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California Gov. Gavin Newsom recently signed new legislation that rolls back key provisions of the state’s influential environmental law, aiming to accelerate housing development amid a persistent affordability crisis.
In a June 30 press release, Newsom’s office said that the reforms would “boost housing production and infrastructure statewide and improve affordability for all.”
The legislative changes, contained in AB 130 and SB 131, introduce 10 new exemptions under the California Environmental Quality Act (CEQA), streamlining the approval process for residential projects in urban areas, KTLA5 reported.
“This isn’t just a budget,” Newsom said in the release. “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.”
Enacted in 1970, CEQA mandates environmental impact assessments for most major development proposals. It was initially hailed as a tool to protect natural resources, but critics have long argued that it has become a legal and procedural obstacle to addressing California’s acute housing shortage.
“For decades, barriers have stood in the way of progress, blocking the urgency that would allow the state to address housing scarcity and better provide Californians with what they need: affordability and greater housing access,” the release stated.
A 2024 report by the bipartisan Little Hoover Commission noted that preparing an Environmental Impact Report under CEQA can take over a year and cost hundreds of thousands of dollars — or in some cases, exceed $1 million — even when projects face no legal challenges. Such delays have hindered efforts to build in high-demand areas, particularly near city centers and transit corridors.
The new law aims to speed up housing and infrastructure projects by easing CEQA rules, limits permitting delays, and freezes most new building regulations through 2031. It adds tools to fund affordable housing, increases oversight of homeless shelters, and boosts renters’ tax credit to up to $500.
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