It was a big, bold year in housing policy changes. Here's what that means for SoCal

Housing policy in California had a big year.

Between the state lawmakers passing pivotal legislation that affects how much housing can be built and where and shifting construction rules prompted by the Palisades and Eaton fires, 2025 policy changes will have lasting effects on how new housing is built in Southern California.

As we head toward closing out the year, here are the top housing updates of 2025.

1. California upzoned neighborhoods near major transit stops

What happened

The state Legislature and Gov. Gavin Newsom approved SB 79 in October. It requires a handful of major counties, including L.A. County, to allow buildings of up to nine stories tall in areas near major transit stops.

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This change overrides local zoning laws in those areas. It was one of the most significant legislative milestones yet for supporters of upzoning and faced major hurdles before it was signed into law. In L.A., a slim majority of the City Council formally voted to oppose it and Mayor Karen Bass asked Newsom to veto it.

Why is this a big deal?

Creating enough housing to address California’s shortage requires being legally allowed to build in areas with demand. That’s where zoning laws come in.

Advocates for more housing density have argued that neighborhoods near transit stops should be first in line to upzone, because not only would that approach create new housing, it also would deliver new potential riders to struggling public transit agencies.

Cities like L.A. have offered developers incentives to build more in some areas if they provide affordable units. But SB 79 requires this upzoning to happen, despite whatever local zoning laws might be in place — even in neighborhoods currently zoned only for single family homes. That's caused backlash from local governments and homeowners in many of these neighborhoods. 

Does this affect my neighborhood?

Possibly, if you’re within a half-mile of a major transit stop.

If you’re in the city of L.A., you can check out this draft preliminary map to see areas that could be upzoned under SB 79.

2. Expect fewer lawsuits against new housing projects

What happened

California’s state Legislature passed new laws that significantly roll back the California Environmental Quality Act, known as CEQA. CEQA requires expensive environmental reports for many new housing projects and allows almost anybody to sue to block developments on environmental grounds.

CEQA still is in place, but it no longer will apply to most new apartment buildings built in and around existing development.

Why is this a big deal?

A CEQA lawsuit can add many years and hundreds of thousands of dollars to a housing project.

For years, critics argued that CEQA was used more often as a political weapon and a tool to block housing — including affordable housing projects — rather than a way to raise legitimate environmental concerns.

One study found that in 2020, CEQA lawsuits targeted nearly 48,000 new housing units — about half of all new units produced in a year in California on average. This rollback means that large new apartment buildings can more easily move through the pipeline to be approved.

3. Housing development policies are shifting in fire-affected areas

Construction workers begin to rebuild a business destroyed by the Palisades Fire on May 7, 2025.

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Justin Sullivan

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Getty Images

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What happened

The communities of Altadena and the Pacific Palisades are rebuilding after massive wildfires razed both areas in January. This is where many thorny questions about how to build new housing are colliding on an expedited timeline.

Here’s what’s happened so far:

• More homes are required to use fire-resistant materials. The California state Legislature expanded the areas where new homes are required to be built with wildfire-resistant materials. This doesn’t change much for the Pacific Palisades, which largely already has those requirements. In Altadena, where the Eaton Fire burned, about 1,500 homes will have to be rebuilt under a stricter code. It’s worth noting that another 7,800 homes in Altadena that burned still fall outside these zones.
  
• Duplexes are banned in burn areas: After the fires, Newsom allowed local leaders to suspend SB 9 in high fire-risk zones. The state law is meant to add more housing density by allowing homeowners to split their lots and build duplexes on land zoned for single-family homes. Mayor Bass, along with officials in Malibu, Pasadena and L.A. County, approved the suspensions, which means duplexes won't be approved in these jurisdictions.
  
• Density is restricted in Altadena’s foothills. Before the fires broke out, the L.A. County Board of Supervisors approved a new zoning plan for Altadena that restricted new construction in the foothills and increased density in the area’s interior, so that’s the plan residents will have to follow while rebuilding.
  
• Who’s buying up the land? A recent analysis showed that more than half of Altadena properties up for sale through September were sold to corporate developers, which will impact how the area gets rebuilt. Other groups are trying to find ways to support affordable housing — for example, a foundation led by Altadena residents awarded a nearly $6 million grant to build 14 affordable units and told LAist it hopes to spur other funders to get involved too.

All of these issues are a big deal, even though the fundamental issues around housing in L.A. — like lack of funding for affordable housing or the cost of building anything new — remain largely the same.

If you're curious about some of the biggest issues we're tackling about how to build new housing in L.A., sign up here for Building Your Block, LAist's seven-issue newsletter starter pack on housing development.

LAist's David Wagner contributed to this story.