For 55 years, environmentalists have used the California Environmental Quality Act as a shield against habitat destruction and pollution.
Developers say some groups have wielded it as a weapon to kill housing construction, factories or transportation projects.
Last month the state legislature updated the law to expedite home-building and other projects ranging from daycare centers to manufacturing.
“Today we told the world we are ready to be open for business: the business of building housing,” Assemblymember Buffy Wicks, who has pushed to update housing policy, said at a press conference.
Changes to the act, known as CEQA, were passed in eleventh hour trailers to the state budget bill last month, after Gov. Gavin Newsom staked the entire budget on infrastructure reform.
“I may have signed a budget bill Friday, but it means nothing unless these bills are signed tonight,” Newsom said at the press conference, calling it the “most consequential housing reform” in recent California history.
I talked to experts about how it could affect San Diego. They told me it could help build housing in dense neighborhoods such as North Park and City Heights, and in downtown areas of suburban cities. But it won’t solve other issues, such as the high costs of labor and building supplies in California.
First, how did we get here? For more than half a century CEQA has been the centerpiece of efforts to safeguard California communities from air pollution, habitat loss and sprawl.
CEQA requires project proponents and public agencies to produce environmental impact reports that describe the potential impacts of projects and ways to avoid or address them. And it provides opportunities for the public to weigh in, and to challenge projects in court.
But critics complain it can also be a legal tool for NIMBYs who want to halt development in their neighborhoods, competitors trying to kill a project, or unions negotiating labor deals.
“The EIR (Environmental Impact Report) 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,” Mary Jo Wiggins, a law professor at University of San Diego told me.
Earlier this year I talked to San Diego lawmakers from both sides of the aisle who argued it was time to revamp the landmark law.
CEQA “has been weaponized by people who don’t want to see projects built,” said Assemblymember David Alvarez, one of Wicks’ co-authors on an earlier bill to carve out exemptions for housing projects.
What Happens Next?
The changes aim to make it easier and cheaper to build housing and other projects in California by giving developers more certainty, cutting red tape and reducing the risk of legal challenges.
“Having CEQA set aside is a huge issue because it removes the risk of a lawsuit,” said Lori Pfeiler, CEO and president at Building Industry Association of San Diego.
The update that made the biggest splash is a CEQA exemption for smaller urban infill housing projects. The bills remove CEQA requirements for environmental review of housing developments up to 20 acres in or near developed urban areas.
Wiggins said that lines up with state incentives to build homes in developed areas near transit: “That’s all a part of an effort to direct housing to where people are already living, where the jobs are.”
It also freezes most state and local building codes for six years, with exemptions for wildfire prevention and some other emergencies. Developers say it will let them build projects without worrying that the rules will change midstream.
“We build the safest, most energy-efficient homes in the world,” Pfeiler said. “I think our code is in really great shape. Just putting a pause on it allows for certainty.”
The bills also grant CEQA exemptions for daycare centers, farmworker housing, high-speed rail and advanced manufacturing. Newsom also said they expedite coastal permitting and limit some appeals to the Coastal Commission.
What this Means for San Diego
Wiggins thinks the infill exemption will spur home construction in open or underutilized parcels in denser areas of the city.
“I’m thinking of North Park and Kensington and City Heights,” she said.
Bill Fulton, a professor of practice at the UC San Diego Design Lab and Department of Urban Studies and Planning, and former planning director for the city of San Diego, thinks the changes could be more pronounced in suburban areas.
San Diego already has by-right building codes that allow streamlined housing permits in some urban areas near transit.
“In suburban cities it might be a different story, because those cities haven’t made similar reforms,” he said. “The big difference you’ll see is downtown Oceanside, Encinitas, and Chula Vista.”
Pfeiler envisions projects to transform aging strip malls into combined residential and shopping complexes.
“I think those could be transitioned into much more productive retail, and couple that with housing,” she said. “It could be really delightful.”
The exemptions for advanced manufacturing could boost San Diego’s biotech sector, by allowing innovative companies to grow in place instead of leaving the state, Fulton said.
“High tech or biotech companies are launched and get their start in San Diego, often spinning off of UCSD, and then at some need to scale their manufacturing,” Fulton said. “Very often what happens then is it will go somewhere else, mainly in the South.”
But What Could go Wrong?
Fulton argues that the new laws don’t really reform CEQA, but rather “punch a hole in it” for smaller infill housing and other specific uses. Real reform would require changing the rules to discourage lawsuits unrelated to actual environmental issues, he said.
He and Wiggins also point out that it will take time to build new housing under the updated rules. And it won’t change certain limiting factors that slow down home-building, including the high costs of materials and labor in California.
Pfeiler said a provision that requires builders to pay out money if they don’t get the right ratio of “vehicle miles traveled” – a metric for driving and road use in new developments – could add $20,000 to $320,0000 to new homes.
Wiggins pointed out that the definition of “infill housing” is tricky in San Diego, where urban neighborhoods back up to canyons and wetlands.
“There could still be negative spillover effects to nearby sensitive areas,” she said. “That’s one of the things that’s making those who prioritize environmental protection nervous about how this could play out.”
Some environmentalists don’t like what they see as a smoke-filled backroom deal to revise CEQA. I talked to Masada Disenhouse, executive director of SanDiego350 last month about her misgivings over the rushed revisions. She said that CEQA updates should have been decided through the normal legislative process, not at the end of a massive budget bill.
Newsom said the changes were “too urgent, too important to allow the process to unfold as it has for the last generation.”
Wiggins acknowledged that some changes could go too far, as lawmakers rebalance environmental protection with affordability.
“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,” she said.
The Sacramento Report runs every Friday. Do you have tips, ideas or questions? Send them to me at deborah@voiceofsandiego.org.