Celebrate Two Fresh California Legislation Wins
California Enacts Reforms to Ease Housing Approval Process
California Governor Gavin Newsom recently signed two bills, AB 130 and SB 131, marking a significant shift in the state's housing regulations. These reforms aim to ease the approval process for private construction projects, particularly in urban areas.
The new laws, which came into effect last month, provide sweeping exemptions from environmental review for market-rate, infill housing development across the state. This move is reminiscent of Vermont's relaxation of an environmentally motivated state-level permitting process for infill housing development.
However, California's complex and transactional politics haven't gone away. Environmental groups and NIMBY (Not In My Back Yard) activists mobilized against the California Environmental Quality Act (CEQA) reform, using CEQA to delay or block housing projects under the guise of environmental protection. Key opposition came from local lawmakers and affluent homeowners resistant to density and housing development reforms.
Concessions achieved include specific provisions in Senate Bill 158 that maintained CEQA reviews for projects in certain city and county size ranges, especially impacting wetland-adjacent parcels and historical landmarks. Localized power to limit density increases also diluted some of the reform's impact on easing housing approvals near transit.
Some union groups shifted from opposition to neutrality on mid-rise housing bills, reflecting negotiated compromises with developers. However, overall reform was limited to easing the process for projects already underway rather than enabling broad new housing pipelines.
The new California laws are expected to spur some housing development but not anything dramatic. Housing costs in Vermont leveled off after the relaxation of the state-level permitting process, offering a potential indicator of what to expect in California.
Governor Newsom has been credited with pushing these bills across the finish line, reportedly twisting arms and dangling carrots to secure their passage. Some believe that his presidential ambitions may have played a role in the success of these bills. Governors, unlike lawmakers, depend on good statewide economic performance for their reelection.
Jason Sorens, a senior research fellow at the American Institute for Economic Research, has pointed out that getting California to embrace an 'abundance mindset' will require fundamental changes to the state's political culture.
In his signing statement, Governor Newsom gave shoutouts to YIMBYs (Yes In My Back Yard) and 'the abundance agenda.' NIMBY environmentalists, organized labor, and law professor Eric Biber have expressed concerns about the new CEQA exemptions and have signaled potential amendments.
It's important to note that CEQA is more far-reaching than the National Environmental Policy Act (NEPA). Under CEQA, state government agencies are required to study, disclose, and mitigate the environmental impacts of their projects. The new laws also exempt 'advanced manufacturing,' high-speed rail, wildfire mitigation, and certain public-serving facilities from environmental review under CEQA.
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