Up to 150
Townhomes per project, with no maximum site area
Strategy 05 · AB–1751 · New for 2027
AB 1751 Fee Simple
Townhome Communities
The next step after SB 684. AB 1751, the Missing Middle Townhome Ownership Act, gives for-sale townhome projects of up to 150 homes a ministerial, CEQA-exempt path from January 1, 2027. Part of our syndication model will be facilitating these projects where a site qualifies.
3 stories
Maximum occupiable stories per home
1,750 SF
Maximum average home size, net habitable
600 SF
Minimum fee-simple lot, each with its own parcel number
60 days
Permit Streamlining Act clock for ministerial approval — no hearing, no CEQA
Statutory parameters under AB 1751 (Chapter 781, Statutes of 2026), effective January 1, 2027. They describe what the law allows, not underwriting targets for any project. Cities have not yet published implementation procedures, and eligibility depends on each site.
The Reasoning
SB 684 proved the model on a single lot. AB 1751 lets the same model work at the scale of a neighborhood block.
SB 684 and SB 1123 made it possible to turn one infill lot into as many as ten fee-simple homes without a public hearing. That ten-home cap left a gap. Larger multifamily-zoned sites could only be subdivided for sale through a discretionary tract map, with public hearings, CEQA review and years of exposure to delay and appeal.
AB 1751 closes that gap. A qualifying project of up to 150 townhomes is approved ministerially against objective standards, on the same 60-day clock SB 684 uses. A city can deny it only with written findings of a specific, unmitigable impact on public health or safety.
The product is deliberately simple to build and to sell. Two- and three-story wood-frame townhomes avoid the elevators, podiums and structured parking that make mid-rise condominiums expensive. Each home can sit on its own fee-simple lot and sell one at a time to an owner-occupant using an ordinary mortgage, with no homeowners association required.
Buyers for new homes also gained new help in November 2026. Proposition 37 created state down payment loans of up to 17 percent of the price, usable only on newly built homes. AB 1751 townhomes are the kind of home it was written for.
How It Fits
Small Lots.
Larger Sites.
The two laws now cover different sizes of the same opportunity: new fee-simple homes, approved ministerially, sold individually to owner-occupants.
| SB 684 / SB 1123 | AB 1751 | |
|---|---|---|
| Homes per project | Up to 10 | Up to 150, no maximum site area |
| Housing type | Any | Townhomes, three stories or fewer |
| Average home size | Up to 1,750 net habitable SF | Up to 1,750 net habitable SF |
| Density | From 2027, base zoning may allow no more than 15 units | At least 75% of the state default density |
| Affordability | Only on certain Housing Element sites | 10% lower-income homes on projects of 11 or more |
| Approval | Ministerial, no CEQA, 60 days | Ministerial, no CEQA, 60 days |
| Best fit | A single infill lot with one dated house | Larger multifamily-zoned sites |
| Our status | Core strategy, with active projects | New for 2027; no project yet |
For the full comparison, read our guide to AB 1751 and our SB 684 strategy.
How It Works
Four Things This Strategy Depends On.
Regulatory
Ministerial Approval
Objective standards, no discretionary hearing, no CEQA review and a 60-day statutory clock. Fees and rules are locked once an SB 330 preliminary application is filed.
Product
Townhomes Built Simply
Wood-frame homes of three stories or fewer, with no podium, elevators or structured parking, and no city requirement for covered or enclosed parking.
Ownership
Fee-Simple Lots
Each home on its own lot of at least 600 SF with its own parcel number, financed by buyers with conventional mortgages. No HOA is required.
Exit
Build, or Sell the Approval
Larger projects can be built and released in stages, so construction follows sales. Or, where the near-term case is stronger, the entitled site can be sold with ready-to-issue plans instead of built out.
The Buyer · Proposition 37
Built for
First-Time Buyers.
Proposition 37, approved by voters on November 3, 2026, lends buyers of newly built homes up to 17 percent of the price for their down payment.
The Loan
Up to 17% of the Price
A fixed-rate second mortgage from CalHFA. With the buyer’s own 3 percent, that makes a 20 percent down payment.
The Home
New Construction Only
Townhomes and row houses qualify when the buyer is the first purchaser and the price is under 125 percent of the county’s conforming loan limit.
The Buyer
Middle-Income Households
A California resident for a year, earning no more than 200 percent of area median income, who will live in the home.
The Timing
Launching by Late 2027
CalHFA has up to a year after the measure takes effect to launch, about when the first AB 1751 homes could be under construction.
Read more: how Proposition 37 works and what it means for buyers of SB 684 and AB 1751 homes.
Prop 37 is not limited to first-time buyers, and loans are not yet available. CalHFA will set rates, terms and underwriting. Program availability and buyer demand are not assured.
AB 1751 Site Screen
What Makes an
AB 1751 Site Work.
The sites we will look at first are flat, multifamily-zoned infill parcels too large for SB 684’s ten-home cap, in the same Los Angeles neighborhoods where we already build.
- Price: up to $3,000,000, scaled to the number of homes. What we can pay depends on how many townhomes the site can hold. Because projects of more than ten homes must set aside 10 percent of them as affordable homes, we generally pay a slightly lower land price per square foot than on an SB 684 site.
- Zoning: multifamily, or underutilized single-family. Multifamily-zoned parcels are the main path. Single-family-zoned lots qualify only if they have no permanent home, or only abandoned or uninhabitable ones.
- Room for the density floor. The project must reach at least 75 percent of the state default density. In Los Angeles County that is generally about 22.5 homes per acre, roughly four townhomes on a 7,500 SF lot.
- Fewer than five homes on the parcel in the past five years, no rent-controlled or covenant-restricted units to be demolished, and no Ellis Act withdrawals in the past 15 years.
- Not in a high or very high fire hazard severity zone. This rules out most hillside parcels.
- Clear of the other exclusions: historic resources and districts, Housing Element sites designated for lower-income units, sites with a minimum density above 50 units per acre, and sites subject to SB 79.
- Coastal Zone parcels still need coastal permits, because AB 1751 does not override the Coastal Act.
- Served by public water and sewer. Flood, fault and past-contamination sites are not excluded outright but need agency clearances.
A screening summary, not legal advice. Final eligibility depends on the local agency’s review of the specific site.
Where We Are
AB 1751 takes effect on January 1, 2027. We do not yet own or have an AB 1751 project in entitlements, and no city has approved one. Our current small-lot projects are SB 684 projects.
As the law takes effect, we will evaluate larger multifamily-zoned sites under AB 1751 and structure qualifying projects the way we structure SB 684 projects: fee-simple lots, no HOA where the site allows it, and homes sold individually to owner-occupants. Building is not the only exit. On some projects we may instead sell the entitled site with ready-to-issue (RTI) building plans to another builder, if that offers a better near-term outcome than building and selling the homes ourselves. Each project will be underwritten on its own merits, and we will share what we learn as the first approvals come through.
What Can Go Wrong
The Risks We Underwrite Against.
Every strategy has a failure mode. These are the ones specific to this one — the complete risk disclosure for any investment lives in its offering documents.
- AB 1751 is a new statute with no approvals yet. Cities will publish their own procedures, interpretations will vary, and the law may be amended or challenged.
- Larger projects mean larger land, construction and carrying costs, and a longer sellout. Selling many homes individually depends on absorption in each submarket.
- Projects of 11 or more homes carry a 10 percent affordability requirement under a 45-year covenant, or a stricter local inclusionary rule. Obligations are disclosed per deal.
- Buyer programs such as Proposition 37 are not yet operating, and their terms, funding and timing are outside our control.
- Site exclusions, the density floor and coastal permitting narrow the number of qualifying sites in Los Angeles.
Questions
AB 1751 FAQ.
The questions we hear most from investors, landowners and agents about AB 1751.
What is Assemble Capital’s AB 1751 strategy?
Building for-sale townhome communities under AB 1751, the Missing Middle Townhome Ownership Act: projects of up to 150 townhomes on larger multifamily-zoned infill sites, approved ministerially, with each home on its own fee-simple lot and sold individually to an owner-occupant. It extends our SB 684 approach to sites too large for SB 684’s ten-home cap.
When does AB 1751 take effect?
January 1, 2027. Governor Newsom signed it on September 29, 2026 (Chapter 781, Statutes of 2026). Cities are expected to publish their own implementation procedures during 2027.
Does Assemble Capital have an AB 1751 project today?
No. The law is not yet in effect and no city has approved an AB 1751 project. Our current small-lot projects use SB 684. As the law takes effect we will evaluate qualifying sites, and each project will be underwritten on its own merits.
How is AB 1751 different from SB 684?
SB 684 and SB 1123 allow up to ten homes of any type on a qualifying lot. AB 1751 allows up to 150 townhomes of three stories or fewer, requires at least 75 percent of the state default density, and requires 10 percent affordable homes on projects of 11 or more. Both are ministerial, CEQA-exempt and run on a 60-day approval clock.
Can each AB 1751 townhome be sold on its own lot?
Yes. Each home can sit on a fee-simple lot of at least 600 square feet with its own parcel number. The law also permits common interest developments, limited-equity cooperatives, community land trust models and tenancy in common, and it does not require a homeowners association unless the Davis-Stirling Act does.
Can lots be sold before the homes are built?
Generally no. Each parcel sold, leased or financed separately must contain a completed home, with limited exceptions such as common areas. A city can waive that rule by ordinance.
What is the AB 1751 affordability requirement?
On projects of 11 or more homes, at least 10 percent of the units must be sold to lower-income households at an affordable housing cost, with affordability maintained for at least 45 years. If a local inclusionary ordinance requires a higher share, the local rule applies. Smaller projects are exempt.
Which Los Angeles sites qualify?
Mainly multifamily-zoned parcels, plus single-family-zoned lots with no permanent home. Sites in high or very high fire hazard severity zones, historic districts, Housing Element lower-income sites, sites subject to SB 79 and parcels that held five or more homes in the past five years are excluded. Coastal Zone sites still need coastal permits.
How does Proposition 37 relate to AB 1751 homes?
Proposition 37, approved in November 2026, lets CalHFA lend buyers of newly built homes up to 17 percent of the price as a down payment loan. A newly built AB 1751 townhome sold to its first buyer can qualify if its price is under the county cap and the buyer meets the income and residency rules. CalHFA has up to a year after the measure takes effect to launch the program.
How much do you pay for an AB 1751 site?
Up to $3,000,000. Our buying power depends on how many townhomes we can fit on the site. Because projects of more than ten homes must set aside 10 percent of the homes as affordable, we generally pay a slightly lower land price per square foot than on an SB 684 site.
Will Assemble Capital always build the AB 1751 projects it entitles?
Not necessarily. On some AB 1751 projects we may sell the entitled site with ready-to-issue (RTI) building plans to another builder rather than build it ourselves, when that offers a better near-term outcome than a full build and sellout. That decision is made project by project.
How can I invest in or bring a site to this strategy?
Investors start with a conversation; any offering is made only through definitive offering documents to eligible investors. Landowners and agents can submit a site through our Submit a Deal page.
More in the Learning Center: AB 1751 explained · AB 1751 or SB 684: which path fits a site · The AB 1751 affordability requirement
Investor Relationships
Start With a Conversation.
We get to know investors before any specific project is discussed. Projects are held in project-specific LLCs, with the principals personally guaranteeing the project loans, never our investors.
Contacting us is not an offer, commitment, or investment. Any offering is made only through definitive offering documents to eligible investors with whom we have a pre-existing relationship.