California loosens housing regs, but they still slow construction
By Sarah Downey | September 26, 2025
As the rate of homeownership declines in California, it’s raising more questions about the bureaucratic costs that make housing development in the Golden State much slower than other parts of the country. New data shows just 15% of Californians can purchase a single family home at the median price of roughly $905,000, while only 25% can afford the $670,000 median price of a condo or townhome.
Slow progress with construction hinders supply. Statistics show Charlotte, N.C., (pop. 912,000) permitted about 26,000 new housing units in 2024, about the same number as Los Angeles, which at 3.8 million population is four times as large.
“The metric that we often get is Dallas frequently produces as many new homes in a year as the entire state of California,” Nick Cammarota, senior vice president and general counsel at the California Building Industry Association (CBIA), told the Free Cities Center.
“It is a very difficult business climate in California and for companies that operate nationwide, they are aware of that,” Cammarota said. “When they are looking to expand, they have to spend so much more in California because the time it takes to get approval for homes in other states is exponentially faster than here.”
Dallas permitting often takes less than three months. Houston has introduced a pilot program to issue residential building permits within 30 days. In Charlotte, it’s a few days for minor projects while a rezoning may take four to six months. The process of getting building permits in Los Angeles County can run one to two years. The number issued is down 18.5% since 2022.
Even since the Palisades and Eaton fires, after which Mayor Karen Bass and Gov. Gavin Newsom pledged to expedite rebuilding, only about 230 permits have been issued.
While every state has its own environmental mandates, North Carolina’s environmental law, the State Environmental Policy Act (SEPA), hasn’t been weaponized like the California Environmental Quality Act (CEQA). The North Carolina statute, passed in 1971, was reformed in 2015 to narrow its scope to apply only to projects that use state funding of $10 million or are built on 10 acres of public land.
In 2023, North Carolina also implemented a regulatory “shot clock”—a tribute to its basketball tradition—to ensure that cities process building permits promptly. The California Legislature recently passed its own “shot clock” bill.
To further address affordable housing, Texas has passed permitting and zoning reform. California has had an infill exemption from CEQA since 2007 so it isn’t yet known how quickly the changes approved this past June might increase housing production.
The newest California laws—A.B. 130 and S.B. 131—don’t apply retroactively, which means projects currently being sued under CEQA are not exempt. And any development over 20 acres would still be subject to CEQA.
“There isn’t really a silver bullet here, it will take broader CEQA exemptions than what we have so far,” Cammarota added. “It will take more to really move the needle because of the constraints on housing, and every kind of regulation out there.” The California Department of Finance just reported that housing growth declined from 0.85% in 2023 to 0.84% in 2024.
A housing development in northern Los Angeles County that recently broke ground took more than 25 years due in part to the number of CEQA lawsuits. A 2023 audit found San Francisco with the slowest permit process in the state, although new city leaders have vowed to turn that around. So will this be the CEQA change that finally solves California’s housing crisis?
In recent years, Democrat and Republican lawmakers have filed dozens of CEQA reform bills— including common-sense exemptions for water projects and forest cleanup—that still failed. And there’s still plenty of organized opposition even to the relatively limited bills that have become law.
A housing development in northern Los Angeles County that recently broke ground took more than 25 years due in part to the number of CEQA lawsuits.
Conservation advocates say that Newsom’s changes to CEQA in a budget trailer bill skipped the usual checks and balances. With only 72 hours to digest the new parameters without committee hearings, legislators were told there would be no budget to pass if the CEQA changes weren’t approved. More than 200 environmental groups have called on lawmakers to scrap some of the exemptions.
Among the developments that could now go forward without CEQA review: a data center atop a former golf course in Pittsburg and 2,100 acres of advanced manufacturing in Solano County, which was announced in July as part of the California Forever project.
Matthew Baker, policy director with the Planning and Conservation League, which has advocated for CEQA since the 1960s, said the environmental community was floored by some of the CEQA exemptions. “Advanced manufacturing industries are not the kind of thing you give an exemption to for an environmental review,” Baker said. “You give them for things that you know are going to be safe.”
Despite the new exemptions, the bar is still low for CEQA litigation. As noted in the Regulatory Review, it is far too easy. Any concerned citizen, community group or business has standing to file suit against an approved development project based on a “public interest in environmental quality.”
The result has been a CEQA industrial machine that hurts all kinds of development. Among CEQA exemptions not granted under Newsom: Limiting who can file certain lawsuits under CEQA to the attorney general and mandating that legal challenges to Environmental Impact Reports (EIR) be resolved within 365 days. Nor is it known how the CEQA changes will impact filings by quasi neighborhood groups that want developers to use union labor.
When CEQA litigation goes on a decade or longer, that can mean thousands of homes are never built. Indeed some plaintiff firms aren’t about productive policy solutions, they are set up to litigate and collect fees. The encouraging news is that, however inadequately, California lawmakers are at least acknowledging the connection between the state’s environmental rules and its slow housing growth.
Sarah Downey is a journalist who covers political and social policy. She’s reported for Newsweek, the Chicago Tribune and Boston Globe in the United States and overseas.
