Earlier this summer, as part of the state’s annual budget deal, California Gov. Gavin Newsom signed legislation that alters how the existing California Environmental Quality Act (CEQA) would apply to certain housing development projects in the Golden State.
A landmark law signed in 1970 by then-governor Ronald Reagan, the CEQA was intended to reduce environmental harms by requiring public agencies to identify and mitigate potential environmental impacts of the implementation of building activities and governmental policies. Throughout the decades since the CEQA was enacted, a string of California governors tried and failed to reform the law, which ultimately served as a crippling obstacle to building more housing in a state — (the nation’s most populous) — infamous for not having enough of it. Californian lawmakers, however, have finally succeeded in rolling back the CEQA, which is expected to exempt a broad variety of housing developments from environmental review, effective immediately.
Under CEQA, builders are required to prepare costly environmental impact reports if they want to build virtually anything bigger than a single-family home. The impact report was required to list alternative ways of building the project if a significant environmental impact was predicted that would account for environmental impact mitigation. After disclosure of the report, the public would have a chance to weigh in about the project. Then, local government would determine whether to allow the project to go forward. In sum, a modest project could take years to reach approval and significantly cost a builder – and even then, it could all be for nought if the local governing body voted against commencing the project. Furthermore, if a lawsuit concerning an environmental impact report is filed and a plaintiff is successful, the impact review process must start over — from scratch.
Under the new reforms, however, bigger projects — especially housing — will be exempted from onerous CEQA red tape.
Supporters of the rollback are excited by the prospect of being able to build urban infill apartment complexes, infrastructure projects, and large manufacturing facilities without the years of delays and millions of dollars spent on time-consuming impact assessments that had become standard for Californians because of CEQA. Indeed, these modifications come at a time when California is experiencing a housing crisis, with thousands of Californians becoming homeless when they can no longer afford skyrocketing rents and mortgages. Supporters are also relieved at the prospect of builders no longer having to face aforementioned environmental impact report litigation, which many believe had become a real impediment to desperately needed development.
Opponents of the CEQA amendments, however, are more skeptical. Since CEQA was intended to streamline the environmental review process by using a single mechanism to also ensure simultaneous compliance with various federal requirements by not having to comply with the traditional CEQA process, builders will have to ensure compliance, individually, with all potentially applicable federal laws. One Sacramento non-profit policy director explained, “By design, it’s a one-stop shop for project proponents to consider all the factors — the Endangered Species Act, the Clean Water Act, the Clean Air Act … If you take CEQA away, you still have to comply with all those other laws.” Moreover, CEQA dictated that the input of community members be considered, which amendment opponents deem more democratic.
Although even the amendments’ supporters concede that the changes in CEQA do nothing to remove other obstacles to building, such as the high costs of labor and materials, they can at least celebrate finally changing law that had been seen by many as an immovable fact of life. Whether those changes will meaningfully chip away at California’s housing crisis in the near future, however, is a celebration that will have to wait.
