New California Laws 2026
AB 130: CEQA exemption accelerates urban infill housing and cuts development costs
By Sheri L. Bonstelle A B 130 provides a statutory exemption for dis- cretionary review of housing development projects in urban infill areas under the Cali- fornia Environmental Quality Act (CEQA). The bill is a game-changer for reducing development time, cost and risk, and encouraging private investment in affordable housing development. Gov. Newsom signed the budget trailer bill, and it became imme- diately operative on June 30, 2025, as part of a larger package of housing bills that sought to address Cali- fornia’s housing crisis. The CEQA exemption applies to a wide array of urban infill properties and types of housing and mixed-use developments that comply with the specific checklist requirements set forth in Public Resources Code (PRC) §21080.66 et seq. Housing development project qualifications: The CEQA exemption applies to a housing develop- ment project, defined as (i) an all-residential project; (ii) a mixed-use project with at least two-thirds resi- dential floor area or at least fifty percent residential floor area with other qualifications; or (iii) transi- tional or farmworker housing. The project may not include a hotel or motel use. The property must be no more than 20 acres and not more than 5 acres for a builder’s remedy project. The project must be located in an incorporated municipality or in an urban area, and must have been previously developed with urban uses, or adjoining or near certain urban uses, as de- fined. The project must also have a minimum resi- dential density of at least half the density required by the Housing Element (Gov’n Code 65583.2(c)(3)(B)), which is 30 dwelling units (DU) per acre for metro areas, 20 DU per acre for suburban areas, 15 DU per acre for incorporated non-metro areas, and 10 DU per acre for non-incorporated areas. Compliance with objective standards: The project must be consistent with the general plan, or consistent with the zoning ordinance and with a local coastal plan, if in the Coastal Zone. (PRC §21080.66. (a) (4)) However, if a project provides sufficient af- fordable units to qualify for a State Density Bonus with its incentives, concessions, waivers, or reduc- tions of development standards, and reduced park- ing ratios (Gov’n Code §65915), it is still deemed to comply with the general plan, zoning or local coastal plan, even if it requires a modification to the objective development standards. (PRC §21080.66.(e)) A city
must grant a Density Bonus incentive unless it does not result in identifiable and actual cost reductions, and for other reasons. A city must also approve an un- limited number of waivers of development standards that would physically prevent the project from being built at the permitted density and with the granted incentives. Therefore, as long as the project provides sufficient affordable housing units, the objective de- velopment standards typically may be waived. Expedited timeline: AB 130 provides an expedited maximum timeline of 178 days for a local jurisdic- tion’s review and approval of the entitlements for a housing development project after the application has been deemed complete, including tribal con- sultation. (Gov’n Code §65589.5(h)(5)) A city must review and deem a project complete within 30 days of application, or provide a specific inclusive list of required items. Each subsequent submittal must be reviewed in 30 days. Then, a city must issue a notice to each California Native American tribe to consult on the proposed project, and the notice, response and consultation time shall take no more than 148 days. (PRC §21080.66.(b) (1)) After completion of the tribal consultation, the city must review and take an action on the project entitlements within 30 days. (Gov’n Code §65950(a)(7)) If the jurisdic- tion fails to take an action, the project is deemed approved. (Gov’n Code §65956(b)) For entitlements that require public hearings, the city must notice and schedule all hearings within this limited time frame. The time limits apply to the city’s initial action, and not to any additional appeals. Property requirements: The property may not be located in certain areas, similar to the limitations for SB 35 projects. (PRC §21080.66.(a)) Specifically, a project may not be located on a property in a coast- al zone, prime farmland, wetlands, very high fire hazard severity zone (Fire Zone), hazardous waste site, special flood area, regulatory floodway, conser- vation area, protected species habitat, conservation easement lands, or have a structure that is placed on a national, state or local historic register, with cer- tain exceptions. A property in the coastal zone may comply if it is within a local coastal plan or land use plan. A project in a Fire Zone may be permitted if the project complies with state fire laws related to brush
See AB 130 on page 105
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