The Arroyo Grande City Council has taken significant steps to enhance housing development in the city by adopting new regulations that align with recent state legislation. During the Planning Commission meeting on September 16, 2025, council members discussed the implications of Senate Bill 9 and Senate Bill 450, which mandate the approval of specific housing projects aimed at increasing residential units.

Senate Bill 9 allows for urban lot splits, enabling property owners to divide a single-family residential lot into two separate parcels. This legislation also permits the construction of two primary homes on a single lot, potentially resulting in up to four new homes from a single parcel. The council previously adopted an ordinance in 2022 to incorporate these provisions into local law.

The new regulations come with certain protections, including restrictions on development in environmentally sensitive areas and historic districts. Additionally, the legislation includes anti-displacement measures, preventing the demolition of affordable housing or rental units that have been occupied within the last three years.

Senate Bill 450 further modifies the framework for urban lot splits and two-unit developments. It limits the city's ability to impose design standards that are not uniformly applicable to all single-family developments, streamlining the approval process. The city is now required to act on complete applications within 60 days, with the ability to deny applications only under specific adverse impacts to public health and safety.

These changes aim to simplify the development process and encourage more housing options in Arroyo Grande. The council's decision to repeal existing design standards that do not comply with state law reflects a commitment to facilitating housing growth while still maintaining some level of oversight.

As Arroyo Grande moves forward with these new housing initiatives, the city anticipates a more dynamic residential landscape that could address the growing demand for housing in the region. The council's proactive approach signals a readiness to adapt to state requirements while considering the needs of the community.