{"id":195554,"date":"2025-09-03T01:28:11","date_gmt":"2025-09-03T01:28:11","guid":{"rendered":"https:\/\/www.europesays.com\/us\/195554\/"},"modified":"2025-09-03T01:28:11","modified_gmt":"2025-09-03T01:28:11","slug":"developers-making-headway-after-ceqa-reform-but-economics-stand-in-their-way","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/195554\/","title":{"rendered":"Developers Making Headway After CEQA Reform, But Economics Stand In Their Way"},"content":{"rendered":"

Long-awaited changes to the California Environmental Quality Act<\/a> have resulted in some progress for developments under review. But two months after the rule changes, developers in Southern California say there are still plenty of hurdles to project completion.<\/p>\n

Macroeconomics and persistent market uncertainty, combined with the severity of the state\u2019s housing crisis, remain roadblocks for development even after crucial exemptions to CEQA<\/a> were signed into law.<\/p>\n

\"Placeholder\"\/<\/p>\n

\n An under-construction apartment project on the outskirts of Downtown Los Angeles.\n <\/p>\n

\u201cI think the big obstacle right now is, even if you have a project that would qualify under the legislation, do the economics still make sense right now?\u201d land use attorney and partner at Venable LLP Bill Sloan said.<\/p>\n

Developers are calculating how economics factor into new projects as they consider how to take advantage of the new rules, Sloan said.\u00a0<\/p>\n

Commercial construction costs are on the rise nationally, and San Francisco and Los Angeles are the second and third most expensive construction markets<\/a> in the country, respectively.<\/p>\n

These cost considerations, along with interest rates and tariffs, are among the factors throttling what might have been robust activity from the rule changes\u00a0in the short- to medium-term.<\/p>\n

While some projects are benefiting from the new rules, they are typically\u00a0those that were already in progress before CEQA was amended. One of the most closely watched exemptions<\/a> applied to certain residential projects no larger than 20 acres in urban infill areas.\u00a0<\/p>\n

\u201cThis law came around, and it made all the difference in the world,\u201d Cedar Street Partners Managing Partner Jonathan Curtis said. Cedar Street was developing a housing project in La Ca\u00f1ada Flintridge that wrapped up about two years of litigation<\/a>\u00a0in March. \u201cWe pivoted to this exemption, [and] the city has acknowledged this exemption because it is so crystal clear as far as what the criteria are.\u201d\u00a0<\/p>\n

Curtis anticipates that one of the effects of the exemption will be that more small and medium-sized developers will have barriers to entry slightly lowered because of the time savings of not having to go through CEQA review.\u00a0<\/p>\n

\"Placeholder\"\/<\/p>\n

\n Courtesy of Cedar Street Partners\n <\/p>\n

\n Cedar Street Partners’ proposed La Ca\u00f1ada Flintridge project will get a boost from the new CEQA exemption.\n <\/p>\n

Shortened timelines might make projects more financially feasible, allowing them to consider and execute projects they would have ruled out without the exemption.\u00a0<\/p>\n

Not every project can use this exemption, but for those that qualify and want to take advantage of it, \u201cit\u2019s fantastic,\u201d said Holland & Knight partner Ryan Leaderman<\/a>.\u00a0<\/p>\n

Still, a few details around certain parts of the new rules need to be ironed out. For example, developers are required to do a tribal consultation, and the timeline for that, as well as other details, have yet to be articulated, Leaderman said. \u00a0<\/p>\n

Project Management Advisors<\/a> Vice President Sonnet Hui<\/a> is working with some clients who have projects that did not previously contain residential elements who are now considering a mixed-use pivot to take advantage of getting to sidestep CEQA.<\/p>\n

However, even those who decide to pivot are still not taking the necessary next steps to build their projects.\u00a0<\/p>\n

\u201cWe’re not seeing execution yet because I think a lot of developers are still waiting for and anticipating that the interest rates are going to come down,\u201d Hui said.\u00a0<\/p>\n

The Trump administration and appointees\u00a0have been after the Federal Reserve<\/a>\u00a0for months to cut the benchmark interest rate.\u00a0Investor confidence has risen<\/a>\u00a0that cuts are on the way.<\/p>\n

People who criticized\u00a0these bills when they\u00a0moved through the legislature<\/a>\u00a0have maintained that these CEQA tweaks will not, on their own, help to lower the high cost of housing in California. That\u00a0is an issue with numerous contributing factors, including stagnant wages, rising rents, the high cost of land and the rising cost of construction.\u00a0<\/p>\n

Others have said that although these\u00a0CEQA reforms will save time for developers, they might not necessarily result in more development.\u00a0<\/p>\n

\u201cIt\u2019s not the CEQA costs that are holding up housing,\u201d Mark Rhoades, a Berkeley-based planning and development consultant, told CalMatters in July.<\/p>\n

\u201cI don\u2019t think this is going to make more development happen,\u201d he said, speaking of the exemption bills. \u201cIt\u2019s going to make development that is already happening a little easier.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Long-awaited changes to the California Environmental Quality Act have resulted in some progress for developments under review. But…\n","protected":false},"author":3,"featured_media":195555,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5123],"tags":[108838,1582,276,108836,24973,24999,2961,224,5337,108834,108837,108835,108833],"class_list":{"0":"post-195554","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-los-angeles","8":"tag-bill-sloan","9":"tag-ca","10":"tag-california","11":"tag-cedar-street","12":"tag-ceqa","13":"tag-holland-knight","14":"tag-la","15":"tag-los-angeles","16":"tag-losangeles","17":"tag-project-management-advisors","18":"tag-ryan-leaderman","19":"tag-sonnet-hui","20":"tag-venable"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115137774073252583","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/195554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=195554"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/195554\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/195555"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=195554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=195554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=195554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}