guide breaks down what SB 79 actually does, which sites qualify, what you can build, and how to position your portfolio before the law takes effect.
What SB 79 Does: The Core Mechanism
At its core, SB 79 establishes statewide zoning minimums that override local restrictions near qualifying transit stops. Cities can no longer impose height limits, density caps, or FAR restrictions below the thresholds set by the state.
The law operates on a tiered system based on transit quality and distance from stations. Better transit and closer proximity unlock greater development capacity.
Tier 1 stops include heavy rail (BART, LA Metro B and D Lines, some Caltrain stations) and very high-frequency commuter rail (72+ trains per day). These are the highest-capacity stations, and they unlock the most development potential.
Tier 2 stops include light rail (SF Muni Metro, VTA, SacRT, San Diego Trolley), high-frequency commuter rail (48-71 trains per day), and bus rapid transit meeting specific service standards. These stops still unlock significant density, but with lower maximums than Tier 1.
The law only applies in "urban transit counties"—counties with 15 or more passenger rail stations. Today, that means eight counties: San Francisco, Alameda, San Mateo, Santa Clara, and Sacramento in Northern California; Los Angeles, Orange, and San Diego in Southern California.
The Numbers: Height, Density, and FAR by Location
SB 79 sets minimum entitlements that cities cannot zone below. The exact allowances depend on (1) the tier of the nearest transit stop and (2) your distance from that stop.
Within ¼ mile of a Tier 1 stop:
Minimum height: 75 feet (approximately 7 stories)
Minimum density: 120 dwelling units per acre
Minimum FAR: 3.5
Between ¼ mile and ½ mile of a Tier 1 stop (cities over 35,000 population):
Minimum height: 65 feet (approximately 6 stories)
Minimum density: 100 dwelling units per acre
Minimum FAR: 3.0
Within ¼ mile of a Tier 2 stop:
Minimum height: 65 feet
Minimum density: 100 dwelling units per acre
Minimum FAR: 3.0
Between ¼ mile and ½ mile of a Tier 2 stop (cities over 35,000 population):
Minimum height: 55 feet (approximately 5 stories)
Minimum density: 80 dwelling units per acre
Minimum FAR: 2.5
The adjacency intensifier: Projects immediately adjacent to a Tier 1 or Tier 2 stop—defined as within 200 feet of a pedestrian access point—receive an additional bonus: +20 feet of height, +40 dwelling units per acre, and +1.0 FAR. For a site adjacent to a Tier 1 station, that means potential for 95-foot buildings at 160 units per acre with 4.5 FAR.
What This Means in Practice
The significance of SB 79 varies dramatically by location. In cities that already allow substantial density near transit, the law may have limited impact. In cities that have historically restricted multifamily development, the changes are transformational.
Consider Los Angeles. A preliminary analysis by Streets for All estimated that SB 79 could zone approximately 1.5 million new housing units in the city—nearly doubling its current housing stock of 1.37 million homes. The law would impact 17,929 acres, with over half of those acres previously zoned exclusively for single-family homes.
The San Fernando Valley alone could see upzoning for 500,000 potential units, with over 150,000 unlocking immediately when the law takes effect in July 2026.
In the Bay Area, virtually all BART and Caltrain stations qualify as Tier 1 stops. Sites within walking distance of these stations—many of which are currently zoned for low-density commercial or residential use—will suddenly allow mid-rise development by right.
Qualifying for SB 79: Project Requirements
Not every project near transit qualifies for SB 79's upzoning. The law establishes specific requirements:
Minimum project size: At least 5 dwelling units
Minimum density: At least 30 dwelling units per acre, or the local minimum density requirement, whichever is greater
Affordability requirements: Projects with more than 10 units must include one of the following:
7% of units for extremely low income households (30% AMI)
10% of units for very low income households (50% AMI)
13% of units for low income households (60% AMI)
Projects with 10 or fewer units are exempt from affordability requirements at the state level, though local inclusionary requirements may still apply.
Unit size cap: Average unit size cannot exceed 1,750 net habitable square feet
Site eligibility: The site must be zoned for residential, mixed-use, or commercial development
Prohibited uses: No hotels, motels, or transient lodging
Anti-displacement protections: Projects cannot demolish rent-controlled buildings with 3+ units, or multifamily housing that has had tenants within the past 7 years
Labor requirements: Buildings over 85 feet must meet prevailing wage and skilled worker requirements
Stacking SB 79 with Other State Laws
One of SB 79's most powerful features is its interaction with California's broader housing law framework. Developers can layer multiple state laws to maximize project feasibility.
State Density Bonus Law (SDBL): SB 79 allows developers to use the density permitted under SB 79 as the base for calculating density bonuses. Projects meeting heightened density thresholds (60+ units per acre at Tier 2 stops, 75+ units per acre at Tier 1 stops between ¼ and ½ mile, 90+ units per acre within ¼ mile of Tier 1 stops) qualify for additional SDBL concessions and incentives.
One important caveat: local governments are not required to grant SDBL height waivers for projects already exceeding SB 79's height limits.
SB 35/SB 423 Ministerial Approval: SB 79 projects can qualify for streamlined, ministerial approval under SB 35/SB 423 with just 10% very low income units (for rental) or 10% low income units (for-sale). This is a significant reduction from SB 35's typical affordability requirements.
Housing Accountability Act (HAA): Projects meeting SB 79's requirements are deemed consistent with local standards for purposes of the HAA. Beginning January 1, 2027, cities that deny compliant SB 79 projects in "high-resource areas" are presumed in violation of the HAA and immediately liable for penalties.
AB 130 CEQA Reform: While SB 79 doesn't create its own CEQA exemption, qualifying projects may be eligible for CEQA exemptions under AB 130, signed earlier in 2025.
This layering is what makes SB 79 particularly powerful. A developer can combine SB 79's height and density entitlements, SDBL's additional bonuses and concessions, and SB 35's ministerial processing to create a project that would have been impossible—or required years of discretionary review—under the prior framework.
Local Government Options and Timing
SB 79 does give cities some flexibility, but it's constrained.
Alternative plans: Cities can adopt local TOD alternative plans that differ from SB 79's defaults, but these plans must maintain at least equivalent total housing capacity and cannot reduce density on any individual site by more than 50% below SB 79 minimums. Alternative plans require approval from the Department of Housing and Community Development.
Limited exclusions: Cities can exclude certain sites from SB 79:
Areas not accessible by a pedestrian path of less than one mile (even if within ½ mile straight-line distance)
Industrial Employment Hubs of 250+ contiguous acres designated before January 1, 2025
Very high fire hazard severity zones (with flexibility to shift density to safer areas)
Sites vulnerable to 1+ foot of sea level rise
Historic resources designated before January 1, 2025 (limited to 10% of any station area)
Deadlines: The window for local alternatives is time-limited. Bay Area counties have until 2032 to adopt alternative plans. All other counties must act by January 1, 2027.
Transit Agency Development Powers
SB 79 includes a separate provision that empowers transit agencies to develop housing on land they already own—a model used successfully in cities like Hong Kong and Tokyo to generate transit system revenue.
For agency-owned parcels within ½ mile of a TOD stop (or adjacent to one), transit agencies can adopt their own zoning standards for mixed-use development. Key requirements:
At least 50% of floor area must be residential
At least 20% of units must be affordable to lower-income households
Affordability restrictions run 55 years for rental, 45 years for ownership
Average unit size cannot exceed 1,750 square feet
If local governments don't update their zoning to match agency standards within two years, the agency standards become the default zoning for agency-owned property.
This provision creates a significant new pipeline of transit-oriented development on publicly owned land—often prime infill sites like surface parking lots adjacent to stations.
What Developers Should Do Now
SB 79 takes effect July 1, 2026. That's less than five months away. Here's how to prepare:
Map your portfolio. Identify every site you own or are considering within ½ mile of a qualifying transit stop. Determine whether each site falls in a Tier 1 or Tier 2 station area, and calculate your distance from the nearest stop.
Understand current vs. future entitlements. For each site, compare what's allowed today versus what SB 79 will allow starting July 1. The delta between those two numbers is your opportunity.
Monitor local implementation. Cities are actively developing implementation strategies. Los Angeles, for example, voted in December 2025 to pursue an "Upzoning and Delayed Effectuation Implementation strategy." Understanding how your target cities are responding helps you anticipate friction points.
Model the economics. SB 79's affordability requirements (7-13% of units) affect project pro formas. Run scenarios that account for these requirements, and model the value of potential SDBL bonuses and SB 35 streamlining.
Identify acquisition targets. Sites that are undervalued relative to their post-SB 79 development potential represent acquisition opportunities. Properties near Tier 1 stations with current low-density zoning are the most obvious targets.
Get ahead of entitlements. If you're planning to submit a project after July 1, 2026, begin design work now so you can file shortly after the law takes effect. First-mover advantage matters in a market where development capacity just expanded dramatically.
The Bigger Picture
SB 79 represents a fundamental shift in how California approaches housing policy. For decades, local governments blocked housing near transit even as the state invested billions in transit infrastructure. The result was transit stations surrounded by parking lots and single-family zoning—a pattern that made transit less useful and housing less affordable.
SB 79 breaks that pattern. By establishing statewide zoning minimums near transit, the law ensures that public investment in transit infrastructure generates public benefit in the form of housing.
For developers, the implications are straightforward: California just opened millions of square feet of developable capacity in the state's most transit-rich, highest-demand markets. The question isn't whether to pay attention to SB 79—it's how quickly you can position yourself to take advantage of it