California's Summer Blockbuster, Continued!: AB 130 And SB 131 Create Further Housing Reforms

Highlights

• Assembly Bill (AB) 130 and Senate Bill (SB) 131, which became effective on June 30, 2025, are designed to bring sweeping change to California housing and infrastructure development across the state.
• Key provisions in the legislation that extend beyond the previously reported California Environmental Quality Act exemptions and streamlining provisions include a freeze on state and local building code updates for nearly six years, with certain exceptions, providing much-needed certainty and housing cost relief.
• Another notable change is the requirement for agencies to process ministerial projects pursuant to the Permit Streamlining Act and approve or disapprove ministerial projects within a 60-day "shot clock."
• A multitude of other important amendments related to the processing of housing projects are discussed in this Holland & Knight alert.

This Holland & Knight alert is part of a series examining major reforms that have been instituted in California in 2025 and their potential impact on various projects in the near future and down the road. For a primer on the important "infill" housing-related California Environmental Quality Act (CEQA) reforms, see Holland & Knight's previous alert, "California Legislature Enacts Major CEQA Reforms for Housing-Rich 'Infill' Projects," July 2, 2025. Additional alerts on other aspects of Assembly Bill (AB) 130 and Senate Bill (SB) 131 will be available on Holland & Knight's West Coast Land Use and Environment blog, Breaking Ground. A two-part webinar series is scheduled for Aug. 20 and Aug. 27, 2025, and will feature analysis of the new laws and a Q&A with Holland & Knight attorneys.

California Gov. Gavin Newsom signed into law AB 130 and SB 131 on June 30, 2025, both of which took effect immediately. Included as part of the 2025-2026 budget, these new laws include sweeping measures aimed at streamlining the development of much-needed housing and infrastructure across the state, among other provisions.

In addition to the new California Environmental Quality Act (CEQA) pathways highlighted in the aforementioned Holland & Knight alert, this alert explores several other nuanced provisions of AB 130 and SB 131 that received less attention in the initial coverage of both laws but are also important for prospective housing development projects across California. These lesser-known reforms provide further CEQA and non-CEQA relief for developers, and this analysis is intended to help prospective clients better understand the full scope and potential benefits of the new legislation.

Summary

1. Building Code Freeze: AB 130 implements a freeze on state and local building code updates for nearly six years, subject to limited exceptions, providing much needed certainty and relief on housing costs.
2. SB 330 Reforms Made Permanent: The processing protections that were instituted as part of the Housing Crisis Act of 2019 and that were scheduled to sunset have been made permanent, signaling the endurance of the housing crisis.
3. Ministerial Approvals Subject to Permit Streamlining Act (PSA) and New "Shot Clocks": Ministerial approvals (e.g., SB 35, AB 2011, SB 4, ADUs/SB 9 projects) are now subject to the same procedural safeguards and time limits under the PSA as projects requiring discretionary review. Notably, ministerial projects are now also subject to an enforceable "shot clock" requiring an agency to approve or disapprove eligible projects within 60 days.
4. Regional Housing Needs Allocation (RHNA) Methodology Enforcement by California Department of Housing and Community Development (HCD): AB 130 gives HCD greater control over the methodology used to identify RHNA targets by requiring each regional government organization to follow HCD direction and obtain HCD approval for its methodology to allocate RHNA across local jurisdictions.
5. Housing Element Rezoning CEQA Exemption: SB 131 exempts from CEQA local rezoning actions that implement Housing Element commitments.
6. Coastal Commission Reforms: After the adoption of a Local Coastal Program, residential projects located in a sensitive coastal area and those that are approved by a coastal county are no longer subject to appeals to the California Coastal Commission.
7. Accessory Dwelling Unit (ADU) Amendments: AB 130 eliminates special protections for "grandfathered" local ADU ordinances and provides new protections against homeowners association (HOA)-imposed fees for ADUs in common interest developments.
8. Other: There are even more amendments to other housing laws, including tweaks to expand eligibility under the Affordable Housing on Faith and Higher Education Lands Act (also known as Yes in God's Backyard (YIGBY) law), Starter Home Revitalization Act (allowing 10 unit-lot subdivisions) and for "environmental leadership development projects."

Key Provisions

Building Code Freeze

Prior to the enactment of AB 130, California law granted cities and counties broad authority to deviate from residential building standards codified in the California Building Standards Code and Title 14 of the California Code of Regulations on a jurisdiction-by-jurisdiction basis. Specifically, local jurisdictions were permitted to adopt modifications to applicable residential building standards upon making express findings that such deviations were "reasonably necessary because of local climatic, geological, or topographical conditions." Though this statutory framework allowed for some measure of local adaptability, it resulted in regulatory uncertainty, elevated development costs and avoidable delays in project delivery.

AB 130 adopted amendments that significantly curtail the authority of local governments to unilaterally amend residential building standards on the basis of localized physical conditions. Cities and counties are now prohibited from modifying applicable building standards for residential projects within their jurisdictions between Oct. 1, 2025, and June 1, 2031. Pursuant to this reform, local jurisdictions may implement modifications to the state building standards for residential projects only if one or more narrowly defined statutory conditions are met. Broadly, these conditions will allow the local government to modify the locally applicable building code only if the modifications either

1. relate to "home hardening" (wildfire mitigation) efforts
2. are offered as emergency standards to protect health and safety
3. are similar to a modification that was filed before the building code freeze took effect
4. are necessary to implement a local code amendment that

• aligns with a general plan approved on or before June 10, 2025
• permits mixed-fuel residential construction
• incentivizes all-electric construction

1. otherwise modify various administrative practices

For the vast majority of residential projects, only those building standards in effect as of Sept. 30, 2025, will govern project design and construction, thereby insulating projects from subsequent local amendments.

Additionally, a separate provision of AB 130 prohibits state agencies from adopting any novel building standard proposed from Oct. 1, 2025, to June 1, 2031, unless that agency can satisfy one of eight specific conditions. Thus, taken together, AB 130 represents a statewide freeze on building standards updates for nearly six years. More specifically, the 2025 version of the Building Code will go into effect, but future updates will be limited as described herein.

This statutory limitation is expected to provide enhanced regulatory certainty for project proponents. By restricting the ability of cities and counties to impose new or increasingly stringent "reach codes" that exceed established statewide standards, AB 130 curtails the proliferation of inconsistent and onerous local requirements. In doing so, it is anticipated to streamline the permitting process, reduce compliance costs and expedite the timeline for bringing proposed developments into conformance with applicable building codes. Notably, though most of the new housing laws focus on expediting the entitlement and permitting process, these provisions provide much-needed and welcome relief from additional building costs.

SB 330 Reforms Made Permanent

The Housing Crisis Act of 2019, commonly known and referred to as SB 330, created new protections and procedural safeguards for housing development projects. Most notably, upon the submittal of an SB 330 "preliminary application," a housing development project will vest to the applicable "ordinances, policies, and standards" in effect at that time. SB 330 also provides a limited set of circumstances in which a housing development project will lose vested rights after submitting an SB 330 preliminary application. Additionally, the submittal of an SB 330 preliminary application triggers deadlines subject to the PSA that are intended to facilitate timely review of a housing development project's formal application. These provisions were set to sunset on Jan. 1, 2030, but AB 130 repealed this sunset date, making SB 330 a permanent tool for housing development applicants.

In a similar vein, the California Legislature extended other SB 330 reforms such as restricting local governments' ability to adopt and enforce growth control initiatives (including similar local housing caps); restricting the timing of historic site determinations; limiting the number of public hearings applicable to housing projects; and setting "replacement housing" obligations for housing development projects that would involve the demolition of certain protected residential units. These provisions were set to sunset on Jan. 1, 2030, and Jan. 1, 2034, but AB 130 made these reforms permanent. The permanence of these provisions signals that the housing crisis is enduring.

Ministerial Projects Now Subject to PSA and "Shot Clock"

The PSA requires, among other things, that local agencies review development applications for "completeness" within 30 days of receipt. If a local agency determines the application is incomplete, applicants have 90 days to resubmit the application, after having cured all deficient or missing items, in order to preserve vested rights under SB 330 (as noted above). If a local agency does not issue an incompleteness determination within 30 days of receipt of a development application, a project will be determined to be complete as a matter of law. The PSA (as amended by SB 330) also requires local agencies to compile and publish "application checklists" that specify in detail the information required from applicants to obtain a complete application.

Traditionally, the PSA applied only to projects seeking discretionary adjudicative approvals (e.g., conditional use permits and site plan review). AB 130 clarifies that, for purposes of triggering the PSA's additional procedural requirements, the definition of "development project" includes a housing development project that requires an entitlement from a local agency irrespective of whether the entitlement is discretionary or ministerial. This important amendment means that under the PSA, by-right housing projects (i.e., those principally permitted by local ordinance) and those that require only ministerial approval (e.g., SB 35, AB 2011, SB 4, ADUs/SB 9 projects) are subject to the same procedural safeguards and time limits as projects that require discretionary review.

Additionally, AB 130 includes an important permitting reform by enacting an enforceable "shot clock" applicable to ministerial housing development projects – the local agency must approve or disapprove the project within 60 days of receipt of a complete application for a ministerial housing development project. Under the PSA, an application is "deemed complete" once all the required information is submitted. Therefore, once the agency receives the complete application, the clock begins to run on the agency's consideration of the project. Failure to meet this deadline is now a defined, actionable Housing Accountability Act violation. This amendment is particularly significant for ministerial projects that were not already subject to an approval or disapproval deadline under another statute (e.g., SB 35) and were heretofore adrift without any such deadlines.

RHNA Methodology Enforcement by HCD

On a regular basis, local governments are required to update their plans to accommodate more housing development (known as the local "Housing Element" of the general plan) to accommodate a certain number of new housing units. This update is referred to as the Regional Housing Needs Allocation, or RHNA. The process to determine each jurisdiction's RHNA is complex and requires consultation and planning across local jurisdictions, regional government organizations (i.e., the Southern California Association of Governments (SCAG) and Association of Bay Area Governments (ABAG)) and HCD.

AB 130 gives HCD greater control over this process by requiring each regional government organization to follow HCD direction and obtain HCD approval for its methodology to allocate RHNA across local jurisdictions. As RHNA targets are expected to received increased attention in future cycles, HCD will be at the center of the methodology melee.

Housing Element Rezoning CEQA Exemption

In each Housing Element cycle, local governments must identify a sufficient quantity of adequate sites in their jurisdiction to accommodate their RHNA obligation for that cycle. In many cases, jurisdictions identify sites for housing that will need to be "upzoned," including to allow residential use where such uses were not previously permitted and increase residential density at less-dense residential sites. Housing Element Law provides a three-year default deadline from the date of Housing Element certification for local governments to accomplish such rezonings. In the current and previous Housing Element cycles, jurisdictions relied on a wide variety of CEQA documents. In many cases, jurisdictions prepared Environmental Impact Reports (EIRs), which are time-consuming, costly and vulnerable to litigation. In doing so, jurisdictions risked failing to complete the timely and effective rezoning that is necessary for housing approvals and construction.

SB 131 addresses this uncertainty by specifically exempting rezoning to implement Housing Element commitments from CEQA. Note, however, that this exemption does not apply to rezoning sites designated as "natural and protected lands," which may include sites with toxic or hazardous waste issues, sites within floodways or nearby wetlands, environmentally sensitive areas within the coastal zone or sites in very high fire severity zones. Also note that many project applicants have relied on, or "tiered" from, Housing Element EIRs to date – an option that may become less available with the use of this Housing Element rezoning exemption.

Coastal Commission Reforms

AB 130 imposes new restrictions on the California Coastal Commission's authority to hear and decide appeals of local government actions taken pursuant to a certified Local Coastal Program. As background, there is a finite list of instances in which projects located in areas subject to a certified local coastal program can be appealed to the Coastal Commission. Two such instances have been removed as grounds for an appeal of residential development projects: projects located in a sensitive coastal area and those that are approved by a coastal county are no longer subject to appeals to the California Coastal Commission. Such projects must be "exclusively residential," rather than the broader definition of residential projects that grants protections to mixed-use projects. Additionally, the Coastal Commission is now also subject to PSA deadlines for ministerial projects, as described above.

ADU Amendments

AB 130 also establishes two important changes for ADU projects. First, AB 130 eliminates a provision of State ADU Law that allowed local jurisdictions that adopted a local ADU ordinance prior to Jan. 1, 2018, to impose development standards on "state-exempt" ADUs. Government Code Section 66323 creates four classes of state-exempt ADUs (e.g., an 800-square-foot detached ADU on a single-family lot that adheres to four-foot rear- and side-yard setbacks). Recent amendments to State ADU Law clarified that local agencies cannot impose objective development or design standards on state-exempt ADUs, unless the local agency had a "grandfathered" ADU ordinance adopted prior to Jan. 1, 2018. AB 130 eliminated that provision, thereby creating an even playing field for state-exempt ADUs regardless of the jurisdiction.

Second, AB 130 now prohibits HOAs from imposing any fees or other financial requirements on ADU projects in common interest development communities. Previously, the California Civil Code allowed HOAs to impose "reasonable restrictions" on ADU projects. The statutory definition of "reasonable restriction" is one that does not unreasonably increase the cost to construct, effectively prohibit or extinguish the ability to otherwise construct a state-compliant ADU. Upon enactment of AB 130, the law now clarifies that the defined term "reasonable restrictions" does not include any fees or other financial requirements imposed by an HOA in connection with its review and approval of an ADU project.

Other Amendments

There are still other amendments not covered in detail here, including:

• amendments to broaden eligibility under the Affordable Housing on Faith and Higher Education Lands Act of 2023, also known as the YIGBY law
• amendments to the Starter Home Revitalization Act, sometimes referred to by the original enacting bill, SB 1123, allowing for ministerial approvals of 10-unit/lot subdivisions; the amendments now allow a subdivision to designate a remainder parcel to retain existing land or structures
• amendments that remove the upper limit on the monetary investment that qualifies a project as an "environmental leadership development project" and expand eligibility to projects consistent with the most recent scoping plan (rather than requiring a net-zero greenhouse gas emissions standard); such projects qualify for expedited judicial review

Conclusion

California's legislators delivered a summer blockbuster in the form of groundbreaking land use reforms. These reforms have both broken the housing law molds with fresh ideas – such as the building code update freeze and "shot clocks" requiring approvals or disapprovals in a finite time period – and continued to tweak existing laws to broaden their eligibility.

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