Opinion Essay

July 2023

By: Rick Bishop: ICSD External Director & Fmr. Executive Director of the Western Riverside Council of Governments (WRCOG)

California is widely known for its high cost of housing and living, which is largely the result of the inability for new housing production to match the state’s population growth. It is estimated that California’s housing shortage is at least 2 million units (A Home for Every California: 2022 Statewide Housing Plan 2022). According to the Public Policy Institute of California, the state ranks 48th in the nation in terms of housing units per capita, having added 3.2 times as many people as housing units during the last decade (Johnson et al., 2022).

Several factors contribute to the housing shortage; among those frequently mentioned are burdensome regulations/policies, including the California Environmental Quality Act (CEQA), which is oft criticized for being abused by slow / no growth advocates to tie up or kill proposed housing projects, and by labor unions to strong arm developers into project labor agreements.

Yet despite regular calls for comprehensive CEQA reform since its enactment in 1970, significant progress in this regard has not materialized. Instead, lawmakers in recent years have enacted several bills designed to ease regulatory burdens, including the provision of CEQA exemptions, on housing proposals that meet certain criteria. Bills that stand out in this regard include, SB 35, AB 2162, AB 430, SB 886, SB 6, and AB 2011. Yet some of these bills have strings attached that increase the cost, and thus the difficulty of, building affordable housing. Although exemptions are provided for some project types, many other housing projects remain subject to CEQA, and to potential abuses from groups who use the law to fight against growth in their communities.

Housing proposals are targeted at a higher rate than any other type of development. In a study of 15 years of CEQA California Appellate and Supreme Court Decisions, 67% of the cases were brought, at least in part, by “a local organization such as a neighborhood group, homeowner association or a new entity created for the purpose of filing a CEQA lawsuit” (Hernandez et al., 2015).

This lends some support to those who claim that CEQA litigation abuse is primarily the domain of Not In My Backyard (NIMBY) opponents and special interests such as competitors and labor unions seeking non-environmental outcomes. A study by the law firm, Holland & Knight LLP, found that over a three-year period, only 13 percent of CEQA lawsuits were brought by groups with a prior record of environmental advocacy (such as the Sierra Club) (Hernandez et al., 2015). A particularly disturbing fact: from 2013-2015, 25% of the CEQA lawsuits filed between 2013-15 challenging housing developments, 78% were against development in communities that are considered to be whiter and healthier, suggesting CEQA red lining (Hernandez, 2018).

As the state’s housing crisis worsens, legislators need to identify all impediments that negatively impact housing development. While some CEQA relief is being provided via legislative exemptions for specified developments, comprehensive CEQA reform efforts that achieve time and cost savings have the potential to increase the rates of housing development throughout the state and help meet statewide housing goals and needs. Should a concerted effort to pursue comprehensive CEQA reform occur, the following are a few of the issues that should be prioritized by legislators.

1. Limit the legal battles: Legislators should consider putting in place protections against lengthy and costly legal processes that often accompany a CEQA suit. Policies that limit or end serial or duplicate lawsuits to projects in which the state has determined to be not environmentally detrimental could be especially helpful. Because CEQA litigation overwhelming targets housing development, policies specifically targeting litigation against housing, and not all types of development, should be considered, especially considering the state’s housing woes. Without harming the ability of all sides to prepare their cases, those delaying tactics could be outlawed. The CEQA litigation process could be improved by requiring lawsuits to be filed with the Courts of Appeals and not lower courts, making plaintiffs pause before filing suit and encouraging more pragmatic decision-making. It would also reduce unnecessary delays and costs that come from CEQA cases having to make their way through the trial courts.

2. End the anonymity: Those who bring a CEQA suit should have to disclose their identity, and their interests – environmental and non-environmental alike.

3. Impose financial disincentives: Increasing the financial cost of baseless CEQA challenges may serve to limit litigation abuse by organizations which exist to solely challenge development under the guises of CEQA. In many civil cases, the losing party pays for court costs and attorney fees for the prevailing party.

4. Examine the concept of providing additional CEQA relief to housing, or even exempting all housing from CEQA. California’s crisis requires bold solutions. Some, including Baruch Feigenbaum at the Reason Foundation, have suggested exempting all housing from the law. More moderate approaches could include expanding negative declaration findings for larger scale projects that are proposed in jurisdictions that have state-certified housing elements, for example.