One of the most expensive parts of buying a restaurant has nothing to do with the purchase price. It’s the dead time between closing the deal and opening the doors, when you’re paying rent, insurance, and utilities on a space that isn’t generating a dollar. And more often than not, the biggest variable in that dead time is how long it takes your local building department to approve your plans.
California’s AB 671, signed by Governor Newsom last October and effective since January 1, changed the math on that. If you’re buying a restaurant anywhere in the state this year, this law is worth understanding.
What AB 671 Actually Does
The core mechanism is simple: local building departments now have 20 business days to approve or deny a restaurant tenant improvement permit application. If they don’t respond within that window, the application is automatically deemed approved, provided you submitted the required documents and fees.
If the agency denies your plans with a correction list, you can resubmit. The resubmission gets a 10-business-day deadline, and the review is limited to the specific deficiencies they identified the first time, so agencies can’t move the goalposts on resubmission.
The bill also creates a Qualified Professional Certifier (QPC) pathway. Licensed architects or engineers with at least five years of commercial building experience and $2 million in professional liability insurance can self-certify that your plans comply with state building codes, effectively bypassing the traditional plan-check review process entirely.
Assemblymember Buffy Wicks authored the bill, and it passed alongside AB 592, which made outdoor dining expansions permanent statewide. The California Restaurant Association called the pair “efforts to eliminate bureaucratic hurdles, added costs, and hiring and opening delays” for neighborhood restaurants.
How Bad Was the Old System?
Bad enough that most industry consultants recommend starting the permit process six to twelve months before your planned opening date. Restaurant permit applications in California cities routinely sat in review for 60 to 120 days with no guaranteed timeline. Applications bounced between building, fire, health, and planning departments, each operating on their own schedule. San Francisco’s building permit backlog became notorious, with some projects waiting over 600 days.
San Diego already had a municipal fast-track program, but it was optional and limited. Los Angeles targeted 21 business days for residential permits but restaurant applications involving multiple agencies regularly blew past that. For buyers, the uncertainty was as costly as the delay itself. You can plan around a known timeline. You can’t plan around “maybe six weeks, maybe five months.”
What This Means for Restaurant Buyers
The practical impact comes down to carrying costs. A typical restaurant acquisition closes in 60 to 90 days from the signed agreement. Then the build-out period starts, and that’s where the permit timeline either helps or hurts. Most buyers negotiate three to six months of rent abatement during build-out, and every week lost to permit delays eats into that window.
If you’re doing tenant improvements on an existing restaurant space, and most acquisitions involve at least some renovation, AB 671 guarantees you a decision within a month. The auto-approval backstop eliminates the worst-case scenario entirely. Estimates from industry analysts suggest the law could cut permit processing times roughly in half compared to the pre-2026 average.
The QPC pathway is particularly useful for straightforward tenant improvements where you’re working with an experienced architect. Instead of waiting for an overloaded city plan-checker to get to your file, your own architect certifies compliance and you move to construction. The tradeoff is real: QPCs carry full liability for their certifications, and local agencies audit at least 20% of QPC-certified projects weekly.
Important Limitations
AB 671 applies to tenant improvements only. If you’re building a new restaurant from the ground up or doing major exterior work, the traditional permitting process still applies. It also excludes fast food chains with 60 or more locations nationwide, though that’s irrelevant for most buyers in our market.
There’s also a scope question. The California Department of Public Health flagged that architects and engineers may not be the right professionals to certify food safety compliance, which typically falls to registered environmental health specialists. The bill passed with that concern unresolved, though the 20% audit requirement was added as a compromise.
For buyers, the takeaway is that AB 671 accelerates the building permit piece of the puzzle. Health department approvals, alcohol licensing through the ABC, fire marshal sign-offs, and other agency clearances still operate on their own timelines. It’s a meaningful improvement to one piece of a multi-step process, not a silver bullet.
The Bigger Picture
California has over 86,000 restaurant locations and the industry supports 1.8 million jobs generating $220 billion in annual sales. The state also had a 12% increase in independent restaurant closures between 2022 and 2024, and Los Angeles alone lost over 100 restaurants in 2024. When it’s easier to close a restaurant than to open one, something is structurally broken.
AB 671 doesn’t fix everything, but it removes one of the most frustrating barriers for buyers and operators who want to invest in restaurant spaces. For anyone looking at acquisitions in San Diego, Orange County, or anywhere else in California this year, the permitting timeline just got more predictable and more favorable. That’s worth factoring into your pro forma.