2025 Legislative Year in Review

By Jason Rhine, Senior Director of Legislative Affairs

Two events shaped the 2025 legislative session more than any others: the reelection of President Donald Trump and the deadly Palisades and Eaton fires that killed 31 people and destroyed 11,000 homes. In total, legislators introduced over 2,300 bills, with around 900 reaching the Governor's desk.

But those issues weren't the only things on city leaders' minds this year - and Cal Cities made sure state leaders knew that. Cal Cities ran an ambitious, proactive legislative agenda, sponsoring 15 bills focused on short-term rentals, climate resiliency and adaptation, housing, sober living facilities, wildfire mitigation, the Brown Act, and clean drinking water. Eight reached Newsom's desk, six of which he signed.

Budget crunch impacts housing and homelessness funding

Crafting a balanced state budget was exceptionally challenging in 2025 due in no small part to a $11.8 billion deficit, changes in federal policy, a sluggish economy, and substantial growth in Medi-Cal costs and caseloads.

The final budget zeroed out the state's biggest homeless prevention grant program for the fiscal year and slashed the Infill Infrastructure Grantprogram - over the objections and warnings of Cal Cities and others. State leaders did, however, allocate $100 million in one-time funding to implement the Proposition 36 public safety initiative and revived a few of the state's most successful affordable housing programs.

While technically balanced, lawmakers and the Governor relied on borrowing, delays, deferrals, shifts, reserve spending, and reductions to close the gap - kicking the can down the road to next year, where a $15-$20 billion deficit looms large.

Well-funded opposition campaign couldn't stop common-sense reform

With cities struggling with fiscal uncertainty and a lack of housing, SB 346 (Durazo) quickly became one of Cal Cities' most important sponsored bills of the year. The measure cracks down on illegal short-term rentals and enables cities to capture the millions of tax dollars left uncollected each year. It passed without a single "no" vote before being signed into law - despite a disinformation campaign led by deep-pocketed corporations.

Prop. 4 funding protected

The state is largely barred from raiding local coffers to fill budget holes, but that doesn't mean it won't try. In the early months of budget negotiations, state leaders attempted to claw back funding from last November's $10 billion climate bond to fill the budget deficit.

Thanks to consistent advocacy from Cal Cities and a broader coalition, the Governor and Legislature agreed to not just preserve the funding stream as is, but increase the first tranche of funding to $3.287 billion. Cities can use Prop. 4 monies for a range of initiatives, including safe drinking water, climate and wildfire resilience, extreme heat mitigation, and outdoor access.

Cal Cities ensures city priorities are in Cap-and-Invest deal

The climate crisis is affecting cities' core functions: infrastructure, public safety, and housing. And Cal Cities made sure that was top of mind for lawmakers, as they negotiated a two-bill deal that makes sweeping changes to the Cap-and-Trade Program (now Cap-and-Invest). In a win for cities, the new framework includes funding for affordable housing and sustainable community efforts, as well as wildfire resilience.

Explicitly excluded are funds for clean transportation, organic waste infrastructure, and climate adaptation. However, the deal allows the Legislature to allocate $1 billion at its discretion during the annual budget process: Cal Cities will fight for every last dollar.

It's Groundhog Day … again

The legislative session is not complete without dozens of new bills aimed at addressing the extreme underproduction of housing in California. In 2025, lawmakers introduced over 100 housing-related bills, many seeking to limit local land use authority, cap or reduce development fees, and impose new ministerial approval processes.

SB 79 (Wiener) may have received the most attention, as it disregards state-certified housing elements and grants land use authority to transit agencies without requiring them to align development standards with local rules. A groundswell of opposition from over 180 cities and other advocacy organizations compelled the author to amend the bill 13 times, narrowing the scope to cities in eight large counties.

Housing element clarity denied

Channeling long-simmering frustrations from city officials about the housing element process, Cal Cities teamed up with Asm. Diane Papan to sponsor AB 650. This common-sense measure would have made it easier for cities to plan for housing faster and more effectively. Even though AB 650 sailed through with bipartisan support and zero "no" votes, Newsom vetoed the bill, claiming it "inappropriately shifts responsibility for preparing housing elements from local jurisdictions to HCD."

Another good year for recovery housing oversight

Newsom signed two recovery housing bills sponsored by Cal Cities: AB 492 (Valencia) and AB 424 (Davies). AB 424 ensures the Department of Health Care Services (DHCS) keeps communities informed on its investigations into complaints of treatment facilities. AB 492 requires DHCS to inform a city if the department approves a new license in its jurisdiction. This marks the second consecutive year that Asm. Avelino Valencia, Asm. Laurie Davies, and Cal Cities have sent recovery housing bills to the Governor's desk - the most movement on the issue in over a decade.

Cal Cities secure changes to flawed homeless measures

Cal Cities pushed back hard on two measures that posed serious threats to cities' ability to address homelessness. The first, SB 634 (Pérez), sought to block cities from adopting any rule that imposes civil or criminal penalties on homeless residents. After sustained opposition from nearly 100 cities, Sen. Sasha Pérez changed the bill to address Cal Cities' concerns, which Newsom later signed into law.

SB 16 (Blakespear) into a two-year bill after receiving similar pushback, shelving it for the year. Cal Cities and over 50 organizations opposed the measure after it was amended to impose sweeping new requirements for the HHAP program - including an ambitious regional interim housing plan.

Putting a dent in metal theft

Metal theft has become a widespread and costly issue that damages critical infrastructure - everything from manhole covers to electric vehicle charging stations - and endangers public safety. This year, Cal Cities sponsored AB 476 (Gonzalez), which enhances reporting requirements for recyclers and junk dealers and increases fines for metal theft. The bill sailed through the Legislature and was signed by the Governor.

Warehouse citing clean-up finally happens

Legislative fights often span multiple legislative sessions, even decades. This year, lawmakers delivered long-promised (and hard-fought) changes to last year's problematic warehouse law. The clean-up legislation, SB 415 (Reyes), addresses a significant number of concerns raised by Cal Cities and others when the original bill emerged at the end of the session last year after months of closed-door negotiations.

Big Brown Act change comes with a big price tag

For years, Cal Cities has pursued much-needed reforms to the Brown Act. In 2025, lawmakers responded - albeit not in the way Cal Cities had hoped - by making the most extensive changes to the Brown Act in years. SB 707 (Durazo) includes several provisions that give cities more meeting flexibility. But these changes come with sweeping and costly new mandates on cities without adequate resources, flexibility, or time to implement them.

Good wildfire and fire insurance bills were signed, but more work remains

Legislators introduced over 100 measures to address issues identified after the devastating fires in Los Angeles County. Cal Cities worked extensively to get many of these bills across the finish line. Some, like AB 1 (Connolly) and SB 616 (Rubio), focus on beefing up the state's wildfire mitigation standards. Others, such as AB 888 (Calderon) and SB 326 (Becker), direct money to local home hardening and Zone Zero implementation efforts. But passing these bills was the easy part. Implementing them is going to be a significant challenge, as city officials must partner with state and other local agencies to reduce fire risk and make communities more resilient.

New resources and punishments to stop prostitution and human trafficking

The Governor signed a critical piece of legislation pushed by Cal Cities, AB 379 (Schultz), that will make it easier for law enforcement to address prostitution and human trafficking. The measure created new charges - including for people who solicit 16- and 17-year-olds for prostitution - and requires certain businesses to display information about human trafficking. AB 379 also increases fines for businesses that enable prostitution and human trafficking, establishes a fund for victim services, and tasks the Office of Emergency Services with directing funds to district attorney offices to fight human trafficking.

Looking ahead

While cities didn't win every fight in the Legislature, 2025 was a successful year filled with major victories: That's because cities throughout the state stepped up and spoke up about the issues that mattered most to them. Cities submitted over 1,300 letters to the Legislature. With this strong engagement, Cal Cities is well-positioned to tackle the numerous challenges that lie ahead in 2026.

It is difficult to know for sure what to expect in the new year. However, state leaders are staring down a $15-$20 billion budget deficit, the nation's second-highest unemployment rate, uncertain federal actions, new leadership in the state Senate, and a gubernatorial election. And this year's raft of new laws certainly did not solve the state's seemingly perennial issues - the high cost of living, homelessness, a lack of affordable housing, and the impacts of climate change. Newsom's lame duck status and higher political aspirations will also likely hang over next year's proceedings.