Oakland Called Its Industrial Zones Off-Limits to SB 79. HCD Read the Code.

You're looking at a site near a transit stop — exactly the kind of parcel SB 79 was written to open up for housing. Then you pull Oakland's new SB 79 ordinance and your heart sinks: the zone is listed as ineligible. Industrial. Open space. Not a residential, mixed, or commercial zone, the city says. Case closed, you figure — no transit-oriented housing here.

Here's the thing: HCD doesn't think that label holds.

On June 12, 2026, the California Department of Housing and Community Development sent the City of Oakland a findings letter on Ordinance No. 13875, the city's SB 79 ordinance. SB 79 — the Abundant and Affordable Homes Near Transit Act — is brand-new law, and HCD spells out how it reads the statute's central phrase: "zoned for." Oakland's ordinance declared whole categories of zones off-limits. HCD took the list apart using Oakland's own Planning Code.

The zones Oakland tried to carve out

The ordinance's eligibility section named these zones as ineligible sites that "may not utilize the development standards" of SB 79:

• OS Open Space
• M-40 Industrial
• S-16 Interstate Corridor Commercial
• D-CE-5 and D-CE-6 Central Estuary District Industrial
• D-GI Gateway District Industrial
• D-CO-5 and D-CO-6 Coliseum Area Industrial

The city's theory: these aren't "residential, mixed, or commercial" zones, so SB 79 never attaches.

HCD's "zoned for" test

HCD's position starts with the statute. Government Code section 65912.157, subdivision (a) makes a housing development an allowed use "on any site zoned for residential, mixed, or commercial development" near a transit-oriented development stop.

The fight is over "zoned for." HCD reads it broadly:

"if the jurisdiction's zoning principally or conditionally permits residential, residential mixed use, or commercial land use on a parcel not underwater within a transit-oriented development (TOD) zone over which the jurisdiction has zoning authority, then SB 79 shall apply."

HCD says this tracks its earlier technical assistance — a January 28, 2025 letter to the City of Hayward — that "zoned for" means principally or conditionally permitted land use within a zone. Then the bright line:

"if a site is zoned industrial or open space but the zone allows for commercial development, then SB 79 may apply."

So for HCD, the zone's name isn't the test — what the zone permits is.

The use tables did the talking

HCD didn't argue in the abstract. It pointed to Oakland's own code. Per the letter, the 17.11.050 OS Open Space Zone "conditionally permits permanent residential activities and commercial activities," and Table 17.72.01 M-40 Industrial Zone "principally and conditionally permits commercial activities." HCD found the same for the Central Estuary, Gateway, and Coliseum industrial zones.

HCD's conclusion: those zones are eligible for SB 79 unless a specific exception applies — and, it wrote, "the parcel land areas must be included in the City's SB 79 capacity calculations," not left out.

"Potentially designated" isn't "designated"

The letter's third finding targets a different move. Oakland tried to temporarily exclude historic sites under Government Code section 65912.161, subdivision (b)(1)(F), which covers "sites with a historic resource designated as of January 1, 2025, on a local register." The city excluded 1,820 sites this way.

The problem: the list swept in "Potentially Designated Historic Properties." HCD noted the city's own website says "PDHP is not a designation." HCD's position: "PDHPs are not designated historic resources and therefore do not qualify for temporary exclusion under Section 65912.161, subdivision (b)(1)(F)."

Verified against HCD's SB 79 Ordinance Findings Letter to the City of Oakland, dated June 12, 2026 (Ordinance No. 13875).

What this means if you're building

An HCD findings letter is HCD's interpretation of SB 79 — not a court ruling, and SB 79 is new enough that no court has blessed this reading of "zoned for." But it's the reading a city gets measured against. If an SB 79 ordinance tells you your industrial or open-space site is ineligible, check what the zone actually permits in the municipal code before you walk away — and note HCD's view that the city's map must end up at least as inclusive as the MTC SB 79 map. Then confirm how it applies to your specific parcel with your jurisdiction and your own counsel before you concede anything.

What CrossBeam does with it

When the letter lands on your desk, CrossBeam turns it around the same day: what each item is actually asking, the code or law behind it, and a written response you can hand to your team or your attorney — the back-and-forth that used to eat weeks, done in a couple of hours.