Merced | Housing Element and Rezone Sites

Merced, California Housing Element and Rezone Sites: Ordinance 2577, the 27 Sites Rezoned in 2025, Ordinance 2594, By-Right Review and the State Review Letter of March 2026

This page covers the topic that most changes what a Merced lot can hold in 2026: the City's housing element and the rezoning that goes with it. A housing element is the part of a city's General Plan that shows where the homes the state assigns it can be built. The assigned number is the Regional Housing Needs Allocation, or RHNA. When a city lacks enough sites zoned for those homes, state law makes it rezone land. Merced did that in Ordinance 2577, adopted April 21, 2025, which moved 27 sites into higher-density zones, and it introduced Ordinance 2594 in July 2026 to add rules the state asked for. The state housing department, HCD, wrote in March 2026 that the element could not yet be found in compliance. This page sets out what each document says. The Merced overview has the summary.

Where Merced's Housing Element Stands

Merced's sixth-cycle housing element covers 2024 to 2032. Ordinance 2594 states that the City "is required to update its September 2016 Housing Element for the Sixth Cycle planning period of January 31, 2024 through January 31, 2032." The City prepared it as part of the "Merced Multijurisdictional Housing Element", with an Appendix G for the City of Merced, both attached to the July 20, 2026 agenda item.

HCD reviews every housing element. In a letter of March 17, 2026 to the City Manager, HCD said the revised draft, received January 16, 2026 with changes on March 13 and March 16, "meets the statutory requirements that were described in HCD's December 8, 2025 review." The same letter says: "However, the housing element cannot be found in substantial compliance until the City has completed the necessary rezones." HCD explained that a city that missed its deadline by more than 120 days had to rezone within one year, and "As this year has passed, the housing element cannot be found in substantial compliance until rezoning has been completed to meet all statutory requirements." It also wrote: "The City's 5th cycle housing element no longer satisfies statutory requirements."

The letter names the City's Programs 2 (Adequate Sites for RHNA and Monitoring for No Net Loss) and 3 (By-Right Approval), and says the rezoning "will be supplemented with additional modifications to meet all statutory requirements." Those modifications are Ordinance 2594, below. This guide found no later HCD letter on the City's agenda system, so it cannot say whether HCD has since found the element in compliance. Ask the Planning Division, or check HCD's own records, before relying on either status.

Ordinance 2577: The 2025 Rezoning

Ordinance 2577 records that "in 2023, City staff identified 33 opportunity sites to rezone to a higher density" and that "there are 27 opportunity sites left to be rezoned which can fully meet the RHNA allocation." The Planning Commission held a hearing on February 5, 2025 and recommended approval of most sites in Resolution #4149, and denial of Sites G, R and S. The City Council introduced the ordinance on April 7, 2025.

The minutes of April 21, 2025 show the Council voting in parts. Two Council Members recused themselves from sites near their homes: one from Site C and one from Sites I and J. Those sites passed 5 to 1. The motion "to adopt the Ordinance, denying sites G, R, and S" passed 7 to 0, and the motion "to adopt the remaining 24 sites of the Ordinance" passed 6 to 1. Section 4 of the ordinance makes it effective "thirty (30) days after its adoption."

The site list below comes from Exhibit A of the Ordinance 2594 draft, which restates the Ordinance 2577 list with new letters. The acres of the 27 approved sites add up to 95.40, and the three denied sites (G at 4.41 acres, R at 0.82 and S at 0.60) to 5.83, which matches the ordinance title's "APPROXIMATELY 95 ACRES" and "ABOUT 6 ACRES" (VanPlex arithmetic). Sixteen sites moved to R-4, three from C-G to C-C, and eight changed the site utilization plan of a planned development.

Sources: Ordinance 2594 draft, Exhibit A (site letters, parcel numbers, acres); Ordinance 2577 and the April 21, 2025 minutes (Sites G, R and S denied). Every General Plan change on R-4 sites is to High Density Residential (HD).

An R-4 site allows one home per 1,000 square feet of lot, 40-foot buildings and 65 percent lot coverage under Table 20.08-3. The 4.93-acre Site F and the 4.73-acre Site T are the largest of the sites moved to R-4. A C-C site allows multiple-family dwellings at 12.1 to 36.0 homes per gross acre under note [1] of Table 20.10-1. Planned development sites follow their own site utilization plans, so ask the City for the plan of P-D #4, #42 or #46.

Ordinance 2594: The Rules Added in 2026

Ordinance 2594 amends Ordinance 2577 "by adding additional language to ensure adequate housing sites consistent with Government Code Sections 65583(c)(1)(A) and 65583.2 as required by the State of California." Its recitals say HCD asked the City to "include certain statutory language in the City's Ordinance 2577." The Planning Commission recommended it on June 17, 2026 in Resolution #4181, the City Council held a hearing to introduce it on July 20, 2026, and the August 3, 2026 agenda listed it as item J.11 for "Second Reading and Final Adoption." It takes effect 30 days after adoption. Exhibit A adds four rules to the site list:

Source: Ordinance 2594 draft, Exhibit A, attached to the August 3, 2026 agenda item 26-646.

Rule A defines its key term: "By-right means approval without discretionary review." In practice, a project on one of these sites with at least 20 percent of its units affordable to lower-income households would be checked against written standards, with no conditional use permit or hearing. Rule C means a site may not be built below 20 homes per acre. For the 4.93-acre Site F, that is at least 98 homes (VanPlex arithmetic: 4.93 times 20, rounded down).

Merced posts minutes on its agenda system only through its January 8, 2026 meeting, and the agenda system records no vote on Ordinance 2594. The copy read for this guide is the draft attached to the agenda, with blank lines for the ordinance number and date. This guide therefore cannot confirm that Ordinance 2594 was adopted or on what date. Ask the City Clerk for the adopted text. Municode's supplement history table lists Ordinance 2577 as "Omitted" from the code text, so the zoning map and the ordinances themselves are the record of the rezoning.

What This Means for a Builder

A city without a housing element in "substantial compliance", the state's term for an element that meets the law, loses some of its power to say no to housing. The Housing Accountability Act, Government Code 65589.5, defines a "Builder's remedy project" as a housing project with homes for very low, low- or moderate-income households where, on or after the date the application was deemed complete, "the jurisdiction did not have a housing element that was in substantial compliance with this article." Under subdivision (d)(5), a city may deny an affordable project for being inconsistent with both its zoning and its General Plan only if, on the date the application was deemed complete, it "had adopted a revised housing element that was in substantial compliance with this article." Whether Merced was in compliance on a given date is a fact to confirm with HCD and the City before filing.

Housing element status also matters for SB 684 small-lot maps. Government Code 66499.41 says that if a parcel is "identified in the jurisdiction's housing element for the current planning period that is in substantial compliance", the project must produce at least as many homes as the element projects for it, with any low-income units held affordable for at least 45 years. For a rezone site, ask the Planning Division what the element projects for that parcel.

Outside the rezone sites, the base rules of Title 20 still apply. The zoning districts page covers what R-4 and C-C allow everywhere, and the three or more homes page covers apartment parking and design.

Where the Documents Disagree

• Plan revision number. The title of Ordinance 2577 and the April 21, 2025 minutes name "Site Utilization Plan Revision #18 to Planned Development #46." Exhibit A of the Ordinance 2594 draft and the title of City Council hearing item 25-254 name "Site Utilization Plan Revision #8" to P-D #46. Ask the City which number is on the record for Site X.
• Ordinance number. Section 1 of the Ordinance 2594 draft amends "The Rezone Site List of Ordinance 2557", while its title and recitals amend Ordinance 2577. Ordinance 2577 is the rezoning ordinance.
• Denied sites in the list. The Ordinance 2594 draft still lists Sites G, R and S, which the Council denied in 2025. Treat those three as not rezoned unless a later ordinance says otherwise.

Where to Go Next

Related on VanPlex: the Merced overview, the California CEQA and permit streamlining page and the California SB 684 and SB 1123 page.

Frequently Asked Questions

Official sources (checked October 2026)