[co-author: Bryce Lourié]
On June 30, California Governor Gavin Newsom signed two budget bills that contained the most significant reforms to the California Environmental Quality Act (CEQA) in decades, effective immediately. These changes create an exemption for housing projects and certain infrastructure projects from CEQA, which has historically been a major hurdle to new development.
Enacted in 1970, CEQA requires state and local entities to evaluate potential environmental impacts of discretionary projects and provide an opportunity for public participation. For many years, critics of CEQA have pointed out that it has been used to hold up, and in some cases, kill new housing development. After failed attempts to reform the law in the past, Governor Newsom successfully got these CEQA housing and infrastructure changes pushed through by threatening to reject the state budget unless lawmakers included these CEQA reforms. Addressing California’s housing crisis has been a chief concern for Newsom, who praised the bills as a “game changer” for advancing the common goal “to build more housing, faster and create strong affordable pathways for every Californian.”
AB 130
The first bill, Assembly Bill (AB) 130, exempts from CEQA review housing projects on “infill sites” no larger than 20 acres if certain conditions are met. “Infill sites” are sites in already developed urban areas. To be eligible for this exemption, infill housing projects must comply with zoning rules, cannot be located in an environmentally sensitive area (including hazardous waste sites, unless cleaned and deemed suitable for residential use), cannot require demolition of a historic resource, and may not be used for temporary lodging (e.g. hotels).
While AB 130 exempts qualifying housing projects from CEQA, tribal consultation is still required. Additionally, certain wage standards apply for construction workers on these projects.
SB 131
The second bill, Senate Bill (SB) 131, creates a streamlined CEQA review for housing projects that narrowly fail to qualify for a CEQA exemption because of failure to meet a single condition. Under this new standard, the initial study or environmental impact report is only required to assess environmental effects that are caused solely by the presence of the one condition that could not be met for exemption. It also expands the CEQA exemptions for other infrastructure improvements such as agricultural employee housing, health centers and rural clinics, wildfire risk mitigation projects, day cares, food banks, public park acquisition, advanced manufacturing and broadband projects, certain high speed-rail projects, and certain community water systems.
Implications
These two bills are the most significant changes to CEQA since its inception. Removing CEQA as a barrier to new urban housing and certain infrastructure development is a major, and for many, long-awaited step in addressing California’s housing crisis.
In addition to those mentioned above, these laws contain other complex CEQA changes and experienced environmental counsel may be necessary to effectively navigate them.
