California Bill Could Lift Transit Housing Height Limits

Multifamily Dive reports that a California housing density bill passed in August and could require seven major cities to permit taller residential buildings near transit. AB 2074 is awaiting Gov. Gavin Newsom’s signature. The measure applies to cities with at least 400,000 residents. It also requires at least two transit stops, according to California YIMBY.

Transit Districts Would Allow Taller Housing

The bill would require affected cities to establish regional transit hub districts. Each district must include at least one transit-oriented development stop. Within those areas, cities could not set the maximum permitted residential building height below 150 feet.

AB 2074 would go further in part of each city’s district network. At least 25% of the districts would need to allow residential buildings up to 450 feet. California YIMBY identified seven affected cities. They are Long Beach, Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and San Jose.

The Details

The legislation is part of California’s broader effort to increase housing production. The state has a goal of 2.5M new homes by 2030. The source says lawmakers have increasingly used preemption measures to push local governments toward more development. A National Association of Counties analysis found California introduced more preemption bills than any other state last year.

The state has also used enforcement. Newsom brought legal action against several localities in July. The cases alleged failures to meet state housing planning measures. AB 2074 would add another state requirement focused specifically on height and density around transit.

Local Costs and State Pressure

A California Senate Appropriations Committee analysis said the measure would create new and unknown costs for the seven affected cities. Those costs would not be reimbursable by the state. San Diego Mayor Todd Gloria endorsed the legislation in April. He called it the type of policy large cities need.

California is increasingly using state housing rules to raise density near major transit corridors. The bill would set a statewide minimum development envelope in designated areas. Cities would still define the districts, but they could not impose lower height caps within the bill’s parameters.

Why It Matters

For apartment developers, the proposal could expand physical capacity in some of California’s largest transit-served markets. The practical effect would depend on where cities draw the hub districts. It would also depend on how much land receives the higher allowance. Still, the legislation directly targets building height. That land-use control helps determine how many residential units can fit on a site.

For cities, the change would also create planning and implementation work. The fiscal analysis flags unknown local costs. Meanwhile, the state’s 2.5M-home goal keeps pressure on major jurisdictions to accommodate more housing.

What’s Next

The immediate next step is the governor’s decision on AB 2074. If Newsom signs the bill, the seven covered cities would have to establish the required transit hub districts and apply the height standards. The legislation would also trigger a housing construction loan and financing study by the California Housing Finance Agency.