AB 2741 California Assembly · 2025-2026 Regular Session

Housing element: inventory of land: substantial compliance.

Summary

The Planning and Zoning Law requires a city or county to adopt a general plan for land use development within its boundaries that includes, among other things, a housing element. Existing law requires the housing element to include, among other things, an inventory of land suitable and available for residential development. Existing law requires a city or county, based on that inventory of land, to determine whether each site in the inventory can accommodate the development of some portion of its share of the regional housing need by income level during the planning period, as provided. Existing law requires local governments to rezone sites according to a specified program if the inventory of sites suitable and available for residential development does not identify adequate sites to accommodate the need for groups of all household income levels. Existing law requires that program to accommodate 100% of the need for housing for specified lower income households on sites required to be zoned to permit owner-occupied and rental multifamily residential use, as provided, and requires these sites to be zoned with specified minimum density and development standards, as provided. This bill would provide that these zoning requirements would be met by applying a zoning classification, including, but not limited to, an overlay zone, mixed-use zone, combining district, or similar zone that permits owner-occupied and rental multifamily residential use with the above-described minimum density and development standards, as specified. The bill would require a program that includes application of this zoning classification to include a written explanation of the housing and affordability incentives of the zoning classification. The bill would permit this zoning classification to allow a mix of uses if it meets prescribed requirements. The bill would define key terms for these purposes. The bill would apply these provisions only to the 6th housing element revision cycle and retroactively to January 1, 2019. Existing law, commonly referred to as the Housing Element Law, prescribes requirements for a city's or county's preparation of, and compliance with, its housing element, and requires the Department of Housing and Community Development to review and determine whether the housing element substantially complies with the Housing Element Law, as specified. Existing law provides that a housing element or amendment is considered substantially compliant with the Housing Element Law when the local agency has adopted a housing element or amendment, the department or a court of competent jurisdiction determines the adopted housing element or amendment to be in substantial compliance with the Housing Element Law, and the department's compliance findings have not been superseded by subsequent contrary findings by the department or by a decision of a court of competent jurisdiction or the court's decision has not been overturned or superseded by a subsequent court decision or by statute. Existing law, the Housing Accountability Act, among other things, prohibits a local agency from disapproving, or conditioning approval in a manner that renders infeasible, a housing development project for very low, low-, or moderate-income households unless the local agency makes written findings as to one of certain sets of conditions, as specified. One set of conditions is that (1) the jurisdiction has adopted a housing element that is in substantial compliance with the Housing Element Law, and (2) the jurisdiction has met or exceeded its share of the regional housing need allocation for the planning period for the income category proposed for the housing development project. Existing law requires a housing element or amendment to be considered in substantial compliance with the Housing Element Law only if the element or amendment was determined to be in substantial compliance when a preliminary application or complete application was submitted, as specified. This bill would require, if a court of competent jurisdiction finds an adopted housing element or amendment to be to be out of compliance despite the department's findings of substantial compliance, that the housing element or amendment be considered in substantial compliance until either the date the department finds that a newly adopted housing element or amendment is in substantial compliance, or 275 days after a court order, writ, or judgment is issued requiring the local agency to bring its housing element into substantial compliance, whichever is earlier.

Issues: ✓ Housing

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2026

Committee Review

Floor Vote

Governor

Introduced Feb 20, 2026 Last action Apr 29, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

02/20/26 - Introduced → 03/19/26 - Amended Assembly · 14 edits · Mar 19, 2026

MAJOR

AB 2741 was transformed from a simple legislative intent statement into a substantive bill that amends three Government Code sections governing housing elements. The amended version adds detailed rules for how local governments must inventory land, determine site adequacy by income level, and zone sites for lower-income housing - including explicitly permitting affordable housing overlay zones as a valid way to meet zoning requirements. It also establishes that if a court overturns a state finding of substantial compliance, the housing element retains its compliant status for up to 275 days after the court order.

SCOPE

The bill changed from a non-binding legislative intent statement to actual amendments of Government Code Sections 65583.2, 65585.03, and 65589.55, giving it enforceable legal effect.

Added an exception for areas within one-half mile of a Sonoma-Marin Area Rail Transit station, where housing density requirements in place on June 30, 2014 continue to apply.

REQUIREMENT

Added detailed requirements for the housing element land inventory, including parcel-level listings, utility availability documentation, environmental constraints, and maps showing site locations.

Set minimum density thresholds for lower-income housing by jurisdiction type: 15 units per acre for nonmetro cities and micropolitan counties, 10 for unincorporated nonmetro areas, 20 for suburban jurisdictions, and 30 for metropolitan jurisdictions.

Required that at least 25 percent of moderate-income and above-moderate-income housing need in metropolitan jurisdictions be allocated to sites zoned for at least 4 units per acre (with a cap of 100 units per acre for moderate income).

Required that sites previously identified in prior housing elements or included in two or more consecutive planning periods without development cannot be counted toward lower-income housing need unless they are zoned at required densities and subject to a rezoning program with deadlines.

Added replacement requirements: sites with rent-restricted, price-controlled, or low-income-occupied housing must require replacement of all affordable units as a condition of any new development on the site.

Permitted mixed-use zoning for lower-income housing sites if the zone allows 100 percent residential use and requires at least 50 percent of total floor area to be dedicated to residential uses in mixed-use projects.

DEFINITION

Defined 'land suitable for residential development' to include four categories: vacant residentially zoned sites, vacant nonresidentially zoned sites allowing residential use, residentially zoned sites capable of higher density, and nonresidentially zoned sites with a rezoning program.

Defined 'suburban' and 'metropolitan' jurisdictions based on Metropolitan Statistical Area population thresholds (2 million) and individual jurisdiction population (100,000 for cities, 25,000 as a floor).

Defined 'shall be zoned' to explicitly include applying a zoning classification such as an affordable housing overlay zone, and required programs using such classifications to include a written explanation of housing and affordability incentives.

Defined 'use by right' to mean that local government review cannot require a conditional use permit, planned unit development permit, or other discretionary approval constituting a CEQA project, though design review is allowed if it does not constitute a CEQA project.

TIMELINE

Added a sunset provision: the section remains in effect only until December 31, 2028, and is repealed as of that date.

ENFORCEMENT

Established that if a court finds a housing element out of compliance despite DHCD's substantial compliance finding, the element retains substantial compliance status until either DHCD certifies a new element or 275 days after the court order is issued, whichever comes first.

03/19/26 - Amended Assembly → 04/23/26 - Amended Assembly · 4 edits · Apr 23, 2026

MODERATE

AB 2741 was amended to broaden the types of zoning classifications that qualify for housing element compliance (adding mixed-use zones, combining districts, and similar zones beyond just affordable housing overlay zones), restructure the mixed-use requirement to offer jurisdictions two alternative pathways for meeting lower-income housing site standards, and add a critical scope limitation restricting the bill's provisions to the 6th housing element revision cycle with retroactive application to January 1, 2019.

Scope change

The bill's applicability is now limited to the 6th housing element revision cycle only, with retroactive effect to January 1, 2019. This represents a significant narrowing from what would have been an open-ended requirement applying to all future housing element cycles.

SCOPE

The bill now applies only to the 6th housing element revision cycle and is made retroactive to January 1, 2019. This is a major limitation that was not present in the prior version, meaning the new zoning and density requirements will not apply indefinitely but are tied to a specific planning cycle.

A legislative intent statement about enacting legislation relating to the use of residential overlay zones in housing element compliance determinations was removed from the digest, likely because the expanded list of acceptable zoning types made that narrow framing unnecessary.

DEFINITION

The acceptable zoning classifications for meeting lower-income housing site requirements were expanded from just 'an affordable housing overlay zone' to include 'mixed-use zone, combining district, or similar zone.' This gives local governments more flexibility in how they designate qualifying sites.

REQUIREMENT

Subdivision (h)(3)(B) was restructured to provide two alternative pathways for the mixed-use requirement. Previously, a single standard applied: the zoning must allow 100 percent residential use and require 50 percent of floor area be residential. Now jurisdictions can either (i) accommodate at least 50 percent of lower-income housing need on purely residential sites with no nonresidential or mixed uses permitted, OR (ii) accommodate all lower-income housing need on mixed-use sites that allow 100 percent residential use and require 50 percent of floor area be dedicated to residential uses.

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Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Apr 29, 2026

Lower · Passed

In committee: Set, first hearing. Failed passage. Reconsideration granted.

lower

Apr 27, 2026

Committee

Re-referred to Com. on L. GOV.

lower

Apr 23, 2026

Lower · Passed

Read second time and amended.

lower

Apr 22, 2026

Introduced

From committee: Amend, and do pass as amended and re-refer to Com. on L. GOV. (Ayes 9. Noes 0.) (April 22).

lower

Mar 23, 2026

Committee

Re-referred to Com. on H. & C.D.

lower

Mar 19, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on H. & C.D. Read second time and amended.

lower

Mar 19, 2026

Committee

Referred to Coms. on H. & C.D. and L. GOV.

lower

Feb 21, 2026

Lower · Passed

From printer. May be heard in committee March 23.

lower

1 primary · 0 co-sponsors