The California Governor’s Office of Land Use and Climate Innovation released final guidance on June 30, 2026 for the AB 130 Statewide VMT Mitigation Program, laying out how it will operate under the California Environmental Quality Act (CEQA).
Core framework stays largely unchanged
Earlier drafts of the guidance described a voluntary, contribution‑based system that lets lead agencies offset significant vehicle‑miles‑traveled (VMT) impacts by depositing money into the Transit‑Oriented Development Implementation Fund. The final guidance keeps that structure intact. Under the model, a lead agency or an applicant’s representative can make a monetary contribution, which the California Department of Housing and Community Development (HCD) will then allocate to affordable‑housing projects that are designed to be VMT‑efficient.
Those projects are expected to generate fewer vehicle miles than comparable market‑rate housing, creating a measurable reduction that can be counted toward the mitigation of other CEQA projects.
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Access initially limited to publicly funded projects
While it theoretically applies to any CEQA project with significant VMT impacts, the guidance specifies that early participation will be restricted to projects receiving public funding. Funding sources include direct assistance, grants, subsidies, loans, tax credits or other support from federal, state, regional or local public entities.
Private developers are advised to watch how it is used in its first phase and continue to consider traditional mitigation methods for their projects. The guidance notes that HCD and LCI may revisit the eligibility criteria in future updates.
Updated credit values and regional pricing
The program calculates required contributions using VMT Mitigation Credits. The final guidance adds a three‑percent administrative fee to each credit to cover tracking, reporting and program updates. LCI plans to review the fee every three years and adjust it if demand changes.
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For the Southern California Association of Governments (SCAG) and Metropolitan Transportation Commission (MTC) regions, the guidance introduces sub‑area pricing. Contributions made within those sub‑areas will still be pooled and prioritized at the broader SCAG and MTC level, following the same framework laid out in the draft.
Details on how VMT reductions are calculated
The final guidance expands on the methodology used to link a project’s VMT impacts to the contribution amount. It provides regional and sub‑regional data on trip generation, average trip lengths, VMT per housing unit and the cost of affordable‑housing development. This data is intended to create a clear nexus between the emissions a project creates and the reductions expected from funded mitigation projects.
Implementation timeline and future updates
The final guidance establishes the program’s operational foundation while HCD administration and future rulemaking will shape its use. LCI states that it will continue coordinating with HCD as formal CEQA regulations are drafted.
