On June 30, 2025, California Governor Gavin Newsom signed into law Assembly Bill 130 (AB 130) and Senate Bill 131 (SB 131), both of which took effect immediately. Together, the bills represent some of the most significant pro-housing reforms in recent state history.
While the legislation spans a wide range of legal and policy areas, key reforms target the California Environmental Quality Act (CEQA), Permit Streamlining Act (PSA), Housing Accountability Act (HAA), and California Coastal Act (CCC).
New infill housing CEQA exemption
AB 130 creates a significant statutory CEQA exemption for infill housing projects. This exemption applies to any required permits, entitlements, or other discretionary approvals for a broad range of housing types, including single-family homes, multifamily homes, mixed-use developments, and transitional and supportive housing. Qualifying projects must meet certain site requirements and perform certain environmental analyses.
Specifically, qualifying sites must be:
- Located in urban areas on non-environmentally-sensitive sites
- Less than 20 acres in size and must have been previously developed in, or otherwise substantially surrounded by, urban areas
- Consistent with applicable general plan and zoning standards and must meet minimum density requirements
- Meet heightened design and, if located within 500 feet of a freeway, certain air filtration and heating, ventilation, and air conditioning requirements
Notably, qualifying projects cannot include hospitality uses or propose the demolition of historic structures.
Qualifying projects are also required to complete an environmental assessment regarding hazardous substance releases. If a recognized environmental condition is discovered, a preliminary endangerment assessment and any necessary mitigation based on that assessment is also required. In some cases, a less onerous human health risk assessment may be able to replace a preliminary endangerment assessment.
Only two limited project categories subject to the CEQA exemption trigger prevailing wage and workforce requirements that functionally require the use of union labor through project labor agreements. These requirements apply exclusively to projects that entail 100-percent affordable housing or that propose buildings over 85 feet in height. For all other qualifying projects, the prevailing wage and workforce obligations do not apply.
New streamlined CEQA review option for projects that almost qualify for exemptions
SB 131 introduces a new streamlined CEQA review for projects that fail to qualify for a CEQA exemption based on one disqualifying factor. Thus, if a proposed project would have been exempt under an existing statutory or categorical CEQA exemption except for one specific condition it fails to meet, only the environmental impacts related to the single non-qualifying condition must be analyzed in an Initial Study, Mitigated Negative Declaration, or Environmental Impact Report.
While a lead agency’s decision on whether a project qualifies for this streamlining option is subject to CEQA’s deferential “substantial evidence” standard of review, the provision raises questions that may only be resolved by future litigation.
This streamlining rule cannot be used for certain high-impact projects, including large distribution warehouses, oil and gas infrastructure, or any project on specified natural and protected lands.
Permit Streamlining Act
AB 130 repeals the sunset dates and makes permanent several key provisions of the PSA. Specifically, AB 130 extends indefinitely the provisions of the PSA that permit submitting a “preliminary” project application, or those requesting a preliminary fee and exaction estimate. The bill also extends indefinitely the PSA provisions requiring agencies to provide a list of complete application requirements and related 60-day and 90-day processing timelines. For ministerial developments, local agencies must approve or disapprove applications within 60 days – or within 30 days if subject to specified environmental evaluations.
The mandatory timelines outlined in Government Code sections 65943 and 65950 of the PSA are also cross-referenced in the HAA, meaning developers can continue to rely on HAA vesting rights tied to PSA timelines that were previously set to expire.
Historically, large-scale residential projects requiring discretionary approvals have not been able to benefit from the PSA, as its mandatory timelines typically do not activate until CEQA review is complete. However, given the new CEQA exemptions created by AB 130 and SB 131, developers may be able to better take advantage of the PSA.
Housing Accountability Act
AB 130 also extends and modifies several provisions of the HAA. It removes the repeal dates for three key elements and extends those provisions indefinitely.
- Under SB 330, local agencies may hold no more than five hearings on qualifying proposed housing development projects
- Localities must determine whether a project site qualifies as a historic site at the time a housing development application is deemed complete, and whether the determination remains valid throughout the project’s review
- The Housing Crisis Act of 2019 prohibits affected localities from enacting regulations that would restrict or limit housing development on residentially zoned land and requires the replacement of any housing units proposed for demolition
Additionally, AB 130 creates a legal cause of action under the HAA, allowing potential residents of proposed housing projects to bring suit against local agencies for non-compliance with the HAA. It also authorizes courts to issue orders or judgments directing the local agency to approve the housing development project under certain circumstances.
Specifically, a cause of action is created for individuals “eligible to apply for residency in affordable housing” in the proposed project. This creates a potentially useful new tool in disputes with local agencies that violate the requirements of the HAA.
Coastal Act
AB 130 exempts residential development projects from certain provisions of the Coastal Act that previously allowed appeals of coastal development permit approvals to the Coastal Commission. Specifically, the bill eliminates the right to appeal residential projects located in a “sensitive coastal area” or approved by a coastal county where the project is not designated as a principal permitted use under the zoning ordinance. Such projects will now generally receive their final non-appealable approvals from the local government.
Advanced manufacturing facility CEQA exemption
SB 131 creates a number of new and expanded CEQA exemptions, including a key exemption for “advanced manufacturing” facilities. These facilities must meet the statutory definition of manufacturing processes that improve existing or create entirely new materials, products, and processes through the use of science, engineering, or information technologies. These processes may involve high-precision tools and methods, a high-performance workforce, and innovative business or organizational models such as nanotechnology or advanced materials. In addition to meeting the definitional criteria, the proposed facility must be zoned on a site that is exclusively for industrial use and not designated as natural or protected land. If these criteria are met, the facility is exempt from CEQA review.
Building code freeze
AB 130 also imposes a freeze on building code standards applicable to new residential units until June 2031. During this time, neither localities nor the state may modify these standards without state approval.
New transportation mitigation development fees
AB 130 introduces a new mechanism for mitigating transportation impacts under CEQA. It authorizes lead agencies to require the payment of unspecified fees into state funds designated for infrastructure and affordable housing projects. Such fees may substantially impact the bottom line for projects with potentially significant transportation impacts.
Cleanup legislation
Legislative cleanup efforts are already underway to clarify – and likely modify – provisions of the two bills. The bills are long, complicated, and were subject to negotiation and revision up to their passage. Additional changes are coming.
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