California Democrats are once again making housing a top legislative priority in 2026, reviving ambitious plans to boost home construction while navigating familiar political divides over tenant protections and development rules.
After a landmark year that saw lawmakers roll back environmental reviews for many urban housing projects and permit denser development near transit, housing advocates are pressing to capitalize on momentum—particularly as Gov. Gavin Newsom enters the final year of his pro-building administration.
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Just days after lawmakers returned to Sacramento, a long-stalled $10 billion housing bond resurfaced and began moving through the Legislature. Senate Bill 417 cleared the Senate Housing Committee on Jan. 7 by an 8-1 vote and is scheduled for a hearing before the Senate Appropriations Committee on Jan. 20. Lawmakers hope to place the bond on the June primary ballot, which would require the governor’s signature by Jan. 22.
“Those homes don’t build themselves, and it’s time to finish the job,” said Sen. Chris Cabaldon, a Napa Democrat and the bill’s author. “To unlock the full promise of these reforms requires cash. It requires sufficient capital, as it always has, to move these affordable housing projects from approval and permitting to construct.”
If approved by voters, the bond would direct $7 billion to California’s Multifamily Housing Program, which provides low-interest loans to support permanent and transitional rental housing for lower-income households. Another $2 billion would fund wildfire prevention, rental assistance, and affordable housing for low-income tenants and farmworkers. The remaining $1 billion would support first-time homebuyers with down-payment assistance.
Lawmakers also advanced a separate bond aimed at expanding housing options for homeless youth, though leaders have indicated the measures could ultimately be combined. Sen. Caroline Menjivar, a Van Nuys Democrat who authored the proposal, shared her own experience with housing insecurity.
“This is an investment that is really going to help us save money down the line,” she said.
The renewed interest in housing bonds reflects broader confidence among pro-abundance lawmakers, many of whom have the backing of Gov. Newsom. The governor has openly aligned himself with the “Yes In My Back Yard” movement and highlighted housing production as a key economic priority in his most recent State of the State address.
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This year, Newsom said lawmakers should focus on lowering construction costs, “utilizing new building methods and technology” and passing “worker-centered reforms that bring our brothers and sisters in labor along with us.”
Leadership changes are also on the horizon. In February, Sen. Jesse Arreguín of Oakland is set to take over as chair of the Senate Housing Committee. A vocal supporter of faster housing approvals, he will replace Sen. Aisha Wahab, a Fremont Democrat who has long raised concerns about tenant protections amid rapid development.
Despite the pro-building momentum, tenant protection efforts suffered another setback this month. Assembly Bill 1157, a proposal to further limit annual rent increases, failed in the Assembly Judiciary Committee on Jan. 13.
Authored by committee chair Assemblymember Ash Kalra of San Jose, the bill would have tied rent increases to inflation, capping most hikes at 5% rather than the current 10%. In an attempt to gain broader support, Kalra amended the proposal to exclude single-family homes.
“Tenants need a permanent solution, not a temporary fix,” Kalra said during the hearing. “If we don’t act with urgency to help our tenants in crisis, we are going to continue to contribute to the risk of homelessness.”
The bill faced strong opposition from landlord and real estate groups, who warned it could discourage investment and strain small property owners. The measure received only four votes—short of the seven needed to advance—with all Republican members voting no and several Democrats declining to vote.
Meanwhile, renters like San Diego resident Lidya Morales say rising rents are becoming unsustainable. Her monthly rent climbed from $1,300 in 2022 to $2,000 last year, forcing her to work multiple jobs.
“I don’t want to live in my car with my kids,” she said.
Following the bill’s defeat, tenant advocates chanted in protest outside the committee room. Kalra later told CalMatters the outcome reflected the influence of powerful real estate interests.
“I think that shows the power and influence of moneyed interests,” he said.
As they pursue new housing initiatives, legislators are also confronting the consequences of laws passed last year. One of the most controversial, Senate Bill 79, allows apartment buildings up to seven stories near major transit hubs by overriding local zoning rules.
Critics argue the law could displace residents of mobile home parks located near transit corridors. Gail Rubino, a Sunnyvale resident, warned lawmakers that dozens of parks could be redeveloped, potentially displacing thousands.
“This lack of protection threatens existing affordable housing stock that SB 79 seeks to increase,” Rubino told lawmakers.
Local officials have also raised concerns about confusion over the law’s scope, with disagreement over which counties are covered. Sen. Scott Wiener, the bill’s author, has acknowledged the ambiguity and said he plans to introduce follow-up legislation later this year to clarify implementation.
As Democrats push to build more homes, the debate underscores the challenge ahead: balancing rapid housing production with tenant protections, affordability, and community stability in one of the nation’s most expensive housing markets.
Originally Reported By Yue Stella Yu, CalMatters in VC Star.
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