What is CEQA?
California has long been seen as a leader in environmental protection in the United States, a reputation that the state has worked hard to preserve since the passage of its hallmark environmental law, the California Environmental Quality Act (CEQA). Passed in 1970 by then-governor Ronald Reagan, the law was originally intended only for government projects. After a 1972 court decision, it was expanded to include the majority of private construction projects, including housing. CEQA aimed to protect local environments in areas of development, creating standards for air and water quality, preservation of fish and wildlife, and considerations for long term environmental health. Before a project can be provided government permits to build or make changes, CEQA requires that a review must be done to determine if it will have any negative environmental impacts. It also allows private groups to sue projects that will have negative impacts on the environment, slowing or halting construction while a more thorough environmental review of the project’s impacts takes place.
Understanding California’s Housing Market
California also has a negative reputation when it comes to housing, as one of the most expensive states to rent in, behind only Massachusetts, New York, and Hawaii. California’s homeownership rate has also remained roughly 10 percent lower than the national rate over the past few decades. Rent stress is also more common in California among both renters and homeowners. Part of the reason for the difficult housing situation is that building homes in California is much more difficult than in other parts of the country. A RAND study from 2025 found that building homes in California is significantly slower and more expensive than in comparable areas in Colorado and Texas. Project completion takes an average of 22 months longer in California than Texas, and development fees average $29,000 in California compared to just $1,000 in Texas. CEQA environmental reviews have been blamed by some as a primary cause of the slow and expensive building process in California, but recent CEQA amendments aim to change that.
Introduction to A.B. 130 and S.B. 131: CEQA Rollback Bills
On June 30th, 2025, the California state senate, heavily supported by Governor Newsom, passed a new spending bill. Of that spending package, Assembly Bill 130 and Senate Bill 131 contain the changes to CEQA. The GreenBelt Alliance’s overview of the spending bill explains that, among other changes, the new budget revision package “created an exemption from CEQA as a statute for projects that are deemed ‘environmentally friendly’ housing.”
Essentially, the rigorous requirements which were previously required under CEQA for developers to follow to build legally have been rolled back on the majority of new projects, especially new housing in densely populated areas. Specific language was also included in the bill to prohibit developments on environmentally sensitive areas such as wetlands or critical species habitats. These changes went into effect immediately after the passage of the bill.
Arguments in Favor of the Rollback
Among other policymakers, Governor Newsom has been a very strong advocate of rolling back CEQA in the name of decreasing housing costs. He has argued that this bill modernizes CEQA and removes barriers that enable the state to address housing scarcity. Naturally, the longer a project takes to permit and build, the more expensive it becomes, pushing costs onto renters and homebuyers. The environmental review requirements will not be gone entirely, but a much shorter process is required now rather than the more extensive review previously. The permit process alone for new housing construction often takes a year and a half or even longer. With the removal of many CEQA requirements, the process may now take only a few months.
State Senator Scott Wiener (D), who introduced the original CEQA rollback legislation, has stated that, “Environmental review under CEQA frequently takes three to four years to complete, creating a major barrier to building or altering housing.” Senator Wiener’s claim that the review frequently takes multiple years is not corroborated by other sources, who generally put CEQA review times at a year at most in most situations. He also contends that CEQA lawsuits have stood in the way of critical housing projects across the state, providing a list of examples such as local businesses using a CEQA lawsuit to block a tiny home project that would have housed 200 previously unhoused people in Sacramento.
However, Senator Wiener’s argument that CEQA lawsuits have been weaponized by so-called “NIMBYs” (an acronym for Not In My Backyard, referring to individuals or groups who oppose local development projects despite broader public benefits) is supported by research. In a study by the international law firm Holland & Knight, it was found that of all lawsuits under CEQA, only 13 percent were brought by groups or individuals with a previous record of environmental advocacy. The study goes on to say that “CEQA litigation use is primarily the domain of NIMBYs and anonymous new unincorporated entities, including those using CEQA for non-environmental related purposes.” This points to the idea that CEQA lawsuits have been used not as a tool for environmental advocates to use, but instead have been weaponized as a means of artificially inflating housing prices and stopping developments.
Public opinion seems to be on the side of the rollbacks as well. A Politico poll taken after the bill’s passage surveyed 1444 Californians on their opinion of the rollback, and the consensus was quite positive towards the changes. 23 percent of all respondents thought it was a good move, 37 percent thought it was a necessary compromise, 14 percent thought it was a good step but not far enough in rolling back CEQA, and only 14 percent were completely against the rollback. Crucially, these responses were quite consistent across gender, race, age, and party lines.
Proponents of the rollback stress that the changes will only take away red tape from the building process and will have minimal impacts on preventing environmental harm. Venable LLP wrote that “rather than triggering an exhaustive environmental review, agencies must now focus only on the specific environmental impacts related to the disqualifying criterion. This eliminates a key procedural choke point.”
Arguments Against the Rollback
The majority of arguments against rolling back CEQA requirements come from environmental protection and conservation agencies. In a letter signed by 237 California conservation agencies addressed to Governor Newsom and his administration in August, the agencies argue that habitat and lands important for conservation plans need to be added to the definition of “natural and protected lands”, which are still protected after the rollbacks. They also argue that the Advanced Manufacturing CEQA exemption needs to be removed, as it can be extremely hazardous to both the environment and public health. They do not mention being entirely opposed to CEQA being rolled back in some form, but that these specific changes need to be made as updates to the bill’s language. The LA Public Press echoed this argument, stating that, “[the rollback] created dangerous exemptions from the law that could put already vulnerable communities at risk of being exposed to more industrial pollution.”
UC Berkeley environmental law professor Eric Biber wrote in his opinion piece on the rollback that he agrees the bill is good for California overall, but that it undermines climate and environmental goals in three ways. The first is that the rollbacks fail to protect many critical habitats for endangered and sensitive species, leaving ecologically important lands vulnerable. He is also concerned with local recreation spaces losing their protection, and finally that the CEQA exemptions may encourage urban sprawl, leading to more vehicle miles traveled, and subsequently, more air pollution.
Additional concerns from opponents of the rollback include the loss of California’s reputation as a climate leader in the United States, and that this rollback represents a big step back for the state’s climate resilience efforts. Matthew Callaway of Sonoma County Conservation Action shared his thoughts in early July:
“California is reeling from the impacts of climate change, fires, heat waves, and floods. Gutting environmental review does not build climate resilience; it does precisely the opposite. By sidelining cumulative impact analysis and public input, these bills make it easier to greenlight projects that will worsen emissions, strain already over-taxed water resources, and eventually endanger public health.”
Opponents of the rollbacks also raised issues with the legislative process by which the bill was passed. Although Senator Wiener’s original iteration of the rollback bill was released in February of 2025, SB 131 was added into the budget bill only days before the deadline for its passage. In the Planning Report’s September issue, they wrote that the bill went through a rushed legislative process that only gave the public three days to see the language of the bill before it was signed into law. The late inclusion of the bills in the budget point to possible bureaucratic maneuvering to avoid opponents preventing the bills from passing, or possibly public opinion being more against the rollbacks than polling suggested after its passage. The Politico poll mentioned previously was taken after the bill had already been passed, so it is possible that public opinion has changed since the bill’s passage.
Conclusion
Overall, there is widespread consensus that the CEQA rollbacks will make the construction of new housing quicker and cheaper in California. However, with the recency of the bill’s passage it is difficult to say exactly how impactful it will be on the construction price of new homes. It is also unclear how much those decreased costs will be passed along to homebuyers and renters. The environmental impacts of rolling back the CEQA requirements are contested, with opponents of the change arguing that it goes too far in removing environmental protections and will cause widespread damage, and proponents of the change arguing that the protections that were left in place are sufficient to protect the environment.