California passes major overhaul of CEQA, hoping to kickstart housing production
Reforming the state's landmark environmental law, the California Environmental Quality Act, has been discussed for years, but has proven to be particularly challenging because the law has staunch supporters among powerful environmental and labor groups. Despite many attempts by the Legislature to speed up housing construction, California home production remains stubbornly slow, something that has dogged Gov. Gavin Newsom.
Facing the last two years of his governorship, Newsom threw his weight behind two major CEQA overhaul proposals in the Legislature and made his signature on the budget this year contingent on the passage of some of those provisions. That put immense pressure on Democrats in the Legislature to pass the bills to ensure the state will have a budget in effect on Tuesday when the 2025-26 fiscal year begins.
The bills grant broad exemptions to CEQA for homes and other buildings in already developed areas. The lawmakers who crafted the original proposals argue that the law is regularly abused by people trying to block development and that building more in densely populated areas where people live and work is good for the environment.
Cities and counties are already required to plan to build housing to meet their population's needs and conduct environmental assessments as part of that work. The legislation passed Monday will exempt housing in already developed areas in compliance with those housing plans from being subject to an additional environmental review. The bills also exempt from CEQA various individual types of projects, including childcare centers in nonresidential areas, farmworker housing, wildfire risk reduction projects, food banks in industrial areas, advanced manufacturing sites and health clinics less than 50,000 square feet.
Republicans and Democrats alike raised concerns about the governor's move to push the policies through as part of the budget, arguing that the process was rushed and didn't allow for enough deliberation on controversial provisions of the bills.
Initial versions of the bills drew swift backlash, especially from labor unions, last week. Many of labor unions' concerns were assuaged with amendments taken to one of the bills, but opposition from environmental groups has persisted.
Many environmental groups opposed one of the bills, SB131, particularly because they said it will not protect habitats for endangered species and allow advanced manufacturing projects to proceed without environmental review. Natalie Brown of the Planning and Conservation League called it 'the worst anti-environmental bill in decades' during a Monday committee hearing.
'We're in a nature crisis, we're seeing unprecedented loss of wildlife, and that's to be made worse with this bill,' said Laura Deehan with the group Environment California. 'We're also very concerned about opening the floodgates for new development that could be really polluting … We also think it was ridiculous to do this type of action behind closed doors in a budget bill.'
But supporters of the bills say CEQA needs to be reined in. Sen. Scott Wiener, D-San Francisco, pointed to lawsuits against a food bank in Alameda and a housing development in San Francisco that were both blocked because people sued under CEQA to preserve parking lots. He said the bills passed Monday will make it 'easier and faster to build new housing.'
'If California is ever going to truly tackle our crisis of affordability, we need to build an abundance of housing, child care centers, transportation, water infrastructure, broadband, and all of the things that make life better and more affordable for people,' Wiener said.
The bills passed Monday also contain funding for homeless aid, which Newsom had at first tried to prevent, saying cities and counties had already gotten enough money from the state and needed to start making progress in decreasing their homeless populations. The bill includes half a billion dollars for the state's homeless aid program.
Bill Fulton, a planning expert and former Ventura mayor who has advocated for CEQA reform, said that the changes passed Monday are significant but are not a panacea.
'I don't think this alone is going to create a housing boom,' he said. 'I think this, together with other things, will gradually increase the amount of housing approved.'
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