In California, YIMBYs Pass Holy Grail Zoning Reform

Plus: San Francisco preliminarily passes citywide upzoning, a New Jersey town backs off family farm seizure, and YIMBY martial law ruled illegal in Hawaii.

Happy Tuesday, and welcome to another issue of Rent Free.

This week's newsletter takes a long look at two stories out of California—the Legislature's passage of a major transit-oriented development bill, S.B. 79, and San Francisco's preliminary approval of a citywide rezoning plan that allows for tens of thousands more homes.

The two are significant by themselves. They also represent two different approaches California's "yes in my backyard" (YIMBY) reformers have deployed to address the state's exorbitant housing costs.

S.B. 79 is an example of direct state zoning preemption—whereby Sacramento identifies a type of housing it thinks the state needs more of (in this case, apartment buildings near transit stops) and tells localities they have to approve it.

San Francisco's family rezoning plan is the result of a more indirect approach; the state handed the city a housing production target and told it to figure out what zoning laws and other regulations would have to change to meet that target.

There's an intra-YIMBY debate about whether state production targets or direct zoning preemption is the better way to boost housing production. It's a debate that's going national as more states experiment with growth targets and state-level zoning preemption.

S.B. 79 and the Family Zoning Plan both advancing this week shows that the two approaches are not mutually exclusive. It's a sign of how much politics around housing has changed in recent years that broad upzonings can pass simultaneously in the state Legislature and in one of the most anti-growth major cities.

Nevertheless, various compromises and carve-outs built into the two policies mean that neither will be a panacea. At the state and local levels, special interest groups and anti-growth forces are still able to extract significant concessions that will blunt the impact of both policies.

The law continues to move into a more liberalized direction, but total YIMBY victory remains elusive.

Additionally, we have follow-up stories on Cranbury, New Jersey, potentially backing off its plan to take a family farm for affordable housing, and a court in Hawaii ruling Democratic Gov. Josh Green's declaration of "YIMBY martial law" illegal.

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California Legislature Passes Landmark Transit-Oriented Development Bill

On the last day of the session, the California Legislature passed S.B. 79, which broadly allows apartment buildings near transit stops across the state.

The bill uses a two-tiered system of upzonings to allow residential projects of up to nine stories by-right within a quarter-mile of heavy rail and high-frequency commuter rail stations, and smaller midrise projects further away or near less heavily serviced rail and bus stops.

Provided Democratic Gov. Gavin Newsom signs S.B. 79 (which he is expected to) and when paired with other streamlining reforms also passed this session, builders in California can now build apartments near major transit stops regardless of local zoning and without having to prepare extensive, largely redundant environmental studies.

Passing a transit-oriented development bill has been a lodestar of the state's YIMBY reformers for nearly a decade now. Similar bills proposed by S.B. 79 author state Sen. Scott Wiener (D–San Francisco) in 2018, 2019, and 2020 all failed in the Legislature.

Each time, opposition from cities anxious about losing local control, as well as labor groups and affordable housing advocates who use the discretionary approval processes that S.B. 79 overrides to obtain concessions from developers, was enough to kill those past bills.

Local control partisans continued to oppose S.B. 79 this year. But they were outnumbered by lawmakers from both parties who argued that state preemption of local zoning was necessary to tackle the state's housing cost crisis.

"Local government control does not necessarily mean small government. Local governments are often some of the strongest governments that take away your God-given rights on a regular basis," said Assemblymember Joe Patterson (R–Rocklin) during the floor debate on S.B. 79.

"Building more homes in our most sustainable locations is the key to tackling the affordability crisis and locking in California's success for many years to come," said Wiener in a statement after S.B. 79's passage.

The vote on S.B. 79 was bipartisan and necessarily so. The bill would not have passed but for support from GOP lawmakers in both chambers of the Legislature.

Labor and affordable housing groups who'd opposed past transit-oriented development bills acquiesced to S.B. 79 in exchange for a long list of amendments.

Labor provisions were added to the bill late in the process that will require any S.B. 79 project that's over 85 feet tall or built on public transit agency land to hire "skilled and trained" labor—effectively a mandate to use unionized construction workers.

Affordability mandates and "anti-displacement" provisions were also folded into the law. Between 7 percent and 13 percent of new units created by S.B. 79 projects will have to be income-restricted housing. These projects cannot replace rent-controlled housing or be built on sites that have had multifamily housing on them in the last seven years.

Cities retain the power to enforce additional affordability mandates and anti-displacement controls on S.B. 79 projects.

The bill would also relieve cities of the need to abide by S.B. 79's specific zoning standards if they pass an alternative transit-oriented development plan that allows for the same overall increased density.

Developers say that the labor provisions of S.B. 79 will likely have a minimal impact.

"When you're dealing with 85 feet, you're essentially a high-rise and you generally need and want skilled and trained employees to build that. I don't think it's as big a push as people say," says Leo Pustilnikov, a Los Angeles–area builder.

The affordability standards will likely have a more negative effect on housing production, as developers usually lose money on income-restricted units. The anti-displacement standards will also prevent the law from being used on a lot of sites.

Los Angeles–area developer Joe Cohen has produced an interesting rough map of where S.B. 79 will apply in the Los Angeles area, given these many carve-outs.

Where will SB 79 apply in LA County?

There are a lot of imperfect maps going around that give a good idea, but only tell part of the story.

Today, I set out to create the most-accurate map possible, based on my knowledge of the final draft of the bill pic.twitter.com/GdUM0K9qPW

— Joe Cohen (@CohenSite) September 15, 2025

In short, that makes S.B. 79 a powerful, sweeping upzoning bill that also includes a lot of asterisks that could blunt its effect. Time will tell just how significant those asterisks will be.

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San Francisco Advances Rezoning, Potentially Forestalling State Takeover

After years of legal pressure from the state to permit more housing or lose the power to set its own land-use regulations, San Francisco has given preliminary approval to a rezoning plan that allows more residential construction across large swaths of the city.

In a narrow 4–3 vote on Wednesday, San Francisco's Planning Commission approved Mayor Daniel Lurie's Family Zoning Plan, which purports to enable the construction of an additional 36,000 homes.

The plan, in summary, increases height and density limits to allow larger midrise buildings along commercial corridors and taller high-rises in the city's densest areas. It also creates a local opt-in "housing choice" program that would allow property owners to construct small apartment buildings in low-rise neighborhoods and on neighborhood commercial properties.

Having passed the Planning Commission, the Family Zoning Plan now goes to the Board of Supervisors. The board must pass it by January 31 to fulfill its obligation under state law to plan for the construction of an additional 82,000 housing units by 2031.

The city says that existing zoned capacity and "pipeline" projects that have already received some city approvals are sufficient to build the other 46,000 units not covered by the Family Zoning Plan.

All cities in California are required by state law to plan for enough housing to meet projected population and job growth. Through the Regional Housing Needs Assessment (RHNA) process, the state delivers housing production goals to regional governing bodies, which then divvy them up among local jurisdictions.

Jurisdictions are then required to produce housing elements showing how they'll change their regulations to allow for additional housing. They must also pass rezoning ordinances to ensure that they have enough "zoned capacity" to meet their housing production targets.

If the state deems a city out of "substantial compliance" with the RHNA—say by not producing an adequate housing element or not following through on the necessary rezonings—a whole host of remedies can be applied to produce new housing anyway.

Those remedies can include the "builder's remedy" whereby developers are allowed to build projects of unlimited density in out-of-compliance cities, provided they include a requisite number of affordable units.

Out-of-compliance cities can also become ineligible for state grants. In the extreme, they can lose the ability to issue new building permits that don't add new housing or even surrender their ability to set zoning regulations to the state.

While a seemingly powerful system for promoting housing construction on paper, the state requirement that cities plan for more housing has been a toothless paperwork exercise since it was first created in the late 1960s.

A slew of recent YIMBY legislation and more proactive state enforcement have tried to make the process actually work by requiring cities to produce more meaningful housing production plans, and making it easier to declare them out of compliance when they don't.

New laws have also made it harder for cities to block builder's remedy projects they are required to approve.

Through a long string of audits and enforcement letters, state officials have repeatedly warned San Francisco that if it does not make good faith efforts to rezone the city and eliminate other regulatory constraints on housing development, the city would risk the loss of local control over its land-use policies.

That's set off a contentious local political dynamic. Pro-growth elected officials have put forward ordinances and plans to meet these state requirements. Anti-growth elected officials repeatedly tried to block or water down those reforms, implicitly preferring to test the state's enforcement powers in court.

Steven Bacio, the director of local advocacy group GrowSF, says that the preliminary approval of the Family Zoning Plan is evidence that state pressure is proving effective at convincing even anti-growth supervisors that the risk of losing local control is real.

"The threat from the state is not something we can ignore. I certainly know in private conversations that supervisors admit they only have one choice, which is to pass the plan, because if they don't, the state will take over," he tells Reason.

Additionally, Bacio says that Lurie's own popularity—polling shows his approval ratings above 70 percent—has helped to bring around support for his rezoning initiative.

"The popularity of the plan is certainly buoyed by his own popularity," he says.

Christopher Elmendorf, a law professor at the University of California, Davis, and housing law expert, cautions that San Francisco's zoning plan does play some games to avoid building too much housing.

The city makes very optimistic assumptions about how likely rezoned parcels will end up being redeveloped into more housing, he says.

Its local opt-in housing choice program will also require developers to agree not to use the state density bonus law and the more generous regulatory waivers it provides when building housing in lower-density zones.

Bacio also argues that the Family Zoning Plan envisions the city meeting its housing goals primarily through the construction of midrise apartments. If larger economic factors make those types of projects less feasible, the rezoning could again underperform.

Even with all these caveats, Elmendorf says the fact that the city is passing anything at all is evidence that a newly muscular RHNA process and state political will to enforce it is working on some level.

San Francisco also has to abide by a so-called circuit breaker provision in its housing element, whereby if it's not on track to meet its housing goals in the next two years, it'll have to do even more upzoning.

The aforementioned reforms that have passed in the state Legislature this session add additional zoned capacity and permitting streamlining to San Francisco beyond what's in the city's own Family Zoning Plan.

Whether the Family Zoning Plan is a workable, good-faith effort to fulfill the requirements of the RHNA is still "to be determined," Elmendorf says.

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Town Says It Might Not Seize Family Farm for Affordable Housing After All

Back in June, Reason reported on the case of Andy Henry, whose 175-year-old family farm property was under threat of being seized by the town of Cranbury, New Jersey, for a 130-unit affordable housing development.

In the face of wide-ranging opposition from town residents, affordable housing advocates, and even the Trump administration, town officials have conditionally said they might be willing to drop their plans to eminent domain the property. Maybe.

This past Thursday, nj.com reported on a letter from Cranbury Mayor Lisa Knierim to town residents in which the mayor said that the town had identified an alternative site to Henry's farm on which the 130 units could go.

Henry told Reason on Friday he's "much more optimistic than in the past" that the town will drop the effort to seize his farm, which his family first acquired in 1850.

It's still uncertain whether the town will definitely drop its eminent domain plans.

Under New Jersey's fair share housing law, Cranbury is required to build an additional 256 units of affordable housing in the town. The town has argued that seizing Henry's farm, a sprawling property surrounded by warehouse developments, was necessary to meet this goal.

While Knierim's letter says the town has identified an alternative site for the 130 units it had planned to put on Henry's farm, she also said the site will only be a viable alternative if the state agrees to waive a regulation prohibiting housing development within 250 feet of a warehouse property.

Tim Duggan, Henry's attorney, says the implication is that if the state is not forthcoming with that waiver, Henry's farm would still be in danger of being seized.

He notes that Cranbury's ordinance authorizing the seizure of Henry's farm, as well as its state-required housing plan identifying the farm as an affordable housing site, remain on the books.

Henry has filed lawsuits challenging both the eminent domain ordinance and the town's affordable housing plan.

Affordable housing groups have also filed lawsuits challenging the town's housing plan for planning to place affordable housing on Henry's property. They argue the farm, located in a warehouse district far away from jobs, amenities, and public services, is ill-suited for affordable housing.

The farm is "a two-mile walk to the bus. So people that are out there are not going to have an ability to get access to transportation. They're not going have an ability to get to the community," Adam Gordon of the Fair Share Housing Coalition, a New Jersey nonprofit that advocates against housing discrimination, told Reason in June.

Cranbury Housing Associates, a local nonprofit builder, said in its own challenge to Cranbury's housing plan that it had identified three superior sites for affordable housing whose owners would be willing to sell.

Town residents uniformly sided with Henry's effort to save his farm, circulating petitions in support of his property rights and backing town council hearings to oppose the plan. State legislators and even U.S. Secretary of Agriculture Brooke Rollins weighed in to oppose the seizure as well.

Henry himself noted the irony that by turning down multiple multimillion-dollar offers from warehouse developers to purchase the farm, he'd made himself an eminent domain target.

"It's the last house out here on this side of town," he tells Reason. "It's basically a part of us."

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Hawaiian Supreme Court Strikes Down YIMBY Martial Law

On Thursday, the Hawaiian Supreme Court struck down Green's use of his emergency powers to streamline housing development in the most annoying possible way.

Readers might recall that in July 2023, Green issued a sweeping emergency proclamation that allowed developers to route around whole swaths of state and local land-use regulations and get their projects approved by a special state working group established by the governor.

From the get-go, this was a radical invocation of emergency powers, which Green justified by citing the long list of negative physical and mental health effects caused by a lack of housing.

Since unaffordable housing negatively impacts public health, Green could use his powers to declare a public health emergency to suspend laws that prevent the construction of new affordable housing.

This argument had no shortage of critics, even among Hawaiian free market advocates who liked the deregulatory substance of Green's order. Shortly after the proclamation, a collection of environmental and Hawaiian cultural groups sued to block it.

Incredibly, the Hawaiian Supreme Court said in its Thursday opinion that Green had presented enough of a factual basis about the negative impact of unaffordable housing on public health to justify his emergency proclamation.

He nevertheless erred, the court said, by waiving regulations for all types of housing development, and not just affordable housing. While his emergency was sound, the particular regulations he was waiving were not "reasonably necessary" to overcome the emergency.

"More housing alone does not correlate to more affordable housing in the short term. Expediting development generally is not a targeted, urgent solution to the lack of affordable housing," reads the court's opinion.

Since Green walked back his order immediately, the court's ruling likely has little practical effect.

Still, the court's opinion displays a frustrating economic ignorance. The expansion of housing supply, any housing supply, will reduce housing costs generally. New units need not be price-controlled "affordable housing" in order to make housing affordable.

Countless studies and basic economic theory support this notion. The logic nevertheless eludes the Hawaiian Supreme Court.

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Quick Links

• This past Tuesday, the New York Board of Elections rejected a request from the New York City Council to remove from the November city ballot three proposed amendments to the city's charter that would limit the council's ability to veto new housing. Read Reason's coverage of the controversy here.
• I missed it when it first came out, but Anya Martin had a very interesting piece in Works in Progress in June about Japan's land readjustment process and how it was successfully used to develop infrastructure after the war without having to resort to large-scale expropriation.
• A district court has blocked the Trump administration's effort to strip homelessness funds going to jurisdictions that have sanctuary policies, after two nonprofit groups sued over the loss of grant funding.
• When home-based business regulations come for the local swingers club:

You can have as many orgies as you want in your home. But if you start charging for the orgies in a residential neighborhood, then it's a zoning violation, as this Vegas sex club is learning. pic.twitter.com/FYpPAN34Vn

— Christian Britschgi (@christianbrits) September 11, 2025

• The Pew Charitable Trusts has a comprehensive rundown of state-level housing supply bills passed this year.