Newsom changed CEQA to promote housing and development. What could it mean for Oakland?

Governor Gavin Newsom signed two bills into law last month, reforming a landmark California environmental law that has been in place since the 1970s. The bills, led in part by two Bay Area legislators, tackle reforms to The California Environmental Quality Act, often known as CEQA, which requires developers to assess the potential environmental harm of proposed development and require mitigation if necessary. Housing advocates had long argued that the law’s requirements hampered development and contributed to the state’s housing crisis.

The two so-called “trailer bills” — which accompanied the state budget bill — created exemptions to CEQA with the goal of reducing barriers to building housing and other urban development. 

Legislators voted on the bills shortly after they were introduced, leaving little room for input from California constituents. While many housing advocates praised the laws as a way to facilitate more equitable housing, some environmentalists have voiced concern that California’s most vulnerable communities have lost a tool for fighting against environmental harms. 

“I think there’s a good case that in most circumstances, that [infill] housing is going to be a net benefit for the climate and so speeding up its production is more likely than not to be good for the for the environment as a whole,” said Zack Subin, an associate research director for climate and housing at UC Berkeley’s Terner Center for Housing Innovation.

“The harm that could result from the recent attacks on CEQA should scare everyone,” said Ruby Acevedo, a lawyer for Communities for a Better Environment, which has an Oakland office. “The recent CEQA exemptions strip away a community’s only opportunity to participate in the environmental review process before a proposed project is approved. It takes away their ability to voice concerns and potentially mitigate negative impacts.”

The Oaklandside has put together an explainer to help unpack what the reforms are and how they’ll likely impact East Bay residents. 

What is CEQA?

The California Environmental Quality Act was signed into law in 1970 by Governor Ronald Regan during a time of growing concern about the environment. It requires public agencies to study, consider, and communicate to the public any potential environmental impacts of a given development project — and it requires the developers to feasibly reduce any impacts. (The law does not apply to projects that don’t require government approval.) For decades, CEQA became a critical tool available to communities to share their thoughts and concerns about a project — or file suit to force change. 

What kinds of construction are now exempt?

The bills, AB 130 and SB 131, do not remove CEQA requirements — but they do carve out significant exemptions. They allow projects of less than 20 acres, located in existing urban areas, to skip CEQA review as long as they comply with existing zoning, planning, and labor standards and guidelines. 

AB 130 mainly exempts so-called infill housing, which makes use of existing land zoned for development in an urban area. It does not exempt housing development projects in or near the wildland-urban interface. Infill development has been associated with reduced emissions as it makes use of existing materials, lowers pollution by reducing commutes, and creates more energy efficient neighborhoods, according to research conducted by the Terner Center for Housing Innovation. 

SB 131 makes exceptions for nine other types of development: childcare centers, health care centers and rural clinics, food banks, farm worker housing, certain clean water projects, wildfire risk mitigation projects, parks, broadband internet, and new advanced manufacturing facilities in existing industrial areas. The last item in that list, which would cover industrial factories and semiconductor facilities, has caused particular concern for environmental groups. Many environmental and community groups, including some in Oakland, have pointed out that this could put historically disadvantaged communities at greater risk of toxic exposure.

“131 at its core, the advanced manufacturing exemption, is fundamentally based on industrial zoning,” Lauren Gallagher, a legal fellow with Communities for a Better Environment, said. “And how that has played out in East Oakland has already caused environmental injustice, and it’s one of the reasons why there’s much greater concentration of industrial polluters and an airport in one community and not the rest of Oakland.”

Who wanted CEQA reform?

When CEQA was implemented, California’s political, social, economic, and environmental landscape was very different. In 1970, the average cost of home was around $23,000, or $190,000 in today’s dollars. Today, the median cost of a California home is over $900,000. Additionally, climate change, urban sprawl, and gentrification have disproportionately impacted Black and Brown, lower income communities.

“Creating some protections, legislatively and institutionally to put some safeguards in place to make sure that doesn’t happen, made so much sense in that moment, right,” said Zachary Lamb, an assistant professor with the Department of City & Regional Planning at UC Berkeley, who studies urban planning’s uneven impact on vulnerable communities in the face of climate change. “We created these really powerful tools, and they have done a lot of good, but also empowered groups have figured out how to use them to their ends.”

In recent years, CEQA has been at the center of the conflict between folks in the “Yes in my backyard” (YIMBY) and “Not in my backyard” (NIMBY) camps. CEQA has been associated with slowed progress on affordable housing, transportation, and other infrastructure, mainly through delays introduced lawsuits filed during the CEQA process — or the threat of lawsuits. A 2024 study conducted by an independent state oversight agency found that CEQA litigation on average adds almost two years to project timeframes. “In the face of such lengthy delays,” the authors write, “financing can vanish, stopping a project even if it would eventually have survived the CEQA process and been approved.”

This effect has led California legislators to seek amendments to CEQA for years. Local state legislators Assemblymember Buffy Wicks, of Oakland, and State Senator Scott Weiner, of San Francisco, have long advocated for CEQA changes as a way to expedite the construction of affordable housing and to protect certain projects from being bogged down by lawsuits. The two legislators sponsored bills AB 609 and SB607, respectively, the policies of which were incorporated into AB 130 and SB 131. 

The change comes at a time when attitudes are rapidly changing toward housing development — and as a progressive movement has emerged calling for a commitment to an “abundance” of social goods such as affordable housing, clean energy, and public transit. California’s housing crisis has escalated. State leaders have been scrambling for ways to increase affordable housing across the state. Many have said it’s now even more important to fast track affordable housing redevelopment in the wake of the devastating wildfires in Southern California earlier this year. Earlier this month, Newsom announced the release of $101 million in state funds to meet this need. 

“I have a young family and buying a house in the Bay Area, as you, I’m sure, are well aware, it’s crazy — it’s virtually impossible,” Lamb said. “CEQA was a significant part of it, right, in terms of just erecting barriers, making it more challenging, making it slower, making it more uncertain, to build anything, including infill housing in already developed urban areas.” 

At the same time, Gallagher, the environmental advocate, said, “Communities are losing the ability to fight back against the projects that have harmed them and will continue to harm them.”

“When we’re talking about abundance, abundance for whom?”

How has CEQA played out in the East Bay?

CEQA has been used in a variety of ways across the East Bay over the years — sometimes to protect at-risk communities, and sometimes simply to halt development. In Berkeley, the law has been a well-known source of tension surrounding new development. 

A high profile CEQA case involving UC Berkeley drew state-wide attention, when Newson signed an exemption to the law in 2022 to allow the university to enroll more than 5,000 California first-year students. A Berkeley neighborhood group had filed a suit claiming that the university did not conduct a proper environmental review, as required under CEQA, to assess the impact of the increased student enrollment. This suit sparked debate over what could be considered a “pollutant” under CEQA.

A similar conflict played out during a three-year legal battle over a university plan to build student housing at People’s Park in Berkeley. In this case, local preservation activists sued, claiming the noise from students would be a community pollutant. Newsom signed another CEQA exemption into law in 2023 to try to reduce barriers for universities seeking to build student housing. Eventually, California’s Supreme Court sided with the university.

These suits brought increased attention to CEQA, and launched a debate over this “swiss cheese” approach to cutting holes in CEQA.

In Oakland, CEQA suits have played out around high-profile expansions, such as an expansion of gates proposed by the Oakland International Airport or a planned mixed-used development of the Howard Terminal, a waterfront property in the Port of Oakland, which advocates said could harm already environmentally burdened ecosystems and communities; increase traffic pollution; and contribute to gentrification. While the airport suits are ongoing, the state sided with Howard Terminal developers in 2023, and the port is actively seeking ways to move forward with development. 

Many of these Bay Area CEQA disputes have pitted housing advocates against environmentalists. Subin called this a false dichotomy. 

“I think there are ways in which, in the spirit of these reforms, they may be able to help the environment as well, because building housing in cities near other housing is good for the climate, good for the environment,” he said. 

What are potential local impacts?

While the East Bay has seen high-profile CEQA lawsuits over the years, Subin said there’s been no definitive analysis of much impact it had in slowing or halting development.

Much of the impact that CEQA had on development happened behind closed doors, Subin said, so “it’s really hard for us to say exactly how big of a barrier CEQA was relative to other other housing policies.”

He said a whole slate of additional reforms — to zoning, tenant protections, and overall housing production — are being considered in California right now that will also impact housing availability. 

Lamb, the urban planning expert, sees potential upside in these reforms. He said the Bay Area’s uniquely temperate climates make it a great place for climate-resilient housing, and more infill housing could reduce the need for people to take long commutes, making a dent in emissions. 

“If you can locate as much of your new housing — and particularly affordable housing —  in places like Berkeley, Oakland, San Francisco, Richmond, that already have that infrastructure, that are relatively safe, that have relatively mild climates, there are really important equity benefits there, in terms of who’s exposed to climate risk and who’s exposed to just the daily grind and pain of long commutes,” he said. 

The reform process left Gallagher, the environmental advocate, extremely frustrated. She said she and her team were watching closely as SB 607 was being considered. However, SB 131 moved so swiftly it did not leave them much time to voice their concerns. 

“We had people show up to that hearing and give public comment, and there was no space for any changes to be made between the Senate hearing, where it was reviewed, and the vote that happened immediately after,” she said. “It will have, for sure, an impact on East Oakland and Oakland and open up an array of really vulnerable communities to projects moving forward with no environmental review at all.”

Aleja Cretcher, another legal fellow with Communities for a Better Environment, said vulnerable communities are in a tougher position now than they were before the bill passed. She said the organization plans to advocate for a “clean up bill” to address the advanced manufacturing exemption in the hope of creating more protections for Oaklanders and other California residents. 

When do the reforms take effect?

The law went into effect on July 1.