California lawmakers finally achieve ‘holy grail’ reform of state’s key environmental law

Jerry Brown once described reform of the California Environmental Quality Act as “the lord’s work” but he, like other recent governors, was not willing to invest enough political capital to change it.

Simply put, significantly altering CEQA, which then-Gov. Ronald Reagan signed more than a half-century ago, would require confronting two powerful interest groups: environmental organizations and labor unions, which have weaponized the law to achieve their goals.

Brown made one stab at compelling the Legislature to alter CEQA in 2016, but otherwise left it to his successor, Gavin Newsom.

For six years, Newsom echoed the attitudes of his predecessors, critical of CEQA’s misuse to block housing and other much-needed projects, or compel developers to hire unionized labor or jump through other hoops, but unwilling to confront it head-on.

Instead, he and the Legislature nibbled at the edges of the law and gave specific projects, such as sports arenas, exemptions.

Finally, however, the social and economic costs of leaving CEQA intact became too high. The state’s critical shortage of housing continued despite innumerable policy declarations aimed at spurring investment. It became downright embarrassing that a politically dominant Democratic Party pledged to socioeconomic equity was unable to deliver on promises to make housing more abundant and affordable.

California starred in a New York Times video that chastised blue states for failing to live up to their stated principles and in a recent book, “Abundance,” about the nation’s chronic inability to deliver much-needed projects due to regulatory overkill, such as CEQA.

This year, with Newsom nearing the end of his governorship and appearing to cast his eyes toward a presidential campaign, the governor decided to confront the CEQA issue squarely. He endorsed two bills that would impose limits on the law’s reach and, in the end, threatening to block the entire state budget if they weren’t placed on his desk.

On Monday, the last day of the fiscal year, the Legislature passed Assembly Bill 130 and Senate Bill 131 with last-minute changes to dampen opposition from construction unions. Newsom quickly signed them.

“We needed to go bold and big on this holy grail reform,” Newsom said at a hastily staged signing ceremony.

Essentially, the legislation exempts virtually all infill housing projects from CEQA’s provisions, making it more difficult for opponents of high-density housing projects, known as NIMBYs, to block approval.

Such projects, particularly those aimed at low- and moderate-income families, have been the most difficult to gain approval, due largely to opposition in upscale communities dominated by single-family homeowners.

“When you are building housing in an existing community, that is environmentally beneficial, it is climate friendly, that is not something that should be subjected to potentially endless CEQA challenges and lawsuits,” Sen. Scott Wiener, a San Francisco Democrat who authored SB 131, told senators before they passed the measure.

Wiener and Assemblywoman Buffy Wicks, an Oakland Democrat who carried AB 130, have been the Capitol’s two most aggressive advocates of pro-housing legislation.

The remaining question, of course, is whether the two new laws, which go into effect immediately, will have a discernible impact on the state’s housing shortage. CEQA is just one factor of many determining whether proposed projects proceed or die. Those who oppose high-density housing in their neighborhoods will not just roll over.

Ironically, as the Legislature was passing the two new laws on Monday, The Atlantic was publishing a lengthy article entitled “The Whole Country Is Starting to Look Like California,” that describes how red tape and local opposition are adversely affecting housing development in red states such as Texas and Florida, which had been viewed as developer paradises.