The debate over California’s landmark environmental law hits new venue

California’s bedrock environmental law has helped protect residents, wildlife and natural resources from pollution and other negative effects of development countless times since then-Gov. Ronald Reagan put it on the books more than half a century ago.

But the California Environmental Quality Act, better known as CEQA, sometimes is weaponized by competing businesses, labor unions and anti-development neighbors who aren’t necessarily motivated by environmental concerns. They challenge projects in court, based on CEQA complaints, and delay or kill some projects entirely. Some people now argue that such tactics have contributed to California’s housing crisis.

Witnesses spelled out those competing realities during an all-day hearing Thursday before the Little Hoover Commission which, for the first time, is studying whether to recommend changes to the environmental law.

“I think that’s the reason nothing can ever be done with CEQA because each side is so compelling,” Commissioner Anthony Cannella said, praising arguments that came from those pushing to reform the law and from others fighting to safeguard it.

The question the Little Hoover Commission aimed to answer through the Thursday hearing, and two more coming in April: Is there some way to do both?

In short, CEQA requires public agencies and decision-makers to evaluate the environmental impact of any proposed project, a term that has been used on everything from housing and office buildings to bike lanes. The law also requires agencies and others to determine if the project in question will have significant effects on environmental quality issues, disclose those effects to the public, and mitigate them as much as is feasible.

Supporters say the law has blocked or forced changes for hundreds of projects that would have worsened air, water and soil pollution and caused other environmental problems that disproportionately affect the state’s most vulnerable residents. They noted that, over the years, the law has prevented the demolition of homes to double the size of the 710 freeway and stopped developers from building apartments on contaminated land.

“We have to preserve the good that’s in CEQA,” Aruna Prabhala, senior attorney with the Center for Biological Diversity, said in Thursday’s hearing. “Little tweaks around the side and all of that may be very well intentioned, but they have unintended consequences that affect people’s lives, that affect our environment, that sometimes we cannot undo.”

But CEQA also has been controversial from the start. Developers and some local governments say it creates too many barriers for projects to advance in cost effective and timely ways — if at all. And they argue red tape and lawsuits around CEQA have contributed to California’s housing and homelessness crises, with some GOP leaders in recent years calling to gut or even eliminate the law.

“CEQA is a litigation defense game, as it has evolved,” San Francisco attorney Jennifer Hernandez told the commission, citing data her firm collected showing that nearly half of the housing units California produced in 2020 were challenged in CEQA lawsuits.

“Many things need a little refreshing over time,” she said. “It’s time, I think, for CEQA to be refreshed.”

In the wake of CEQA being used recently to stop a high-profile student housing project for UC Berkeley, talk of reforming the landmark law has reached a fever pitch. Even Democrats have called for major reforms, with Gov. Gavin Newsom in February calling the approval process “clearly broken.”

“California cannot afford to be held hostage by NIMBYs who weaponize CEQA to block student and affordable housing,” Newsom said. “This selfish mindset is driving up housing prices, and making our state less affordable. The law needs to change. And I am committed to working with lawmakers this year to making more changes so our state can build the housing we desperately need.”

Such pressure prompted this new study on potential CEQA reform by the 61-year-old Little Hoover Commission, a nonpartisan oversight agency, made up of commissioners appointed by the governor and legislative leaders, that investigates state operations and offers recommendations to improve efficiency, cost savings and improved service for Californians. After two more hearings on the topic in April, the commission is expected to publish a report that might include recommendations to the legislature and governor’s office about CEQA reforms.

One key question is just how much of an impact the environmental law has actually had on the state’s housing crisis. Data supports both sides of the argument.

For example, supporters of the law cite a 2018 survey by the Association of Environmental Professionals that indicated just 2.8% of development projects were withdrawn due to CEQA concerns. And Prabhala pointed out that many other states are struggling with affordable housing issues, even though California is unique in having such a rigorous environmental review law.

Meanwhile, those who want to change CEQA cite work from Hernandez’s firm, such as a study that showed 33% of CEQA lawsuits filed in Southern California from 2013 to 2015 were aimed at stopping housing projects that had already been approved. Hernandez also has data suggesting most lawsuits come from groups with no history of environmental advocacy, and that a majority challenge denser housing that environmental groups generally claim to support.

Citing these conflicts and confusion, Chris Elmendorf, a professor at UC Davis who specializes in land-use law, told the commission he’s “very skeptical” of data both “from the CEQA apologists and the data from the CEQA skeptics.”

“I think the best hope for figuring out whether CEQA is a big problem or a little problem is not to look at data, but to talk to people who are in the trenches, to do more of a qualitative analysis of people’s experience with the law,” he said. He suggested those conversations should focus “on the loopholes in the relationship between CEQA and state housing law.”

One compelling anecdote to support CEQA reform came from witness Laura Tolkoff, transportation policy director for the San Francisco Bay Area Planning and Urban Research Association. During a window a few years back, when CEQA challenges held up plans to add 34 miles of dedicated bike lanes to city streets, Tolkoff said, “Nine people died and 2,000 people were injured while riding their bikes in the city.” And while San Francisco’s Slow Streets Program went through CEQA appeals due to how it would take away some parking spots, Tolkoff said the father of her 4-year-old’s best friend was hit and killed riding his bike.

“There is a real human cost when projects and plans are held up by CEQA,” Tolkoff said.

Those real human impacts work both ways, though, Prabhala argued. She pointed to a situation that’s been unfolding near Scottsdale, Ariz., where a housing community has had its water supply cut off. Arizona doesn’t have a CEQA-style law that requires consideration of whether there’s adequate water supply before developments get approved, leaving those residents without assurance of basic services.

There have been a number of CEQA reforms in recent years, Prabhala noted. These include rules that, under certain circumstances, can exempt affordable housing projects and public transportation projects, including bike lanes, from full CEQA review.

But Hernandez said the fact that so many exemptions are needed is an indication that it’s time to look at broader reforms.

Creating one more exemption for housing also won’t solve that problem, Hernandez argued, since the people who might live in those homes also need new and upgraded schools, transportation, utilities and other services, any of which might be stymied by CEQA-related challenges.  And while most CEQA talk revolves around housing, the law also can affect many other types of development, from oil field expansions to cannabis farms to upgraded public transit.

When it comes to reforms, Hernandez and Dan Dunmoyer, president of the California Building Industry Association, spoke about four key proposals. These include a ban on anonymous lawsuits related to CEQA, ending duplicative lawsuits, and disallowing CEQA challenges from halting an entire project unless there are significant health or safety effects being considered. Their fourth proposal calls for judges to stop interpreting the law as broadly as they have for the past half century.

That last change is likely only if a CEQA case makes its way to the California Supreme Court, where new precedent could be set, Hernandez said.

When commissioners pressed CEQA defenders for any reforms they’d like to see, they only mentioned changes that would strengthen the law.

Marvin Norman, with the Riverside-based Center for Community Action and Environmental Justice, told commissioners that his group has seen abuse with CEQA exemptions that have already been carved out. He said warehouse developers, for example, have used carve outs for infill housing to advance their projects next to homes in the Inland Empire. And he cited the law’s inability to stop the massive World Logistics Center development in Moreno Valley.

“The CEQA process isn’t able to stop the most egregious projects,” Norman said.

The Little Hoover Commission’s second and third hearings on CEQA reform will be held on April 13 and April 27. All three hearings will be streamed on the commission’s website: lhc.ca.gov/events. The public can make comments at the end of each hearing or submit written comments through the agency’s website.