CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
City of Belmont
City Council/Planning Commission Study Session
State Housing Policy Trends and Laws
Dane Hutchings, Founder and CEO, California Public Policy Group Dan Carrigg, Senior Policy Advisor, California Public Policy Group Updated as of 10/27/25
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
CPPG: Presenters Snapshot
Dane Hutchings
Dan Carrigg
• Senior Policy Advisor with CPPG
• 25 years of legislative advocacy—Former League of California Cities Legislative Director and Deputy Executive Director
• Regarded as a leading expert in housing, land use and taxation policy in the state • CPPG Founder and CEO
• 18 years of legislative advocacy—Last 10 representing local government • Former League of California Cities lobbyist
• Advanced legislation on behalf of clients in areas of housing, transportation, Brown Act and Voting Rights
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Goals and Objectives
➢ Trends in State Housing Laws. (A few charts and graphs) ➢ Major Factors Not Being Addressed in Policy
➢ Recently Signed Bills, including SB 79
➢ What to expect next session
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Policy Trends
➢ State has tightened many housing laws, mostly focused on local authority (softest target)
➢ Legislative policy focus largely reflects housing/land use disputes within the Bay Area, attempting to respond to:
✓ Affordability challenges through increased density.
✓ Traffic/commute/GHG reduction by promoting TOD
✓ Lack of vacant, buildable land, by up-zoning single-family and other low-density development.
➢ Most aggressive laws carried by Bay Area legislators and signed by Bay Area Governor.
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
State Tightened Many Laws
• RHNA and Housing Elements: Increasing allocations to local agencies; adding new factors; increasing state oversight with penalties for non-compliance.
• Density Bonus Law: Authorizing increased densities and expanding developer incentives. • “By-Right” Development: Authorizing “ministerial” (non-discretionary) approval of projects which meet specified criteria.
• Housing Accountability: Expanding Attorney General’s and HCD’s authority to enforce various housing laws.
• Accessory Dwelling Units: Authorizing construction of multiple ADUs on a single-family parcel and multifamily parcels.
• Duplex and Four-Plex Housing: Authorizing development of up to four units on a single-family lot. (SB 9) • Housing in Commercial Zones: Authorizing ministerial approval of multifamily housing development on sites meeting various criteria in commercial zones. (SB 6, AB 2011) • Affirmatively Furthering Fair Housing: Promoting development/retention of affordable housing in higherresourced areas.
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Other Factors Not Being
Addressed in State Policy
State housing policy expectations disconnected from some market realities:
✓ Production: Decline in state housing production Since the 80’s, made even worse after 2008- 2009 recession/foreclosure crisis. Despite hundreds of bills being signed over the past 7 years production remains down.
✓ Population: Flattening of state population growth decreases demand for new units. ✓ Market dynamics: increased interest rates, labor and construction costs affect investment. ✓ Developer/investor behavior: They pull back when prices/rents flatten. ✓ Wall Street: Corporate ownership of single-family housing increases competition for first-time homebuyers.
✓ Lack of Resources: Affordable units require subsidies. Declines exacerbated by RDA elimination.
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Production Declines over Governor’s Term,
and through 2028 state forecast
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Deeper Economic Issues at Play
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Corporate / Speculative Ownership of
Single-Family Homes
• Since 2010, California has lost over 700,000 owneroccupied single-family homes. • This decline is driven not just by Wall Street landlords, but also by a broader shift toward financialized
ownership — including private equity, short-term
rentals, and absentee buyers.
• Combined, these forces have turned homes into assets, reducing affordability and destabilizing communities
across the state.
• In the Bay Area, these pressures are intensifying — as institutional, remote, and corporate buyers reshape
once locally-owned neighborhoods.
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Major Factor: Significant Shortage of
Affordable Housing Funding
Affordable housing construction
dollars have been reduced:
✓ Federal investments have declined
since the 1980’s
✓ Elimination of Redevelopment in 2012
✓ State funding infrequent and minimal
compared to needs
✓ 1986 Tax Reform Act, reduced tax
benefits for multifamily housing
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
ABAG’s RHNA More Than Double for 6th Cycle
Affordability Level 5
th Cycle Allocation 6th Cycle Allocation Percentage
Increase
Very Low 46,680 114,442 245%
Low 28,940 65,892 227%
Moderate 33,420 72,712 217%
Above Moderate 78,950 188,130 238%
Total 187,990 441,176 234%
Comparison Between ABAG’s 5th and 6th Cycle RHNA Allocations CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Major Bills Signed
SB 79 (Wiener) Transit-Oriented Development
Establishes minimum height, density, and floor-area-ratios for housing development projects as an “allowed use” (on any site zoned for commercial, mixed, or residential development) within either ¼ or ½ mile of a transit stop. (Transit districts given separate authority for projects developed on district-owned property). Takes effect July 1, 2026.
For a transit-oriented housing development project within one-quarter mile of a Tier 1 transit-oriented development stop, all of the following apply:
• A local government shall not impose any height limit less than 75 feet. • A local government shall not impose any maximum density of less than 120 dwelling units per acre. • A local government shall not enforce any other local development standard or combination of standards that would physically preclude achieving a residential floor area ratio of up to 3.5. • A development that achieves a minimum density of 90 dwelling units per acre and that otherwise meets the eligibility requirements of Section 65915, including, but not limited to, affordability requirements, shall be eligible for additional concessions pursuant to Section 65915, as specified in subdivision (d).
CPPG provided its clients with a detailed analysis of this bill.
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Major Bills Signed
SB 79 (Wiener) Implementation
MPO’s are required to create maps of each TOD zone within its region by tier, in accordance with HCD’s guidance. HCD will promulgate standards by July 1, 2026, on how to allow for capacity in housing land inventory.
Locals can adopt interpreting ordinances, and “alternative plans” subject to HCD review and approval, which can offer some flexibility for locals on applicability of these standards to specific sites. ➢ Alternative plans can be developed via the housing element, a program to implement the housing element, a specific plan, a zoning overlay, or enactment of an ordinance. Plans must maintain overall “net zoned capacity” (units and floor area) across all TOD zones.
➢ Plans cannot reduce maximum allowed density for any individual site for which the plan allows residential use by more than 50 percent, unless the site meets one of the following criteria:
i. Within very high fire hazard severity zone, or vulnerable to one-foot of sea level rise. ii. Sites with a historic resource designated on a local register. (Excluded sites can’t be more than 10% of eligible area.) iii. Where jurisdictions have more than one TOD zone, can’t reduce density by more than 50 percent in any one zone.
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Major Bills Signed
AB 507 (Haney) Adaptive Reuse
Allows for “by right” conversions of office and other building to residential uses regardless of the underlying zoning. Does not apply within industrial zones that do not permit residential uses or hotel conversions.
Building must be either: (1) less than 50-years old, or (2) more than 50-years-old and not a historic resource, or (3) more than 50-years-old and a historic resource and the project complies with specified criteria.
At least 50% of project must be dedicated to residential uses.
Project must include affordable units:
Rental units must designate either 15% for lower income, or 8% very low and 5% extremely low.
Ownership units must designate either 15% for lower, or 30% for moderate.
Local inclusionary ordinances (requiring additional affordability) may also apply.
Local agencies are authorized to adopt an ordinance or resolution that agrees to dedicate additional property tax received from the converted property to the project proponent for up to 30 years as an “incentive amount” to support the project’s affordable units.
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Going Forward
• Monique Limon (D-Santa Barbara) assumes leadership of the Senate. Decisions on chairs of key committees very important.
• Continued state budget challenges, exacerbated by state/federal tensions. • Many candidates vying for Governor.
• In Housing,
• Expect another run at major revisions to SB 9 (duplex-fourplex) law. • Continued efforts to erode, limit, cap local development fee authority. • HCD will have major role in implementation of SB 79.
• Possible housing bond for 2026 ballot.
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
Thank You!
CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM