California’s Bold CEQA Shake-Up
In a dramatic pivot for California, Governor Gavin Newsom has signed two historic bills (AB 130 and SB 131) into law, fundamentally altering the California Environmental Quality Act (CEQA). These measures, tucked within the state’s budget package, exempt most infill housing and infrastructure projects from CEQA requirements, a long-standing barrier blamed for inflating housing costs and stalling construction. New housing can now skip the often-lengthy environmental review, potentially accelerating approvals for multifamily housing, transit stations, and workforce housing.
Why now?
California has wrestled for decades with a shortage of housing and soaring rents. Critics argue CEQA lawsuits, often used strategically by NIMBYs, labor unions, and businesses, have slowed development and driven up costs. Now, with Newsom nearing the end of his term and eyeing a presidential bid, he tied the budget to these reforms, pressuring legislators into action.
The legislation takes immediate effect, but the proof is in the building. Will this lead to a surge in affordable housing construction? While this is the most sweeping CEQA reform in 55 years, it’s only one piece of the puzzle. Local opposition, supply chain bottlenecks, and financing challenges still loom.
Why it matters
Housing affordability: Faster approvals could help ease California’s statewide housing crisis.
Environmental balance: While infill is generally more sustainable than sprawl, using less land and fuel, exempting it from CEQA may reduce safeguards for air quality, water resources, and local ecosystems.
Political precedent: Setting precedent for tying environmental law changes to budget bills, potentially differently shaping governance and reform strategies in the future .
Supporters call it a bold move to tackle the housing crisis. Environmental groups call it the biggest rollback in decades. Either way, this is California’s biggest CEQA reform since 1970.
“Saying ‘no’ to housing in my community will no longer be state sanctioned.”
Gov. Gavin Newsom, alongside Assemblywoman Buffy Wicks and state Sen. Scott Wiener, signs two bills Monday June 30, 2025 to reform CEQA, with the goal of building housing and other projects faster.
Photo: Governor’s Office