California Construction News staff writer
Gov. Gavin Newsom has signed into law a sweeping package of housing and infrastructure reforms aimed at accelerating construction, reducing costs and increasing accountability across California.
The measures are included in Assembly Bill 130 and Senate Bill 131, two budget trailer bills tied to the 2025–26 state budget. The legislation marks what Newsom’s administration called the most significant overhaul of California’s housing and environmental review laws in decades.
“This isn’t just a budget. This is a budget that builds,” Newsom said in a statement. “It proves what’s possible when we govern with urgency, with clarity, and with a belief in abundance over scarcity.”
The reforms are part of the governor’s “Abundance Agenda,” a broader initiative focused on building more housing and infrastructure to address California’s affordability crisis.
The legislation includes changes to the California Environmental Quality Act (CEQA) that aim to streamline reviews for housing and infrastructure projects, including infill developments, high-speed rail, wildfire prevention and farmworker housing. The law also exempts local rezoning efforts tied to approved housing plans from CEQA review.
“The Carpenters want to thank Governor Newsom and those legislators that are keeping the housing crisis at the very top of the California legislative agenda,”said Douglas J. McCarron, President, United Brotherhood of Carpenters. “By streamlining housing construction, this budget will provide the legal foundation to get more homes built, bring housing costs down and add stronger enforcement of wage laws for thousands of construction workers on the job.”
Other provisions include:
- Expansion of the Permit Streamlining Act to speed up housing approvals;
- Limits on certain Coastal Commission appeals and changes to Coastal permitting rules;
- A freeze on new residential building standards through 2031, except for emergency and safety updates;
- A new CEQA VMT (vehicle miles traveled) Mitigation Bank to help developers meet mitigation requirements by funding location-efficient affordable housing and infrastructure;
- Increased oversight of homeless shelters, with cities and counties required to conduct annual inspections;
- Stronger enforcement mechanisms allowing civil actions by individuals and the state against noncompliant jurisdictions;
- An expansion of the Renters Tax Credit, more than doubling the benefit to $500 for qualifying filers, pending future appropriations.
Supporters said the reforms will remove long-standing obstacles to housing development and encourage new investment.
“We applaud the governor and the legislature for this breakthrough reform package to streamline housing production,” said Matthew O. Franklin, president and CEO of MidPen Housing. “We know that increasing housing supply is key to solving our affordability crisis.”
Newsom’s administration said the legislation reflects a commitment to more responsive, results-driven governance and will help meet the housing needs of future generations.
