Los Angeles is facing its first major test under SB 79, the new statewide housing law that automatically upzones land near major transit stops. The law, signed earlier this year, goes into effect next July, but cities have until March to decide which neighborhoods to include or delay. As reported in The Future Is LA, the stakes are enormous. In Los Angeles alone, more than two thirds of the parcels eligible for new housing could be deferred, representing over a million potential homes.
SB 79 allows cities to temporarily exempt certain areas for five years while they craft their own transit-oriented zoning plans. Those areas include fire zones, sea level rise zones, historic districts, and low-income neighborhoods. Cities can also defer parcels or entire transit station areas that are already upzoned under local programs. In LA’s case, that means the new Community Housing Incentive Program, or CHIP. The city must decide by July 1, when SB 79 officially takes effect, but the state housing department needs up to 120 days to review the city’s plan, pushing the real deadline to early spring.
City Council is expected to take the path of least resistance on several fronts. Fire zones will almost certainly be deferred after months of confusion and misinformation about the law supposedly upzoning the Palisades. Sea level rise zones don’t apply because there is no major transit in Venice Beach. Historic areas will likely be deferred as well, especially around the new Wilshire subway stops, where historic preservation laws already limit new construction.
The hardest decision will be about low-income neighborhoods. Groups like ACT-LA have urged the city to use the five-year exemption to slow down development in vulnerable communities, giving tenants time to understand the law and participate in planning without fear of displacement. Abundant Housing LA and other pro-housing groups disagree, arguing that keeping SB 79 in place for at least some low-income areas would allow more homes to be built near jobs and transit, easing pressure citywide. Council President Marqueece Harris-Dawson, whose district covers many of these neighborhoods, has signaled he may want some market-rate housing on major commercial corridors but faces strong pressure to defer single-family areas where homeowners and renters are aligned against change.
The debate also exposes tension between SB 79 and CHIP, which was passed earlier this year to meet state housing goals through local upzoning. CHIP’s Transit-Oriented Incentive Areas, or TOIA, already allow bigger buildings near transit and require more affordable housing than SB 79. Advocates like Public Counsel’s Greg Bonett say that deferring TOIA areas would protect stronger affordability requirements, while others like Abundant Housing’s Scott Epstein say both tools should coexist to maximize housing production. The truth is no one knows yet whether developers can afford the stricter CHIP standards.
There is also concern that councilmembers could exploit a loophole that lets them defer entire transit station areas if they already have enough zoned capacity. Wealthy neighborhoods like Beverly Grove, near the new Wilshire/Fairfax stop, could use nearby high-rise buildings in Park La Brea to argue for deferral, even though few expect those buildings to be redeveloped. Housing advocates fear this could become a backdoor way for affluent homeowners to escape SB 79 altogether while poorer neighborhoods remain in limbo.
The deferral system was not added for policy reasons but to secure votes from lawmakers worried about losing local control. In practice, it could shape LA’s housing future for decades. Neighborhoods that get deferred now will have five years to pressure the legislature for permanent exemptions. What gets delayed today may never return. For SB 79 supporters, the coming months will determine whether the law fulfills its promise to put more homes near transit or whether Los Angeles falls back into the same old pattern of delay, deflection, and political protection for the privileged few.