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A Commercial Lending Solutions Publication
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Issue No. 2 | Week of May 25, 2026
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The Legislative Edge
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California housing bills, decoded into deals.
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Hi ,
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This Week's Featured Bill
SB 79: Transit Oriented Density, By Right, Across LA County
On October 10, 2025, Governor Newsom signed SB 79 into law. On July 1, 2026, every qualifying transit-adjacent parcel in LA County becomes eligible for ministerial multifamily approval at 80 to 120 units per acre by right. This week we walk through how a developer actually underwrites one of these sites before wiring earnest money.
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What the Bill Does
SB 79 (Wiener) overrides local zoning on parcels within one half mile of qualifying transit. The bill sets statewide minimum density and height standards that cities must approve ministerially. No discretionary review, no CEQA, no public hearings on residential or mixed-use projects that meet the criteria.
Tier 1 (heavy rail, BRT, ferry, 72 plus trains per day). Includes LA Metro B Line (Red), D Line (Purple), and A Line (Blue). Inner one quarter mile: 120 du per ac, FAR 3.5, 75 ft. Outer one quarter to one half mile: 100 du per ac, FAR 3.0, 65 ft.
Tier 2 (light rail, BRT). Includes LA Metro C, E, K Line. Inner: 100 du per ac, FAR 3.0, 65 ft. Outer: 80 du per ac, FAR 2.5, 55 ft.
SB 79 also carries labor standards (prevailing wage on 50 plus units), a lower income housing set aside in Tier 1, antidisplacement protections, and HCD oversight. Effective date for local agencies: July 1, 2026.
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Does Your Site Qualify
| 1. |
Within one half mile of qualifying transit. Heavy rail, light rail, BRT, ferry, or major commuter station. Confirm with the station map and a parcel-level distance calc. |
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Residential, mixed-use, or commercial zoning. Single-family-only zones excluded. R2 and up, CG, C2, C4, mixed-use districts qualify in LA City. |
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Project geometry. Minimum 5 units, minimum 30 du per ac, average unit size 1,750 net habitable sf or less. Demolition of any rent-controlled or deed-restricted housing in the prior 10 years disqualifies the parcel. |
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Legally formed parcel. Confirm assessor parcel numbers and check for a deleted prior APN, an unrecorded lot tie, or a parcel map condition. SB 79 is ministerial on a legal parcel. It is not a substitute for a lot line adjustment or parcel map. |
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The Opportunity: 923 and 927 Long Beach Blvd
Real listing. Walking analysis below reflects how we underwrite the deal. Numbers are framework only, not a return guarantee.
Verified site facts.
APN 7273-012-037 (9,000 sf) and APN 7273-012-011 (7,500 sf). Two contiguous, legally formed, vacant land parcels. Combined 16,500 sf / 0.38 ac. Listed at $3,500,000 ($212 per sf). Zoned LBPD-30 Downtown Plan with the Height Incentive overlay. Approximately 0.6 mi (13 min walk) to the A Line Anaheim Street station. That distance places the site in the Tier 1 OUTER band (one quarter to one half mile) under SB 79: 100 du per ac, FAR 3.0, 65 ft.
Existing entitlement. In May 2022 the Long Beach Planning Commission approved a 75-unit, 6-story residential project at this address under Site Plan Review SPR21-039 within the Downtown Plan Program EIR. Buyer to verify current validity of that approval.
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How a Developer Reads This Deal
1. Underlying zoning beats SB 79 here. PD-30 already permits FAR 5.0 and 150 ft. The 2022 SPR approved 75 units. SB 79 by-right (Tier 1 outer) would deliver only 38 units at 65 ft on this lot. SB 79's role on this parcel is a ministerial fallback if the 2022 approval has expired, or if a buyer wants a quick re-cut without going back through discretionary review.
2. Asking price tested against comps. $3.5M / 75 entitled doors = $46,667 per door. The September 2025 Marcus and Millichap sale of the 226-unit River Park site in Long Beach traded at roughly $57,500 per planned door. The asking here is below recent comp basis. Listing premium reflects the entitlement work already in the file.
3. Penciling the 75-unit market-rate execution. A 6-story Type IIIA mid-rise at this site pencils to roughly $475 to $525 per sf all-in, or about $625K to $675K per door on 850 sf average units. Downtown LB new construction 1BR rents in 2026 are $2,300 to $2,800. At a 5.6 percent stabilized cap, NOI supports a $625K to $640K per door valuation. Margin is tight but real, and the existing entitlement removes 18 to 24 months of carry that competing land plays cannot.
4. The arbitrage is optionality. Buyer gets PD-30 base entitlement at $46,667 per door today, SB 79 as a ministerial backstop on July 1, and the option to add State Density Bonus units later. The base case underwrites without any of the upside. The upside is free.
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Framework Numbers: 75-Unit Market-Rate Execution
| Line Item |
Value |
| Land basis (asking) |
$3,500,000 |
| Land basis per entitled door |
$46,667 |
| Recent LB comp (River Park, Sept 2025) |
$57,500 per door |
| Buildable doors (entitled base) |
75 units |
| All-in cost per door (Type IIIA mid-rise) |
$625,000 to $675,000 |
| Total development cost (framework) |
$47M to $50M |
| LB downtown new construction 1BR rents |
$2,300 to $2,800 |
| 2026 LB multifamily cap rate (CBRE, blended) |
5.6 percent |
| Senior construction loan (up to 75 percent LTC) |
~$35M to $37M |
| Sponsor equity required (25 percent) |
~$12M to $13M |
| Stack |
Senior construction + perm takeout |
Framework numbers, not a guarantee. Construction cost references: RSMeans 2026 mid-rise range $220 to $700 per sf; multifamily.loans LA Type IIIA 6-story benchmark $450 to $525 per sf all-in. Cap rate source: CBRE LA County multifamily 2026 forecast and Apartment Loan Store Long Beach data. Rent comp band: Apartments.com new construction surveys 2026. Actual loan sizing depends on sponsor financials, pre-leasing, and final underwriting.
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How We Finance These Deals
We size SB 79 and PD-30 sites with a two-product structure: ground-up senior construction during the build, then a stabilized permanent takeout at certificate of occupancy plus lease-up.
| Product |
Indicative Terms |
| Ground-Up Senior Construction |
Up to 75 percent loan-to-cost. 24 to 36 month term. Interest only during construction, drawn against verified hard and soft cost line items. Recourse and pricing tied to sponsor balance sheet and project specifics. |
| Permanent Takeout at Stabilization |
5.75 percent fixed indicative rate. 30 year amortization. 1.25x DSCR minimum. Up to 65 percent stabilized LTV. Sized off in-place stabilized NOI at certificate of occupancy plus 12 months of seasoning. Available on agency, bank, debt fund, and life company execution depending on sponsor profile. |
Indicative terms only. All loans subject to underwriting, credit approval, third party reports, and market conditions at lock. Rate quoted is a current-market indicative for a stabilized core-plus 75-unit Long Beach multifamily takeout and is not a commitment to lend.
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Other LA Parcels Worth Looking At
Pulled from active LA County listings. Always verify APN, current entitlements, transit qualification, and disqualifier checks with qualified counsel before underwriting. None of these have been validated to the same depth as the featured site.
| Address |
Transit |
Lot SF |
Tier |
Ask |
| 923 Long Beach Blvd, 90813 (featured) |
A Line |
16,500 |
Tier 1 outer |
$3,500,000 |
| 335 Centinela Ave, 90302 |
K Line |
4,320 |
Tier 2 |
$3,435,000 |
| 600 N La Brea Ave, 90302 |
K Line |
13,504 |
Tier 2 |
$2,500,000 |
| 230 W Arbor Vitae St, 90301 |
K Line |
3,111 |
Tier 2 |
$250,000 |
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Closing Thought
SB 79 is real, it is sweeping, and on July 1 it changes the ministerial default on every transit-adjacent parcel in LA County. It is also not a magic wand. Most sites that already trade in Tier 1 corridors carry a richer underlying zoning. The bill is most useful as a ministerial backstop, a way to refresh stale approvals, and a tool for adding density to a base case that already pencils. Read each deal against the underlying entitlement before you assume SB 79 unlocks anything new.
If you want us to stress test a specific parcel, validate APNs and transit tier, or size a senior construction loan with stabilized takeout, reach out. We finance ground-up multifamily nationally and we know this bill cold.
Until next issue,
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Trevor Damyan
President, Commercial Lending Solutions
The developer's first choice for construction lending
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Disclosures. This newsletter is for informational purposes only and does not constitute legal, tax, or investment advice. All deal frameworks shown are illustrative. Verify all legislative criteria, APNs, current entitlements, and ministerial path applicability with qualified legal counsel before relying on any bill for project approvals. Not a guarantee of investment return. Loan programs subject to underwriting, credit approval, and market conditions.
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