SB79 is being celebrated as one of California’s most consequential housing reforms in years. The law opens the door for mid-rise and high-density housing within a half-mile of major transit stops, creates consistent development rules across participating counties, and removes decades of local zoning barriers. Statewide, the expectation is clear: more housing, faster approvals, and a development pipeline that can finally grow at the pace California needs.

For Los Angeles, the story is more complicated. Even with a streamlined approval structure and strong support from housing advocates, many developers warn that SB79’s benefits may be limited inside LA city limits. High construction costs, limited financing, the Measure ULA transfer tax, and a sluggish permitting environment continue to make underwriting difficult. While the law may spark new opportunities across the state, early comments from major firms suggest LA could see far less momentum unless local conditions shift.

SB79: A Statewide Push for Transit-Oriented Density

SB79 establishes a baseline height, density, and floor-area framework for sites near rail and bus rapid transit stops. When the law takes effect on July 1, eligible parcels will qualify for:

• Building heights of up to 75 feet
• Streamlined ministerial approvals
• By-right multifamily construction in transit-rich areas
• Preemption of certain local zoning limits

Housing advocates, including California YIMBY, argue that the law finally creates a predictable path for transit-oriented development that cities have long resisted. For regions like San Diego, Sacramento, and parts of the Bay Area, developers say SB79 will meaningfully expand inventory.

Why Developers Say Los Angeles May See Less Activity

Despite being one of the regions SB79 intends to benefit most, Los Angeles faces a different set of challenges. Several developers interviewed by CoStar note that LA’s financial and regulatory climate has made new construction increasingly difficult.

Sean Burton, CEO of Cityview, said his firm has been one of LA County’s most active builders for more than a decade, but current conditions no longer support the numbers required to bring new units online. Burton cites three primary headwinds:

• The Measure ULA transfer tax, which adds up to 8% to project costs
• Construction pricing that remains near peak levels
• Financing packages that have become harder to secure

Burton warned that much of the statewide development expected under SB79 may bypass Los Angeles entirely. High rents alone are no longer enough to offset total project costs, and many lenders have paused LA-specific backing until margins stabilize.

The Scale of Development LA Could Unlock With SB79

Transit advocates estimate that the law technically opens more than 448,000 housing units for by-right development within LA. These parcels sit near the Red Line, Purple Line, Expo Line, and key transit corridors in Central LA, Hollywood, Koreatown, West Adams, Culver City, and Westwood.

The challenge is not land or zoning. It is feasibility.

A recent report by Hilgard Economics concluded that local costs make it unlikely that SB79 will trigger widespread construction without additional policy changes. Many market-rate projects require rents in the $4,000 to $5,000 range just to break even, and lenders are cautious about underwriting those assumptions.

Where SB79 Could Make a Difference for Los Angeles Multifamily

Even if SB79 does not immediately unleash a surge of new development, the law still creates notable implications for Los Angeles multifamily owners and investors:

• Long-term redevelopment value may increase for parcels within transit zones
• Higher-density zoning can boost land valuations over time
• Acquisition strategies may shift as buyers look for underutilized sites
• Affordable and mixed-income developers may benefit the most from by-right approvals
• Institutional capital may re-enter the market once local cost barriers ease

Owners positioned near transit corridors now have a clearer entitlement framework than they’ve had in decades, even if the financing environment delays immediate construction.

Conclusion

SB79 is a reminder that California is pushing aggressively toward transit-aligned housing production, but it also underscores the unique challenges facing Los Angeles multifamily development. State leaders expect the law to unlock tens of thousands of units, yet developers warn that LA’s high project costs, local tax structure, and lengthy approval timelines may limit near-term activity.

For multifamily owners, the path forward is strategic rather than immediate. Understanding how SB79 alters long-term redevelopment value, how transit-adjacent parcels may appreciate, and how future cycles may reactivate stalled projects is essential. As the broader market adjusts to the new framework, SB79 will remain one of the most important policy changes shaping Los Angeles multifamily planning for 2026 and beyond.