California’s housing crisis continues, as homeownership drifts further out of reach for most people. New housing construction remains stubbornly low relative to the state’s housing demand. People across the political spectrum want to address the problem, but rather than fully reforming the state’s primary environmental review law, which plays a significant role in blocking and slowing housing development, California lawmakers have increasingly turned to workarounds.
Since 2014, the median home price has more than doubled statewide. According to Redfin, the median housing price in Orange County is over $1.2 million. In Los Angeles County, the median price is over $892,000, while in Riverside County it is $610,000. With these high prices, the state has slowly been forced to confront the growing conflict between its need for more housing and the ways the California Environmental Quality Act (CEQA) impedes housing development.
CEQA was designed to ensure that environmental impacts are considered in projects. But it has evolved into a system where lawsuits can be filed by nearly anyone, for almost any reason, often long after a project complies with zoning and local planning rules. This has allowed environmental review to function less as a safeguard and more as a procedural veto on housing development.
Gov. Gavin Newsom has signed and supported a series of needed laws over the past several years that narrow CEQA review for housing. Most recently, Assembly Bill 130 and Senate Bill 131 created some of the most significant CEQA reforms in decades. Together, the laws exempt qualifying infill housing projects from CEQA altogether and sharply limit the scope of environmental review for projects that narrowly fail to qualify for an exemption. These changes will allow more housing to move forward, particularly in urban areas.But they do so by shielding certain projects from CEQA rather than by updating the law itself. If housing can only be built by repeatedly bypassing the state’s primary environmental review law, then the law needs to be changed.
Washington state offers a useful contrast to California because it addressed a similar problem. However, rather than treating housing as an exception to environmental review, Washington amended its environmental review statute to clarify that housing development consistent with adopted plans in the state’s urban areas no longer triggers environmental review by default. Thus, environmental review is no longer structured as a second pass on land use decisions that have already been made through planning.
Washington faced comparable constraints to California under its environmental review statute, the State Environmental Policy Act, or SEPA. Like CEQA, SEPA subjected development to environmental review and allowed appeals that frequently delayed projects. But Washington focused on recalibrating the relationship between planning and environmental review. Lawmakers altered SEPA so that environmental analysis was tied more closely to adopted plans, particularly in urban areas where zoning already permitted housing.
Projects consistent with those plans were no longer presumed to require duplicative review, and environmental analysis was directed toward impacts not already addressed through the planning process.
California’s recent reforms move in a similar direction but stop short of the same conclusion. Instead of updating CEQA’s core framework, California has relied on a growing patchwork of exemptions that narrows the law’s reach without resolving the underlying problems. The consequences of this misalignment are not evenly borne. CEQA litigation is costly and time-intensive, favoring well-resourced opponents of development projects. Meanwhile, renters, lower-income households, and younger Californians bear the downstream effects of constrained housing supply and rising costs.Washington state’s experience is not a universal template. Differences in scale, governance, and political context matter in California, but they underscore a broader principle: environmental laws should address real harms, not enable procedural obstruction, particularly in already urbanized areas.
California can continue expanding a complex patchwork of exemptions, or it can undertake the better path of aligning CEQA with housing realities. The state needs to move beyond temporary workarounds and toward a system that enables us to build the housing needed.
Christina Mojica is a senior policy analyst at Reason Foundation.
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