Last year, California passed several consequential laws for the multifamily sector, including rolling back environmental reviews for most urban developments and permitting dense housing near transit statewide. Housing advocates hope to maintain that momentum in 2026 during pro-building Gov. Gavin Newsom’s last year in office.
Policymakers hit the ground running in early January with Assembly Bill 1157, which would have lowered the cap on rent increases from 10% to 5% annually and removed a clause that allows the cap to expire in 2030, the Los Angeles Times reported. However, the measure failed to get enough votes to pass out of the state Assembly committee.
There are nonetheless a slew of other housing-related efforts coming out of California that multifamily pros should keep an eye on this year, from the local to state to national level.
$10 billion affordable housing bond bill introduced
At the top of the wish list for housing advocates is SB 417: The Affordable Housing Bond Act of 2026, which would provide $10 billion in bonds. Proceeds from the sale of these bonds would be used to finance programs that fund affordable rental housing and home ownership programs.
The measure would direct $7 billion to the state’s Multifamily Housing Program, which issues low-interest loans to build and maintain permanent and transitional rental housing for lower-income households. It also includes $1 billion to the CalHOME Program and the MyHome down payment assistance program, $800 million for the Portfolio Reinvestment Program to preserve affordable housing and $500 million for a new program that funds acquisition and rehabilitation of naturally affordable housing and attaches long-term affordability restrictions to the units.
Lawmakers are seeking to put the measure on the Nov. 3 statewide election ballot. Once signed, it would take effect immediately as an urgency statute.
LA County seeks to override new TOD law
Last October, Newsom signed SB 79 into law, which upzones land near high-frequency transit stops to facilitate multifamily housing development. It takes effect in July.
However, Los Angeles politicians are fighting the measure, LAist reported, and the L.A. Metro board of directors voted to oppose its implementation locally. Metro staff argue that SB 79 could harm its expansion goals by galvanizing housing opponents against new rail stations and bus lanes. About 75% of residential land in Los Angeles County is zoned for single-family homes, the Los Angeles Times reported.
Santa Barbara, San Leandro mull rent control
The Santa Barbara City Council voted on Jan. 13 to support a measure that halts rent increases for up to a year while the City Council drafts a more permanent rent cap to be considered later in 2026, the Santa Barbara Independent reported.
The proposal needed five yes votes to be considered an emergency and go into effect immediately, but it only received four, so it will start in February. The freeze expires on Dec. 31 or when a permanent rent stabilization ordinance goes into effect.
San Leandro, in the east San Francisco Bay Area, is also working on a rent control ordinance that would impose some of the most restrictive limits on rent increases in the state, according to the California Apartment Association. On Jan. 12, the San Leandro City Council advanced the bill on first reading, allowing it to move forward for a final vote in February.
The proposed ordinance would cap annual rent increases at 65% of the consumer price index or at 3%, whichever is lower; establish a base rent date of July 1, 2025; and bar the banking of unused allowable rent increases. It would largely apply to older apartment properties built before Feb. 1, 1995.
Senator proposes national housing construction bill
In December 2025, Sen. Adam Schiff (D-Calif.) introduced the Housing BOOM Act, which includes a raft of new measures to rapidly boost construction of affordable and middle-income housing across the country. The proposal includes the biggest-ever expansion of the Low-Income Housing Tax Credit program to fund shovel-ready projects in need of additional capital.
“We need to jumpstart a housing boom in America and massively increase the supply of new homes,” Schiff said in a release. “In the same way we built millions of houses for returning GI’s in the wake of World War II, we need to bring a similar urgency to the construction of vast numbers of new homes. Nothing less will address the crisis of housing unaffordability in America.”
The legislation also proposes a new housing construction fund for middle-income Americans, and other measures to expand access to affordable housing options, combat homelessness, protect renters and safeguard federal housing programs. It has been referred to the Committee on Finance.
Groups file to stop San Francisco’s family zoning plan
A coalition of San Francisco-based groups filed a petition in state court over the city’s adoption of the Family Zoning Plan in December 2025, which permits denser housing developments in certain areas. The groups argue that the city and county’s approval of the plan without sufficient environmental review violates the California Environmental Quality Act.
In the petition, filed in the Superior Court of the State of California, County of San Francisco, the groups argue that the city relied on an addendum to an environmental impact report — instead of preparing a new one — that doesn’t fully account for the amount and location of construction now allowed. The petitioners want the judge to vacate the plan and order the city to pull any permits it has already approved.
City Attorney David Chiu’s office said San Francisco took deliberate steps to comply with its obligations under state law, including CEQA, when creating the plan, Courthouse News Service reported.
Relocation payments challenged in LA
An industry group is appealing an earlier ruling regarding Los Angeles’ rent-increase relocation mandate, which requires a payment when a tenant moves out following a rent hike exceeding a specified threshold. The core legal question in Apartment Association of Greater Los Angeles County v. City of Los Angeles et al. is whether cities can impose financial penalties tied to rent increases on units that state law expressly exempts from local rent regulation.
It comes in the wake of a recent California Court of Appeals ruling that Pasadena’s rent-increase relocation assistance requirement did conflict with the Costa-Hawkins Rental Housing Act. A similar ruling in LA could suppress the spread of relocation assistance mandates tied to lawful rent increases statewide, according to the California Apartment Association.
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