AB2741 - Housing element: inventory of land: substantial compliance.

Amended IN Assembly April 23, 2026 Amended IN Assembly March 19, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 2741 Introduced by Assembly Member Muratsuchi February 20, 2026 An act to amend Sections 65583.2, 65585.03, and 65589.55 of the Government Code, relating to housing elements. LEGISLATIVE COUNSEL'S DIGEST AB 2741, as amended, Muratsuchi. Housing element: inventory of land: substantial compliance. The Planning and Zoning Law requires a city or county to adopt a general plan for land use development within its boundaries that includes, among other things, a housing element. Existing law requires the housing element to include, among other things, an inventory of land suitable and available for residential development. Existing law requires a city or county, based on that inventory of land, to determine whether each site in the inventory can accommodate the development of some portion of its share of the regional housing need by income level during the planning period, as provided. Existing law requires local governments to rezone sites according to a specified program if the inventory of sites suitable and available for residential development does not identify adequate sites to accommodate the need for groups of all household income levels. Existing law requires that program to accommodate 100% of the need for housing for specified lower income households on sites required to be zoned to permit owner-occupied and rental multifamily residential use, as provided, and requires these sites to be zoned with specified minimum density and development standards, as provided. This bill would provide that these zoning requirements would be met by applying a zoning classification, including, but not limited to, an affordable housing overlay zone, mixed-use zone, combining district, or similar zone that permits owner-occupied and rental multifamily residential use with the above-described minimum density and development standards, as specified. The bill would require a program that includes application of this zoning classification to include a written explanation of the housing and affordability incentives of the zoning classification. The bill would permit this zoning classification to allow a mix of uses if it meets prescribed requirements. The bill would define key terms for these purposes. The bill would apply these provisions only to the 6th housing element revision cycle and retroactively to January 1, 2019. Existing law, commonly referred to as the Housing Element Law, prescribes requirements for a city’s or county’s preparation of, and compliance with, its housing element, and requires the Department of Housing and Community Development to review and determine whether the housing element substantially complies with the Housing Element Law, as specified. Existing law provides that a housing element or amendment is considered substantially compliant with the Housing Element Law when the local agency has adopted a housing element or amendment, the department or a court of competent jurisdiction determines the adopted housing element or amendment to be in substantial compliance with the Housing Element Law, and the department’s compliance findings have not been superseded by subsequent contrary findings by the department or by a decision of a court of competent jurisdiction or the court’s decision has not been overturned or superseded by a subsequent court decision or by statute. Existing law, the Housing Accountability Act, among other things, prohibits a local agency from disapproving, or conditioning approval in a manner that renders infeasible, a housing development project for very low, low-, or moderate-income households unless the local agency makes written findings as to one of certain sets of conditions, as specified. One set of conditions is that (1) the jurisdiction has adopted a housing element that is in substantial compliance with the Housing Element Law, and (2) the jurisdiction has met or exceeded its share of the regional housing need allocation for the planning period for the income category proposed for the housing development project. Existing law requires a housing element or amendment to be considered in substantial compliance with the Housing Element Law only if the element or amendment was determined to be in substantial compliance when a preliminary application or complete application was submitted, as specified. This bill would require, if a court of competent jurisdiction finds an adopted housing element or amendment to be to be out of compliance despite the department’s findings of substantial compliance, that the housing element or amendment be considered in substantial compliance until either the date the department finds that a newly adopted housing element or amendment is in substantial compliance, or 275 days after a court order, writ, or judgment is issued requiring the local agency to bring its housing element into substantial compliance, whichever is earlier. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 65583.2 of the Government Code, as amended by Section 6.5 of Chapter 282 of the Statutes of 2024, is amended to read: 65583.2. (a) A city’s or county’s inventory of land suitable for residential development pursuant to paragraph (3) of subdivision (a) of Section 65583 shall be used to identify sites throughout the community, consistent with paragraph (10) of subdivision (c) of Section 65583, that can be developed for housing within the planning period and that are sufficient to provide for the jurisdiction’s share of the regional housing need for all income levels pursuant to Section 65584. As used in this section, “land suitable for residential development” includes all of the following sites that meet the standards set forth in subdivisions (c) and (g): (1) Vacant sites zoned for residential use. (2) Vacant sites zoned for nonresidential use that allows residential development. (3) Residentially zoned sites that are capable of being developed at a higher density, including sites owned or leased by a city, county, or city and county. (4) Sites zoned for nonresidential use that can be redeveloped for residential use, and for which the housing element includes a program to rezone the site, as necessary, rezoned for, to permit residential use, including sites owned or leased by a city, county, or city and county. (b) The inventory of land shall include all of the following: (1) A listing of properties by assessor parcel number. (2) The size of each property listed pursuant to paragraph (1), and the general plan designation and zoning of each property. (3) For nonvacant sites, a description of the existing use of each property. If a site subject to this paragraph is owned by the city or county, the description shall also include whether there are any plans to dispose of the property during the planning period and how the city or county will comply with Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5. (4) A general description of any environmental constraints to the development of housing within the jurisdiction, the documentation for which has been made available to the jurisdiction. This information need not be identified on a site-specific basis. (5) (A) A description of existing or planned water, sewer, and other dry utilities supply, including the availability and access to distribution facilities. (B) Parcels included in the inventory must have sufficient water, sewer, and dry utilities supply available and accessible to support housing development or be included in an existing general plan program or other mandatory program or plan, including a program or plan of a public or private entity providing water or sewer service, to secure sufficient water, sewer, and dry utilities supply to support housing development. This paragraph does not impose any additional duty on the city or county to construct, finance, or otherwise provide water, sewer, or dry utilities to parcels included in the inventory. (6) Sites identified as available for housing for above moderate-income households in areas not served by public sewer systems. This information need not be identified on a site-specific basis. (7) A map that shows the location of the sites included in the inventory, such as the land use map from the jurisdiction’s general plan, for reference purposes only. (c) Based on the information provided in subdivision (b), a city or county shall determine whether each site in the inventory can accommodate the development of some portion of its share of the regional housing need by income level during the planning period, as determined pursuant to Section 65584. The inventory shall specify for each site the number of units that can realistically be accommodated on that site and whether the site is adequate to accommodate lower income housing, moderate-income housing, or above moderate-income housing. A nonvacant site identified pursuant to paragraph (3) or (4) of subdivision (a) in a prior housing element and a vacant site that has been included in two or more consecutive planning periods that was not approved to develop a portion of the locality’s housing need shall not be deemed adequate to accommodate a portion of the housing need for lower income households that must be accommodated in the current housing element planning period unless the site is zoned at residential densities consistent with paragraph (3) of this subdivision and the site is subject to a program in the housing element requiring rezoning by the applicable deadline for rezoning set forth in subparagraph (A) of paragraph (1) of subdivision (c) of Section 65583 to allow residential use by right for housing developments in which at least 20 percent of the units are affordable to lower income households. An unincorporated area in a nonmetropolitan county pursuant to clause (ii) of subparagraph (B) of paragraph (3) shall not be subject to the requirements of this subdivision to allow residential use by right. The analysis shall determine whether the inventory can provide for a variety of types of housing, including multifamily rental housing, factory-built housing, mobilehomes, housing for agricultural employees, supportive housing, single-room occupancy units, emergency shelters, and transitional housing, and whether the inventory affirmatively furthers fair housing. The city or county shall determine the number of housing units that can be accommodated on each site as follows: (1) If local law or regulations require the development of a site at a minimum density, the department shall accept the planning agency’s calculation of the total housing unit capacity on that site based on the established minimum density. If the city or county does not adopt a law or regulation requiring the development of a site at a minimum density, then it shall demonstrate how the number of units determined for that site pursuant to this subdivision will be accommodated. (2) The number of units calculated pursuant to paragraph (1) shall be adjusted as necessary, based on the land use controls and site improvements requirement identified in paragraph (5) of subdivision (a) of Section 65583, the realistic development capacity for the site, typical densities of existing or approved residential developments at a similar affordability level in that jurisdiction, and on the current or planned availability and accessibility of sufficient water, sewer, and dry utilities. (A) A site smaller than half an acre shall not be deemed adequate to accommodate lower income housing need unless the locality can demonstrate that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower income housing units as projected for the site or unless the locality provides other evidence to the department that the site is adequate to accommodate lower income housing. (B) A site larger than 10 acres shall not be deemed adequate to accommodate lower income housing need unless the locality can demonstrate that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower income housing units as projected for the site or unless the locality provides other evidence to the department that the site can be developed as lower income housing. For purposes of this subparagraph, “site” means that portion of a parcel or parcels designated to accommodate lower income housing needs pursuant to this subdivision. (C) A site may be presumed to be realistic for development to accommodate lower income housing need if, at the time of the adoption of the housing element, a development affordable to lower income households has been proposed and approved for development on the site. (3) For the number of units calculated to accommodate its share of the regional housing need for lower income households pursuant to paragraph (2), a city or county shall do either of the following: (A) Provide an analysis demonstrating how the adopted densities accommodate this need. The analysis shall include, but is not limited to, factors such as market demand, financial feasibility, or information based on development project experience within a zone or zones that provide housing for lower income households. (B) The following densities shall be deemed appropriate to accommodate housing for lower income households: (i) For an incorporated city within a nonmetropolitan county and for a nonmetropolitan county that has a micropolitan area: sites allowing at least 15 units per acre. (ii) For an unincorporated area in a nonmetropolitan county not included in clause (i): sites allowing at least 10 units per acre. (iii) For a suburban jurisdiction: sites allowing at least 20 units per acre. (iv) For a jurisdiction in a metropolitan county: sites allowing at least 30 units per acre. (4) (A) For a metropolitan jurisdiction: (i) At least 25 percent of the jurisdiction’s share of the regional housing need for moderate-income housing shall be allocated to sites with zoning that allows at least four units of housing, but not more than 100 units per acre of housing. (ii) At least 25 percent of the jurisdiction’s share of the regional housing need for above moderate-income housing shall be allocated to sites with zoning that allows at least 4 units of housing. (B) The allocation of moderate-income and above moderate-income housing to sites pursuant to this paragraph shall not be a basis for the jurisdiction to do either of the following: (i) Deny a project that does not comply with the allocation. (ii) Impose a price minimum, price maximum, price control, or any other exaction or condition of approval in lieu thereof. This clause does not prohibit a jurisdiction from imposing any price minimum, price maximum, price control, e [Text truncated for display. Full text available on Congress.gov.]