Assembly Bill 98 – New Rules for Development of California Warehouses
Effective January 1, 2026, California’s Assembly Bill 98, will implement new statewide design standards for logistics use developments, which will prohibit cities and counties from approving new or expanding warehouse developments unless they meet the criteria set forth in the new law. Due to the impact of warehouses and distribution centers over the past several years, the legislation aims to address planning and zoning processes for logistics facilities while considering community needs and environmental concerns.
Under AB 98, all proposed new or expanded logistics facilities must comply with comprehensive design and building standards. These standards will cover elements such as building aesthetics, truck loading bays, landscaping buffers, entry gates, and signage. Existing logistics operations and those already in the local entitlement process will be exempt from these requirements.
However, if an existing building is expanded, it may have to comply with the new standards. A key requirement of the bill is for facility operators to submit a truck routing plan to local authorities prior to receiving a certificate of occupancy. This plan must align with local truck route maps and is intended to manage truck traffic effectively, reducing potential disruptions in residential areas, which the law considers “sensitive areas.” Facility operators will be responsible for enforcing this plan, with provisions for enforcement by the Attorney General under specific circumstances.
Local governments will not be able to approve logistics developments that do not meet or exceed the standards set forth in AB 98. Additionally, the legislation includes a provision for affordable housing, requiring a 2-to-1 replacement of any demolished housing units occupied within ten years, unless those units were deemed substandard. To support better urban planning, the bill mandates that cities and counties update their circulation elements by January 1, 2028. This update must identify specific routes for transporting goods, aiming to mitigate truck traffic in sensitive areas and improve public safety.
The South Coast Air Quality Management District will monitor air quality impacts related to logistics developments. Beginning in 2026, the district will deploy mobile air monitoring systems in Riverside and San Bernardino counties to gather data on air pollution in communities near logistics facilities, which will help assess the effects on public health and the environment.
As AB 98 is set to take effect, stakeholders may benefit from understanding its implications for real estate and development projects. Legal expertise can assist in navigating the requirements and ensuring compliance with the new standards. Overall, AB 98 represents an effort to balance logistics development with community and environmental considerations in California.