Fee Increase Contained in Budget Bill Could Raise Housing Costs - Will 2026 See Changes?

Assembly Bill 130 is a budget bill that was signed by Governor Newsom on June 30th. A provision highlighted by the CLTA was the revision of the foreclosure law placing new restrictions on lenders’ ability to foreclose on subordinate mortgages.  Another significant provision not directly affecting title, but that could raise housing costs is the vehicle miles traveled (VMT) fee in Section 58 of the legislation.

The California Building Industry Association identified VMT as a key policy area for builders and has been critical of the fees.  Under the new law, if a residential project has “significant transportation impact,” local governments or regional agencies can impose fees to mitigate the transportation impact by vehicle miles traveled fees.  These fees have been described as simply a new housing tax. 
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The language about VMT fees was never mentioned in analyses of the bill because budget trailer bills are often amended just before being passed and take effect immediately when signed by the Governor. Whether the new fee authorization may be changed or eliminated in 2026 legislation is an ongoing question.