On July 1, California enacted one of the most significant housing reforms in decades. SB 79, also known as the “Abundant and Affordable Homes Near Transit Act,” overrides local zoning to allow the development of multifamily housing of up to nine stories near qualifying bus, metro and rail stops. The goal: more housing supply, more affordable units and shorter commutes by building close to transit, jobs and services.
But inexplicably, Los Angeles is choosing to be left behind. Rather than allowing SB 79 to take effect, Los Angeles adopted two ordinances that together postpone much of the law until 2030 while expanding the number of properties exempt from it. A “Phased Implementation Ordinance” allows the city to temporarily exempt sites until a year after the next Housing Element is released, likely in 2030. A companion “Low-Rise Ordinance” upzones properties that currently don’t qualify for temporary exemption so they do.
Together these ordinances delay SB 79’s impact for years and could permanently exclude some sites from its reach. That is the opposite of what the legislature intended.
The last thing Los Angeles needs is another way to avoid building housing. The city has permitted just 81,306 units against its 2021-2029 Regional Housing Needs Assessment goal of 456,643 by 2029. Not all permitted units will be built, putting us even further behind. Every month we fall further behind on the city’s housing goals and rents climb further out of reach because housing production remains far below what’s needed.
The city’s housing shortage has wide-reaching economic implications. Employers struggle to recruit workers, professionals leave for less expensive regions and businesses face higher wage pressures simply because housing is scarce.
Los Angeles may miss the party
Many in the real estate industry expect California to enter a housing boom in the coming years, one that may bypass Los Angeles entirely. Construction costs, land costs and interest rates already make development difficult. Layer on the SB 79 exemption and Measure ULA (which applies a 4% transfer tax to all real estate transactions above $5.4 million and 5.5% on transactions above $10.9 million in the city), and it’s hard to see why a developer would choose Los Angeles over any other city.
When one jurisdiction combines higher transaction costs, lengthy approvals and regulatory uncertainty while neighboring cities offer a clearer path to entitlement, investment predictably flows elsewhere. Los Angeles is the state’s largest city and has its most severe housing shortage, yet its own government is undermining the legislation designed to help.
It’s not that building isn’t happening. It’s that it isn’t happening in the city of Los Angeles. Changing that is the only way to ease this city’s housing crisis and make it affordable again.
SB 79 is not an isolated effort. It builds on last year’s landmark California Environmental Quality Act (CEQA) reforms, which streamlined environmental review and removed significant procedural barriers for mid-rise infill housing. Together, these reforms mark the most consequential land-use changes California has seen in decades, replacing uncertainty with a more predictable, scalable framework for housing delivery. This is exactly the kind of legislation needed to spur the housing production the state desperately needs.
SB 79 also offers a far more stable and transparent path than the “builder’s remedy,” a workaround that lets developers bypass zoning when jurisdictions fall out of compliance with housing-element law. While the builder’s remedy theoretically allows projects to move forward, it remains contentious, unpredictable and frequently litigated. SB 79, by contrast, provides a zoning pathway backed by legislative authority and clear eligibility standards. For the first time, qualifying multifamily projects can move forward with fewer of the political risks that have long deterred new development.
Sacramento has finally taken action to modernize decades-old land-use rules. Rather than taking advantage of it, Los Angeles is choosing to delay it for years at the very moment the city can least afford to keep housing scarce. By choosing delay over reform, Los Angeles risks losing much-needed housing, jobs, investment and affordability for residents. Los Angeles doesn’t need more time to find reasons not to build. It needs to get out of its own way.
Sean Burton is chief executive of Cityview, a real estate investment manager in Century City specializing in multifamily development.
