Getting CEQA Out of the Way of Missing Middle Housing – Pacific Research Institute

Getting CEQA Out of the Way of Missing Middle Housing

California is in the grips of an unprecedented housing crisis, which has sent hundreds of thousands of Californians packing for affordable states like Arizona and Nevada. Here in Los Angeles, both home prices and homelessness have hit record highs, a sign of the ironic situation of the Golden State. At the root of this crisis is a housing shortage. Thanks in large part to overregulation at the local level, California’s cities and suburbs allow little housing to be built, keeping supply stagnant alongside surging demand.

So what are legislators doing about it? In recent weeks, I’ve discussed some of the bills currently floating around Sacramento. In cities, AB 1401 would remove onerous parking mandates near transit. Out in the suburbs, AB 602 would add a degree of transparency and consistency to California’s infamous development impact fees. This week, let’s look at SB 10, a wonky bill that could help to streamline housing production.

To understand SB 10, you first have to understand two dysfunctional California institutions: zoning and the California Environmental Quality Act. Let’s start with zoning, a set of regulations that allow local governments to determine what gets built. In theory, zoning is supposed to be about separating incompatible uses and funneling growth into the right areas. But in practice, many California cities enforce unreasonably strict zoning regulations, effectively blocking all development. Restrictive zoning is a key reason why cities like Los Angeles and San Francisco build far less on a per capita basis than most other US cities.

What might this look like on the ground? Imagine the typical California town of Puebloville. Puebloville adopted zoning in the 1950s. Virtually all of the city was mapped under single-family districts, which ban “missing middle” housing typologies like townhouses, bungalow courts, and fourplexes. Yet Puebloville is now in the throes of a housing shortage; local kids can’t afford to stick around, while local renters are getting priced out. To address this crisis, local leaders are considering easing their zoning regulations to allow more infill housing development near downtown.

But that’s where CEQA comes in: as a government action, any change to the zoning must come with an extensive study of the possible environmental impacts. These studies are enormously costly to conduct and open the city up to near-endless litigation. Indeed, as written, CEQA grants anyone with a few dollars in their pocket and an ax to grind the power to tie up projects for years. As I have written previously over on The Atlantic, the corruption of this well-intentioned law now stands as one of the biggest hurdles for getting anything built in California.

Return to Puebloville. After researching the issue and speaking with stakeholders, local leaders have decided to allow townhouses, duplexes, and small apartment buildings within a half-mile of the town’s downtown. Planning staff promptly produce an environmental statement, and the proposal sails through the city council. But then, reform hits a wall: one angry resident files a CEQA suit. As the law exists today, this needed zoning reform will now likely be tied up in the courts for months, if not years.

This is where SB 10 comes in: under the proposed law, any change in zoning to allow up to 10 units per lot—that is to say, small-scale, low-rise apartment buildings—in an existing urban or transit-served area would be exempt from CEQA. As written, SB 10 recognizes two rather obvious facts: First, this type of “missing middle” infill housing is extremely unlikely to impose any environmental harms—so why require CEQA? Second, everyone in California knows we need more housing—why should burdensome state mandates get in the way of cities removing bad regulations?

The decision to reform would remain up to local governments. But should local governments opt to reform, SB 10 would streamline the process, cutting the costs of unnecessary CEQA review and eliminating litigation risk. That is to say, SB 10 would make it easier for cities like Puebloville to voluntarily do the right thing. As with ending parking requirements or taming impact fees, exempting zoning reform from CEQA mandates won’t end California’s housing crisis. But it could mean one less rule standing in the way of the housing our state so desperately needs.

Nolan Gray is a professional city planner and a housing researcher at UCLA. 

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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