Weekly Real Estate News
Summary
California enacted SB 344 and SB 958 to reduce legal and regulatory obstacles affecting San Diego’s Midway Rising redevelopment, which calls for 4,254 homes, including 2,000 deed-restricted affordable units.
California has enacted two laws aimed at reducing legal and regulatory obstacles facing San Diego’s long-planned Midway Rising redevelopment, a project the Legislature says would deliver 4,254 homes, including 2,000 deed-restricted affordable units.
Gov. Gavin Newsom signed Senate Bills 344 and 958 on Sept. 29. The measures address separate issues affecting the redevelopment of the city’s Sports Arena site: environmental review under the California Environmental Quality Act and the treatment of building height for qualifying infill development.
The most project-specific measure, SB 344, is an urgency statute that took effect immediately. The Legislature declared the Midway Rising environmental impact report sufficient, adequate and complete for CEQA compliance once the San Diego City Council certifies it, allowing subsequent project approvals to rely conclusively on that report.
More than 4,200 homes planned
The enacted law describes Midway Rising as approximately 4,254 new homes, including 2,000 deed-restricted affordable homes for households at or below 80% of area median income. Plans also include up to 130,000 square feet of commercial uses, roughly 14.5 acres of parks and open space and a new 16,000-seat multipurpose entertainment center.
The statute calls it one of the largest mixed-income housing communities on the West Coast and the largest affordable housing development in California’s history. Those descriptions are legislative findings, not independent WRE News rankings.
The project would redevelop roughly 49 acres around the existing sports arena. San Diego selected the development team in 2022, and the proposal has since faced years of environmental and land-use disputes.
Law narrows a major source of litigation risk
SB 344 does not itself approve construction. The measure becomes operative for the environmental report when the law is effective and the City Council certifies the report, whichever occurs later. Required mitigation measures remain enforceable, and the project applicant must provide annual status reports on their implementation.
But the legislation materially changes the legal landscape surrounding the project by making the certified environmental report final and conclusive for purposes of reliance under CEQA. The Legislature said immediate effectiveness was necessary to promote the swift development of affordable housing in San Diego.
A second measure, SB 958, addresses how added building height is treated for qualifying infill projects, another issue with implications beyond the arena redevelopment.
Project opponents have criticized the legislation as an improper project-specific limitation on environmental challenges, while supporters argue repeated litigation has delayed thousands of homes, including a large affordable component. Those competing views remain part of the dispute even after the bills’ enactment.
Construction still depends on local approval
The legislation removes or narrows important legal obstacles, but it does not mean bulldozers can immediately begin work. The City Council still must act on the project’s environmental review and approvals. Project representatives have said they hope to begin construction by the end of 2027 if the city approves the redevelopment.
For California’s housing industry, the significance extends beyond one San Diego site. The state has repeatedly revised CEQA and other development rules as lawmakers confront high housing costs and chronic underproduction. Midway Rising now provides an unusually large test of how far Sacramento is willing to intervene when litigation threatens a project containing thousands of homes.
