That’s a Wrap: The 2025 Legislative Year Comes to a Close!
The 2025 legislative session officially ended, capping off a busy year with over 2,400 bills introduced across both houses. Roughly one-third of those bills have passed and are now on Governor Newsom’s desk, where they face one of three fates: signature into law, veto, or passive enactment if the Governor takes no action within the 30-day window.
The final stretch of the session was marked by a flurry of last-minute deals, closed-door negotiations, and major amendments as lawmakers raced against the clock. To help our members navigate the whirlwind, CCAH hosted a legislative update webinar on Monday, September 22, offering a deep dive into the bills that made it through and what they mean for our industry. If you missed this one, keep an eye out for our next one!
Key Legislative Highlights
SB 686 – A Win for Affordable Housing Financing CCAH, in partnership with the California Housing Consortium, successfully advanced SB 686, allowing affordable housing developers to repay HCD loans early and reinvest the equity into new projects. Though this was our third attempt, the Governor incorporated the bill’s provisions into AB 130 via the budget trailer process in June. We continued to use SB 686 throughout the session to refine and clarify repayment language—marking a major policy win for our community.
AB 130 & SB 131 – CEQA and Housing Streamlining AB 130 and SB 131 represent a sweeping reform package aimed at accelerating housing development and infrastructure. AB 130 modernizes CEQA by creating new exemptions for qualifying infill housing projects up to 20 acres, while preserving protections for sensitive lands and historic sites. It also expands the Permit Streamlining Act to include both discretionary and ministerial projects, imposes strict approval timelines, and introduces tools like the CEQA VMT Mitigation Bank.
SB 131 complements these reforms with targeted CEQA modifications and new funding for Homeless Housing Assistance and Prevention, contingent on local compliance with housing and homelessness benchmarks.
Housing Bond – Delayed but Not Defeated Despite strong bipartisan support, efforts to place a housing-focused bond on the November 2025 ballot stalled largely due to redistricting distractions. CCAH remains committed to working with our coalition partners to revive this initiative in 2026.
Department of Insurance Reforms – Tackling the Rate Review Crisis On September 19, Insurance Commissioner Ricardo Lara announced proposed reforms to the intervener process, which has long delayed rate reviews and increased costs for Californians. Groups like Consumer Watchdog have exploited the system, collecting over $22 million in fees since Prop 103’s passage. CCAH proudly joins a broad coalition, including builders, farmers, local governments, and insurers in supporting these reforms and advocating for a more transparent and efficient insurance system.
Leadership Changes – New Senate President Pro Tempore Senator Monique Limón (D–Santa Barbara) was formally elected to succeed Senator Mike McGuire as President pro Tempore of the California State Senate. Originally expected to assume the role in February, Senator Limón stepped in early and brings strong environmental credentials to the position. CCAH looks forward to working with her to advance our housing priorities.
Cap-and-Trade Reauthorization – A Major Win for AHSC In a last-minute deal, the Legislature reauthorized the cap-and-trade program, now rebranded as “Cap-and-Invest” through 2045. Under the new framework, the Affordable Housing and Sustainable Communities (AHSC) program will receive a guaranteed $800 million annually from the Greenhouse Gas Reduction Fund. This is a significant increase from the previous 20% allocation and ensures stable, long-term funding for affordable housing projects.
Governor’s Reorganization Plan – A New Housing-Focused Agency Governor Newsom unveiled a bold plan to dissolve the Business, Consumer Services and Housing Agency and create two new entities, including the California Housing and Homelessness Agency. This new agency will consolidate key housing departments and introduce a Housing Development and Finance Committee to streamline funding. While CCAH supports the creation of a cabinet-level housing agency, we remain firm in our position that CDLAC and CTCAC should stay under the Treasurer’s authority to preserve their efficiency and predictability.
If you have any questions or would like to discuss any of these updates further, feel free to reach out to me at pshafer@californiacouncil.org. I’d be happy to connect!