California Rolls Back Environmental Law to Tackle Housing Crisis

California is finally tackling one of the biggest roadblocks to solving its housing crisis by reforming the state’s half-century-old landmark environmental law — and green groups aren’t happy.

The legislation signed Monday by Democratic Governor Gavin Newsom exempts certain developments from the California Environmental Quality Act, or CEQA, a 1970 law that has shaped how the state balances growth with environmental protections. The reforms received bipartisan support.

The changes will allow some projects in already developed areas to bypass additional environmental assessments if the land has previously been reviewed under a local or regional plan, a shift aimed at cutting red tape for projects deemed broadly beneficial.

Supporters argue the measures are necessary to accelerate construction in a state grappling with high housing costs and a persistent homelessness crisis. A report by the RAND Corp. in April found that building an apartment in California costs about 2.5 times more per square foot than in Texas, and projects take nearly two years longer on average to complete.

Among the projects that could now bypass the more rigorous environmental reviews are housing in some urban neighborhoods, as well as high-speed rail stations, advanced manufacturing facilities and wildfire risk-reduction efforts.

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The reforms “are a bold step” tackling the root causes of California’s affordability crisis, said Democratic state Senator Scott Wiener, one of the bill’s sponsors.

“The high costs devastating our communities stem directly from our extreme shortage of housing, childcare, affordable health care, and so many of the other things families need to thrive,” he said.

Critics say the reforms undermine California’s global reputation as a leader in environmental regulation and could shut communities out of key decisions about how neighborhoods are developed.

“These half-baked bills written behind closed doors will have destructive consequences for environmental justice communities and endangered species across California,” said Jakob Evans, a senior policy strategist at Sierra Club California.

Dan Dunmoyer, chief executive officer of the California Building Industry Association, called the legislation a “mixed bag.”

He praised the reforms for streamlining urban infill development near major transit corridors, but he said that such projects make up only a small share of new housing statewide. Most homes are built in suburban areas, where costs and regulatory burdens remain high, Dunmoyer said.

Jim Wunderman, CEO of the Bay Area Council, welcomed the changes as a turning point in California’s approach to its housing shortage.

“With these bills we are taking a sledgehammer to California’s unacceptable and self-inflicted housing shortage and affordability crisis — a crisis that is hurting millions of residents and holding us back economically,” he said. “History will remember this day as the moment we stopped delaying and started building.”

Addressing California’s housing crisis was a cornerstone of Newsom’s 2018 campaign for governor. Now in his second term, with potential White House ambitions in 2028, he faces continued pressure to show progress as the state struggles with a homelessness crisis and one of the highest cost of living in the nation.

The changes come as Newsom has been increasingly using his powers to waive CEQA in emergency situations, including after this year’s Palisades and Eaton wildfires.

To contact the reporters on this story:
Isabela Fleischmann in Los Angeles at ifleischman2@bloomberg.net;
John Gittelsohn in Los Angeles at johngitt@bloomberg.net;
Andrew Oxford in Arlington at aoxford@bloomberg.net

To contact the editors responsible for this story:
Pierre Paulden at ppaulden@bloomberg.net

Sarah McGregor, Rob Golum

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