California Streamlines Housing Approvals by Rolling Back CEQA

Governor Newsom signs bills easing environmental review for new housing projects to spur development.

On June 26, 2025, California Governor Gavin Newsom signed two major reform bills that relax environmental regulations under the California Environmental Quality Act (CEQA), signaling a pivotal shift in the state’s approach to housing approvals. The legislation is designed to expedite the development of residential housing by exempting most urban, infill housing projects from burdensome environmental impact reviews, which have historically delayed or derailed construction—sometimes for years.

The new laws target large-scale rental and mixed-use developments in transit-rich or job-dense corridors, allowing local governments to fast-track permitting without litigation delays commonly triggered by CEQA lawsuits. CEQA, which was originally intended to prevent environmental harm, has increasingly been used by project opponents—often wealthier homeowners or commercial competitors—to block affordable housing developments on technical or procedural grounds.

Supporters, including real estate developers, urban planners, and housing advocates, argue that these rollbacks are essential to resolving California’s severe housing shortage, which exceeds 3.5 million homes. They see the legislation as a way to lower construction timelines and costs, which are often inflated by years of legal battles and complex regulatory hurdles. The reform also offers incentives for environmentally sustainable housing by integrating CEQA exemptions with green building certification and climate-smart zoning.

Opponents, including environmental organizations and some neighborhood associations, warn that CEQA reform could lead to unchecked growth, weakened environmental oversight, and reduced public input on new developments. They argue that climate resiliency should not be sacrificed in the name of housing speed, particularly as California faces record heatwaves and water scarcity.

Nonetheless, the bills represent one of the most aggressive efforts by the state to take control of the housing crisis, and they are expected to significantly affect property managers, landlords, and developers by opening the door to faster, more predictable project approvals across urban markets.
https://www.wsj.com/us-news/thrilled-california-developers-cheer-rollback-of-states-environmental-law-3ba6f997