California is on the brink of a significant shift in its housing policy. A recently enacted series of bills signed by Gov. Gavin Newsom opens up the possibility for a broader range of housing options, from affordable accessory dwelling units (ADUs) to mid-rise complexes and even towering residential buildings near public transit hubs.

At present, over 95% of residential land in California is designated solely for single-family homes, as reported by a 2024 Zoning Atlas analysis. This restrictive zoning contributes to a housing market characterized by some of the highest prices in the nation, while the state grapples with the largest homeless population in the U.S.The recent reforms are designed to cut through the bureaucratic hurdles that delay housing construction and inflate costs.

“Every Californian deserves a fair shot at a stable home – families shouldn’t have to wait years for housing to be approved and built in their communities,” Newsom stated during the announcement. This sentiment underscores the urgency of the situation.

Building the Missing Middle

The focus on diversifying housing types also includes the “Missing Middle Townhome Act,” AB 1751. This legislation aims to streamline the development of mid-scale housing by implementing a by-right approval process for townhomes housing up to 150 units, allowing local jurisdictions to fast-track approval within 60 days for qualifying projects and exempting them from certain environmental reviews.

Incentivizing ADUs

There’s also momentum building around ADUs, often referred to as “granny flats.” The new legislation further incentivizes their construction by modifying the impact fee structure imposed by local governments. Previously, ADUs over 750 square feet were subject to full impact fees, but the recent changes limit fees based on the size exceeding 750 square feet, thereby making larger units more financially viable for homeowners.This change is intended to boost the availability of larger family-sized ADUs, a crucial step in addressing housing shortages.

California YIMBY's CEO, Brian Hanlon, remarked that this adjustment is "a substantive change that will help create more family-sized ADUs."

Encouraging High-Rise Developments

AB 2074 targets urban centers, mandating seven of California's largest cities to form regional transit hub districts where zoning regulations must permit building heights of up to 150 feet. In some areas, heights exceeding 450 feet are required, promoting density in locations with robust public transport options.Assemblymember Matt Haney, who sponsored the bill, expressed that the need for such reforms is urgent, stating that “our downtowns are still struggling and need to be brought back to life.”