Governor Newsom's September 2026 Housing Package: SB 1116, AB 1815, AB 2074 for Pacific Beach Builders

On September 29-30, 2026, Governor Gavin Newsom signed 66 housing bills in what represents California's most significant housing legislation push in a single weekend. Among the 97 total housing bills signed in 2026, three bills stand out for Pacific Beach, La Jolla, and Mission Beach builders: SB 1116, AB 1815, and AB 2074. These laws create synergistic opportunities for starter home construction, factory-built housing streamlining, and transit-oriented high-rise development, with most provisions taking effect January 1, 2027.

SB 1116: Pacific Beach Starter Homes Get Height Flexibility

SB 1116 strengthens the Starter Home Revitalization Act by requiring cities to measure building height in feet rather than stories. This closes a documented loophole where local jurisdictions limited starter homes to two stories even within 30-35 foot height envelopes. Starting January 1, 2027, Pacific Beach builders can design three-story townhomes on typical 3,000-5,000 sq ft lots in RM-1-2 zoned areas between Garnet Avenue and Grand, creating more livable square footage without increasing building footprints. This is particularly valuable for narrow lots along Cass Street and Law Street near Crystal Pier. The bill maintains the ministerial approval path for small-lot projects up to 10 homes, eliminating discretionary review delays that historically added 6-18 months to project timelines. Our construction services are specifically designed to help homeowners navigate these new opportunities for starter home development.

AB 1815: Factory-Built Housing Streamlining for San Diego Builders

AB 1815, chaptered September 29, 2026, bars local jurisdictions from imposing building standards that exceed or differ from the California Building Standards Code for factory-built housing structures. The bill streamlines inspections, reduces duplicative fees, and creates a rebuttable presumption favoring factory-built housing determinations. For Pacific Beach builders working on ADU construction or small infill projects in Bird Rock and along Garnet Avenue, this means prefabricated housing units receive consistent statewide treatment, eliminating the patchwork of local requirements that previously delayed factory-built projects by 2-4 months during the permitting phase. This is ideal for ADU projects near Tourmaline Surfing Park or Mission Boulevard.

AB 2074: Downtown San Diego High-Rise Opportunities

AB 2074 requires San Diego to establish regional transit hub districts by mid-2027, where residential projects meeting labor standards receive streamlined ministerial approval. The bill sets a 150-foot height baseline with at least 25% of each district allowing 450 feet or more. While Pacific Beach, La Jolla, and Mission Beach are primarily served by MTS bus routes 8, 9, and 30 rather than major transit hubs, the bill's $500 million low-interest revolving loan fund creates financing opportunities for builders working on larger mixed-use projects near the UTC Transit Center corridor connecting to La Jolla. Our team has extensive experience with transit-oriented development projects throughout San Diego County.

Conclusion

The September 29-30, 2026 housing package represents a historic legislative moment for California builders. By combining starter home height flexibility, factory-built housing streamlining, and transit-oriented financing, these three bills create unprecedented opportunities for Pacific Beach, La Jolla, and Mission Beach construction projects beginning January 1, 2027. For builders working in Bird Rock or near Tourmaline Surfing Park, these opportunities extend from the ocean to Mission Bay. If you're ready to take advantage of these new housing laws, contact us today to discuss how we can help you navigate the updated regulations and maximize your project's potential.