California’s year of fees

California housers informally dubbed 2026 the “Year of Fees”: On the heels of the SB79 win that will decisively legalize midrise transit-oriented development statewide when it takes full effect in the early 2030s, YIMBYs and legislative champions took a breather on big zoning bills and turned to fee and exaction reform to boost construction feasibility.

Still, a CAYIMBY pure zoning play just passed: AB 2074, Matt Haney’s Downtown Revitalization Act, requires California’s seven largest cities to designate regional transit hub districts with a 150-foot height baseline (and at least 25% of each district allowing 450 feet) where highrise housing gets streamlined ministerial approval. The bill imports the SB 35/423 labor mandate framework requiring prevailing wage on all projects over 10 units, “skilled-and-trained” workforce above 85 feet. Downtown high-rises are already heavily union-built (though not necessarily always paying full closed-shop wages above market rates for every trade). It’s not clear what to expect in production outcomes because downtown highrises in SF have been mysteriously sluggish of late, with even entitled projects citing extreme construction costs as a reason for delay. AB 2074 originally included a $500M revolving loan fund to help subsidize financing to offset the cost of the labor mandates; the enrolled version downgrades it to a CalHFA study. But surging rents, up at least 26% in SF proper over the last 12 months, may yet wake SF-skeptical bank loan committees out of their dogmatic slumber. It would be ideal if this bill successfully unlocks feasible “missing massive” zoning on top of a half dozen of California’s underutilized rail systems, but at the very least this is still a nice solidarity effort by YIMBYs to repay organized labor’s support for SB79 last year.