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Amid a worsening housing affordability and homelessness crisis, California legislators have made a drastic move to bolster inventory levels throughout the state.
On Monday, Governor Gavin Newsom announced that he’d signed Assembly Bill 130 and Senate Bill 131, both of which include sweeping reforms to California’s building permit and new residential building standards systems, alongside greater oversight of city and county homeless shelters and an increase to the Renters Tax Credit.
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However, the most consequential change within AB 130 and SB 131 is the streamlining of the state’s 55-year-old environmental protection law, California Environmental Quality Act (CEQA).
Although originally limited to government projects, CEQA’s strict environmental reviews expanded throughout the decades to include private housing projects. Legislators on both sides of the aisle said the reviews, which are meant to identify and mitigate risks to air, water quality, biodiversity, habitats and ecosystems, had become too cumbersome.
The CEQA reform offers exemptions to high-density projects not on environmentally sensitive or hazardous sites, and critical housing and infrastructure projects, including infill housing, high-speed rail facilities, utilities, broadband, community-serving facilities, like child care centers, and farmworker housing. The reform also opens the door for municipalities to rezone commercial projects, like malls and office buildings, into multifamily housing with more ease.
Gavin Newsom
“This isn’t just a budget. This is a budget that builds. It proves what’s possible when we govern with urgency, with clarity, and with a belief in abundance over scarcity,” Newsom said in a prepared statement on Monday. “In addition to the legislature, I thank the many housing, labor and environmental leaders who heeded my call and came together around a common goal — to build more housing, faster and create strong affordable pathways for every Californian.”
“Today’s bill is a game changer, which will be felt for generations to come,” he added.
Both bills received bipartisan support, with AB 130 receiving a unanimous vote from the Assembly and a 28-5 vote from the Senate. SB 131 received similar support, passing the Assembly 50-3 and the Senate 33-1.
Senator Scott Weiner, who represents Senate District 11 in San Francisco, said the bills’ passage will enable the state to “move the needle on affordability.”
“It isn’t easy to make changes this big, but Californians are demanding an affordable future, and it’s our job to deliver for them no matter what,” he said in a written statement. “I’m incredibly proud of the work Governor Newsom, Assemblymember Wicks, Speaker Rivas, and my friend and partner Pro Tem McGuire did to push this bold package across the finish line and set us on a path to build again in California.”
Although legislators and several housing groups, such as the United Brotherhood of Carpenters, MidPen Housing and California YIMBY, are praising CEQA’s reform, environmentalists are ringing the alarm bell, saying the exemptions could yield potentially deadly consequences.
“It blows a hole in our efforts to protect habitat,” environmental lobbyist Kim Delfino told The New York Times on Monday. “Make no mistake, this will be devastating.”
Political experts said California’s decision could set the stage for more states, especially those with Democratic leaders looking to woo voters with the promise of more affordable housing, to relax environmental reviews and permitting laws.
“This has created a different political environment,” Public Policy Institute of California survey director Mark Baldassare told the Times. “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.”
