California NIMBYs Are Ruining U.C. Berkeley. Stop Them Before They Kill Again.

A California Supreme Court decision freezing enrollment at the state's flagship university is focusing the public's fury on the normally obscure, but incredibly consequential, California Environmental Quality Act.

An early March decision by the California Supreme Court requiring the University of California, Berkeley, to freeze enrollment until it adequately studies the environmental impacts of its growing student body is focusing the fury of the public and politicians alike on the usually obscure, but incredibly consequential, California Environmental Quality Act (CEQA).

The law, signed in 1970, has the seemingly straightforward requirement that government agencies study the environmental impacts of projects they undertake.

But, in the 50 years that it's has been on the books, the definition of a "project" subject to the law has grown to include almost any discretionary decision made by a government agency. The number of impacts that need to be studied has expanded at a similar rate. The law also lets anyone sue if they think one of these impacts hasn't been studied thoroughly enough.

The result is CEQA's conversion into a "super statute" with the awesome power to grind almost any human activity, public or private, to a halt. CEQA lawsuits and appeals have been used has been used to stop new housing, new hospitals, new bike lanes, new burger joints, new solar plants, new marijuana dispensaries, and more.

Thus far, the state has taken those losses with remarkable grace and patience. A CEQA lawsuit forcing California's flagship university to slash enrollment by some 3,000 students is provoking an abnormal, but perfectly justified, amount of outrage at the law and its consequences.

In response, lawmakers and politicians are proposing some remarkably tepid reforms that will address the recent headlines, but otherwise, leave CEQA unrestrained and ready to kill again.

First, some background.

For the past few years, U.C. Berkeley has been trying to build a new faculty housing complex on campus. That naturally requires it to, per CEQA, prepare an environmental impact report. When the university approved the report in 2019, the group Save Berkeley's Neighborhoods filed a lawsuit arguing that it didn't sufficiently study the environmental effects of an increasing student population.

Their lawsuit contended that that student population increase was its own separate project that needed its own environmental impact report.

A pair of court decisions in July and August 2021 agreed that U.C. Berkeley didn't adequately study the effects of the increased student population on things like noise, traffic, and parking, and therefore, enrollment would have to be frozen at 2020 levels until a new, CEQA-compliant report could be prepared.

On March 3, the California Supreme Court rejected the university's request to stay that enrollment freeze while it prepared that new report. The result is that U.C. Berkeley is being forced to send out about 5,000 fewer acceptance letters than it otherwise would to get the desired enrollment cut of around 3,100 students.

The seemingly ridiculous result has captured the attention of commenters across the political spectrum.

"Processes meant to promote citizen involvement have themselves been captured by corporate interests and rich NIMBYs," fumed Ezra Klein in The New York Times yesterday. "Laws meant to ensure that government considers the consequences of its actions have made it too difficult for government to act consequentially."

"Thousands of future engineers, teachers, and social workers must give up their plans because a group of entitled community activists is tired of having students live in their neighborhoods where they drive up the cost of housing," wrote Steve Greenhut here at Reason.

The angry response to the state Supreme Court's decision in the U.C. Berkeley case has also provoked California politicians to tackle CEQA reform. Sort of.

When the case was still pending, Democrat Gov. Gavin Newsom's administration filed an amicus brief with the California Supreme Court supporting the university and arguing for the lower-court ordered enrollment freeze to be lifted.

"We can't let a lawsuit get in the way of the education and dreams of thousands of students who are our future leaders and innovators," said Newsom at the time. And yet, the brief that the governor's administration filed took no broader position on the law that enabled that lawsuit in the first place.

"This letter focuses on the benefits and burdens of the requested stay" of the enrollment freeze, it reads. It "does not address the merits issues surrounding the Regents' compliance with the California Environmental Quality Act (CEQA)."

Hardly a profile in political courage.

Only slightly more impactful is a new bill from California Assembly members Anthony Rendon (D–Lakewood) and Phil Ting (D–San Francisco) that requires courts to wait 18 months before freezing enrollment if they find a university hasn't complied with CEQA. The bill would be retroactive, meaning the court decision in the U.C. Berkeley case couldn't go into effect.

Rendon and Ting are explicit that they want to change CEQA as little as possible while still fixing the thing that's made the law national news.

"An educated workforce is needed to keep the state's economy growing, motivating the Legislature to bolster the number of college enrollment slots, especially for California residents," they said in a statement. "At the same time, we care deeply about CEQA… we cannot ignore the environmental impacts of growing campuses on surrounding communities."

In February, Sen. Scott Wiener (D–San Francisco) introduced a further-reaching bill, S.B. 886, that would exempt student and faculty housing developments from being considered projects under CEQA, and thus, those painstaking environmental reviews.

"It is unacceptable for NIMBY lawsuits to strip students of their right to a quality education by blocking housing and effectively forcing schools to reduce enrollment," said Wiener when introducing the bill. "We need to make it easier for them to build the housing they so badly need on their campuses."

S.B. 886 wouldn't save would-be Berkely students from receiving a rejection letter. Courts have already decided—in a separate, active lawsuit brought by Save Berkeley's Neighborhoods—that enrollment increases themselves are a CEQA project.

So, exempting university housing projects from the law wouldn't relieve the university of the responsibility to study the impact of its student population on the environment.

In fairness, Wiener's bill is aimed at fixing a general shortage of housing on California's university campuses. It's that shortage that sends students into adjacent neighborhoods in search of housing, enflaming NIMBYism as they go. If it were to pass, you might get fewer Save Berkeley's Neighborhood-style lawsuits.

In recent years, the California Legislature has tried to carefully limit CEQA's reach by passing bills that exempt things like transit projects and the upzoning efforts of local governments from having to perform environmental reviews.

Even when these efforts have been successful, they still leave a myriad of other industries and human activities subject to CEQA and its crushing effects.

Leveraging the outrage sparked by the Berkeley episode into another piecemeal reform is the wrong approach and a wasted opportunity, argues California attorney Chris Carr in a recent Wall Street Journal op-ed.

S.B. 886 "simply continues the Legislature's longstanding practice of adopting 'exemptions' for narrow categories of activities or projects," Carr writes. "These exemptions take enough pressure off the politicians to prevent comprehensive reform. They also ease pressure on the courts that have presided over the expansion of CEQA into a monstrously complex and convoluted body of law."

Carr suggests requiring all CEQA suits to be filed in California Courts of Appeals. He argues that would deter some people from filing these suits, speed up the lawsuits that do happen (a major cost of CEQA lawsuits is the delays they cause), and increase judicial scrutiny of frivolous CEQA complaints.

Another reform people have suggested is narrowing who has the standing to file CEQA lawsuits and administrative appeals. Right now, basically, anyone can for very little cost. That obviously invites abuse.

These wholesale CEQA reforms are necessary, but they're also very hard to do. Almost every special interest group has a vested interest in keeping the law around.

Wiener acknowledged the opportunity the current moment opened for wider CEQA reform in a recent interview with Politico, while also sounding a pessimistic note on the likelihood of that reform to materialize.

The Berkeley "train wreck has definitely highlighted for the broader public the problems with never-ending CEQA expansion," he said. "But, with that said, CEQA is big and expansive, and a lot of stakeholders have an interest here."

"There are situations in politics when we have something like a mass shooting, and for 24 hours or for a month, it seems like, 'oh my God, we're finally going to break the logjam on gun safety in Congress,' and that ends up dying," he continued. Better to pursue the narrow reform that has a higher chance of passing, argues Wiener.

One needn't share his enthusiasm for gun control to understand the truth of the political dynamic he's describing. CEQA-skeptical politicians have been saying much the same thing for years now.

"You can't change CEQA," said then-California Gov. Jerry Brown in a frank 2016 interview. "The unions won't let you because they use it as a hammer to get project labor agreements," he said, referencing their practice of filing cynical environmental lawsuits until a developer agrees to hire all-union labor. "The environmentalists like it because it's the people's document that you have to disclose all the impacts."

The difficulty of wholesale CEQA reform doesn't make it any less necessary, however.

The growth-destroying effects of the law have pushed California into a state of crisis. It's contributed to incredibly high housing costs that are forcing more and more residents to decamp to other states. It makes building the infrastructure necessary to serve the people that stay there prohibitively expensive.

The U.C. Berkeley fiasco is a rare instance where the harms caused by the exceedingly technical and complicated CEQA are apparent and intelligible to the average voter.

If anything could generate the political capital necessary to pass deeper reforms of the law, this should. California policy makers serious about fixing the law should seize this unprecedented opportunity. They likely won't get a better one.