There is another shift happening in California real estate, and this one is not about taxes or financing. It’s about where housing can be built, how dense it can be, and who ultimately gets to decide. We previously wrote about it a few months back
At the center of it is Senate Bill 79, a new law that is opening the door for more housing near major transit areas across the state. Starting this summer, developers will have the ability to build midrise properties, in some cases up to nine stories, near train lines, subway stops, and key bus routes.
On paper the goal is clear: Increase housing supply in areas where people already have access to transportation, make better use of existing infrastructure, and create more opportunities in high demand markets.
But as with most things in California real estate, the reality is not that simple.
The law gives cities flexibility in how they respond. And right now, cities across California are doing exactly that.
Some are moving forward and working to align with the intent of the law. Others are creating their own versions to better fit local priorities. And some are taking a step back, using every available option to slow things down while they figure out their next move.
Cities like Los Angeles have already started adjusting their zoning strategies to buy time. By making smaller changes now, they are positioning themselves to delay larger changes until later in the decade.
In Northern California, places like San Francisco are exploring ways to roll out their own approach more quickly, building on recent planning efforts and trying to stay ahead of the deadline rather than push it out.
Other cities are still trying to understand how the law even applies to them, especially when it comes to future transit routes, zoning definitions, and planning requirements.
What you are seeing is not one unified response, but patchwork.
And that patchwork matters, because where housing can be built directly impacts property values, development opportunities, investment strategies, and ultimately how transactions come together.
For borrowers, this may show up as changing property values or new development opportunities in areas that were previously restricted.
For mortgage brokers and real estate agents, it can mean shifts in inventory, pricing, and how quickly certain areas become competitive.
For investors and developers, it changes the equation entirely. Density, feasibility, and timing all start to look different depending on how each city chooses to respond.
Even within the same region, the approach can vary. One city may move forward quickly, while another delays and reevaluates. That creates uneven opportunities across the market.
At the same time, there is another layer to this.
Not every city has the resources to create a customized plan. Some will simply follow the state guidelines as they are written, either by choice or by necessity. Others may try to resist or delay, but history has shown that those efforts tend to be short lived.
The bigger picture is this: Change is coming, whether it is immediate or gradual.
The real question is not if things will shift, but how quickly and where those shifts will happen first.
And just like the last wave of policy changes, the impact will not stay contained to planning departments or city councils. It will move into transactions, timelines, and the way deals are structured across the state.
The Pacific Direct Mortgage Bottom Line
As California continues to change how and where housing is built, the ripple effects will show up in real world scenarios, from property values and development opportunities to how quickly transactions need to move.
At Pacific Direct Mortgage we focus on helping you navigate those moments where timing, structure, or traditional financing no longer align with what is happening in the market. Our direct Private Money loans can be very beneficial to solving problems fast.
Whether you are working on a purchase, refinance, bridge loan, or a more complex scenario tied to changing conditions, we look at the full picture and work toward solutions that keep things moving.
If you are working through a refinance or property purchase that feels uncertain or is time sensitive, we are here to help and hopefully find you a path forward!
