California strikes environmental law that choked new housing

California’s housing crisis has prompted the state to rescind parts of longstanding environmental law that critics say has stifled new home construction.

The state legislature and Governor Gavin Newsom passed two bills Monday that will allow some development projects to bypass the California Environmental Quality Act (CEQA), believing that it will spur more suburban projects.

The bills were part of a larger effort to come to a budget deal, which Newsom threatened to veto if CEQA reform wasn’t part of it. CEQA was originally passed in 1970 by then-governor Ronald Reagan.

“With these historic laws, we finally have the tools we need to move the needle on affordability in California,” said California state Senator Scott Wiener in a statement. “It isn’t easy to make changes this big, but Californians are demanding an affordable future and it’s our job to deliver for them no matter what.”

The first of the two bills will allow high-density developments to proceed if they are not on environmentally hazardous land, and the second will streamline legal and municipal processes, including rezoning.

According to Politico, non-residential projects can be exempt from CEQA as well, including industrial, manufacturing and high-speed rail.

Whether the changes spur housing development remains to be seen, but addressing the need for affordable housing has never been more acute in California, as skyrocketing home prices, rent and homelessness are plaguing residents.

According to data from Altos, a household in Los Angeles making the median income in California would have to pay more than they make to cover a monthly mortgage payment on a median-priced home. In San Diego, a household would have to pay 77.1% of their income on a mortgage payment, and San Jose (72.4%) and San Francisco (59.8%) have similar numbers.

After stalling during the pandemic, home prices in the Bay Area are now among the fastest growing in the nation, particularly San Jose.