New California Laws 2026
AB 1050: Expanding opportunity to remove restrictive covenants that block housing
Daniel R. Golub A uthored by Assemblymember Nick Schultz (D-Burbank), Assembly Bill (AB) 1050 aims to clear barriers to housing development by marrying two important legal trends. First, Califor- nia has increasingly adopted laws promoting the con- version of underutilized commercial properties— such as offices, retail spaces and parking lots—into residential and mixed-use developments. Second, the state has established and expanded mechanisms for “redacting” restrictive covenants from title, par- ticularly those that block housing development. AB 1050 combines these two trends by allowing resi- dential developers—even developers of market-rate housing—to eliminate restrictive covenants that might otherwise preclude their projects. Developers eager to take advantage of California’s recent legislative efforts to convert vacant commer- cial properties into residential housing have fre- quently encountered a major obstacle: restrictive covenants that prohibit or limit residential uses of property. Laws such as AB 2011 of 2022 allow devel- opers seeking to redevelop commercial property to supersede local zoning laws that prohibit residential use. But many developers’ plans to invoke these strat- egies have been stymied by covenants that enable neighboring property owners to block housing devel- opment even where state or local law would allow it. The persistent barrier posed by these covenants was the impetus for AB 1050. California has a long history of allowing parties to “redact” or remove restrictive covenants from title, beginning with laws that allow for the removal of unenforceable covenants that unconstitutionally dis- criminate on the basis of race. This legal precedent paved the way for subsequent reforms, including the 2021 enactment of California Civil Code Section 714.6, which enables qualifying affordable housing projects to eliminate covenants that limit residential use of property. AB 1050 expands the scope of Section 714.6 to include any housing development—affordable, mar- ket-rate or mixed-income—on existing commercial properties where residential uses are permitted un-
der state or local law. Developers can now pair AB 1050 with other legislative pathways, such as AB 2011’s streamlined ministerial approval process and the State Density Bonus Law, to accelerate the trans- formation of vacant commercial sites into vibrant res- idential communities. The process for removing restrictive covenants under AB 1050 is not automatic. Owners or develop- ers must submit a restrictive covenant modification document, along with supporting materials, to estab- lish the project’s eligibility with key requirements in statute and achieve the concurrence of the relevant county recorder that the project and the covenant qualify for redaction. AB 1050 applies only to cove- nants that restrict residential uses, along with the number, size or location of residences or number of occupants. Certain covenants, including those that impose “purely aesthetic standards” and certain con- servation easements, are exempt from redaction. Conclusion By marrying the incentives for commercial-to-res- idential conversion with the legal mechanism to “re- dact” outdated or exclusionary covenants, AB 1050 provides developers a powerful tool to unlock sites previously off limits for housing. This confluence of legal trends supports the revitalization of commer- cial corridors and represents a critical step toward meeting California’s growing housing crisis.
Daniel R. Golub is a partner at Holland & Knight LLP.
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