AB 306
ASSEMBLY THIRD READING
AB 306 (Schultz and Rivas)
As Amended March 12, 2025
2/3 vote. Urgency
SUMMARY
Imposes a moratorium on the adoption or modification of new state and local building standards affecting residential units from June 1, 2025 until June 1, 2031, with limited exceptions.
Major Provisions
1) Prohibits the California Building Standards Commission (CBSC) and any other adopting agency, from June 1, 2025, until June 1, 2031, from considering, approving, or adopting any proposed building standards affecting residential units unless any of the following conditions is met:
a) The CBSC deems those changes necessary as emergency standards to protect health and safety;
b) The building standards are related to home hardening and are proposed for adoption by the Office of the State Fire Marshal (SFM);
c) The building standards are proposed for adoption in relation to the SFM's study of standards for single-exit, single stairway apartment houses with more than two dwelling units in buildings above three stories; or
d) The building standards are proposed for adoption pursuant to an adaptive reuse standards working group, to reduce potable water use in new residential buildings, or to support risk-based water quality standards for the onsite treatment and reuse of nonpotable water for certain residential buildings, as specified.
2) Prohibits a city or county from making changes or modifications to building standards affecting residential units, including to green building standards, from June 1, 2025 until June 1, 2031, unless one of the following conditions is met:
a) The changes or modifications are substantially equivalent to changes or modifications that were previously filed by the governing body of the city or county and were in effect as of January 1, 2025;
b) The CBSC deems those changes or modifications necessary as emergency standards to protect health and safety;
c) The changes or modifications relate to home hardening; or d) The building standards relate to home hardening and are proposed for adoption by a fire protection district pursuant to existing provisions governing the proposal of new standards by fire protection districts.
AB 306
3) Requires CBSC to reject a modification or change to any building standard affecting a residential unit filed by the governing body of a city or county, from June 1, 2025 until June 1, 2031, unless one of the conditions in 2) above is met. 4) Includes an urgency clause.
COMMENTS
Background on Building Standards: Most building standards in use in California are developed and vetted at the national level every three years by technical organizations, academics, and trade associations that develop national consensus standards, which are then incorporated into the International Building Code (IBC), the national model code. State agencies with authority over various occupancies then review the IBC and amend as necessary for California's specific needs.
There are around 20 state agencies that develop and propose standards via a public vetting process. A code advisory committee composed of experts in a particular scope of code reviews the proposed standards, followed by public review. The proposing agency considers feedback and may then amend the standards and re-submit them to the CBSC for consideration. CBSC reviews and adopts the standards and files them with the Secretary of State for codification and publishing, and there is a 180-day period during which local agencies file modifications and changes to the state codes (though they are not limited to this window). The new codes then take effect January 1 of the subsequent year following publication. Updates and changes to building standards are adopted on two timelines: through the triennial code adoption cycle which occurs every three years, and through the intervening code adoption cycle which provides an update to codes 18 months after the publication of the triennial codes. Regulatory activities for each cycle begin over two years before the effective date of the codes.
Local Amendments to State Codes: Local governments are provided wide latitude to make changes and modifications to the state codes – so long as they exceed or are more protective than the state baseline, not a reduction – and for codes affecting residential buildings (excluding energy "reach codes" which follow a different process), neither the CBSC nor statute requires the local modifications to include any cost determinations or economic impact analysis. Local governments simply have to include a finding in their filing with the CBSC that the modifications are "reasonably necessary because of local climatic, geological, or topographical conditions" (Health and Safety Code (HSC) Section 17958.7) or environmental conditions for green building standards. CBSC does not currently have the authority to review these findings for validity, merits, or the justification of reasonableness, nor do the local amendments have to follow more rigorous state review criteria requiring state building standards to "not [be] unreasonable, arbitrary, unfair, or capricious, in whole or in part" (HSC 18930(a)(4)) or have a "cost to the public [that is] reasonable, based on the overall benefit to be derived from the building standards" (HSC 18930(a)(5)).
Los Angeles Wildfires and Rebuilding Challenges: The fires in Southern California that began on January 7th displaced tens of thousands of Los Angeles County residents. Once the fires were extinguished, more than 13,000 homes and apartments had been destroyed. Disasters compound existing housing market challenges and the Los Angeles region had been in a severe housing affordability crisis well before the sudden destruction of 13,000 housing units. Many of the homes that burned in the fires were built decades ago, even before the state had adopted certain building standards which are now extremely robust, like the Energy Code which was first adopted in the late 1970s. In addition, not all affected properties were insured, or had minimal AB 306
insurance that likely lacked building code upgrade/replacement coverage. Thus, some owners will not be able to draw on insurance payouts to assist with rebuilding older homes and apartments up to current code, as is generally required. Since these older homes and apartments were built, there have been many additions to state and local code requirements that owners will have to incorporate into their rebuilding plans in order to be issued building permits, including requirements to install fire sprinklers in all new dwellings, solar panels and battery storage in certain types of residential construction, larger electrical panel capacity and more 240V outlets for electric vehicles and appliances, and more.
It is likely to take fire victims who wish to rebuild several years to remediate sites, receive insurance payouts or FEMA financial assistance and line up financing, locate contractors and supplies, and pull permits to begin reconstruction. Given this lengthy rebuilding timeline and the frequency of code changes every 18 months, building codes will continue to be modified during the rebuilding period. While not all code modifications are significant, further changes to these requirements may present challenges to fire victims as building codes only "lock in" when a person receives a building permit from a local government.
Key Provisions of This Bill: This bill would impose a six-year moratorium on the proposal or adoption of new state building standards and modifications to building standards affecting residential units (new and existing) from June 1, 2025 until June 1, 2031. There are a small number of exceptions – first, if the standards are proposed via the existing emergency standards process and the CBSC agrees with the proposing agency that the standards meet the criteria for emergency adoption. Second, if the standards are proposed by the SFM and relate to home hardening. And third, for recently enacted legislation that directed code agencies to study and recommend changes to standards related to single-exit single stairway apartments, adaptive reuse of nonresidential buildings for residential uses, and the reduction of potable water use and treatment and reuse of nonpotable water in certain multifamily buildings.
This bill would also impose a six-year moratorium on the adoption of new local amendments and modifications to building standards affecting residential units (new and existing) from June 1, 2025 until June 1, 2031. Local agencies would be permitted to re-file amendments or modifications that are substantially equivalent to those that they already had in effect as of January 1, 2025 – in effect a "hold harmless" to allow the reauthorization of any local standards that are already in place – but new amendments impacting residential units would not be permitted unless they meet limited exceptions similar to the state exceptions.
Individuals may still choose to exceed the state baseline codes, as they always have the option to do. In addition, proposals impacting new and existing non-residential buildings would still be permitted to continue. All the items contained in the most recent triennial code that will take effect January 1, 2026 will continue to go into effect as planned, as those codes have already been adopted by the CBSC. Code agencies will still be able to bring new proposals to the CBSC through the emergency standards process if there is justification for the urgency of those standards. And agencies and stakeholders may continue to work on other non-emergency items and could have them ready to propose immediately upon expiration of the moratorium.
Frequency of Code Changes: Building codes are updated every 18 to 36 months. This frequency of changes means that when agencies are publishing final versions of triennial codes, they are already beginning to coordinate proposed changes for the next cycle before the ink is barely dry on the new codes. This rush to begin formulating amendments to codes that have not yet actually AB 306
taken effect raises a number of concerns. Triennial and intervening code cycles effectively "back up" into each other, given the intensive calendar of code advisory committee reviews, public comment periods, and staff resources that must be allocated to develop and vet new changes and comply with regulatory timelines. The speediness of new changes also raises questions regarding the cost analyses that are required for standards, given there may not have been sufficient time for developments to have completed construction under the new standards (many projects take longer than 18 months to complete) and have quality data that agency staff can utilize when performing these cost analyses. Some agencies, like the Energy Commission, must perform more granular cost-effectiveness analyses of new standards, although these are amortized over an anticipated 30-year timeframe and involve complex energy and construction cost modeling.
Furthermore, once codes are in effect, a large array of individuals have to be trained up to the new requirements – including local building officials who are charged with implementing and enforcing the codes, planners and architects who design projects, contractors and subcontractors who are managing projects, various tradespeople responsible for the specific construction work, and building inspectors who have to sign off on the work being completed up to the relevant codes in effect at the time building permits were pulled. Temporarily pausing further changes will allow the current workforce and local building officials to learn the newest code requirements and have certainty that they will remain in place for six years such that they will not have to take time to re-learn and reconfigure certain practices every 18-to-36 months.
In addition, given the lengthy timeline for some development projects to get approvals and for affordable housing in particular to line up many financing sources, and in single-family projects with phased sequencing of tracts of a subdivision, projects sometimes have to be redesigned once or multiple times to keep up with new codes. For developers, time is money and delays and redesigns contribute to increased overall project costs. A temporary moratorium would provide certainty to both affordable and market-rate developers facing longer project timelines that significant redesigns or modifications will not be necessary to comply with new requirements.
Numerous Additional Directives and Mandates in Recent Years: The Legislature has passed and the Governor has signed multiple additional directives to research and propose new building standards in recent years. Some of the most impactful mandates have also come from outside stakeholders or the adopting agencies themselves (rather than the Legislature), like solar panel mandates and fire sprinkler requirements. There are a number of legitimate and important concerns that are addressed by these and many other elements of building standards for housing.
However, the framework for proposing and adopting new standards leaves agencies in silos with regard to the volume or costs of new proposals that counterpart agencies are also simultaneously developing. Cost analyses are performed on each individual modification or for each respective chapter, not on the accumulation of the entirety of changes in each intervening or triennial cycle across all agencies. Holistic review is therefore difficult and while individual standards may increase costs by what appears a reasonable amount, from a different lens, the cost of the totality of all cumulative changes may be less reasonable. In addition, cost impacts to affordable housing developments are less visible in these analyses as these increased costs are indirectly borne by the state via higher per-unit development costs in the state's grant, tax credit, and loan financing programs rather than extrapolated as a direct impact to the state budget in the evaluation process.
Limited GHG Benefits from Continued Increases in New Housing Standards: The state has made significant strides over the last decade to increase stringency in energy efficiency for new residential construction. To that end, under the bill, the increased performance standards, AB 306
electric-ready requirements and retrofit mandates contained in the most recent 2025 Energy Code update will still take effect and the proposed moratorium would become active after.
Stanford University's Pathways to Carbon Neutrality in California (2022) report on existing buildings points to the diminishing returns of continuing to increase energy efficiency requirements for new residential buildings. This is due to a number of factors, including the slow pace of residential construction, which has rarely exceeded 100,000 units per year since 2018 (according to HCD's Annual Progress Report Data Dashboard), in contrast with the roughly 14.6 million existing housing units in the state, many of which were constructed before the Energy Code existed, let alone the robust energy efficiency requirements elevated in more recent code cycles. Given the longevity of building use, most of these existing homes will still be in use for decades more. The volume of energy consumption from existing homes as compared to new homes is drastically higher. New homes consume a small fraction of the amount of the energy consumed in existing homes, such that a 5% energy savings achieved in existing homes would amount to the same as 10 years' worth of new net-zero residential construction.
Challenges with Mandating Retrofits and Alterations to Existing Housing: Despite the high emission reduction impact possible with a focus on existing homes, there are significant challenges with how to achieve these retrofits and upgrades – for example, availability of labor familiar with newer technologies, upfront costs that lower income residents may not be able to bear while waiting for rebates or incentives, high electricity rates, and more. In addition, while homeowners face one set of costs and incentives when making decisions about when and how to upgrade and retrofit their homes, property owners with tenants in rental units may face an entirely different set of costs/incentives and tenants may be negatively impacted.
Strategic Actions for a Just Economy's Decarbonizing California Equitably: A Guide to Tenant Protections in Building Upgrades/Retrofits Throughout the State (2023) identifies a number of these challenges if energy efficiency retrofit policies for existing residential units are not carefully crafted with possible repercussions to tenants – especially low-income tenants – in mind. While tenants may benefit from energy savings on utility bills, property owners are likely to pass on costs of retrofit/upgrade work to tenants in the form of increased rents. Disruptions from construction work may negatively impact habitability in the tenant's home or may necessitate they relocate for days or weeks (possibly at their own expense), and tenants who lack robust eviction protections may face "renoviction" if a property owner seeks to remove a tenant entirely to perform the work in question. Given the long-term ripple effects of the displacement wrought by the fires (and risk of more displacement from future disasters) pushing thousands more people into the Los Angeles region's extremely tight housing market, imposing additional retrofit requirements – of any kind, not just with regard to energy codes – on the existing residential stock may inadvertently cause further displacement of tenants and increased rents.
According to the Author
"California has a multi-million unit housing deficit. This mismatch of supply and demand has resulted in our longstanding housing crisis. Our home prices are double the national average, a majority of renters sacrifice basic needs like food and health care to pay for housing, and we have an astonishing level of homelessness, exceeding 180,000 unhoused Californians. The recent fires in Los Angeles have only exacerbated these housing issues.
California's building codes are some of the most energy-efficient and protective of health and life safety in the nation, but the cumulative impact of ever more aggressive building code updates has AB 306
measurably increased the cost of new housing construction. Industry stakeholders estimate the upfront cost increases of the code changes made over the last 15 years to be in the $50,000- $100,000 range per single-family unit, not including further cost pressures from local modifications.
AB 306 would pause additional changes to state building standards affecting residential construction for six years, excluding emergency changes necessary for protecting health and safety and home hardening. This bill would also prohibit local governments from making new modifications to residential building standards for six years, with limited exceptions.
This moratorium will bring more certainty to the home construction industry and help stem further construction cost increases, given the demand surge from the volume of homes and apartments that will need to be rebuilt in Los Angeles. Freezing the codes affecting residential construction will prevent further cost increases for new homes and apartments. Pausing further changes will also allow the current contractor workforce and local building officials to absorb the newest code requirements and have certainty that they will remain in place for six years such that they will not have to take time to relearn and reconfigure certain practices every 18-to-36 months.
Given it is likely to take affected individuals several years to remediate sites, receive insurance payouts or financial assistance and line up financing, locate contractors and supplies, and pull permits to begin reconstruction, further increases and changes to building standards requirements will only make the rebuilding process more difficult and costly for residents." Arguments in Support
According to the California Housing Consortium, "The affordable housing industry is under immense financial stress for various reasons, including the high cost of building housing in California. Excessive state and local regulatory requirements drive up the cost of building affordable housing in our state, including building code requirements that go above and beyond what is needed to protect the health and safety of California residents. These requirements are often imposed without a holistic review that analyzes the aggregate impacts of various state and local regulatory requirements and how these add to the cost of producing affordable housing. By pausing additional changes to state and local building standards for residential construction, AB 306 would provide affordable housing developers with relief from unexpected increases in project costs associated with changes to building code requirements." Arguments in Opposition
According to a coalition of environmental and energy groups, including the Climate Action Campaign, Natural Resources Defense Council, and US Green Building Council – Los Angeles, "While the bill allows exceptions for 'health and safety standards' and 'fire hardening' […] AB 306 omits consideration of green building standards as a basis for acceptable code updates. This omission implies that the authors believe sustainability measures impose an unjustifiable cost on homeowners and developers. Is this the authors' intention? Some of our issues of concern include protecting new reach codes, EV charging requirements, energy efficiency upgrades, elimination of NOx-emitting appliances, and achievement of greenhouse gas reduction goals—all of which are being addressed by forward-thinking building codes in development around California. We hope that halting this progress towards a cleaner, healthier future is not the author's intent." AB 306
FISCAL COMMENTS
According to the Assembly Committee on Appropriations:
CBSC and HCD will each incur costs, likely in the hundreds of thousands of dollars annually, to evaluate each statewide rulemaking proposal and each local modification proposal that affects residential units to determine if the proposal meets the bill's exemption criteria. 1) CBSC estimates annual costs of approximately $262,000 for six years (Service Revolving Fund) for one permanent staff position to perform the additional analyses necessary to determine if a local or statewide proposal meets the exemption criteria of fire and life safety or home hardening. CBSC indicates it lacks existing staff with the needed background to evaluate these issues because these reviews typically fall under the authority of the Office of the State Fire Marshal.
Further, CBSC indicates staff will need to review local modification and change proposals in more detail to compare each ordinance to those already codified from the previous year, and to ensure they are substantially similar or equivalent, not more restrictive than previous years. CBSC notes the bill requires CBSC to make its own determination on whether the ordinance is substantially similar or equivalent, unlike CBSC's existing process, which relies on findings made by the local agency. CBSC anticipates these additional responsibilities will at least double the staff time needed to review these proposals, but anticipates these costs will be minor and absorbable.
2) HCD estimates ongoing General Fund costs of $226,000 annually, beginning in fiscal year 2026-27, for one staff position to handle increased inquiries from CBSC to ascertain whether local code changes fall under an exemption and to advise CBSC on local amendments. HCD notes CBSC has no direct authority for residential building standards and will most likely require HCD's assistance reviewing local code amendments. Additionally, HCD anticipates the need to provide technical assistance to local government agencies, builders, design professionals, and the public and will likely need to create and publish clarifying information.
HCD further indicates it may require additional positions once the moratorium is lifted in 2031, when it expects to face a significant surge in workload to update and implement multiple building standard changes delayed during the six-year pause. 3) The California Energy Commission (CEC) anticipates no costs from this bill. 4) The cost, if any, to the SFM is unknown at this time.
VOTES
ASM HOUSING AND COMMUNITY DEVELOPMENT: 12-0-0
YES: Haney, Patterson, Ávila Farías, Caloza, Gallagher, Kalra, Lee, Quirk-Silva, Ta, Wicks, Wilson, Gabriel
ASM APPROPRIATIONS: 14-0-1
YES: Wicks, Sanchez, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hadwick, Hart, Pacheco, Pellerin, Solache, Ta
AB 306
ABS, ABST OR NV: Dixon
UPDATED
VERSION: March 12, 2025
CONSULTANT: Nicole Restmeyer / H. & C.D. / (916) 319-2085 FN: 0000170