For over 55 years, the California Environmental Quality Act (CEQA) has served as a crucial tool for environmentalists, helping to protect communities from pollution and habitat destruction. However, developers argue that some groups have misused this law to obstruct housing construction, factories, and transportation projects. In a significant shift, last month, the state legislature enacted updates to CEQA aimed at expediting the development of housing and various other projects, including daycare centers and manufacturing facilities.
“Today we told the world we are ready to be open for business: the business of building housing,” said Assemblymember Buffy Wicks, a leading advocate for updating housing policy, at a press conference. These changes were incorporated into last month’s budget bill, which was heavily influenced by Governor Gavin Newsom’s commitment to infrastructure reform. Newsom emphasized the importance of these updates, stating, “I may have signed a budget bill Friday, but it means nothing unless these bills are signed tonight,” calling it the “most consequential housing reform” in recent California history.
To better understand the implications of this legislation, experts analyzed its potential impact on areas like San Diego. They noted that the updates could facilitate housing development in densely populated neighborhoods such as North Park and City Heights, as well as downtown areas of suburban cities. Nonetheless, they cautioned that this revision may not address underlying issues, including high labor costs and expensive building materials in California.
The roots of these changes can be traced back to CEQA’s role in protecting California from environmental degradation. For decades, CEQA has mandated that project proponents and public agencies provide environmental impact reports (EIRs) that assess the possible repercussions of new projects and outline preventive measures. The law also allows public participation and provides opportunities for community members to challenge projects in court.
However, critics argue that CEQA has been exploited by those resisting development, including local residents, competing businesses, and unions engaged in bargaining over labor contracts. Mary Jo Wiggins, a law professor at the University of San Diego, commented, “The EIR process had become a tripwire for projects that would have had and have had positive impacts on making more housing available and reducing the shortage of affordable housing.”
Earlier this year, members of the San Diego legislature from both sides called for a fresh look at the CEQA legislation. Assemblymember David Alvarez, a co-author of a previous bill advocating exemptions for housing projects, stated, “CEQA has been weaponized by people who don’t want to see projects built.”
The recent modifications to CEQA are intended to simplify and reduce costs for housing and other developments in California by providing developers with more certainty, minimizing bureaucratic hurdles, and lowering the risk of legal disputes. Lori Pfeiler, CEO and president of the Building Industry Association of San Diego, noted the significance of set-aside provisions in CEQA that lessen the chances of lawsuits.
A notable aspect of these revisions includes a CEQA exemption for smaller urban infill housing projects, eliminating the need for environmental reviews for developments of up to 20 acres situated in or near developed urban areas. Wiggins highlighted how this aligns with state efforts to concentrate housing developments where existing residents already live and where employment opportunities are accessible.
Furthermore, the revisions freeze most state and local building codes for a period of six years, with certain exceptions for wildfires and other emergencies. Developers view this freeze as an opportunity to construct without the fear of sudden rule changes. Pfeiler stated, “We build the safest, most energy-efficient homes in the world. I think our code is in really great shape. Just putting a pause on it allows for certainty.”
In addition to the housing exemptions, the new legislation also includes provisions for daycare centers, farmworker housing, high-speed rail projects, and advanced manufacturing, with expedited coastal permitting and limited appeal options to the Coastal Commission.
For San Diego, Wiggins believes that the infill exclusions will motivate construction in underused or vacant lots within denser parts of the city. She specifically mentioned neighborhoods like North Park, Kensington, and City Heights as potential hotspots for new housing developments. Bill Fulton, a professor at UC San Diego and former city planning director, pointed out that suburban cities may see a more significant impact from these changes, given that they typically lack the streamlined building codes that exist in urban areas.
“In suburban cities, the absence of such reforms may yield a different outcome. The most noticeable changes are likely to emerge in downtown Oceanside, Encinitas, and Chula Vista,” Fulton observed. Pfeiler foresees transformations of aging shopping centers into vibrant mixed-use complexes that incorporate residential options.
Moreover, exemptions for advanced manufacturing may prove beneficial for San Diego’s thriving biotech sector, allowing local companies to expand operations without relocating out of state. Fulton noted, “High tech or biotech companies are launched and get their start in San Diego, often spinning off of UCSD, and then at some point need to scale their manufacturing. Very often, this leads them to move elsewhere, primarily to the South.”
Despite the anticipated benefits, some experts argue that the recent legislative changes merely provide a partial fix to CEQA rather than comprehensive reform. Fulton remarked that while the updates create exceptions for certain small infill projects, substantive changes needed to deter lawsuits unconnected to genuine environmental concerns have not been made.
Both Wiggins and Fulton emphasized that it will take time for these revised laws to translate into new housing opportunities, and that the high costs associated with construction materials and labor will remain barriers to building. Pfeiler cautioned that the vehicle miles traveled ratio requirement might also impose significant additional costs on new housing, ranging from $20,000 to $320,000.
Wiggins also pointed out that the term “infill housing” can be complicated in San Diego, given the proximity of urban locations to canyons and wetlands. This may create unforeseen negative impacts on sensitive areas nearby.
Some environmental advocates have raised concerns about the changes, perceiving them as a rushed legislative maneuver. Masada Disenhouse, executive director of SanDiego350, shared her reservations about the swift revisions to CEQA, expressing that such updates should have gone through regular legislative channels rather than being tagged on to a larger budget bill.
In defense of the expedited process, Newsom asserted that the changes were essential and pressing enough to warrant a swift legislative approach, stating, “The changes were too urgent, too important to allow the process to unfold as it has for the last generation.” Wiggins acknowledged that there could be risks associated with rebalancing environmental protection with housing affordability, saying, “Any time in law and policy when lawmakers and policy makers attempt to do a rebalancing, there’s a risk that the balance won’t be properly struck.”
image source from：voiceofsandiego
