California Just Made It Legal to Build Taller Apartments Near Transit Stops and It Could Add a Million New Homes
Housing shortages and rising rents have pushed cities across the U.S. to rethink zoning near bus and rail lines. In California, lawmakers on June 30, 2025 approved a major update to state transit-oriented housing rules that could allow significantly taller apartment buildings near transit stops.
California approved a major transit housing expansion
The California Legislature sent AB 130 and SB 131 to Gov. Gavin Newsom on June 30, 2025 as part of the state budget package, and the measures expanded the reach of an existing law known as AB 2097, according to legislative summaries and bill text released that day. The changes let multifamily housing in some transit-rich areas rise above prior local limits when projects meet state standards.
One of the biggest changes is height. In qualifying areas near rail stations and major bus corridors, residential projects can reach as high as 75 feet, or about 7 stories, under the new rules described in the budget legislation. Lawmakers and housing advocates said the update could unlock around 1 million homes statewide, a figure cited during Sacramento negotiations by pro-housing groups including California YIMBY.
The state action did not rezone every parcel in California overnight. What it did do was create a broader legal path for cities and developers to approve denser apartment buildings near transit, while limiting how much local rules can block those projects in covered areas.
What this means in Los Angeles, San Diego, and the Bay Area
The biggest effects are expected in places that already have extensive transit networks, including Los Angeles, San Diego, San Jose, Oakland, and San Francisco. Those regions have large numbers of parcels within walking distance of rail stations and high-frequency bus routes, according to California transit maps and local planning data used by housing researchers.
What is confirmed is the legal change at the state level. What is not yet known is exactly how many city blocks, neighborhoods, or individual lots will see new proposals first, because no statewide parcel-by-parcel rollout list has been released by the California Department of Housing and Community Development.
Local rules still matter in several areas. Projects must continue to meet building code, environmental review where required, and safety standards, and cities still control many design and permitting details. That means the law can widen what is legal near transit in California without guaranteeing that cranes, permits, or groundbreakings will appear immediately in every city.
Why California is doing this and what residents should expect
California has been trying for years to close a housing deficit that state officials have measured in the millions. Gov. Newsom’s administration has repeatedly set a goal of 2.5 million new homes by 2030, and state lawmakers have tied that push to high housing costs, long commutes, and low vacancy rates in major metro areas.
Supporters said taller housing near transit addresses two problems at once: limited home supply and transportation access. California YIMBY and other backers argued during the 2025 budget process that allowing more homes near trains and frequent buses can lower development barriers in places where demand is already concentrated.
For residents, the short-term change is mostly legal, not physical. In the coming months, planners, developers, and city officials will sort out how the June 30, 2025 law applies on specific sites, and some neighborhoods may see new apartment proposals that would not have penciled out under earlier height caps. State housing policy in California continues to move toward denser building near transit, according to the final budget package approved in Sacramento.
