Summary:

California’s housing crisis is a pressing issue that demands not only the construction of new homes but also policies that keep people housed and prevent displacement.  Senate Bill 262 (SB-262), signed into Law in September 2025, is a crucial step in strengthening the state’s Pro-housing Designation Program (PDP) by broadening the definition of pro-housing local policies and enhancing incentives for jurisdictions that adopt them.

Background: What is the Pro-housing Designation Program?

The Pro-housing Designation Program, established under Government Code Section 65589.9, is a program that rewards local jurisdictions that exceed the minimum housing element compliance requirements.  Jurisdictions with a Pro-housing Designation receive a range of benefits that can significantly boost their housing initiatives:

• Priority scoring for competitive state housing and infrastructure grants, including:
• Affordable Housing and Sustainable Communities (AHSC)
• Infill Infrastructure Grant (IIG)
• Transformative Climate Communities (TCC)
• Transit and Intercity Rail Capital Program (TIRCP)
• Access to the Pro-housing Incentive Program (PIP), which provides direct funding to accelerate affordable housing production and preservation.

Key Changes Introduced by SB-262: The bill expands the scope of pro-housing policies and clarifies how jurisdictions can earn designation.  This is a significant shift that will have a profound Impact on housing policies in California.

1.  Broader Definition of Pro-housing Local Policies

Previously, pro-housing policies focused on planning, approval, and construction of housing.  SB-262 introduces policies that prioritize keeping people housed, recognizing that housing stability is as crucial as the supply of housing.

2.  New Qualifying Policies

Local governments can now earn points for implementing:

• Safe Parking Programs
• Designated parking areas for individuals living in vehicles, with bathrooms, security, and enrollment processes.
• Safe Camping Programs
• Managed sites for unsheltered individuals and families.
• Low-Barrier Navigation Centers & Noncongregate Shelters
• Facilities that meet health and safety standards.
• Eviction Defense and Prevention
• Funding legal services for tenants facing eviction.
• Residential Rent Stabilization Ordinances
• Measures to prevent displacement and maintain affordability.

3.  Existing Prohousing Policies Still Apply

Jurisdictions can continue to earn designation through:

• Zoning for by-right residential and mixed-use development
• Local housing trust funds
• Reduced permit processing times
• Objective development standards
• Lower development Impact fees
• Adaptive reuse ordinances for converting commercial properties into housing.

4.  Scoring Rules

Points for new “keep people housed” policies cannot exceed the minimum points awarded for policies directly related to housing production.  This ensures the program remains focused on building housing while supporting stability.

Impact on Housing Element Compliance

SB-262 does not change the core requirement for jurisdictions to adopt a compliant housing element under the Planning and Zoning Law.  However, it creates more substantial incentives for cities and counties to adopt comprehensive housing strategies that combine:

• Production (new units)
• Preservation (existing affordable stock)
• Protection (anti-displacement measures).

Jurisdictions with both a compliant housing element and a pro-housing designation gain a competitive edge in securing state funds for housing and infrastructure projects.

Why This Matters

California’s housing shortage is intertwined with homelessness and displacement.  SB-262 acknowledges this reality by rewarding jurisdictions that:

• Build more housing
• Streamline approvals
• Protect vulnerable residents from losing their homes

This holistic approach aligns with the state’s long-term goal of achieving housing stability for all Californians.

Bottom Line

SB-262 is a strategic evolution of California’s housing policy.  By expanding the definition of prohousing policies and linking them to funding incentives, the state encourages local governments to adopt measures that produce, preserve, and protect housing—a three-pronged approach essential for solving the housing crisis.