This year’s devastating wildfires decimated upwards of 13,000 homes. In response, California has passed two new laws that seek to streamline the process of housing development. Will they have the desired effect? That remains to be seen.
Under AB130, new housing developments that meet certain size, density, location, and use requirements will be exempt from the California Environmental Quality Act (CEQA) during the permitting, approval, or public improvements phases. Exempted projects include previously developed projects that are smaller than 20 acres and located within urban areas. Other requirements include that the projects are consistent with local plans and zoning ordinances, are not transient lodgings (e.g., hotels and motels), and do not require the demolition of historic structures.
Complementing AB130 is SB131, which provides streamlined review for projects that would meet AB130’s requirements but for one disqualifying condition (near-miss projects). In such cases, environmental impact analysis is limited to that one condition. Beyond housing, SB131 also exempts a wide variety of development projects from CEQA review, including:
- New agricultural employee housing projects and projects exclusively focused on repair and maintenance of existing farmworker housing projects
- Projects improving water systems in small, disadvantaged communities
- Wildfire risk reduction projects
- Updates to the State’s climate adaption strategy
- Activity and approval required for design, construction, operation, and maintenance of public parks or non-motorized recreational trail facilities
- Day care centers, federally qualified health centers, rural health clinics, and facilities for advanced manufacturing
- Passenger rail stations and maintenance facilities in service of electrically powered high-speed rail
Governor Newsom described the package as a ‘game changer, which will be felt for generations to come.’ Yet, in typical California style, policy changes can’t take one step forward without taking a half step backward.
Nick Cammarota, Senior Vice President and General Counsel at the California Building Industry Association argues that while these bills are ‘more substantial and significant’ than previous efforts, opponents of development may still take advantage of several provisions within the bills.
For example, AB130’s CEQA’s exemptions apply only to projects consistent with a city’s General Plan or a site’s zoning, but that determination, Cammarota points out, is left to the city government. That subjectivity, he argues, can create unwarranted obstacles preventing expeditious housing construction.
SB131’s provision for a truncated review for near-miss projects may be less impactful than intended. Cammarota points out that the local authorities can simply deem the disqualifying conditions ‘too fundamental’ for a streamlined review. Even if they qualify for a streamlined review, these projects may be scuttled if their impacts are deemed too significant.
AB130 also introduces a new vehicle miles traveled (VMT) mitigation bank program that would contribute significant construction costs and hamper development of new housing. VMT measures the distance traveled by all vehicles in a specified area over a certain period. Policymakers set VMT thresholds that new projects must meet.
Prior to the passage of these bills, developers could work with municipalities to determine how best to act when the projected VMT of a new development exceeded the city’s threshold, perhaps by building bike lines or bus stops. Now, however, they must buy credits which assign a dollar value to each VMT. Because these credits represent a more expensive and less flexible solution, the Chamber of Commerce has criticized AB130 for making this option mandatory rather than voluntary.
Overall, these bills will help address California’s crippling housing crisis. Loosening the grip of CEQA on new projects will stimulate housing development in California, a sentiment shared by non-profit organizations, business leaders, activist organizations, and real estate developers across the State. If these bills are an admission that CEQA is driving the state’s worst in the country housing crisis, then perhaps California is finally learning its lesson.
