June 2025 was a monumental month for the state of California’s housing market. Governor Gavin Newsom signed several bills into law that affect housing, from ADUs to environmental issues. Known as AB 130, the particular set of changes found in this piece of legislation has far-reaching effects on homeowners and home builders in Southern California and beyond. This article explores these changes and what they mean for you.
ADU Rule Changes
ADUs, or Accessory Dwelling Units, are incredibly popular in the cramped Los Angeles housing market. However, they’ve also been subject to scrutiny and restrictions as certain interest groups try to impose financial barriers or prohibitions on their construction. Now, with AB 130, homeowner’s associations (HOA) are no longer allowed to levy fees on ADU projects considered common interest developments.
Another ADU change under AB 130 relates to how government agencies are obligated to treat them. Prior to the bill’s passage, ADU ordinances in effect before January 1st, 2018 received special exemption from certain standards or policies that came after that date. Now, these older ordinances are no longer grandfathered in, which means all ADUs – including new construction ADUs – are now subject to the same rules and regulations.
CEQA Requirements Lifted
Previously, relevant agencies were required to review and disclose the environmental impact of many housing development projects. CEQA, the California Environmental Quality Act, was initially signed into law in 1970 by Governor Ronald Reagan, and was designed to ensure potential environmental impacts and damage were taken into account before construction began. Over time, this policy was expanded, which led to delays and increased costs for homeowners looking to build in California.
Under AB 130, certain housing development projects in designated urban areas are exempt from CEQA reviews, which involve in-depth, lengthy studies on the potential environmental impacts of new housing projects. Proponents say this exemption will encourage new development and speed up existing new construction timelines. On the other hand, opponents fear that environmental concerns could be overlooked as a result of the legislation.
Building Code Freeze
For decades, California has been attempting to combat climate change through residential building codes. Now, changes under AB 130 are reworking the development landscape, particularly as it relates to electrification efforts. AB 130 freezes updates to building codes for six years, through 2031.
As a result, scheduled electrification codes that were slated to go into effect in 2028 will now be paused. Groups and organizations focused on environmental concerns state that the code freeze undermines California’s effort to promote electricity over other forms of energy, including the less efficient and clean gas.
Keeping Up With California Housing
The policy changes in AB 130 represent some of the most significant updates in recent history regarding residential housing in California. At Creative Innovation Developers, we’re committed to understanding and communicating these new rules and regulations to our clients to ensure their homebuilding experience is as seamless as possible – no matter what the current laws say. Plan your new home construction in Los Angeles with us today.