California’s 2026 Housing Legislation: What Made It to the Governor’s Desk

Perhaps there has been no greater theme across the policy spectrum in 2026 than affordability. And with housing costs consuming most household budgets, it’s no surprise that elected officials and the Legislature have sought to emphasize the cost of housing within those efforts. The rising relevance of the issue even saw action from a deeply divided Congress for the first time in decades through the passage of the 21st Century ROAD to Housing Act.

California, to its credit, has been attempting to change the trajectory on housing and homelessness for the past decade. 2026 legislative efforts have continued this trend across common themes, still finding some fruit on the vine for a multi-faceted approach to decrease both construction costs and timelines to housing completion under a policy umbrella seeking continued progress in increasing housing production and reducing homelessness.

The most impactful legislative actions of 2026 have likely already occurred through the negotiations and passing of the state budget earlier this summer. The budget included a deal to place an $11.25 billion housing bond on the November ballot and cemented the commitment to reform the housing finance system through the new California Housing and Homelessness Agency and Housing Development and Finance Committee. The budget also included $1.7 billion in additional investment for housing and homelessness programs.

An unfortunate truth is that many policy interventions, especially those focused on land use or process reforms, can take some time to show results.  Nevertheless, removing barriers and red tape sends a signal that the state is committed to addressing the issue and bending the stubborn curve of affordability.

The Legislature concluded its session on August 31, and Governor Newsom will now have until September 30 to sign or veto the following measures.

Removing Development Barriers

• AB 1815 (Wicks, D-Oakland): Supports factory-built housing by limiting local jurisdictions’ ability to impose building standards that exceed the states.
• SB 677 (Wiener, D-San Francisco): Enhances streamlining to already approved housing projects.
• SB 963 (Laird, D-Santa Cruz): Streamlines the Coastal Development Permit appeals process by establishing clear deadlines for the California Coastal Commission to request information and make final decisions on appealed projects, providing greater certainty for housing and other coastal development.
• SB 1116 (Caballero, D-Merced): Expands and strengthens existing state law to make it easier to subdivide eligible urban lots and build smaller, lower-cost starter homes for homeownership, including townhomes and condominiums.

Reducing Development Cost

• AB 2044 (Petrie-Norris, D-Irvine): Already signed into law, this bill requires proposed state building standards to include a complete estimate of compliance costs and underlying assumptions before the California Building Standards Commission can approve them, increasing transparency around the cost impacts of new building regulations.
• SB 1014 (Grayson, D-Orinda): Increases certainty for housing developers by requiring local governments to provide timely, upfront information about required onsite and offsite infrastructure improvements, helping prevent unexpected requirements and costs later in the permitting process.
• SB 1117 (Cervantes, D-Riverside): Changes how jurisdictions calculate impact fees for ADUs, allowing fees only for units greater than 750 square feet.

Increasing Resources

• SB 113 (Budget Trailer Bill): $94 million allocated to specific housing needs or projects in communities throughout the state.
• AB-750 (Quirk-Silva, D-La Palma): Allows HCD to provide loans or grants to financially “challenged” affordable housing developments to rehabilitate properties, replenish operating reserves, and preserve their long-term affordability.
• AB 2074 (Haney, D-San Francisco): Would create a new, lower-cost financing option for high-rise residential developments near major regional transit hubs through a new revolving loan fund.
• SB 417 (Limón, D-Goleta/Cabaldon, D-West Sacramento): Already signed, this places an $11.25 billion Veterans and Affordable Housing Bond on the November 2026 ballot to fund affordable rental housing, supportive housing, homeownership programs, and housing assistance for veterans.
• SB-1388 (Durazo, D-Los Angeles): Establishes an Affordable Housing Risk Reduction Program within HCD to provide technical assistance and resources to affordable housing providers to reduce portfolio risk and help them secure more affordable insurance coverage.

Streamlining Processes

• AB 956 (Quirk-Silva, D-La Palma): Expands ADU development by requiring streamlined, ministerial approval of up to two detached ADUs on lots with an existing or proposed single-family home, increasing housing opportunities in single-family neighborhoods.
• AB 1621 (Wilson, D-Suisun City): Reduces delays during the construction plan check process by streamlining post-entitlement building permit reviews and enforcing clear, predictable timelines once a housing project has been approved.
• AB 2089 (Ward, D-San Diego): Extends the sunset on provisions in the welfare exemption for affordable rental housing that received Low Income Housing Tax Credits to maintain eligibility when a tenant’s income increases to 140% of Area Median Income.
• AB 2433 (Alvarez, D-Chula Vista): Streamlines approvals for projects that meet CEQA exemption and density bonus law.

Reforming the Housing Finance System

• AB 179 (Budget Trailer Bill): Already approved, this reforms and streamlines the state’s affordable housing finance system through a “one-stop shop” approach, reduces development costs and impact fees, extends homelessness funding and accountability measures, and supports investments including $500 million for state Low-Income Housing Tax Credits and $200 million for the Multifamily Housing Program.
• AB 2020 (Gabriel, D-Encino): Allows affordable housing developers to move project reserves across their portfolios to stabilize projects under extreme financial pressure.
• AB 2185 (Quirk-Silva, D-La Palma): Requires state housing and finance agencies to review and revise affordable housing program rules to remove barriers to and facilitate the use of factory-built housing, with the goal of lowering costs and accelerating affordable housing production.

Addressing Homelessness

• AB 1556 (Haney, D-San Francisco): Establishes standards for state-funded recovery housing for people experiencing or at risk of homelessness, requiring programs to align with Housing First principles while supporting substance-use recovery, relapse protections, and overdose prevention.
• AB 2146 (Stefani, D-San Francisco): Requires the California Interagency Council on Homelessness to complete a statewide study of the Coordinated Entry System to identify barriers to connecting people with affordable housing by July 2028.

Supporting Student Housing

• AB 1732 (Alvarez, D-Chula Vista): Expands an existing California Environmental Quality Act (CEQA) statutory exemption for infill affordable housing to include qualifying public university and community college housing projects, allowing those projects to proceed without environmental review if they meet specified labor, location, and environmental standards.
• AB 2480 (Ávila Farías, D-Concord): Requires a local government to provide an additional density bonus for student housing developments that meet a minimum affordability threshold and provide additional units for moderate-income students.
• SB 916 (Ashby, D-Sacramento): Accelerates student housing development by allowing courts to require plaintiffs challenging public university student housing projects to post a bond to cover potential costs and damages from project delays.

Next month we’ll confirm what bills have been signed into law –  so don’t forget to open the October newsletter!