A new California housing bill could significantly change how seven of the state’s largest cities develop around major transit hubs, potentially opening the door to taller residential buildings and greater urban density.
Assembly Bill 2074 (AB 2074) has been approved by the California Legislature and was presented to Governor Gavin Newsom on September 10. If signed, the legislation would require seven major California cities to establish regional transit hub districts where substantially taller residential development would be permitted.
The cities covered by the measure are Long Beach, Los Angeles, Oakland, Sacramento, San Diego, San Francisco and San Jose.
A New Approach to Transit-Oriented Development
AB 2074 is designed to connect housing growth more closely with public transportation. Under the proposed framework, qualifying cities would have to designate at least one regional transit hub district by July 1, 2027.
Within these districts, downtown housing developments would receive streamlined approval if they meet the bill’s requirements. The legislation would also establish minimum development potential for building heights.
According to Planetizen, qualifying districts would have to allow residential buildings with height limits of at least 150 feet, while at least 25% of a city’s regional transit hub districts would have to permit residential buildings reaching 450 feet.
That could make a substantial difference in cities where zoning restrictions currently limit the scale of development around transit infrastructure.
Read the Planetizen report on AB 2074
Which California Cities Would Be Affected?
The legislation targets cities that have both significant populations and established transit infrastructure.
The seven cities identified in reporting on the bill are:
- Long Beach
- Los Angeles
- Oakland
- Sacramento
- San Diego
- San Francisco
- San Jose
The measure is part of California’s broader effort to increase housing production and encourage development in locations already served by public transportation. Multifamily Dive reports that the legislation is connected to the state’s broader goal of facilitating 2.5 million new homes by 2030.
Read the Multifamily Dive report on the seven-city housing bill
Why Transit Hubs Matter
The basic idea behind transit-oriented development is straightforward: put more homes near places where people can access trains, buses and other forms of public transportation.
California has already moved in this direction through Senate Bill 79 (SB 79), which took effect on July 1, 2026. SB 79 establishes statewide rules allowing qualifying transit-oriented housing developments near specified transit stops in urban transit counties.
AB 2074 would add another layer by focusing specifically on major regional transit hubs and downtown housing development.
The result could be a shift toward more vertical development in some of California’s most important urban centers.
The 450-Foot Question
The most striking element of the proposal is the requirement that at least a quarter of regional transit hub districts in each affected city allow residential buildings with maximum heights of at least 450 feet.
A 450-foot building is roughly comparable to a 40-plus-story tower, depending on floor-to-floor heights and building design.
For cities such as San Francisco, Los Angeles and San Jose, where land values and housing demand are high, the policy could create new opportunities for high-density residential development close to transit.
However, zoning capacity does not automatically translate into completed buildings. Construction costs, financing conditions, land prices, permitting, labor requirements and market demand will all influence whether the additional development potential becomes actual housing.
What Happens Next?
The immediate question is whether Governor Gavin Newsom will sign AB 2074.
If enacted, the bill would require affected cities to establish their regional transit hub districts by July 1, 2027. It would also trigger a study by the California Housing Finance Agency examining housing construction loans and financing, with the study due to the Legislature in 2028.
For California’s major cities, the legislation could therefore become another important step in the state’s continuing effort to increase housing supply while directing growth toward existing transportation infrastructure.
For urban planners, developers and residents, the larger question is not simply how tall California’s next generation of buildings can be, but how effectively higher density can be integrated with transit, housing affordability and the existing urban fabric.
