CP&DR News Briefs May 12, 20216: S.F. & SB 79; L.A. Streamlining; VMT "Mitigation Credits," and More

This article is brought to you courtesy of the paying subscribers to California Planning & Development Report. You can subscribe to CP&DR by clicking here. You can sign up for CP&DR’s free weekly newsletter here.

San Francisco to Adopt SB 79 Local Alternative

San Francisco is moving forward with a local alternative to California’s new transit-oriented housing law, Senate Bill 79, which takes effect July 1. The state law requires taller and denser housing within a half-mile of transit stops, but San Francisco’s Board of Supervisors unanimously approved a modified plan backed by Mayor Daniel Lurie that exempts large parts of the city. Officials estimate about 80% of parcels in the city fall within SB 79 transit zones, but argue San Francisco already has high housing capacity due to earlier zoning reforms. Pro-housing groups such as SF YIMBY and GrowSF say the exemptions for “low-resource” neighborhoods where officials say residents face higher risks of displacement could limit thousands of potential homes in transit-rich areas as the city struggles to meet a state requirement to permit 86,000 new homes by 2031. (See related CP&DR coverage.)

Los Angeles to Consider Package of Streamlining Reforms

Los Angeles Mayor Karen Bass is advancing a package of reforms aimed at speeding up housing construction and making it easier to open businesses in Los Angeles. The initiative focuses on reducing delays, simplifying permits, and modernizing city approval systems to address the city’s severe housing shortage. Speaking at the Department of Water and Power, Bass said Los Angeles needs “structural change” in how housing and business projects are approved. The reforms include launching the city’s first standard pre-approved home plan program with an online portal for single-family homes. The city will direct LADWP to reduce delays in power connections and create a project tracking system for developers and applicants. Developers have criticized the department for delaying projects. The reforms include implementation of AI tools to connect city departments into one digital permitting system so reviews can happen simultaneously instead of sequentially.

State Proposes VMT "Mitigation Credits" as In-Lieu Fees

The California Governor’s Office of Land Use and Climate Innovation released draft rules for a new statewide program that would let developers pay into a fund to offset transportation impact from new projects under the California Environmental Quality Act (CEQA). The program would allow developers to buy vehicle miles traveled "mitigation credits" instead of relying only on project-specific traffic reduction measures. The money would help fund affordable housing projects in transit-friendly and infill areas, based on the idea that residents in these locations drive less than average. Affordable housing projects funded through the program would be required to remain affordable for at least 55 years. Credit prices would vary widely by region, ranging from about $1,515 per daily vehicle mile reduced in parts of Madera County to $6,682 in the Santa Barbara region, with most areas falling between $2,000 and $4,000. (See related CP&DR coverage.)

LAO Report Assails High Speed Rail Business Plan

A new report from the Legislative Analyst’s Office criticizes the California High-Speed Rail Authority for lacking transparency in its latest business plan. The report says the agency failed to clearly disclose assumptions about relocating stations in Merced and Bakersfield, which could significantly affect costs and planning. The 171-mile Merced-to-Bakersfield segment boasts a potential cost of $34.76 billion, and is predicated on changing the Merced and Bakersfield stations without specifying how. The HSRA board has delayed a vote on the 2026 business plan on grounds that it may violate state law due to a lack of required details on costs, timelines, and how the full San Francisco–Los Angeles system will be completed. The board, which is facing widespread criticism, will consider the plan on May 20th and procure the finalized version by June 1. 

CP&DR Coverage: Cities Consider Warehouse Restrictions Amid Concerns About Tariffs

As the global economy has wobbled in the face of tariffs imposed by the Trump administration, the California logistics industry has followed suit. The promise of jobs and economic development has pushed jurisdictions to embrace warehouses by the millions of square feet -- totaling over 1.17 billion square feet of warehouse space in Southern California alone and sprawling further into desert territories. Meanwhile, local opponents remain vigilant, citing concerns of environmental damage and job insecurity that may follow such expansion. The tension between expansion and restriction plays out against the backdrop of 2024’s AB 98 (and a 2025 cleanup bill, SB 415), requiring jurisdictions to impose buffer zones between warehouses and sensitive uses, create truck routes, use solar power, and adopt a host of other measures designed to reduce pollution and lessen other impacts on residential neighbors.

Quick Hits & Updates

Environmental groups are asking a judge in Oakland to stop a major expansion of Oakland San Francisco Bay Airport, arguing the project was approved without adequate environmental and public health review. Three lawsuits claim the Port of Oakland violated state environmental law and is relying on outdated data to justify a large modernization plan that would add 16 new gates, a roughly 55% increase in capacity.

Eureka City Council will consider approving $50 million in bond financing for two of the city’s largest affordable housing projects this week. One proposal would allocate $20 million for the eaRTH Center Apartments, a 46-unit affordable housing mixed-use building with a transit hub; the second would provide $30 million for the Green Phase Apartments, which is part of a larger redevelopment plan expected to replace 106 existing units with 256 new ones.

A state judge has ruled that a Trump administration executive order does not override state environmental and regulatory laws in a dispute over oil pipeline operations off the Central Coast. The decision upholds a state order blocking Sable Offshore Corp. from restarting a pipeline system that closed in 2015 after a major spill until it complies with California permitting rules and other legal requirements.

According to the 2026 State of the Air report, 82% of California residents live in counties affected by unhealthy air, as compared to 44% nationwide. Of the fifteen counties most impacted by smog last year, eight were in California. Los Angeles remains the most ozone-polluted metro area in the nation, and has ranked worst for ozone in 26 of the 27 years the ALA has conducted the study.

Despite building over 677,000 new housing units statewide in the past six years, demand for housing has increased due to demographic change, according to the Public Policy Institute of California. As the number of people sharing a household has been falling over the past five years, more units are needed to house the same number of people. Despite new construction and higher incomes, the study estimates that 14% of homeowners and 28% of renters spend more than half of their income on housing.

Brisbane, a city of fewer than 5,000 on the San Francisco Peninsula, is considering a major redevelopment that could nearly double its housing supply and significantly reshape its shoreline. The 684-acre plan proposes about 1,800 to 2,200 homes, up to 7 million square square feet of non-residential space, over 100 acres of new parks, and transit-oriented development near the Caltrain station on the edge of the San Francisco Bay. The 2026 Draft Specific Plan is scheduled to be released the week in May, with the Planning Commission review expected to begin in mid-June. A recent study by SmartAsset found that nine out of eleven American cities with the highest salaries needed to live comfortably are in California. The study used the cost of necessities such as housing, groceries, utilities, and transportation and discretionary costs and the 50/30/20 budgeting rule, assuming 50% of your post-tax income goes to needs, 30% to your wants, and 20% gets set aside for the future. The average cost of living in the top 10 most expensive cities hovers between $130,000 and $150,000 for single adults, and over $400,000 in some places for families. While New York had the highest individual salary needed to live comfortably, the rest of the top-5 consist of San Jose, Irvine, Anaheim, and Santa Ana.

A January 2026 study argues against the common assumption that restrictive regulations limiting housing supply are to blame for lack of affordable housing. The study found that even major deregulation leading to large increases in market-rate construction would take decades to significantly improve affordability in high-cost U.S. cities. Instead, they argue that rising inequality and uneven demand growth across regions and income groups are the primary drivers of worsening affordability. The study concludes that relying on supply-side deregulation alone would deliver benefits too slowly and insufficiently for cost-burdened households.

The Pasadena City Council unanimously adopted most elements of the “Reconnecting Pasadena” plan for redeveloping the 50-acre "710 Stub" site, a former freeway project area left undeveloped after the 2017 cancellation of the 4-mile extension connecting the 710 to the 210. Approved items include a goal of about 1,800 housing units along with transit and infrastructure changes in the unused patch.

California’s Board of Forestry and Fire Protection has proposed new wildfire “Zone Zero” landscaping rules that establish a “Safety Zone” around homes in high fire-risk areas where flammable materials such as plants, mulch, and grass, would be prohibited.