SB 79 Is Live. What HCD Told LA About Carving Out Sites

You own, or are eyeing, a parcel near a rail stop in Los Angeles. SB 79 — California's new transit-oriented development law, codified at Government Code sections 65912.155 through 65912.162 — went live July 1, 2026, and in theory it lets housing rise on sites local zoning never allowed. But your city is drafting an ordinance to pull sites back out. So which sites are really in, which are out, and who decides?

Los Angeles asked the state those same questions. On June 9, 2026, the City submitted a draft SB 79 ordinance to exempt and temporarily exclude certain sites. On June 22, 2026, HCD answered with a 21-page Technical Assistance Letter — twenty questions, point by point. It is worth reading if you build near transit, because several answers narrow what a city can carve out.

One caution first: a technical-assistance letter is HCD's interpretation, not a court ruling. It tells you how the state reads SB 79, and how it intends to enforce it — but the lines below are HCD's position, not settled law.

Verified against the HCD Technical Assistance Letter to the City of Los Angeles, "Senate Bill 79 Ordinance to Exempt and Temporarily Exclude Sites," dated June 22, 2026.

"Industrial" zoning doesn't automatically get you out

LA asked how "mixed" and "commercial" zoning are defined. HCD's view: if local zoning principally or conditionally permits residential, mixed-use, or commercial land use, SB 79 applies. The bright line that matters for industrial districts:

"if a site is zoned for industrial use, but allows for commercial uses, then SB 79 applies."

In HCD's reading, that sweeps in planned developments and public-facility zones that allow retail, office, or service uses. A city can exempt a true industrial employment hub, but HCD's position is that labeling a district "industrial" while still allowing commercial uses does not take it out of SB 79.

A parcel half-in the zone is all the way in

What about a large parcel where only a sliver sits inside the half-mile TOD zone? HCD's answer is that it is eligible:

"large parcels where only a portion of which are in a TOD zone are eligible for SB 79 provisions in their entirety unless a development project subdivides the parcel."

You can still take the local path

SB 79 is a tool, not a mandate. HCD confirmed an applicant is not required to use it: "An applicant for a housing development project is not required to utilize SB 79 provisions and standards and may opt to utilize the local ordinances, policies, and standards" in effect when the application is submitted. If local zoning gets you a better project, HCD's position is that you keep that option.

Rent-controlled sites still count

Here's the thing: a city carving out capacity can't quietly drop rent-controlled parcels from the math. SB 79 bars a project from demolishing rent- or price-controlled units occupied in the past seven years — but HCD's position is that this is a siting limit, not an exclusion from the capacity count: "otherwise eligible sites with more than two units subject to local rent or price control must be included in the overall SB 79 capacity."

A late or noncompliant ordinance doesn't stop your project

This is the part to mark. HCD gets up to 90 days, with one optional 30-day extension, to decide whether a city's ordinance substantially complies. If HCD stays silent past that window, HCD's reading is that the ordinance is "automatically deemed compliant for the limited purpose of assessing penalties" — not blessed on the merits. And if HCD finds an ordinance out of compliance, it can issue a Notice of Violation and may refer the matter to the California Office of the Attorney General.

For a project caught in that gap, HCD drew the brightest line of all:

"a qualifying housing project within a TOD zone that submits while a jurisdiction's ordinance is found to be out of compliance must be afforded the full weight of the statute."

In plain terms: if a project qualifies, a city's shaky carve-out ordinance is HCD's problem to fix — in HCD's view, not a reason to strip you of SB 79's standards.

Before you lean on any of this

These are HCD's interpretations of a brand-new law, and the agency itself notes a city can disagree and defend its ordinance. Confirm how your jurisdiction's adopted ordinance treats your specific site, 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.