A new approval path starts January 1, 2027
California’s AB 1751 creates a streamlined approval path for qualifying townhome projects starting January 1, 2027. For a San Diego buyer, that makes the proposed ownership and project documents worth understanding. For a landowner, it creates another development path to evaluate against the parcel’s actual conditions.
The Missing Middle Townhome Ownership Act was signed September 29, 2026 as Chapter 781. It applies to qualifying projects in cities and unincorporated county areas, including charter cities. The Governor’s signing announcement identifies the townhome approval measure within the state’s housing legislation.
A qualifying application follows a ministerial process: approval turns on the applicable standards rather than a discretionary judgment about whether the project is desirable. The parcel still has to qualify, and the proposed development must satisfy the law’s requirements. Before relying on AB 1751 in a purchase or land valuation, establish those facts.
Check the project size and the site together
The law’s project definition allows up to 150 homes, with average net habitable floor area of no more than 1,750 square feet. That is a project average, not a promise that every home will have the same floor plan. A townhome has no more than three occupiable stories and shares a wall or meets the prescribed fire-separation arrangement.
The project must also meet at least 75% of the density benchmark referenced in state housing law. A planning professional needs to establish the applicable benchmark for the site. The minimum size of a newly created parcel is 600 square feet; that lot-size minimum does not establish the size of the home or how many homes a particular property can support.
Site eligibility narrows the opportunity further. The single-family-zoned sites covered by this provision must have no existing permanent residential structures, except structures that are both abandoned and uninhabitable. The subdivision provisions require service by a permitted community water system and municipal sewer. For qualifying sites outside a U.S. Census-defined urban area, the law imposes an infill test involving developed adjoining parcels on three sides.
That is why I would ask for a written site analysis before treating a potential townhome layout as part of a land price. A drawing showing a home count does not resolve utilities, access, existing housing or the approvals needed to build it.
The existing housing history matters
The law protects certain existing housing and restricts which sites can use this route. The prior-housing test includes a five-year lookback for a site that contained five or more homes, and a 15-year lookback for specified Ellis Act withdrawals. Protected affordable and rent-controlled housing also requires careful review.
Environmental, historic and other location restrictions matter as well. Ask the project’s planning team to identify the controlling maps, statutory exclusions and any applicable exceptions for the parcel. Fire, flood and other hazard classifications should be checked against the actual provisions, rather than reduced to a broad description of the neighborhood.
The Coastal Act remains in force. A coastal address alone does not settle whether a site qualifies, and AB 1751 does not erase a coastal approval requirement. A buyer evaluating coastal land needs the parcel-specific answer.
Understand what you would own and maintain
A townhome can look similar from the street while carrying a different ownership structure. Ask whether the purchase includes a separately owned lot, a condominium interest or another arrangement, and obtain the recorded documents that establish it.
AB 1751 limits a local government’s ability to require a homeowners’ association, but retains an exception involving California’s Davis–Stirling law for common-interest developments. It also permits arrangements for maintaining shared spaces. Separate lot ownership therefore should not be read as a guarantee of no association, no shared maintenance costs or no restrictions.
For a buyer, the practical questions are who maintains the roof, shared walls, private access and other common improvements; how the work is funded; and how decisions or disputes are handled. Compare those obligations with the purchase price and monthly ownership cost.
The ownership form also does not guarantee a mortgage or insurance policy. Have the lender and insurer evaluate the actual home and documents. Where an association is involved, my San Diego condo and HOA due-diligence checklist explains the financial, insurance and disclosure records to request.
Some homes will carry affordability restrictions
Projects with 11 or more homes must generally provide at least 10% for lower-income households, with affordability maintained for at least 45 years. A higher applicable local inclusionary percentage controls. The project’s approved documents determine how the requirement is satisfied and which homes are restricted.
For someone buying a restricted home, the price is only part of the decision. Request the household qualification rules, occupancy conditions and future resale provisions. Do not compare that home with an unrestricted one as though the ownership terms were identical.
For a landowner, the affordable-home requirement belongs in the development analysis alongside the proposed home count, construction and infrastructure costs. A project under the 11-home threshold still has to meet the other conditions of the law.
Check the parcel before a separate lot transaction
The act’s separate sale, lease and financing rule generally requires a completed home or an existing permitted home on the parcel being transferred or financed. It is a parcel-specific rule, with exceptions for common-area parcels and the last undeveloped parcel, as well as a possible local waiver.
For a buyer or seller, ask which provision authorizes the particular transaction and whether the relevant building and subdivision approvals are complete. Avoid treating a proposed subdivision map as proof that every new vacant parcel can immediately be sold on its own.
The complete Chapter 781 text reproduced by LegiScan contains the project, subdivision and transaction conditions. Holland & Knight’s October 6 analysis also explains the final law and its limits.
Put the unresolved questions into the transaction plan
Before making an offer on land, I would want the zoning and site analysis, utility information, existing-housing history and the basis for the proposed subdivision. Identify which approvals exist, which remain to be obtained and which assumptions support the asking price.
Before buying a completed townhome, focus on the title and ownership documents, maintenance obligations, affordability restrictions if applicable, and the lender’s and insurer’s requirements. My buyer representation services connect those property questions with the offer and investigation period.
The useful opportunity is a qualifying path to a particular home or development. Build your purchase or sale decision around the documented property and the work that remains.
Questions buyers and landowners ask
Does owning the townhome lot mean there will be no HOA or shared costs?
No. AB 1751 limits when a local government can require an association, but retains the Davis–Stirling exception for common-interest developments and allows shared-space maintenance arrangements. Check the ownership form, recorded documents and maintenance obligations for the actual home.
Can a developer sell every new lot before the homes are built?
The separate sale, lease or financing rule is parcel-specific. It generally requires a completed home or an existing permitted home on that parcel. The law includes exceptions for common-area parcels and the last undeveloped parcel, and permits a local waiver. Check which provision supports the particular transaction rather than assuming the entire project must be finished or that any vacant lot can be sold.
Must a city approve any project described as townhomes?
The streamlined route applies to projects and sites that satisfy the law’s conditions. Objective standards, site restrictions, tribal consultation and applicable Coastal Act requirements remain. The law also allows a denial based on written findings of a specified health or safety impact that cannot be satisfactorily mitigated. A townhome label alone does not establish eligibility.