California Governor Gavin Newsom has signed Senate Bill 79, a highly debated housing measure designed to increase density near public transit hubs in the state’s largest metro areas.

The new law applies to counties with more than 15 passenger rail stations — including Los Angeles, Orange, San Francisco, Alameda, Santa Clara, San Mateo, Sacramento, and San Diego. It requires local governments to approve certain large residential projects — in some cases up to nine stories — located within a half-mile of major rail or subway stations.

Supporters, led by Sen. Scott Wiener (D–San Francisco) and pro-housing group California YIMBY, argue SB 79 will reduce commute times, cut emissions, and make urban housing more attainable.

“Housing near transit means shorter commutes, lower costs, and more time with family,” said Newsom. “When we invest in housing, we’re investing in people.”

Local Resistance Remains Strong

The bill faced sharp opposition from Los Angeles Mayor Karen Bass and the L.A. City Council, who warned it could erode local control and lead to displacement in lower-income neighborhoods. In a letter to Newsom, Bass cautioned that while she supports streamlining housing production, it must not “diminish community input on planning and zoning, or disproportionately impact low-resource neighborhoods.”

Despite concerns, SB 79 advanced after Wiener added a key amendment requiring unionized labor for projects over 85 feet tall — a compromise that helped secure support from labor groups and progressive legislators who had previously resisted the bill.

What SB 79 Means for Developers and Property Owners

SB 79 marks another milestone in California’s ongoing effort to centralize housing decisions at the state level — further limiting cities’ ability to block dense developments near transit.

The law is expected to reshape entitlement potential in areas adjacent to major transit corridors, especially in L.A. County, Orange County, and the Bay Area. While implementation timelines will vary by jurisdiction, landowners near qualifying stations may soon see increased developer demand and upward pressure on land values.

Note: SB 79 takes effect on January 1, 2026. Local jurisdictions are expected to release implementation guidance in the coming months.

Market Outlook: County-by-County Impact

Los Angeles County

Expect higher competition for parcels near Metro and Expo Line stations. Height and density allowances could boost valuations, though community resistance may slow early approvals.

Orange County

With fewer qualifying rail hubs, the law’s impact will be more concentrated — particularly around Anaheim and Santa Ana — potentially creating high-value infill opportunities.

Bay Area Counties

San Francisco, Alameda, and Santa Clara could see faster adoption, with predictable by-right entitlements driving developer interest and tightening land supply near transit zones.

Lucrum’s Perspective

At Lucrum, we see SB 79 as a pivotal moment for infill development across Southern California. While local resistance remains strong, savvy investors and property owners can position themselves ahead of zoning changes by proactively evaluating sites near transit corridors.

With deep market knowledge in L.A. County, Orange County, and the Bay Area, our team is closely tracking how each jurisdiction will apply SB 79 — and how these policies could redefine development economics in prime locations.

Next Steps for Property Owners & Developers

To stay ahead of the curve:

• Identify parcels within 0.5 miles of qualifying transit stops
• Assess current zoning and evaluate potential height/density bonuses
• Begin entitlement feasibility studies early to capitalize on new allowances
• Monitor local planning responses as each county rolls out implementation guidelines

As entitlement and investment experts, Lucrum is helping clients analyze their holdings, identify upzoning opportunities, and plan strategic moves under the new SB 79 framework.

Unlock your property’s full potential with expert guidance

Whether you’re looking to sell, entitle, or redevelop, our advisory team can help you uncover the hidden potential in your portfolio.

Visit lucrumre.com to connect with our team and discuss how SB 79 may shape property values and development prospects in your market.

Source: Politico.com