SB 79 Alternative Plans: The Capacity Math HCD Won't Accept

You run the numbers on an SB 79 alternative plan, or you own a parcel inside a transit zone, and the capacity doesn't add up. The city swapped the state's transit-zone standards for its own plan, and somewhere in the swap the units, the floor area, or whole categories of parcels got smaller. The plan still says it maintains capacity. Does it?

SB 79, California's 2025 transit-oriented development law, lets a city replace the state's base TOD standards with a local alternative plan — but only if the plan keeps the same capacity. Government Code section 65912.161, subdivision (a)(1), as HCD quotes it, requires an alternative plan to:

"maintain at least the same total net zoned capacity, in terms of both total units and residential floor area, as provided for in this chapter across all transit-oriented development zones within the jurisdiction."

Both total units and residential floor area. That "and" is where these HCD reviews landed.

One caution first: these are HCD enforcement findings — the state's interpretive position on how it reads SB 79, not settled law. A court is the final word. The lines below are HCD's position.

Verified against the HCD review letter to the City of Beverly Hills, "Enacted Senate Bill 79 Transit-Oriented Development Alternative Plan," dated May 8, 2026, and the HCD review letter to the City of San Francisco, "Enacted Senate Bill 79 Ordinance," dated July 1, 2026.

Double the density, same height — and the floor area falls short

Beverly Hills built its plan by moving density around: some parcels ("import" sites) would absorb extra units pulled off other parcels. On paper the unit count holds. But HCD found the math works only for units, not floor area:

"the 'import' sites will receive twice the amount of density allowed in SB 79, but the height and Floor Area Ratio (FAR) limits would remain the same."

HCD's position: pack twice the units onto a site without raising height or FAR to hold them, and the average unit shrinks below what the statute anticipated — failing the residential-floor-area half of the test. HCD did leave a door open, noting a methodology that adjusts heights on import and export sites proportionately "would meet statutory requirements and address this finding." The takeaway: capacity is units and square footage, and HCD checks both.

HCD: rent-controlled parcels still count toward capacity

Beverly Hills also dropped its rent-stabilized parcels out of the capacity analysis, reading SB 79's demolition protection as an exclusion. HCD's position is that it is a siting limit, not a capacity exclusion:

"otherwise eligible sites with more than two units subject to local rent or price control must be included in the overall SB 79 capacity."

Because the protection in section 65912.157, subdivision (h), runs on a seven-year lookback tied to the date an application is filed, HCD reads those parcels as eligible again once the window passes — so their units and floor area belong in the count. Leave them off the SB 79 map, and HCD's position is that the capacity math is short by exactly those sites.

HCD: a plan can't switch off the Density Bonus Law

San Francisco shows the flip side. HCD found the City's ordinance — Ordinance 082-26, adding Planning Code section 207.11 — substantially complies with SB 79, but with a string attached. One subsection went too far:

"Section 207.11(b)(5) impermissibly prohibits the use of the State Density Bonus Law for qualifying housing development projects on applicable alternative plan sites."

So HCD's compliance finding is conditional. HCD wrote that the finding "is contingent on the City not enforcing Section 207.11(b)(5)" against qualifying projects on alternative-plan sites. HCD's position: a city can redistribute capacity through an alternative plan, but it cannot use that plan to switch off the State Density Bonus Law on the sites the plan covers.

The pattern

Here's the thing: all three findings are the same move from different angles — a plan that looks like it preserves capacity while quietly trimming it. Too little floor area behind the units. Whole parcels left off the map. A state entitlement switched off on the covered sites. If you build on an alternative-plan site, the capacity the city advertises may not be the capacity the law requires — and HCD's position is that the missing piece still counts.

Before you rely on any of this

These are HCD's findings on brand-new law, and a city can push back or defend its ordinance in court. Check how your jurisdiction's adopted alternative plan treats your specific parcel — its units, its floor area, its density-bonus rights — and run anything load-bearing past your own counsel before you file. None of this is legal advice.

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.