SB79 was “meant to address two crises at once: The state’s long-term housing shortage and the financial precarity of its public transit agencies.”[a] The 3rd crisis is the enormous budgetary deficits the state and cities are also facing: San Diego has a $300m deficit, SF $728m, LA $1b, CA $45b.
One suspects the 2nd and 3rd crises are the intended targets.
But it’s unclear how SB79 would fix transit’s fiscal cliffs. The SF BART system is facing a 2026 cliff and ascribes its steep revenue declines to high work from home rates and a struggling downtown area [c] The SD MTS system has a 2028 cliff LA Metro uses sales tax increases (measures M and R) to fund 50% of its budget (fare revenue funds only 1%), yet it still faces a 2030 cliff. RTO remains deeply unpopular and downtown commercial real estate has seen steep losses [d] However, SB79 does allow transit agencies to develop and acquire land adjacent to transit stops as an additional revenue source [e]
SB79 supporters seemed to be focused on lowering multifamily rental prices, but again it’s unclear how SB79 would accomplish this, since it still depends on market incentives to add multifamily units. Banks or investors won’t loan money to developers unless the net operating income (rent) is high enough to justify investment. The other factor is interest rates, but SB79 can’t change that. Many existing multifamily properties struggle to break even and now have the highest loan delinquency rate after offices [e] Manville points out new multifamily supply is constrained by recent “mansion taxes” (eg 2023 ULA measure in LA, 2020 Prop 1 in SF)[f]. Also, SB79 reserves only 10% of a multifamily building to low income and allows market rate rents in the other units.
SB79 would give even more leverage to institutional investors and developers over municipalities and communities. Their concerns are valid (eg zoning and development plans balanced over decades, gentrification, eminent domain, etc.) and shouldn’t be dismissed automatically as collateral damage in an attempt to drive down rental prices. One housing coalition estimates 2/3 of multifamily units in LA are owned by investment vehicles which historically have shown higher annual rent increases and eviction rates than local operators [g]
[a] <https://calmatters.org/housing/2025/09/neighborhood-transit-...>
[b] SF <https://sfstandard.com/2025/05/30/san-francisco-budget-screw...>
LA <https://calmatters.org/commentary/2025/03/california-bails-l...>
CA <https://apnews.com/article/california-budget-deficit-18ff9c1...>
[c] <https://www.bart.gov/sites/default/files/2025-01/FiscalCliff...>
[d] <https://www.sfexaminer.com/news/business/stressed-sf-commerc...>
[e] <https://laist.com/news/housing-homelessness/sb79-heads-for-n...>
[f] <https://www.trepp.com/trepptalk/cmbs-delinquency-rate-increa...>
[g] <https://www.lewis.ucla.edu/research/the-consequences-of-meas...>
[h] <https://knock-la.com/los-angeles-rental-speculation-4022d16a...>