California Governor Gavin Newsom signed two bills last week aimed at easing environmental regulations for certain housing and infrastructure projects. While he dubbed it the state’s biggest modern housing reform, experts and developers warn the celebration might be premature, with lingering challenges and limited scope.
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Decades-Old Law Under Fire
Just a year ago, efforts to relax California’s strict environmental review law, the California Environmental Quality Act (CEQA), struggled to gain political traction. But last week marked a turning point as Governor Newsom approved two bills, AB 130 and SB 131, softening CEQA requirements for some urban housing and infrastructure projects. “Go YIMBYs! Thank you for your abundant mindset,” Newsom declared at a June 30 press conference.
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Targeted Exemptions Only
Despite the fanfare, the reforms are narrow in scope. The new laws allow housing and infrastructure projects in urban infill areas to bypass full environmental reviews if they meet specific criteria: under 20 acres in size (or five for “Builder’s Remedy” projects), located on previously developed land or near urban use areas, and compliant with local planning and labor rules.
Urban planning expert William Fulton called this a “Swiss cheese” approach, saying, “Maybe we should take a step back and examine the purpose of CEQA as a whole rather than keep passing more bills.”
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Pro-Housing Movement’s New Tool
Pro-housing advocates have long argued CEQA was being weaponized to block much-needed developments. Newsom framed this reform as a major victory for the YIMBY (Yes In My Backyard) movement, echoing similar carve-outs previously made for projects like Berkeley’s People’s Park and the Capitol Annex renovation. “The good part about [AB 130 and SB 131] is that they further the state’s overall policy direction of building as much as we can in dense places,” said Fulton.
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Lingering Legal and Market Risks
Developers and land-use attorneys reacted cautiously. While the laws could speed up project approvals, legal risks remain. Multifamily developers pointed out that thousands of approved units remain unbuilt due to high costs and financing obstacles. “This will give pro-growth city leaders more cover to throw up their hands and blame Sacramento if NIMBYs get upset,” one anonymous developer told The Standard.
San Francisco’s Special Carve-Outs
City officials in San Francisco are still parsing the new provisions. Dan Sider, chief of staff at SF Planning, noted, “The new streamlining provisions are complex, presenting both opportunities and obligations as well as special carve-outs unique to San Francisco.” The impact, he added, likely won’t be visible for several months until applications under the new laws start rolling in.
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Critics Call for Bigger Fix
While the reforms mark progress, many say California needs a comprehensive overhaul of CEQA, especially for major infrastructure and “greenfield” projects. Fulton emphasized that infrastructure efforts like the BART extension into San Jose or the California Forever proposal in Solano County remain unaffected. “The downside is that it’s all very reactive,” Fulton added.
In a recent podcast with Derek Thompson, state Senator Scott Wiener acknowledged slow progress but insisted the groundwork is vital. “My view is that we need to get the rules right and in place so that when the economic stars align again, we can build a ton of housing.”
