It means more for sale townhomes could get approved faster, starting next year. Assembly Bill 1751, the Missing Middle Townhome Ownership Act, was signed by Governor Newsom on September 29, 2026 and takes effect January 1, 2027. As the law firm Holland & Knight explained in its October 22 roundup of California's 2027 housing laws, it creates a streamlined path for small townhome developments, and I think that is exciting news for San Diegans who want to own.
What does the law actually do? According to Holland & Knight, qualifying projects of up to 150 townhomes are approved "by right" by local planning staff, without discretionary review, public hearings, or appeals, and they are not subject to CEQA review. Projects also fall under a 60 day approval shot clock. That kind of certainty can save builders a lot of time and money.
What kind of homes qualify? The law is aimed at modest, owner friendly homes. Townhomes can be up to three stories, and the average unit size in a project can be no more than 1,750 square feet. Fee simple lots as small as 600 square feet are allowed, so buyers can own the land under their home, and the law does not require a homeowners association. Projects with 11 or more homes must set aside 10% as affordable, with covenants lasting 45 years.
Are there limits? Yes. Sites in high or very high fire hazard severity zones and historic resources are excluded, and the law does not override the California Coastal Act. That matters here, since a lot of coastal San Diego falls under coastal rules. The law applies to multifamily zoned land and to vacant or underutilized single family lots, so the biggest opportunities may be on inland infill sites.
Why does this matter in San Diego? Price. San Diego MLS data from the Greater San Diego Association of Realtors shows the county's median attached home, which includes condos and townhomes, sold for $670,000 in September 2026, compared with $1,079,000 for detached homes. Townhomes give buyers their own front door, often a small yard or patio, and a path to equity at a lower entry point than a detached house.
Will this create new homes right away? Not overnight. The law starts in 2027, and projects still need land, financing, and construction time. How much gets built will depend on builders and local conditions, and city rules will keep evolving. But from where I sit, a faster, more predictable approval path for ownership housing is a big step in the right direction.
My advice? If a townhome fits your goals, there is no need to wait for 2027. There are townhomes and condos on the market across the county today, and owning sooner means building equity sooner. I'm your realtor, let me know when you need me.
Quick answers
What is AB 1751? California's Missing Middle Townhome Ownership Act, signed September 29, 2026, creating a by right approval path for qualifying townhome projects.
When does it take effect? January 1, 2027.
How big can projects be? Up to 150 townhomes, up to three stories, with an average unit size of no more than 1,750 square feet.
Does it apply in the coastal zone? The law does not supersede the California Coastal Act, and sites in high or very high fire hazard zones and historic resources are excluded.
Read the original article: https://www.hklaw.com/en/insights/publications/2026/10/californias-2027-housing-laws-what-you-need-to-know
Sources
Holland & Knight, "California's 2027 Housing Laws: What You Need to Know," October 22, 2026
California Legislative Information, AB 1751 bill history (Chapter 781, Statutes of 2026)
Image credit: Another Believer via Wikimedia Commons, CC BY-SA 4.0