CEQA, California’s Controversial Environmental Law, Primed for Big Reforms

Former Golden State Gov. Jerry Brown once said that reforming the California Environmental Quality Act (CEQA) was “the Lord’s work.” He isn’t alone.

All of California’s governors since Ronald Reagan — Brown, George Deukmejian, Pete Wilson, Gray Davis, Arnold Schwarzenegger and Gavin Newsom — have called for, or attempted, the modernization of CEQA at one point or another. The law is intended to inform government agencies and the public of the potential environmental impacts of development projects, and compel the mitigation of those impacts. It was innovative at the time of its enactment in 1970. 

The law serves a critically important purpose, to be sure, yet the scope of CEQA has expanded greatly over the decades, and critics say it is often used as a tool to disincentivize, or even derail, certain developments regardless of their actual environmental impact. Many have found the statute to be not only onerous, but also a likely factor in California’s current housing availability crisis. California State Sen. Scott Wiener is among them.

“A portion of CEQA is about protecting the environment and protecting communities from contamination, and that’s all very important,” Wiener told Commercial Observer. “But for the most part, CEQA is not about protecting the environment. It applies to a massive array of projects in ways that have literally nothing to do with the environment, and in ways that can actually undermine climate action. CEQA is also, at times, abused, and basically is a tool for anyone who doesn’t like a project to try to stop it … So we really need to make sure that CEQA is being used for its core purpose, which is to protect the environment and protect communities from contamination, and that we move away from making CEQA a tool for people to block anything they don’t like.”

Wiener and State Assemblymember Buffy Wicks have introduced separate bills in recent months, SB 607 and AB 609, respectively, in an effort to reduce the risk of the law’s abuse, and broaden CEQA exemptions to incentivize development. Newsom has voiced support for the bills, and both (in one form or another) are expected to become part of the state’s budget bill this summer. 

Wiener’s team has branded the bills as “the strongest ever” reforms to CEQA, but time will tell their ultimate effectiveness. There exists a long history of attempted improvements to the law. The state legislature passed 25 bills amending CEQA in 2023 alone, according to the Little Hoover Commission, an independent oversight body. Yet few have managed to make a sizable dent in two of CEQA’s biggest drawbacks. 

The first is that nearly all new development projects in California that require some form of agency approval are subject to CEQA guidelines. There are exceptions to that rule, naturally, including most single-family home construction, remodels or additions to existing structures, and other specific project classes. 

Developers of projects that are subject to CEQA, however, must submit a checklist of the following items taken from Appendix G of the law, referred to as an “initial study,” to a government agency with jurisdiction over the project. Items on the checklist include aesthetics; agriculture and forestry resources; air quality; biological resources; cultural resources; geology/soils; greenhouse gas emissions; hazards and hazardous materials; hydrology/water quality; land use/planning; mineral resources; noise; population/housing; public services; recreation utilities/service; transportation/traffic; tribal cultural resources; utilities/service systems; and mandatory findings of significance. 

Each item has a series of subsequent questions — ranging from asking whether the project has “a substantial adverse effect on a scenic vista” to if it will “expose sensitive receptors to substantial pollutant concentrations” — that must be answered as “no impact,” “less than significant impact,” “less than significant impact with mitigation incorporated,” or “potentially significant impact.” If the lead agency determines that a given project would have no impact or less than significant impact, it will issue its approval via the counterintuitively named “negative declaration,” or “mitigated negative declaration.”

However, if “potentially significant impact” is the answer to any of the questions in Appendix G, the developer is automatically required to conduct an Environmental Impact Report (EIR) for the entire project.

Each EIR is a scrupulously detailed document that analyzes the potential environmental effects of the project, potential mitigation solutions, and viable alternatives. Submission of an EIR is a requirement before a lead agency can even begin to seriously consider a given project. Important to note is that if the initial study determined that the project would have no impact on a particular item, the EIR may or may not need to address it. 

According to Article 10 of CEQA, draft EIRs should be less than 150 pages, or less than 300 pages for “proposals of unusual scope or complexity.” In reality, EIRs often stretch into the thousands of pages, taking years to produce and costing hundreds of thousands, if not millions, of dollars, according to Andrew Fogg, an attorney specializing in land use entitlements and related areas for law firm Cox Castle & Nicholson. 

“There’s no way to do it within the [suggested length], given everything that’s required, it would just never happen.” Fogg said. “I have project descriptions that are longer than 150 pages. We have just lost our bearing on what these things are and what’s required.”

When it comes to real estate, time is money. Critics of the law say that just the idea of spending years, and nebulous funds, to even land consideration for a project is simply too much risk than many developers are willing to take on.

Pastor Martin Porter is the founder and CEO of Logos Faith Development, a Los Angeles-based privately funded affordable housing developer. Logos exclusively builds affordable projects by right on church-owned land, mostly across Southern California. Because Logos’ projects are by-right, and not subject to agency approval, they are exempt from CEQA. Porter prefers to keep it that way.

Additionally, SB 4, a bill signed into law by Newsom last year (and notably also introduced by Wiener), exempts fully affordable housing projects from CEQA review if developed on land owned by independent higher education or religious institutions, barring some exceptions. 

“Will I pursue a project that gets [targeted by] CEQA, or in the frame of having to engage with CEQA? The reasonable answer is, I’ll probably avoid it,” Porter said. “There’s so many stipulations, and reporting requirements, and fiduciary requirements that come with taking on a project that’s CEQA-heavy that, all things considered, I will avoid.

“If a piece of property came to my table and I could build 200 amazing units for moderate- to low-income families, and it’s on church land, but it triggers CEQA, the short answer is that I would think — not twice about it — I would think three times about it and probably pass.”

Wiener and Wicks’ latest bills attempt to address the inherent complexities of CEQA review and EIRs, by streamlining approvals and reducing costs and delays, particularly for infill housing developments, narrowing the focus of environmental reviews or by expanding exemptions to CEQA altogether. Under AB 609 in particular, exemption would be granted for infill housing projects on “sites less than 20 acres, not located on environmentally sensitive or hazardous lands, and meet minimum density thresholds.”

SB 607 also attempts to address the law’s second major drawback: That aspects of the law can, and often have, been used to unduly challenge developments that have already completed their environmental reviews. 

The most common method to oppose a CEQA project is what’s generally referred to as a “late hit” or “data dump.” After a negative declaration proposal or a draft EIR is submitted for review, a public comment period is automatically triggered, typically lasting between 30 and 45 days. Yet CEQA’s not-so-dirty secret is that the law allows for anyone to add new information to the lead agency’s record at any time during the review process — including up until the agency issues a final decision, well after the close of the public comment period. Project opponents use the loophole to submit letters of concern, sometimes dozens or even hundreds of pages long, arguing that the project does not comply with the law. 

The move is often an attempt to delay the proceedings. A significant portion of all projects under CEQA review — as many as half — face late hits, Fogg estimated.

That’s not to say that the law’s public review aspect is all bad. Brian Boxer, senior vice president of environmental consultancy firm ESA, said that he personally believes CEQA as a whole has done more good than harm.

“The legislature has made incremental changes, because as much as people like to complain about it, people also treasure the parts of CEQA that opened the door to community engagement in development and change in their own community. And, fundamentally, I think that that’s a good thing. 

“The legislature made CEQA, and they can continue to evolve CEQA. I’ve been in this business for 40 years. Every single year I’ve seen CEQA reform laws, and they’re getting a little more traction right now, particularly as it relates to housing in infill settings. But CEQA has been around for about 50 years now. I think that California is better for it, but that doesn’t mean it doesn’t have a cost and that there aren’t negative consequences.”

Lead agencies are not legally required to respond to such complaints after the public comment period has closed. Failure to do so, however, can open the project up to lawsuits on CEQA grounds. Even if the complaint ultimately has little to do with environmental concerns, plaintiffs often argue that the agency violated its obligation to fully review said concerns.

Relatively few CEQA projects face litigation. About 200 lawsuits on average are filed each year, or roughly 2 percent of all projects subject to CEQA, according to a 2024 report from the Little Hoover Commission. Yet the real-world examples of such lawsuits against projects are legion: a food bank in Alameda (recently dismissed by the Alameda Superior Court); a child care center in Napa; a Planned Parenthood in South San Francisco (rejected by California’s First District Court of Appeal); and housing developments throughout the state. 

A University of California at Berkeley plan to develop 1,200 units of student housing is another well-cited example. Although litigation over the project began years earlier, a neighborhood group filed a CEQA-related lawsuit against the project in 2021, claiming the university’s EIR had failed to analyze “social noise,” as well as alternate locations for the development. After two years of worming its way through the judicial system, the state legislature passed AB 1307, which clarified that residential noise was not a significant environmental impact under CEQA. The case was eventually taken up by the California Supreme Court, which ruled in favor of the university in 2024.

“Sometimes, people who don’t want to see any change to CEQA will say that only a small percentage of projects get sued under the law,” Wiener said. “And that may be true, but that’s not the heart of the problem. The reality is that it’s the threat of a CEQA lawsuit that distorts the whole system. Because you have projects that either don’t happen, because they think they’re going to get sued under CEQA, or they self-edit and reduce the size of a project — reduce the number of units of housing, for example — to try to protect the project from a lawsuit.”

Several pieces of state legislation have attempted to address the late hits loophole, including ones in 2014 2024 that ultimately failed to pass. Wiener’s SB 607 aims to address the loophole by limiting an agency’s CEQA review to the most pertinent complaints via “excluding communications of persons tangential or far removed from project decision-making, with specified exemptions.”

“I think that CEQA is a law that goes well, well beyond what most people would think of in terms of an environmental law,” Wiener said. “And when you have a law that has the word ‘environment’ in its name, but it’s being used to slow down or kill child care centers, food banks, housing near train stations and health centers, that’s not what most people think of when they think of environmental protection. Those are all things that people want. … And so our goal here is not to get rid of CEQA. It’s to make sure that CEQA can protect the environment while not being abused.”

Nick Trombola can be reached at ntrombola@commercialobserver.com.