Starting in 2026, they can pay into what's called a Vehicle Miles Traveled Fund.
How will it work?
The money would help build affordable housing and infrastructure near transit areas where people are less dependent on cars. While supporters say it's about cutting emissions while easing the housing shortage, critics see it differently.
"It is a housing tax that is put on new home developments, so homebuilders will have to pay this tax which will ultimately be passed on to home buyers and in the case of apartment buildings renters," said Mitchell Vieyra, the executive vice president at BizFed, which advocates for businesses in the Southern California region.
He said the fee will make new housing and rentals unaffordable, impacting workers and in turn employers.
"At the end of the day, we need housing for our workforce, and we need new headquarters to come in stay in L.A. County, and we need that workforce housing," he said. "That is why it is important to everyone."
While he does support some of the new measures set to take effect, Vieyra is urging lawmakers to remove the Vehicle Miles Traveled fee, which he says penalizes developers who build away from transit and job centers.
"We have high housing goals as far as supply and production, and so to reach goals, we need all types housing in all areas," he said.
Supporters counter that developers will still have flexibility, they can choose this Vehicle Miles Travel fund or stick with traditional fixes, like transit upgrades or bike lanes.