What Senate Bill 79 Does
California continues to face one of the most severe housing shortages in the country. High demand, limited supply, and restrictive local zoning have made it harder than ever for families to afford homes—especially in major cities. At LBC Mortgage, we understand the challenges this creates for homebuyers and homeowners alike. That’s why we’re paying close attention to California Senate Bill 79 (SB 79), also known as the Abundant and Affordable Homes Near Transit Act. Signed into law in October 2025, SB 79 aims to tackle housing shortages head-on by unlocking more development near transit hubs. The potential impact on housing availability and mortgage affordability could be significant.
SB 79 changes how and where new housing can be built in eight of California’s largest urban counties. It overrides certain local zoning rules to allow multi-family housing near major public transit. This includes areas within a half-mile of rail stations, ferry terminals, and bus rapid transit corridors. These zones are considered “transit-rich” and often have infrastructure already in place to support additional residents.
Increased Building Heights and Densities
One of the most impactful provisions of SB 79 is the ability to build taller and denser housing in previously restricted areas. In some transit-rich zones, developers can now build up to seven to nine stories high. This is a sharp contrast to older zoning laws that limited construction to single-family homes or low-rise buildings. By opening the door to mid-rise and high-rise construction, SB 79 dramatically increases the potential number of housing units in key areas.
Faster and More Predictable Approvals
The law also includes measures to streamline the approval process. Developers no longer have to navigate time-consuming and often inconsistent local permitting procedures. Instead, projects that meet SB 79 requirements can move forward more efficiently. This is especially true for developments that include affordable housing units. By reducing bureaucratic delays, SB 79 lowers development costs and speeds up construction timelines—helping to bring homes to market faster.
Focus on Key Urban Counties
SB 79 applies to counties that already have a high level of transit infrastructure. These include Los Angeles, San Francisco, San Diego, Sacramento, and other major metro areas. The goal is to maximize housing growth in places where people can realistically live without relying on cars. This supports both housing access and environmental goals by reducing vehicle miles traveled.
Expanding Housing Supply Near Transit
The real promise of SB 79 lies in its potential to unlock vast amounts of new housing. California has long faced a crisis of underbuilding, particularly in urban areas where demand is highest. SB 79 addresses this directly by focusing on infill development—building on vacant or underused parcels within already developed communities.
Efficient Land Use
By allowing more homes near existing transit, the law makes smarter use of land. It shifts growth away from sprawling suburban expansion and toward compact, walkable neighborhoods. This kind of urban density supports local businesses, improves public transit usage, and fosters vibrant communities.
Addressing the Supply Shortage
Experts estimate that in some cities, SB 79 could allow for as many as 1.5 million new units. That’s not just a number—it represents real housing opportunities for families, seniors, and individuals who have been priced out of the market. More housing means less competition, which helps slow down skyrocketing home prices. With more options on the market, buyers have a better chance of finding a home that fits their budget.
How This Could Improve Mortgage Affordability
For homebuyers, affordability isn’t just about price tags—it’s about how much of their income goes toward monthly payments, down payments, and long-term financial stability. SB 79 could lead to mortgage opportunities that are more manageable and sustainable.
Lower Entry Prices for Buyers
As housing supply increases, price growth is expected to slow. In some areas, prices may even decline slightly as inventory rises. That gives buyers an advantage. Lower home prices mean smaller down payments and loan amounts, reducing the overall financial burden of buying a home. For first-time buyers and moderate-income families, this opens the door to homeownership in areas that were previously out of reach.
More Variety in Housing Types
Because SB 79 encourages multi-family and smaller-unit housing, more condos, townhomes, and duplexes are likely to enter the market. These types of homes often come with lower price points than traditional single-family residences. For buyers, this means more affordable mortgage options and potentially lower monthly payments. Smaller homes can also mean lower utility and maintenance costs, further improving overall affordability.
Reduced Transportation Costs
Housing near transit reduces reliance on cars. That can translate into significant savings. Families living near rail lines or rapid bus routes may be able to go without a second car—or even without a car altogether. The money saved on car payments, insurance, fuel, and maintenance can go toward mortgage payments or home improvements. These long-term savings can help families build equity and financial stability faster.
Lower Development Costs Benefit Buyers
By streamlining the development process, SB 79 reduces delays and regulatory costs for builders. Those savings can potentially be passed on to buyers through more competitive home prices. When development is less risky and more efficient, the entire market becomes more stable and accessible.
Broader Benefits Beyond Affordability
The benefits of SB 79 extend beyond just homebuyers. The law supports environmental, economic, and social goals that contribute to better communities for everyone.
Environmental Impact
By promoting transit-oriented development, SB 79 helps reduce greenhouse gas emissions. Encouraging people to live near public transit cuts down on car trips, which helps California meet its climate goals. Dense housing also uses less energy and water per household compared to suburban sprawl.
Stronger Local Economies
When more people live near transit hubs, local businesses benefit from increased foot traffic. Restaurants, grocery stores, and service providers in walkable neighborhoods tend to perform better. This creates local jobs and generates tax revenue for cities to reinvest in infrastructure and public services.
Community Investment
Transit-oriented development often attracts investment in public spaces, parks, and community resources. When more people live in one area, it becomes economically viable to invest in amenities that improve quality of life for everyone—like better sidewalks, lighting, and public art.
Challenges and Considerations
While SB 79 is a significant step forward, it is not without challenges. Some cities and local leaders have expressed concerns about losing control over local zoning. Others worry that new development may favor market-rate units over truly affordable housing.
Protecting Tenants
The law includes tenant protections to prevent displacement. If existing rent-controlled units are demolished for new development, tenants must be compensated, given the option to return, and provided with affordable replacement units. These safeguards are designed to ensure that lower-income residents benefit from the new housing supply—not get pushed out by it.
Need for Oversight and Enforcement
The success of SB 79 will depend on how it’s implemented. Strong oversight will be needed to make sure developers follow through on affordability commitments and tenant protections. Additional housing policy measures may also be necessary to fill in gaps and ensure that benefits are shared widely.
What This Means for Buyers and How LBC Mortgage Can Help
For buyers, especially in competitive metro markets, SB 79 represents new opportunity. More homes near transit mean more options to find a property that fits your budget and lifestyle. Whether you’re looking for a condo, townhome, or investment property, this law may expand the housing stock in ways that benefit you.
At LBC Mortgage, we’re watching these developments closely. As new projects move forward, we’re here to help buyers explore financing options, qualify for competitive mortgage rates, and navigate the loan process with confidence. Our team understands the California market, and we’re committed to helping clients take advantage of these new housing opportunities.
