SB 79 San Diego: 5-Month Window Before Transit Housing Law 2026

What is California SB 79?

Governor Gavin Newsom signed Senate Bill 79 into law on October 10, 2025, with implementation scheduled for July 1, 2026. The legislation effectively ends single-family-only zoning within half-mile radiuses of major transit stations in California's eight most transit-rich counties.

Legislative Background

Senator Scott Wiener authored SB 79 as the culmination of an eight-year fight to legalize homes near transit. Previous attempts to upzone transit corridors faced opposition from neighborhood groups concerned about changing community character. SB 79 passed by framing transit-oriented development as both a climate strategy—reducing vehicle miles traveled—and an affordability solution, concentrating new housing where residents can access jobs without owning cars.

The law applies exclusively to "urban transit counties" defined as those with 15 or more passenger rail stations. Only eight California counties qualify: Los Angeles, San Diego, Orange, San Francisco, Alameda, San Mateo, Santa Clara, and Sacramento.

Key Provisions: Height Limits and Density Overrides

SB 79 establishes two development tiers based on transit type and service frequency:

For context, most San Diego neighborhoods currently restrict residential buildings to 30-35 feet in height—roughly three stories. SB 79 doubles or triples allowable building heights within walking distance of transit.

Minimum Density Requirements

To qualify as a "transit-oriented housing development project" under SB 79, proposals must include:

• At least 5 dwelling units
• Minimum density of 30 dwelling units per acre (or higher local minimums)
• Average unit size not exceeding 1,750 square feet
• No hotel, motel, or transient lodging uses

These requirements favor mid-to-large scale multifamily projects over small duplexes or triplexes. A 10,000-square-foot lot—typical for many San Diego single-family properties—could accommodate 6-8 units at the 30-unit-per-acre minimum density.

San Diego Transit Corridors Affected

The San Diego Trolley system operates 62 stations across approximately 67.9 miles of route. Every station becomes a development opportunity zone under SB 79, with properties within half-mile radiuses gaining new building rights starting July 1, 2026.

Blue Line Stations (UTC to San Ysidro)

The Blue Line is San Diego's longest trolley route at 26.3 miles, connecting La Jolla job centers with the Mexico border. The Mid-Coast extension opened November 21, 2021, adding nine stations in University City.

Key Northern Extension Stations:

• UTC Transit Center
• UC San Diego Health La Jolla
• UC San Diego Central Campus
• Nobel Drive
• Balboa Avenue
• Clairemont Drive

Old Town to Downtown:

• Old Town Transit Center
• County Center/Little Italy
• America Plaza
• Gaslamp Quarter
• Convention Center

For cash buyers, the Blue Line presents opportunities at both ends: undervalued single-family properties near northern university-area stations, and affordable housing stock in South Bay communities where land costs remain lower than coastal neighborhoods.

Green Line Stations (Downtown to El Cajon)

The Green Line serves 24 stations over 19.8 miles, connecting downtown San Diego with Mission Valley, SDSU, La Mesa, and El Cajon.

Mission Valley Corridor:

• Fashion Valley Transit Center (adjacent to major shopping center)
• Stadium (serving Snapdragon Stadium)
• Grantville

College Area:

• SDSU Transit Center (only underground station in the system)
• 70th Street Station

East County:

• La Mesa Boulevard
• Grossmont Center
• El Cajon Transit Center

Mission Valley's three stations—Fashion Valley, Stadium, and Grantville—sit at the geographic center of San Diego County, offering access to both coastal and inland job markets. Properties within half-mile radiuses here gain value from central location plus new development rights.

Orange Line Stations (Downtown to El Cajon)

The Orange Line connects downtown with East County through Lemon Grove and La Mesa.

Key Stations:

• 12th & Imperial Transit Center (universal transfer point for all lines)
• Santa Fe Depot (Amtrak and Coaster connection)
• Lemon Grove Depot
• El Cajon Transit Center

12th & Imperial Transit Center is the only station serving all major lines, making it San Diego's highest-frequency transit location. Properties within half a mile of this hub gain maximum development potential under SB 79.

Copper Line (El Cajon to Santee)

Service began September 29, 2024, connecting El Cajon Transit Center with Santee Town Center. This newest addition creates development opportunities in Santee, an inland community with lower land costs than coastal San Diego.

Investment Opportunity for Cash Buyers

Real estate consulting firm RCLCO analyzed SB 79's opportunity: "SB 79 effectively scales transit-oriented development statewide: transforming select, politically negotiated opportunities into a consistent, as-of-right framework that improves predictability for developers and their capital partners."

For cash buyers, this "as-of-right framework" creates time-sensitive arbitrage.

Why Properties Near Transit Gain Value

Upzoning increases underlying land value due to increased income potential. A single-family home on a 7,500-square-foot lot that generates $3,000/month in rent has one value. That same lot with rights to build 60 units generating $180,000/month has a completely different value to developers.

Tax experts note that property valuations shift from "current use" to "highest and best use" when development rights change. Starting July 1, 2026, properties within SB 79 zones will be assessed based on their development potential, not just their existing residential use.

Timing Advantage: Pre-July 1 Purchases

Markets take time to reprice assets when regulations change. The gap between legal effective date (July 1, 2026) and market recognition of new values creates opportunity.

Cash buyers can:

1. Identify undervalued properties near trolley stations where owners haven't recognized SB 79 implications
2. Make fast offers with 7-14 day closings before competing buyers enter the market
3. Acquire at residential prices before properties reprice for development potential
4. Hold or flip to developers once the market adjusts post-July 1

Financed buyers face 30-60 day closing timelines and stricter underwriting. In competitive situations, cash offers win—especially when sellers want certainty before July 1.

12-24 Month Market Arbitrage Window

Historical zoning changes show markets take 1-2 years to fully reprice. After Los Angeles upzoned transit corridors in 2017-2018, property values near Metro stations increased 15-30% over the following 18 months as developers competed for sites.

San Diego's SB 79 implementation creates a similar window. Cash buyers acquiring in February-June 2026 can capture value before:

• Broader investor community recognizes opportunities
• Developers complete market analysis and begin acquisition campaigns
• Property owners educate themselves on new development rights
• Tax assessments reflect "highest and best use" valuations

The early-mover advantage compounds in markets with limited inventory. San Diego County has 62 trolley stations, but only a finite number of developable parcels within half-mile radiuses of each station.

Neighborhoods to Target

Not all transit corridors offer equal opportunity. Cash buyers should focus on neighborhoods where SB 79 creates maximum value differential between current residential use and future development potential.

Old Town: Preservation District Meets Transit Hub

Old Town's community plan already aims to triple housing, increasing population from 832 to 2,430. Old Town Transit Center connects Blue Line, Green Line, Coaster, and Amtrak—making it one of San Diego's most multimodal hubs.

Target zones:

• Properties along Pacific Highway (north of historic core)
• Areas near Interstate 5 and Interstate 8 interchanges
• Parcels between transit center and Hotel Circle

Price points: Single-family homes near Old Town currently trade $700,000-$1.2 million. Assemblages of 2-3 parcels totaling 15,000-20,000 square feet offer development sites for 30-50 unit projects.

Mission Valley: Central Location, Underutilized Land

Mission Valley features three Green Line stations—Fashion Valley Transit Center, Stadium, and Grantville—plus large underutilized commercial parcels.

Target zones:

• Grantville neighborhood (predominantly single-family)
• Properties near Mission Valley Center
• Parcels adjacent to Fashion Valley Transit Center

Price points: Grantville single-family homes: $650,000-$950,000. Mission Valley commercial properties: varies widely based on zoning and condition.

Downtown: 12th & Imperial Transit Center Radius

Downtown San Diego already permits high-density development, but 12th & Imperial Transit Center's half-mile radius extends into neighboring communities like Barrio Logan, Logan Heights, and Sherman Heights—areas with lower-density zoning and affordable property prices.

Target zones:

• Logan Heights (residential neighborhood south of downtown)
• Sherman Heights (mix of single-family and small multifamily)
• Barrio Logan edges (near transit but outside primary commercial corridor)

Price points: Single-family homes in Logan Heights and Sherman Heights: $500,000-$750,000—significantly below coastal San Diego while offering downtown trolley access.

El Cajon: East County Transit Hub

El Cajon Transit Center serves as the eastern terminus for both Orange and Green Lines, plus transfer point for Copper Line to Santee. East County property values run 30-40% below coastal communities, creating affordability for cash buyers with smaller capital.

Target zones:

• Residential blocks within quarter-mile of transit center
• Commercial properties eligible for residential conversion
• Assemblage opportunities in older subdivisions

Price points: Single-family homes near El Cajon Transit Center: $450,000-$650,000. Commercial properties: $200-$400 per square foot.

College Area: SDSU Station Student Housing Demand

SDSU Transit Center is San Diego's only underground trolley station, serving 35,000+ students. Student housing demand remains constant regardless of market cycles, creating stable rental income potential.

Target zones:

• Properties along College Avenue
• Residential streets between SDSU campus and 70th Street Station
• Parcels near Alvarado Road trolley access

Price points: Single-family homes near campus: $650,000-$900,000. Student rental conversion properties: $550,000-$800,000.

FAQ: California SB 79 Transit Housing Law

Take Action Before July 1, 2026

California SB 79 represents the most significant property rights change in San Diego County in decades. The July 1, 2026 effective date creates urgency—a compressed 5-month window where informed cash buyers can acquire properties before the broader market reprices assets for development potential.

Properties within half a mile of San Diego's 62 trolley stations will transition from single-family residential assets to development opportunities capable of supporting 6-9 story buildings with 75-120 units per acre. The gap between current residential values and future development values represents substantial profit potential for those who move decisively.

Cash buyers hold critical advantages: 7-14 day closing timelines, no financing contingencies, and ability to compete in multiple-offer situations. As developers begin assemblage campaigns in summer and fall 2026, early acquisitions positioned in strategic locations will command premium prices.

The question for San Diego homeowners near Old Town Transit Center, Mission Valley stations, Downtown's transit hub, SDSU, El Cajon Transit Center, and 50+ other trolley stops: capitalize on current residential valuations before July 1, or wait as neighborhoods transform and the market reprices?

Don't wait until developers flood the market with acquisition offers in July 2026. Act now while you control the timeline.