California’s High-Rise Housing Push

Nora Whitman

If, if you walked through downtown San Francisco or Los Angeles recently, you, you know the quiet. The office buildings are half empty, the foot traffic just isn't what it used to be, and local leaders are, well, they are scrambling for solutions. But Assemblymember Matt Haney has introduced a bill that doesn't just ask cities to rezone. It, it basically mandates high rise downtowns. Assembly Bill 2074, which he calls the Downtown Revitalization Act, is designed to accelerate the recovery of dense, urban neighborhoods in California’s largest cities.

Nora Whitman

Now, how does it actually do that? The legislation would require major transit cities to designate one or more regional transit hub districts by July 1, 2027. And when we say major transit cities, we are talking about California's seven biggest: Los Angeles, San Diego, San Jose, San Francisco, Fresno, Sacramento, and Long Beach. Depending on the city size, these districts would span anywhere from 0 point 5 square miles in medium cities up to 1 point 5 square miles in Los Angeles.

Nora Whitman

And here is where the land use rules get really, really wild. Inside these districts, local governments would be strictly barred from imposing restrictive zoning. Cities cannot set maximum building height limits lower than 150 feet anywhere in the district, that is roughly 15 stories. And on at least 25 percent of the land in the district, they have to allow towers up to 450 feet. That is over 40 stories tall! Floor area ratios, or FAR, could not be capped below 6, with 25 percent of the zone allowing an FAR of 12. On top of that, unit density minimums are set at 200 units per acre, and density caps are completely prohibited on a quarter of the land.

Nora Whitman

Now, if, if you follow urban planning, you might be thinking, okay, but won't local city councils just stall these proposals with discretionary hearings and years of environmental review under CEQA? Well, Haney built a workaround right into the draft. AB 2074 grants eligible high rise projects streamlined, by right ministerial approvals using the existing mechanisms under Senate Bill 35, now codified in Section 65913 point 4 of the Government Code. That means no California Environmental Quality Act reviews, no lengthy planning commission battles, and no city council votes. The state is asserting its statewide concern doctrine to completely override local charter city zoning authority on these sites.

Nora Whitman

Naturally, a state preemption this massive raises huge economic and constitutional questions. To secure union support, the bill requires developers to pay prevailing wages and employ a skilled and trained construction workforce. Politically, that is how you pass housing bills in Sacramento. But financially, high rise steel and concrete towers are already enormously expensive to build. Adding prevailing wage rules raises per square foot costs even higher.

Nora Whitman

To offset those costs in an environment with elevated interest rates, AB 2074 creates the Downtown Revitalization Loan Fund, a continuously appropriated revolving fund administered through the California Housing Finance Agency, or CalHFA. The goal is to offer below market interest loans directly to high rise builders. But housing economists are already asking a fair question: even with state loans, can a 450 foot tower with prevailing wage labor actually pencil out in secondary transit markets like Fresno or Long Beach without massive, massive public subsidies? That remains to be seen.

Nora Whitman

Meanwhile, charter cities like San Francisco and Los Angeles are almost certain to push back against what they view as a total erosion of municipal land use authority. But AB 2074 is not the only housing reform moving right now. We have got a few quick hits across the state and nation that show just how fast the legal landscape is shifting.

Nora Whitman

First, California Senate Bill 1014 is advancing through the legislature. This transparency bill would force cities to disclose all local requirements related to infrastructure, like sewer connections, water main upgrades, and sidewalk mandates, within 30 days of a development application being submitted. No more secret, surprise infrastructure fees popping up three years into a project.

Nora Whitman

Second, Senate Bill 1117 targets accessory dwelling units, or ADUs. It places strict fee caps on local governments that try to charge exorbitant permit fees on ADUs over 750 square feet. Cities have been using those heavy fees to discourage back yard cottages, and SB 1117 aims to shut that door for good.

Nora Whitman

And finally, looking outside California, Cambridge, Massachusetts just officially ordained its citywide upzoning law. The city legalized 4 story multi family housing by right across every single residential neighborhood in the entire municipality. From Cambridge to Sacramento, the push to eliminate restrictive single family zoning and legalise urban density is gaining momentum like never before. That is the roundup for today, talk to you next time.