From red tape to green light: How California’s CEQA reforms will speed up projects

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In a state with a infamous antidevelopment repute, actual property and constructing professionals have a uncommon victory to have fun. 

The California Environmental High quality Act has lengthy formed the state’s growth panorama, typically entangling initiatives in prolonged allowing and litigation processes. That landscape has now shifted dramatically. 

In a daring effort to handle California’s housing disaster and spur financial progress, Gov. Gavin Newsom signed two payments, AB 130 and SB 131, into legislation on June 30, marking essentially the most important overhaul of CEQA in a long time. Each give builders a a lot wanted win in California’s constructing panorama. 

Infill developments

The primary, AB 130 establishes a broad exemption from CEQA for infill multifamily residential and mixed-use developments. To qualify, initiatives have to be code-compliant, in an city space and situated on a website that’s no bigger than 20 acres. 

In a dramatic departure from previous guidelines, AB 130 doesn’t impose reasonably priced housing, labor or wage necessities as situations for CEQA exemption for many initiatives beneath 85 toes in top. Whereas initiatives involving the demolition of historic buildings or situated in delicate areas, reminiscent of fireplace hazard zones, wetlands or hazardous waste websites will nonetheless have to fulfill CEQA, this alteration alone ought to considerably ease builders’ getting approval for these builds. 

The rationale why is as a result of the brand new legislation is far more litigation resistant than the present Class 32 categorical exemption for infill housing. 

Whereas Class 32 was meant to ease infill approvals, as with different exemptions created beneath California legislation, a Class 32 exemption can nonetheless be overturned if there are “uncommon circumstances” related to the undertaking which will create environmental impacts. 

Thus far, undertaking opponents have typically used the “uncommon circumstances” argument to derail infill initiatives or at the very least tie them up in years of litigation. The massive win in AB 130 is that it eliminates this technique by making a statutory exemption, which can’t be overturned primarily based on uncommon circumstances. On this manner, the brand new legislation creates higher certainty and lowers the litigation danger related to infill housing initiatives.

Professional-development intent

Taking this safeguard one step additional, SB 131 then reinforces the pro-development intent of those reforms, making clear that “CEQA shouldn’t be used primarily for financial pursuits, to stifle competitors, to realize aggressive benefit, or to delay a undertaking for causes unrelated to environmental safety.” That has been the precise playbook anti-development activists have used through the years. 

As a substitute, the brand new invoice broadens CEQA exemptions to incorporate an array of different socially helpful undertaking sorts, together with childcare facilities, well being clinics, meals banks, farmworker housing, broadband infrastructure, water methods, parks and superior manufacturing amenities.

Importantly, SB 131 additionally introduces a streamlined CEQA evaluation for infill housing initiatives that narrowly miss qualifying for a full exemption. Somewhat than triggering an exhaustive environmental evaluation, companies should now focus solely on the precise environmental impacts associated to the disqualifying criterion. This eliminates a key procedural choke level that has stifled initiatives prior to now.

And maybe most encouraging for builders, SB 131 now imposes a agency 30-day deadline for public companies to approve or disapprove a qualifying undertaking. 

A change for the higher

This marks a placing departure from the usually open-ended evaluation timelines which have traditionally stalled growth. By introducing actual deadlines, the legislature has added tooth to the CEQA reforms, decreasing uncertainty and signaling a powerful push towards undertaking supply and accountability.

These sweeping reforms intention to get rid of long-standing bottlenecks in city infill and infrastructure growth — components typically blamed as causes of California’s hovering housing prices and sluggish financial growth. 

Coupled with latest adjustments to federal environmental laws, AB 130 and SB 131 promise a smoother, extra predictable path to undertaking approval, they usually’re efficient instantly. Which means qualifying initiatives nonetheless within the allowing pipeline might now be exempt from CEQA, offered clearance hasn’t already been accomplished. 

That’s another reason for builders to cheer.