CP&DR News Briefs June 16, 2026: L.A. and SB 79; Greenhouse Gas Funds; S.F. Historic Preservation; and More

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Los Angeles to Delay Implementation of SB 79; Adopts “Low-Rise” Substitute

Los Angeles will implement a “Low-Rise Ordinance” that will allow up to four-story residential buildings in 57 transit-adjacent neighborhoods, delaying full implementation of California’s SB 79 transit-oriented housing law until 2030. The state law, which takes effect July 1, would permit buildings between five and nine stories near major transit stops, but cities are able to postpone those standards by adopting phased local housing plans. City officials propose concentrating growth in selected areas while exempting some historically significant, fire-prone, and lower-resource neighborhoods. The proposal requires final City Council approval and Mayor Karen Bass’s approval before taking effect. (See related CP&DR coverage.)

CARB to Divert $4 Billion in Greenhouse Gas Monies to new Industrial Fund

The Air Resources Board (CARB) approved changes to the state’s cap-and-invest program, including a new $4 billion Manufacturing Decarbonization Incentive that would allow major industrial polluters to receive emissions allowances in exchange for investments in emissions-reduction projects. Affordable housing, transit, and environmental advocates warned the program could reduce revenue currently flowing into the state’s Greenhouse Gas Reduction Fund, which could drop from $4 billion to $2 billion. The fund is the state’s largest source of monies for affordable housing, largely through the Affordable Housing and Sustainable Communities program, and its largest recipient is high speed rail. The San Francisco Municipal Transportation Agency stands to lose $202 million. The fund collected more than $31 billion since its first auction in 2013. The cap is lowered every year to help the state meet its goal to reduce greenhouse gas emissions by 85% below 1990 levels by 2045.

San Francisco Conducts Seeks to Expand History Preservation Efforts

San Francisco officials have launched an ambitious historic preservation effort aimed at doubling the number of protected landmarks and historic district properties from about 2,800 to 5,600 within five years. The plan includes seven preservation planners and contracted consultants to conduct a citywide survey of historic properties, with completion targeted by 2028. The city has already accelerated landmark designations, with 66 new landmarks currently in progress compared with just one approved in 2025 and 321 designated over the previous 50 years. Though housing advocates fear expanding landmark protections could restrict housing production and undermine pro-housing reforms, city officials argue the survey will provide greater certainty by clearly identifying which buildings are suitable for preservation and which may be redeveloped.

Funding Measure for Bay Area Transit May Qualify for Ballot

Organizers of the Connect Bay Area campaign submitted over 300,000 signatures to qualify a regional transit funding measure for the November ballot. The proposal, called The Connect Bay Area Act would impose a half-cent sales tax in Alameda, Contra Costa, San Mateo and Santa Clara counties and a one-cent sales tax in San Francisco, generating an estimated $1 billion annually for agencies including BART, Muni, AC Transit and Caltrain. The campaign has raised about $5.5 million and has garnered support from labor groups, businesses and major donors, with top funders including Salesforce, Ripple co-founder Chris Larsen and the Service Employees International Union Local 1021. Under SB 63, the state law authorizing the measure, the four major agencies must complete a two-stage fiscal efficiency review, and a first-phase report released last week found they had already saved over $1 billion cumulatively between 2019 and 2025. If the measure fails to qualify, transit officials have warned of severe service cuts, including reduced frequency, shortened nighttime hours, and eliminated lines.

Coastal Commission to Receive Federal Scrutiny 

The Trump administration is planning a review of the California Coastal Commission and other state regulatory agencies that deal with the state’s shoreline, suggesting that the agencies may be out of compliance with coastal management laws. U.S. Commerce Secretary Howard Lutnick directed the National Oceanic and Atmospheric Administration to review the agencies, claiming that the California agencies may be acting in a way that could complicate military plans and other federal interests. The move comes amid escalating tensions between the Trump administration and California over expanding offshore oil and gas leasing, which would mark the first new leases off the state's coast in roughly four decades.

CP&DR Coverage: California Cities Revolt against Data Centers

Silicon Valley famously houses many of the companies that are leading the boom in artificial intelligence, including behemoths like Nvidia, Anthropic, and OpenAI. But, while their end products are ephemeral and devoid of mass, the AI is very much an industry, with a rapidly expanding real estate footprint. California is a relatively small player in the data center industry, far behind states like Virginia and Texas, where developments are collectively measured in the tens of millions of feet -- and energy consumption rivaling that of tens of thousands of homes for some of the largest facilities. California has roughly 160 operational data centers and 40 planned. Even so, proponents consider them a significant part of the state’s economy. Opponents, however, object to the disruption, aesthetics, and possible environmental impacts that accompany data centers. The City of Monterey Park became the first in the country to face a ballot measure to ban data centers, and similar sentiments are building statewide.

Quick Hits & Updates

The High-Speed Rail Authority awarded a contract worth up to $3.5 billion to a joint venture between rail and engineering contractors Kiewit, Stacy Witbeck and Herzog to begin work on track and systems for the Merced and Bakersfield portions by November 30. California voters initially approved $9.95 billion in bonds for the LA to San Francisco route, initially projected to cost $45.5 billion. Now, the 171-mile Merced-to-Bakersfield route is projected to cost at least $34.76 billion to be completed by 2033. 

President Trump is invoking Defense Production Act, a 1950s emergency law, to push a $75 million coal export terminal in at the Port of Oakland, will become the first new export terminal on the West Coast after years of discussion about a west coast export site. Local groups oppose the Oakland plant and plan to oppose construction on the grounds that a new plant may not be considered critical to national defense under the Defense Production Act.

Santa Barbara will embark on a $100 million redevelopment of the Paseo Nuevo shopping center, converting a former Macy's building into office space for Yardi Systems and turning the former Nordstrom building into 80 to 112 housing units, with 10% reserved for moderate-income households under the city's inclusionary housing rules. The plan emerged from negotiations between Yardi Systems, mall owner Arrow Retail Management, developer DSP and city officials. The plan is the second proposal council has reviewed, replacing an earlier plan that called for demolition in favor of preserving the existing structures.  

Merced County received notice from the California Department of Housing and Community Development that its 2024-2032 Housing Element has been approved, following unanimous Board of Supervisors approval on May 19, 2026. The Board of Supervisors unanimously approved the County’s Housing Element, which county officials credited staff, community partners, and state officials for the achievement. Beyond fulfilling state planning requirements, the approval strengthens the County's eligibility for federal, state, and regional funding for housing and infrastructure projects. 

The Fresno Unified School Board narrowly voted 4-3 on Wednesday to oppose Mayor Jerry Dyer's $4.3 billion Southeast Development Area (SEDA) plan, which would build 45,000 homes on 9,000 acres but fall within Clovis and Sanger Unified's boundaries, citing concerns that the development will pull away students and funding from Fresno Unified's already declining enrollment. Projections show the district's roughly 66,800 students could fall below 60,000 within five years, prompting officials to consider measures like school consolidations and boundary changes. (See related CP&DR coverage.) 

The state Court of Appeal has clarified the purpose of Senate Bill 9, the 2021 law that allows up to four homes on parcels previously zoned for a single-family residence. The decision sends the case back to Los Angeles Superior Court, where a judge had previously sided with charter cities including Redondo Beach, Carson, Torrance and Whittier in their challenge to the law. Those cities argued the state improperly overrode local land-use authority by requiring approval of lot splits and duplexes in single-family neighborhoods.

Lori Ann Farrell, the former city manager of Costa Mesa and longtime municipal finance official, has been selected as chief executive of the Los Angeles County Affordable Housing Solutions Agency (LACAHSA). She is expected to begin the role July 6 after serving as interim city manager of Santa Rosa. LACAHSA was established to streamline affordable housing financing across Los Angeles County with funding from Measure A.

The Trump administration is seeking to halt plans to remove the aging Potter Valley PG&E hydroelectric project dams on Northern California’s Eel River, arguing that preserving the facilities would protect water supplies, maintain hydropower generation and support federal energy goals. In a letter from Agriculture Secretary Brooke Rollins suggests a potential buyer, the Elsinore Valley Municipal Water District, though the agency is hundreds of miles from the sites and may struggle to procure the likely hundreds of millions of dollars needed for the purchase.

Sacramento Regional Transit proposed $164 million Downtown Riverfront Streetcar Project, a 1.8-mile rail line that would connect downtown Sacramento to Sutter Health Park and cross the historic Tower Bridge. The project would add three new stations, modernize six existing light rail stations, and create connections to major destinations including Golden 1 Center, the Crocker Art Museum, the State Capitol and the Railyards district. (See related CP&DR coverage.)

California reported a nearly 3% decrease in the state’s total unhoused population from 2025-2026, placing it in the top five states with the largest decreases from 2024 preceded by Illinois (44%), Hawaii (41%), Florida (11%) and New York (8%). According to new data from the U.S. Department of Housing and Urban Development, California’s unhoused population fell nearly 3% to 181,934 people, though the state still maintains one of the largest unsheltered homeless populations in the country alongside New York.

The Pasadena City Council adopted Reconnecting Pasadena, a vision plan guiding redevelopment of the 50-acre 710 Stub, land seized by Caltrans in the early 1970s for a freeway extension that displaced mostly black residents and was never completed. Approved elements include a CEQA exemption, a goal of 1,800 new housing units, multimodal transportation upgrades, relocation of a stormwater facility, governance structure creation, and exploration of financing mechanisms and public-private partnerships.