CC 07-01-2025 Item No. 10. Assembly Bill (AB) 306_Desk Item1
CITY COUNCIL STAFF REPORT
DESK ITEM
Meeting: July 1, 2025
Agenda Item #10
Subject
Accept Ad-Hoc Legislative Review Committee (LRC) City Council Subcommittee
recommendation regarding Assembly Bill (AB) 306
Recommended Action
Accept the Ad-Hoc LRC City Council Subcommittee recommendation to oppose AB 306
and authorize the Mayor to send position letters to the state legislature
Background:
On June 24, provisions from AB 306 were added to AB 130, a budget trailer bill
containing a broad range of housing-related measures aimed at streamlining
development processes at the state level. On June 30, the legislature passed the bill and
Governor Newsom signed AB 130 into law the very same day. This bill became effective
immediately upon signing as part of the state budget. As a result, the legislative
subcommittee’s prior recommendation for Council to take an oppose position on AB 306
is no longer necessary, given that its key provisions have already been adopted through
AB 130.
A full analysis on AB 130 is included as Attachment C and the provisions related to AB
306 are below and found on page 10:
28) Prohibits a city or county from making changes or modifications to building
standards affecting residential units, including to green building standards, from October
1, 2025 until June 1, 2031, unless one of the following conditions is met:
a) The changes or modifications are substantially equivalent to changes or
modifications that were previously filed by the governing body of the city or
county and were in effect as of September 30, 2025;
b) The CBSC deems those changes or modifications necessary as emergency
standards to protect health and safety;
c) The changes or modifications relate to home hardening; or
2
d) The building standards relate to home hardening and are proposed for adoption
by a fire protection district pursuant to existing provisions governing the proposal
of new standards by fire protection districts.
e) The changes are necessary to implement a local code amendment that is adopted
to align with a general plan approved on or before June 10, 2025, and that permits
mixed-fuel residential construction consistent with federal law while also
incentivizing all-electric construction as part of an adopted greenhouse gas
emissions reduction strategy.
f) The changes or modifications are related to specified administrative practices.
Attachments Provided with Original Staff Report:
A. Subcommittee Report
B. AB 306 Opposition Letter
Attachments Provided with Desk Item:
C. AB 130 Senate Floor Analysis June 30, 2025
SENATE RULES COMMITTEE
Office of Senate Floor Analyses
(916) 651-1520 Fax: (916) 327-4478
AB 130
THIRD READING
Bill No: AB 130
Author: Committee on Budget
Amended: 6/27/25 in Senate
Vote: 21
ASSEMBLY FLOOR: 53-17, 3/20/25 - See last page for vote
SENATE BUDGET & FISCAL REVIEW COMMITTEE: 13-1, 6/30/25
AYES: Wiener, Allen, Cabaldon, Durazo, Grove, Laird, McNerney, Menjivar,
Pérez, Richardson, Smallwood-Cuevas, Wahab, Weber Pierson
NOES: Choi
NO VOTE RECORDED: Niello, Blakespear, Ochoa Bogh, Seyarto
SUBJECT: Housing
SOURCE: Author
DIGEST: This bill provides statutory changes to facilitate implementation of the
Budget Act of 2025 as it related to housing and homelessness.
ANALYSIS:
Amendments of June 27, 2025:
The amendments remove provisions in Section 60 of the bill that would have
established county-by-county wage floors for exempt housing development
projects, as specified.
Specifically, as amended, this bill:
1) Changes the Encampment Resolution Fund (ERF) expenditure deadline from
two fiscal years after appropriation of funds to two fiscal years after award of
funds.
AB 130
Page 2
2) Requires Homeless Housing, Assistance, and Prevention (HHAP) recipients to
report fiscal and system performance metrics on Rounds 1 & 2 of the program
in the same way as they are required to report this information for subsequent
HHAP rounds.
3) Consolidates the existing default reserve funds from specified affordable
housing funding programs at the Department of Housing and Community
Development into a single, continuously appropriated backstop against the loss
of affordable housing due to loan payment defaults. Requires notice to the Joint
Legislative Budget Committee whenever more than 25 percent of the fund is
spent in a single fiscal year.
4) Adds affordable housing projects funded by Proposition 1 of 2024, which
includes Homekey+, to the list of affordable housing that is not subject to
Article 34 of the California Constitution’s requirement that approval of
specified affordable housing projects be put up for public vote.
5) Allows affordable housing developers funded by the Department of Housing
and Community Development Department (HCD) to utilize equity in their
affordable housing projects to finance further investments in other affordable
housing projects, subject to specified limitations.
6) Subjects the California Coastal Commission’s review of housing project permit
applications to the shorter California Environmental Quality Act (CEQA)
timelines that apply to other lead agencies under the Permit Streamlining Act.
7) Establishes a statewide vehicle miles traveled (VMT) mitigation bank program
that:
a) Gives cities, counties, cities and counties, transit agencies, eligible tribal
applicants as specified, and project developers the option to meet vehicle
miles traveled mitigation obligations under the California Environmental
Quality Act (CEQA) by paying into HCD’s Transit-Oriented
Development (TOD) program fund to support VMT-efficient affordable
housing and related infrastructure projects, as specified.
b) Modifies the TOD program as specified so that it operates in conjunction
with this VMT mitigation program, as specified, including requiring at
least 20 percent affordability, requiring 55 year affordability covenants
AB 130
Page 3
on TOD funded housing projects, and establishing prioritization for
greater affordability, filling funding gaps, and project readiness.
c) Directs the Governor’s Office of Land Use and Climate Innovation (GO-
LCI) by July 1, 2026 and every three years thereafter, to create guidelines
for the program, as specified, including methodologies to ensure nexus
and proportionality between the development project seeking to mitigate
its VMT impact and the TOD project that will provide the VMT
mitigation.
d) Directs GO-LCI to evaluate the program after the program’s first year in
operation and, upon appropriation and with the agreement of the
University of California, to contract with the University of California to
evaluate other specified aspects of the VMT mitigation program.
8) Allows housing developments involving more than $100 million in investment
the option of utilizing the same streamlined CEQA process already open to
smaller housing projects.
9) Provides housing development projects with the option of meeting the air
quality requirements to qualify for CEQA streamlining by showing consistency
with the California Air Resources Board’s Scoping Plan instead of using a
quantitative net-zero greenhouse gas emissions analysis.
10) Provides that CEQA does not apply to a housing development project (i.e.,
projects where at least two-thirds of the square footage is residential) that meets
the following conditions:
a) The project site is not more than 20 acres, except for a builder’s remedy
site, which cannot be more than five acres.
b) The project site is either located within the boundaries of an incorporated
municipality or is located within a Census Bureau-defined "urban area."
c) The project site has been previously developed with an "urban use" as
specified, at least 75 percent of the perimeter of the site adjoins parcels
that are developed with urban uses, at least 75 percent of the area within
a one-quarter mile radius of the site is developed with urban uses, or for
sites with four sides, at least three out of four sides are developed with
AB 130
Page 4
urban uses and at least two-thirds of the perimeter of the site adjoins
parcels that are developed with urban uses.
d) The project is consistent with the applicable general plan and zoning
ordinance, as well as any applicable specific plan and local coastal
program.
e) The project will be at least one-half of the applicable "Mullin" density
(i.e, at least five units per acre for an unincorporated area in a
nonmetropolitan county, 10 units per acre in a suburban jurisdiction, and
15 units per acre in a metropolitan jurisdiction).
f) The project is not on an environmentally sensitive or hazardous site, as
specified.
g) The project does not require the demolition of a historic structure that
was placed on a national, state, or local historic register.
h) No portion of the project is designated for use as a hotel, motel, bed and
breakfast inn, or other transient lodging.
11) Requires that projects that utilize the CEQA exemption provided by this bill
undertake the following with regards to California Native American tribes
(tribes):
a) Within 14 days of determining that an application for a project is
complete, the local government must provide specified information to all
tribes traditionally and culturally affiliated with the project site, and
invite them to consult on the project;
b) Provides that each California Native American tribe has 60 days to notify
the local government that it accepts the invitation to consult;
c) Requires the local government to begin the consultation within 30 days
of notification that a tribe would like to consult, that the consultation
must seek to find measures that would avoid significant impacts to a
tribal cultural resource, and that deference must be given to tribal
information, knowledge, customs, and understanding of the significance
of any resources.
AB 130
Page 5
d) Specifies that the consultation must conclude within 45 days of initiation,
subject to a one-time 15-day extension upon request by a participating
tribe.
e) Requires the local government to include, as binding conditions of the
project approval, any enforceable agreements reached during the project
consultation, and all of the following measures, unless there is mutual
agreement between the California Native American tribe and the project
proponent not to include the measure as a binding condition:
i) Upon request by a California Native American tribe, the project must
include tribal monitoring during all ground-disturbing activities, as
specified;
ii) Tribal cultural resources shall be avoided where feasible, as specified;
iii) The project must stop upon discovery of human remains or burial
grounds, as specified;
12) Requires that projects that utilize the CEQA exemption provided by this bill
undertake the following remediation measures:
a) The development proponent must assess the site for environmental
hazards, and mitigate for any hazards found, as specified, before the
issuance of the certificate of occupancy.
b) Any housing on a site located within 500 feet of a freeway must include
specified air filtration and design mitigations.
13) Establishes labor standards for all projects that utilize the CEQA exemption
provided by this bill, as follows:
a) Requires that construction workers be paid the prevailing wage for
projects that are 100 percent affordable housing.
b) Requires the use of a skilled and trained construction workforce for
buildings that are over 85 feet in height.
c) Requires that construction workers be paid the prevailing wage for
projects of 50 units or greater in the City and County of San Francisco if
AB 130
Page 6
not subject to (b), above, for any construction craft where at least 50
percent of the units in market-rate multifamily housing projects, as
defined, that received their certificate of occupancy between 2022 and
2024, inclusive, were built by workers that were paid not less than the
general prevailing rate of per diem wage.
d) Makes the project proponent liable if the general contractor or
subcontractor fails to meet the applicable wage standards and enables a
joint-labor management cooperation (JLMC) committee to enforce this
requirement.
e) Enables a JLMC to enforce state law that ensure that contractors are
properly licensed, are paying their payroll taxes, and have proper workers
compensation insurance.
14) Clarifies that providing legal services for homeownership preservation,
including foreclosure prevention, is an eligible use of National Mortgage
Settlement funds.
15) Eliminates a provision in state accessory dwelling unit law that any local
agency that has adopted an ordinance by July 1, 2018, providing for the
approval of accessory dwelling units in multifamily dwelling structures, must
ministerially consider a permit application to construct an accessory dwelling
unit meeting specified requirements, but may impose objective standards
including design, development, and historic standards on said accessory
dwelling units, but not minimum lot size requirements.
16) Prohibits the separate sale, lease, or financing of any individual parcel
following ministerial approval of a starter housing subd ivision project meeting
specified eligibility requirements unless that parcel has a completed residential
dwelling on it, with specified exceptions. Allows local jurisdiction to opt out of
this prohibition.
17) Clarifies that any remainder parcel should not be taken into account when
calculating project density for purposes of state law requiring ministerial
approval of starter housing subdivision projects meeting specified eligibility
requirements.
18) Makes the following changes to the Regional Housing Needs Assessment
(RHNA) process in housing element law:
AB 130
Page 7
a) Requires the relevant Council of Governments (COG) to provide data
assumptions from their projections for overcrowding and percentage of
cost-burdened households based on the difference between the region’s
rates and those comparable regions in the United States.
b) Requires COGs to submit a draft allocation methodology and develop a
revised methodology in consultation with HCD within 45 days, if HCD
finds the draft allocation methodology does not further the objectives.
19) Removes several sunset dates within the Housing Accountability Act (HAA)
making permanent provisions of the HAA that:
a) Define when a project application is “deemed complete” to mean when
the project applicant has submitted a specified preliminary application or,
if the applicant has not submitted a preliminary application, then when
the applicant submitted a complete application, as specified.
b) Define “objective” as meaning involving no personal or subjective
judgment by a public official and being uniformly verifiable by reference
to an external and uniform benchmark or criterion available and
knowable by both the development applicant or proponent and the public
official.
c) Require a court to issue an order to correct an action in the case of a local
agency requiring a housing development project to comply with an
ordinance or standard not in effect when the preliminary application was
submitted.
d) Provide that the HAA applies to a housing development project that
submits a specified preliminary application before January 1, 2030.
20) Removes several sunset dates within the Housing Crisis Act (HCA) making
permanent provisions of the HCA that:
a) Prohibit local agencies from requiring more than five hearings on a
housing development project that complies with the applicable, objective
general plan and zoning standards in effect at the time the application is
deemed complete.
AB 130
Page 8
b) Require a local government to determine whether a site for a proposed
housing development project is a historic site at the time the application
is deemed complete.
c) Require a local government to compile a list or lists that specify in detail
the information required from any applicant for a development project, as
specified.
d) Authorize a housing development proponent to submit a preliminary
application, and require a local government to determine the
completeness of that preliminary application, as specified.
21) Makes the following changes to the Davis-Sterling Act governing common-
interest developments (CIDs):
a) Specifies that reasonable restrictions on Accessory Dwelling Units
(ADUs) and Junior Accessory Dwelling Units (JADUs) in a CID shall
not include any fees or other financial requirements.
b) Limits fines that may be imposed on an association member in a CID, as
specified. Additionally, the bill provides that an association member shall
have the opportunity to cure a violation associated with damage to the
common area or facilities by themselves or a guest, prior to a board
meeting to discuss the violation, as specified.
22) Makes the following change to the State Lands Act (SLA):
a) Removes school district real property from the definition of “exempt
surplus land,” requiring this land must be disposed of in accordance with
the SLA.
23) Makes the following changes to the Permit Streamlining Act (PSA):
a) Provides that the PSA applies to an entitlement for a housing
development project regardless if the permit is discretionary or
ministerial. This change would not apply to a post-entitlement permit.
b) Requires a local agency to approve or disapprove a ministerial permit
within 60 days from the date of receipt of a complete application.
AB 130
Page 9
24) Makes the following changes to the California Coastal Act:
a) Prohibits appeals for residential projects (projects that are exclusively
residential and made up of four or more units) that are located in a
sensitive coastal resource area or are not the principal permitted use in
the Local Coastal Plan (LCP).
b) Requires an annual report by the California Coastal Commission (CEC)
for residential projects that are appealed to evaluate how many residential
projects were appealed; how many residential projects waived the
timelines for acting on an appeal; and how many residential projects were
approved, approved with conditions, denied, or withdrawn on appeal to
the CCC. The CCC shall include, for each project: a description of the
project, including, but not limited to the number of units in the project,
and the percentage of units affordable to low- and moderate-income
households; time from the appeal to final decision on each project; and
any conditions requested or imposed on a project, and the reason for
approval, approval with conditions, or denial.
25) Makes the following additional changes:
a) Requires the California Residential Mitigation Program (CRMP), upon
appropriation by the Legislature, to fund the seismic retrofitting of
affordable multifamily housing serving low- and moderate-income
households, as specified.
b) Prohibits specified conduct by a mortgage servicer in connection with
subordinate mortgages, as defined, including, among other things, failure
to communicate with the borrower in writing for over three years; failure
to provide notice of a transfer of loan ownership as required; conducting
or threatening to conduct a foreclosure sale after the relevant statute of
limitations has run or after providing a form indicating the debt had been
written off or discharged; and failure to provide required periodic account
statements; among other things. Provides specified legal prote ctions in
foreclosure proceedings for borrowers subject to subordinate mortgages.
26) Extends the expenditure deadline by six months, and the reimbursement
submission deadline by six additional months after that, for Regional Early
Action Planning (REAP) 2.0.
AB 130
Page 10
27) Prohibits the California Building Standards Commission (CBSC) and any other
adopting agency, from October 1, 2025, until June 1, 2031, from considering,
approving, or adopting any proposed building standards affecting residential
units unless any of the following conditions is met:
a) The CBSC deems those changes necessary as emergency standards to
protect health and safety.
b) The building standards are related to home hardening and are proposed
for adoption by the Office of the State Fire Marshal (SFM).
c) The building standards are proposed for adoption in relation to the SFM's
study of standards for single-exit, single stairway apartment houses with
more than two dwelling units in buildings above three stories.
d) The building standards are proposed for adoption pursuant to an adaptive
reuse standards working group, to reduce potable water use in new
residential buildings, or to support risk-based water quality standards for
the onsite treatment and reuse of nonpotable water for certain residential
buildings, as specified.
e) The building standards are necessary to ensure the latest editions of the
model codes are incorporated into the triennial edition of the California
Building Standards Code.
f) The building standards are necessary to incorporate the updates to
accessibility requirements that align with minimum federal accessibility
laws, standards and regulations.
g) The building standards under consideration would take effect on or after
January 1, 2032.
28) Prohibits a city or county from making changes or modifications to building
standards affecting residential units, including to green building standards,
from October 1, 2025 until June 1, 2031, unless one of the following
conditions is met:
a) The changes or modifications are substantially equivalent to changes o r
modifications that were previously filed by the governing body of the
city or county and were in effect as of September 20, 2025;
AB 130
Page 11
b) The CBSC deems those changes or modifications necessary as
emergency standards to protect health and safety;
c) The changes or modifications relate to home hardening;
d) The building standards relate to home hardening and are proposed for
adoption by a fire protection district pursuant to existing provisions
governing the proposal of new standards by fire protection districts;
e) The changes are necessary to implement a local code amendment that is
adopted to align with a general plan approved on or before June 10, 2025,
and that permits mixed-fuel residential construction consistent with
federal law while also incentivizing all-electric construction as part of an
adopted greenhouse gas emissions reduction strategy; or
f) The changes or modifications are related to specified administrative
practices.
29) Requires CBSC to reject a modification or change to any building standard
affecting a residential unit filed by the governing body of a city or county,
from October 1, 2025 until June 1, 2031, unless one of the conditions in 28)
above is met.
30) Requires a city or county to perform annual inspections on every homeless
shelter in its jurisdiction to ensure that the shelter is compliant with existing
law requirements relating to substandard housing. Provides that these
inspections may be unannounced.
31) Specifies that a city shall conduct an inspection for the shelters within the
city’s jurisdiction; a county shall conduct an inspection for the shelters in the
county’s jurisdiction; and a city with a population under 100,000 may partner
with its county to conduct an inspection.
32) Requires a homeless shelter to prominently display information about an
occupant’s rights and the process to report a complaint about a substandard
shelter, including contact information for the owner or operator of the shelter,
the city or county, and HCD. The shelter must also provide this information to
any new occupant during intake.
AB 130
Page 12
33) Provides that a plaintiff who prevails in an action pursuant to this statute shall
be entitled to recover reasonable attorney’s fees and costs and authorizes HCD
to bring a civil action pursuant to this statute.
34) Amends the annual report that each city and county is required to submit to
HCD and BCSH as follows:
a) Adds the number of complaints received by the city or county of
substandard shelters, including if the city or county did not receive any
complaints.
b) Requires a city or county to submit a report even if there are no
outstanding violations, or any violations corrected, during the applicable
period.
35) Requires HCD to withhold state funding from any city or county that fails to
comply with reporting requirements or fails to take action to correct a
substandard shelter violation.
36) Requires local jurisdictions, as part of their General Plan Annual Progress
Reports, to provide data about the number of applications submitted, the
location and number of developments approved, and the total number of
building permits issued pursuant to the Affordable Housing on Faith and
Higher Education Lands Act.
37) Clarifies that childcare centers may be incorporated into an eligible project
pursuant to Affordable Housing on Faith and Higher Education Lands Act
without limitation on the number of children.
38) Modifies specified height and parking restrictions applicable to Affordable
Housing on Faith and Higher Education Lands Act projects.
39) Extends by up to one year the amount of time that the owner of a multifamily
building has to complete required balcony inspections when the discovery of
asbestos prevents timely inspection completion.
40) Adjusts the Renters Tax Credit, subject to future appropriation, as follows:
a) For spouses filing joint returns, heads of household, and surviving spouses
with gross income of $50,000 or less, from $120 to $250 for qualified
AB 130
Page 13
renters with no dependents, and from $120 to $500 for qualified renters
with dependents.
b) For other individuals with adjusted gross income of $25,000 or less, from
$60 to $250 for qualified renters with no dependents, and from $60 to $500
for qualified renters with dependents.
41) Requires the Franchise Tax Board (FTB) to report to the Legislature about the
efficacy of the change in (40), above, including the number of taxpayers
claiming the credit and the average credit amount on tax returns claiming the
credit, beginning two years after any appropriation for the adjusted Renters
Tax Credit.
FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: Yes
This bill will result in minimal general fund costs for the administration of the
homeless shelter conditions and minimal special fun d costs associated with
building standard codes. It provides for a continuous appropriation of funds from
the Affordable Housing Default Reserve Account fund for the purpose of curing or
averting a default on the terms of any loan or other obligation by th e recipient of
financial assistance, or bidding at any foreclosure sale where the default or
foreclosure sale would jeopardize the department’s security in the rental housing
development assisted by the department.
SUPPORT: (Verified 6/27/25)
None received
OPPOSITION: (Verified 6/27/25)
None received
ASSEMBLY FLOOR: 53-17, 3/20/25
AYES: Addis, Aguiar-Curry, Arambula, Ávila Farías, Bains, Bennett, Berman,
Boerner, Bonta, Bryan, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel,
Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Jackson, Kalra, Lee,
Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Patel, Pellerin,
Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle
Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache,
Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas
AB 130
Page 14
NOES: Alanis, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Flora, Gallagher,
Jeff Gonzalez, Hadwick, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa
NO VOTE RECORDED: Ahrens, Alvarez, Bauer-Kahan, Calderon, Essayli,
Hoover, Irwin, Krell, Papan, Wallis
Prepared by: Timothy Griffiths / B. & F.R. / (916) 651-4103
6/30/25 15:52:00
**** END ****