California's Environmental Regulations Are a Mess. Why Won't Lawmakers Fix Them?
The California Environmental Quality Act has created a regulatory nightmare.
It's not that typical that an acronym for an arcane regulation would be a household word, but in California the term CEQA—pronounced see-kwa—is as well-known as terms such as OMG and LOL. Signed by Gov. Ronald Reagan in 1970, the voluminous statute provides a laundry list of terms and conditions on developers of every manner of construction project. CEQA has created a regulatory nightmare, although it still has defenders. LOL indeed.
As the Planning and Conservation League explains, "The California Environmental Quality Act…is California's premier environmental law. It allows public agencies to make informed decisions about activities that could degrade public health and damage the environment. It also provides California residents with the legal framework to hold their public agencies accountable."
That sounds so unobjectionable. Who doesn't want public agencies to make informed decisions and provide community members with tools to protect the environment and hold officials accountable? But the reality is far different than what these Pollyannaish civics-textbook explanations suggest. California lawmakers refuse to substantively reform the law, but what's the first thing they do whenever they want a particular project built?
You guessed it—they provide a CEQA exemption or streamlining. When the Sacramento Kings wanted to build a new downtown arena and keep the team from leaving town, Senate President Darrell Steinberg (later elected the city's mayor) ushered through an exemption. We've seen multiple examples—or attempts—to reduce the application of CEQA to other professional sports projects, as well as other favored projects, including one tied to LA's effort to lure the Olympics.
It's always the sign of a bad law when it constantly requires exemptions. That reminds me of Assembly Bill 5, which banned most independent contracting—but its supporters exempted more than 100 industries from its grip because it threatened so many people's livelihoods. A recent national example: Donald Trump's tariffs posed an existential threat to many businesses, so he's been exempting certain industries. All these regulatory edicts empower the politically well-connected, who have lobbyists who can secure special favors.
So what's wrong with CEQA? Whenever the government has discretionary approval authority, the law requires the agency to conduct a review. It usually requires the developers to conduct an extensive environmental analysis. It triggers an initial study process and then often a costly, time-consuming full Environmental Impact Report. Agencies can then mandate remediation or reject the project. It gives any stakeholder the right to file a lawsuit challenging the agency's approval.
As is now well documented, interest groups often file lawsuits that are not related to improving the environment. No-growthers file suits to stop—or reduce the size—of projects they don't like. Neighbors can file lawsuits because they don't want more traffic. Unions threaten suits as a way to gain leverage to secure project-labor agreements and other union-friendly conditions. As the law firm Holland & Knight reported in 2015, "64% of those filing CEQA lawsuits are individuals or local 'associations,' the vast majority of which have no prior track record of environmental advocacy."
And if you think these cynical efforts to gum up the construction process help the environment, then consider this alarming point from that analysis: "Projects designed to advance California's environmental policy objectives are the most frequent targets of CEQA lawsuits." These include transit projects, multi-family housing, parks, schools and libraries. It notes that 80 percent of the CEQA lawsuits are in infill locations, which is where environmentalists want us to build.
CEQA criticism has grown even on the political Left thanks largely to the law's stifling effect on new housing construction. As everyone here knows, California faces a severe housing crisis as the median home price statewide has soared above $800,000 and well over $1 million in many coastal metros. That has led to massive rent spikes and has exacerbated our homelessness situation. Lawmakers have—to their credit—passed targeted exemptions and streamlining provisions for particular types of housing projects (infill, multi-family, duplexes), but it's not enough.
A 2022 report for the Center for Jobs and the Economy by Holland & Knight attorney Jennifer Hernandez notes that despite those new laws, "CEQA lawsuits targeting new housing production, in contrast, continue to expand—with 47,999 housing units targeted in the CEQA lawsuits filed just in 2020." The California Air Resources Board (CARB) "acknowledges that two-thirds of CEQA lawsuits allege violations of climate impacts."
Look, if CEQA can be used to stop projects based on climate impacts, then it can be used against any project. It's been weaponized as a no-growth tool—constraining housing, energy projects, freeways, rail, you name it. Unless we're happy just grinding progress to a halt, we need to repeal—or significantly reform—this monstrosity and get beyond occasional exemptions for ballparks and public housing. We all know CEQA by name and deed, so why won't elected officials do anything about it?
This column was first published in The Orange County Register.
