California CEQA Changes – “Game Changer” for Housing
California has enacted some of the most significant changes to the state’s environmental review law since its inception, which supporters call “Holy Grail reform” and “the biggest CEQA reform in 55 years.”
Key Effects on Housing Development
- Mixed-income projects can now qualify with lower percentages of affordable units (7% very low income, 10% low income or 13% moderate income).
- New financing mechanisms include a revolving fund for reinvesting equity from stabilized affordable housing.
- The state is converting underutilized land into affordable housing, creating new opportunities for public-private partnerships and development.
- Regional mall sites up to 100 acres can now be redeveloped for housing, creating opportunities for large-scale, mixed-use projects.
- Urban “infill” housing developments, housing built in and around existing developments, are no longer subject to CEQA. The new policy exempts qualifying infill, housing-rich projects from CEQA for projects up to 85 feet. It also imposes a new 30-day deadline for agencies to approve or disapprove qualifying projects.
Infrastructure and Manufacturing Effects
The reforms also exempt various infrastructure projects from CEQA, including:
- Water system upgrades, advanced manufacturing facilities (including EV plants) and wildfire fuel breaks
- Childcare centers, health clinics, broadband infrastructure, food banks, wildfire mitigation, and clean water systems
Effects
- The exemption is “the most significant change to the California Environmental Quality Act’s effect on housing production since CEQA was passed.” One of the biggest obstacles to building new housing in California has now vanished.
- Decreased regulatory risk will lead to more interest from institutional investors.
By Teddie Steffelin, Intern, and David R. Pascale, Jr., Senior Vice President at
George Smith Partners.