California rolls back its landmark environmental law

Sacramento, California: California leaders on Monday rolled back a landmark law that was a national symbol of environmental protection before it came to be vilified as a primary reason for the state's severe housing shortage and homelessness crisis.

For more than half a century, the law, the California Environmental Quality Act, has allowed environmentalists to slow suburban growth as well as given neighbors and disaffected parties a powerful tool to stop projects they disliked.

Gov. Gavin Newsom signed two bills, which were written by Democrats but had rare bipartisan support in California's divided state Capitol, that will allow many development projects to avoid rigorous environmental review and, potentially, the delaying and cost-inflating lawsuits that have discouraged construction in the state.

Democrats have long been reluctant to weaken the law, known as CEQA, which they considered an environmental bedrock in a state that has prided itself on reducing pollution and protecting waterways. And environmentalists took them to task for the vote.

But the majority party also recognized that California's bureaucratic hurdles had made it almost impossible to build enough housing for nearly 40 million residents, resulting in soaring costs and persistent homelessness. In a collision between environmental values and everyday concerns, Democrats chose the latter Monday.

"If we can't address this issue, we're going to lose trust, and that's just the truth," Newsom, a Democrat, said in a news conference. "And so this is so much bigger in many ways than the issue itself. It is about the reputation of not just Sacramento and the legislative leadership and executive leadership, but the reputation of the state of California."

Discussions about changing the environmental law have repeatedly surfaced at the state Capitol over the past decade, only to be thwarted by opposition from environmentalists and local governments. This year was different.

Newsom threatened to reject the state budget unless lawmakers rolled back CEQA. Democrats were also aware that voters nationwide had blamed the party last year for rising prices.

"This has created a different political environment," said Mark Baldassare, survey director for the Public Policy Institute of California. "Voters have been telling us in our polling for quite a while that the cost of housing is a big problem, but maybe for the elected officials the election itself was a wake-up call."

Newsom is nearing the end of his second and final term in office having made little progress on housing and homelessness, which were central to his first campaign in 2018. He has been skewered for the prevalence of homeless encampments throughout California and for a dip in population, driven in part by people seeking lower-priced homes in other states.

The governor, who may run for president in 2028, recognized that Democrats had to shift course on pocketbook issues.

"We've got to get out of our own damn way," he said last week.

The changes are, by any measure, a pivotal moment for the environmental movement, and they may have implications beyond the borders of the nation's most populous state. California has long been at the vanguard of pioneering environmental measures, and other Democratic-run states could similarly look for ways to encourage more housing construction.

Environmentalists flooded a legislative hearing room Monday, saying the sweeping changes could hurt sensitive ecosystems and make it too easy to build manufacturing sites that could cause more pollution. Some Democratic lawmakers expressed concern that the legislation could threaten habitat for certain species of butterflies, bears and bighorn sheep.

"Jeopardizing those whole ecosystems, I think, is a risk that we don't want to take," said state Sen. Catherine Blakespear, a Democrat.

With its requirements for extensive review and public disclosure of potential environmental ramifications, CEQA was viewed as the strictest measure of its kind in the nation.

As governor, Ronald Reagan, a Republican, signed the environmental act into law in 1970 at a time when his party was much more aligned with environmental protections than it is today. It reflected a consensus among the state's leaders over the need to protect a vast array of wildlife and natural resources -- forests, mountains and coastline -- from being spoiled by rising smog, polluted waterways, congestion and suburban sprawl.

But CEQA has been described even by some environmentalists as a good law that produced unintended consequences. The law was initially written to apply principally to government projects; a 1972 court decision expanded it to apply to many private projects as well.

One of the bills signed Monday will exempt from CEQA high-density projects as long as they are not on environmentally sensitive or hazardous sites. The other bill will create sweeping changes that are aimed at accelerating legal review and that will exempt numerous types of development projects, from farmworker housing to child care centers. The legislation will also make it easier to rezone areas to allow for more housing in some cities.

The changes could, for instance, make it easier to convert a vacant shopping center into condos and apartments by reducing government hurdles.

Republicans have long blamed CEQA for California's problems, arguing that it was bad for the state's business climate. It was notable that Democrats, led by Newsom, moved the party away from the kind of measure that has long been central to Democratic thought.

California legislators have become increasingly motivated to combat the state's housing shortage as homelessness and the cost of living have become serious concerns for residents. In recent years, the Legislature has passed hundreds of bills to expedite housing production, and has tried to push cities to build more homes, usually tinkering around the edges of the environmental act.

"The crisis has metastasized to such a level that our constituents are demanding it," said State Assembly member Buffy Wicks, a Bay Area Democrat who wrote the bill to encourage more high-density housing projects.

Christopher S. Elmendorf, a property law professor at the University of California, Davis, who has closely followed the CEQA battles in the state Capitol, said the reforms were "huge," the biggest since the mid-1970s.

Elmendorf said he viewed Newsom's shift partly as a testament to how much housing has risen as a priority for California voters. But it also reflects a broader reckoning for Democrats nationwide after Donald Trump's reelection in 2024. Democrats are reevaluating whether they are aligned with the needs of the electorate, he said, which has opened the door for considering positions that were once off-limits.

Opponents of construction projects -- neighborhood groups, rival businesses, unions -- frequently seized on CEQA provisions to delay or, in some cases, kill all kinds of projects, including housing, office buildings and homeless shelters.

Recent cases have come to symbolize what critics of the environmental law saw as its unintended consequences. In San Francisco, it was used to delay, but ultimately not derail, a bike path. In Berkeley, a neighborhood group used it to block the University of California from expanding the size of its student population, contending it would lead to noise, trash and traffic; the Legislature stepped in and passed a bill overriding a court decision. Another group in Berkeley won a court order blocking construction of a new dorm because students would create "social noise" pollution; the Legislature again passed an overriding law.

As in Berkeley, previous efforts to change CEQA had largely been piecemeal, responding to the crisis of the moment and often with the backing of powerful labor unions. When the Sacramento Kings threatened to move out of the state, the Legislature granted an exemption for the construction of a new arena. Similar exemptions were given for stadiums in San Francisco and Los Angeles, as well as for a major renovation of the state Capitol.

Matt Lewis, spokesperson for California YIMBY, which supports the new legislation, said a law that had initially been intended to prevent projects like new freeways from plowing through neighborhoods had over the years been "Frankensteined" into a tool to block housing development. And the act, ultimately, has harmed the environment by limiting denser housing, which reduces pollution, he said.

But Kim Delfino, a lobbyist for several environmental groups, said the law would allow the destruction of coastal habitats, forests, deserts and grasslands, and called it the "worst bill" for declining species that she had seen in 25 years of advocacy.

"It blows a hole in our efforts to protect habitat," she told lawmakers on Monday. "Make no mistake, this will be devastating."

Still, Robert Rivas, the speaker of the state Assembly, framed the vote as a social issue for Democrats during a news conference after the vote.

"Affordable housing is the civil rights struggle of our time here in California," he said, "and today we take a transformative step forward in that fight."

Ben Metcalf, managing director of the Terner Center for Housing Innovation at the University of California, Berkeley, said the changes will speed up the building process because projects in the urban core will be able to skip environmental review, which can take several months. He said it remained unclear how much that will increase total housing production, especially given the inflated costs of construction, insurance and interest rates.

"It's probably not the full solution," he said of the changes.

In 2016, Gov. Jerry Brown also proposed exempting urban housing from CEQA. But that attempt failed under opposition from unions, environmental groups and other organizations. Metcalf, who at the time was leading California's housing department under Brown, said that the political winds had shifted in the past nine years.

He said that California's moves could inspire other Democratic-led states to weaken their environmental regulations to address their housing shortages. Massachusetts, New York, Minnesota and several other left-leaning states have laws much like CEQA.

"I could certainly see it emboldening other governors: 'If they can do it in California, we can do it, too,'" he said.