Published On: January 24th, 2023 / Categories: Uncategorized /

CEQA and building startsThe California Environmental Quality Act (“CEQA”) has been a regular topic of discussion in this blog over the years, from challenges to local zoning bans against mobile medical marijuana dispensaries, to the expansion of the use of “categorical exemptions” from environmental review, to modifications to the methods of measuring traffic impacts of development projects.  As one of the most significant pieces of legislation in California history since its enactment in 1970, it has had an outsized impact on land use and development in the Golden State.

While enhancing the public’s ability to weigh in on government decisions affecting the environment, CEQA has also been criticized during its existence for its susceptibility to abuse.  Because CEQA is “a self-executing statute” (i.e., any member of the public, even anonymously, can enforce the law “through litigation or the threat thereof”), filing a CEQA lawsuit against a development project can be a relatively low-risk tactic that could cause indefinite project delays regardless of the merits of the case, thus making it potentially uneconomic for a project to proceed.

Jennifer Hernandez, a partner at the law firm of Holland & Knight (and one of my law school classmates), recently authored a study for the California Business Roundtable’s Center for Jobs & the Economy, which showed that CEQA was used to block, indefinitely delay, or cancel nearly half of all of California’s housing production (47,999 units) in 2020.  Her study, an interim report of a longer-term project, revealed that these CEQA actions have been used to systematically block housing, thus leading to the impoverishment of low-wage workers due to increased commuting and housing costs, and resulting in a net outflow of that population group from the state as they flee housing insecurity.  Further, an earlier (2010-2012) review in this ongoing study of CEQA filings (obtained by public records request from the California Attorney General’s Office, which is required by law to be served with copies of all these lawsuits) showed only 13% of these actions were filed by traditional environmental organizations, with lawyers seeking quick cash settlements, NIMBYs, projects’ economic competitors and labor unions comprising the bulk of the parties filing CEQA lawsuits.

Given these facts, the risk of CEQA filings has led to cases of “greenmailing” by special interests ranging from construction unions, neighborhood groups, and business associations, which can force concessions from a project before public review even starts.  These considerations have worked to usurp the role of city councils and city planning departments and commissions in these decisions, since modifications are made to projects before they are even filed in order to accommodate special interests.  There has been no clear consensus on how to fix this problem, and it has “made CEQA the preferred lever of California’s infamously litigious NIMBYs (Not in My Backyard-ers)”.

One potential solution to this problem that has gotten some traction has been statewide legislation freeing certain projects from discretionary local review, thus avoiding CEQA.  In other words, if a city has no discretion in issuing permits for certain projects, CEQA cannot be invoked in the review process.  For example, the California legislature has recently enacted statutes allowing accessory dwelling units (ADU) to be built with only ministerial review, meaning that local government has no discretion in issuing ADU permits.  The use of this approach would mean that certain types of projects could proceed without CEQA review.

The flip side of this approach, however, is that it could also work to curtail the use of other, more popular land use and zoning restrictions.  The possibility of this result appears to have limited the potential use of this approach in other arenas.  Ultimately, it would seem that comprehensive CEQA reform is needed, for which the requisite political will appears to be lacking.

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