Sacramento passes hundreds of bills every year. Few are as consequential as Assembly Bill 130 and Senate Bill 131, signed by Gov. Gavin Newsom on June 30.
Those bills reform the California Environmental Quality Act, better known as CEQA, to clear the way for desperately needed housing development.
Economists and housing advocates have long pointed to the supply side of the equation as a significant contributor to the housing crisis. The state has not built enough new single-family homes, condominiums and apartments to keep up with demand.
As a result, too many Californians found themselves priced out of the market, unable to find housing they can afford near where they work. Median home prices reached $868,150 in 2024. The housing crisis is especially acute among low- and middle-income households. That, in turn, contributed to rising homelessness and people moving out of the state.
The changes enacted by the Legislature and signed by the governor will not solve that problem entirely. Local zoning ordinances limit where construction occurs. Building fees and labor costs also push up prices. But the new rules remove one monumental barrier to building.
CEQA, enacted in 1970, originated with noble intent. Californians wanted development to occur in harmony with the natural environment, not to just bulldoze across it.
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The two bills signed by the governor create sweeping exemptions for urban infill housing developments up to 20 acres. Projects still will have to exclude sensitive areas like wetlands, prime farmland and protected species habitat.
Predictable regulatory review without prolonged lawsuits should lower development costs and allow more projects to go forward more quickly and less expensively.