Note: North County Pipeline reached out to several cities for comment, but spokespeople said their staff were still reviewing the legislation and how cities must adjust.
STATE — A pair of landmark laws with sweeping changes to the California Environmental Act are expected to radically change the future of housing development.
The landmark laws target multi-family housing in urbanized or urbanizing areas under 20 acres and exempt many other projects from the much-maligned and weaponized CEQA. Legislative Democrats, some Republicans and YIMBYs (Yes in My Backyard) are celebrating as Gov. Gavin Newsom signed the bills — Assembly Bill 130 and Senate Bill 131 — on Monday after adding a poison pill to veto the state’s budget if the trailer two bills were not approved by the legislature.
If the bills didn’t pass, it would have voided the state’s budget, per reports. Supporters, meanwhile, said these laws will allow for rapid, density-driven infill development as a means to address the state’s housing crisis.
The bills went into effect Monday.
“This isn’t just a budget. This is a budget that builds,” Newsom said in a statement. “It proves what’s possible when we govern with urgency, with clarity, and with a belief in abundance over scarcity. In addition to the legislature, I thank the many housing, labor, and environmental leaders who heeded my call and came together around a common goal — to build more housing, faster and create strong, affordable pathways for every Californian. Today’s bill is a game changer, which will be felt for generations to come.”
The laws make all urban areas subject to density of 30 units per acre to drive the construction of more affordable and low-income units. Additionally, the laws push cities to hit more of their Regional Housing Needs Assessment goals and mandates from the state.
During a press conference last week, Newsom railed against NIMBYs (Not in My Backyard) for stalling housing production and using lawsuits as a means to do so. He said the YIMBY movement has supplanted and thwarted the NIMBY movement as these laws will bring a new era of housing development to meet the state’s needs.
AB 130
The bill was authored by Assemblywoman Buffy Wicks (D-Oakland) and reforms and streamlines CEQA reviews and labor and wage provisions. The law gives full CEQA exemptions for multi-family housing projects on urban infill sites, eliminates redundancies with CEQA reviews for projects built on existing urban zones, along with others such as sewer, public parks (as infrastructure, not for housing), broadband, day care, transit and advanced manufacturing, to name a few.
New projects will not require approval from a Planning Commission, City Council or Board of Supervisors, also known as ministerial approval, per the bill. AB 130 exempts qualifying housing projects from CEQA review.
It exempts infill housing from CEQA and cities that relied on aspirational or non-zoned parcels in their Housing Elements must now rezone those sites to qualify for CEQA exemptions, according to the bill language. For example, if a Housing Element used aspirational zoning instead of parcels already zoned, those aspirational zones must be rezoned. The law gives a three-year grace period for compliance.
Other elements of the bill include:
No environmental impact report (EIR) is required
No mitigated negative declaration required
No CEQA lawsuit can be filed to challenge a project under environmental grounds
For a full CEQA exemption, a project must meet the following:
100% residential or two-thirds residential if mixed-use
Complies with objective zoning and design standards
Pays prevailing wages under certain circumstances (see below)
(Market-rate and mixed-income projects qualify if they meet the requirements)
The CEQA exemptions have been applauded by Democrats, YIMBYs and others for reducing the production timeline by months or years. Under CEQA before the laws were enacted, a city’s Housing Element could only be certified with an environmental impact report (EIR).
In addition, developers were also required to complete another EIR, which added significant time and money to a project. Now, a developer is not required to deliver an EIR, and can’t be sued on environmental grounds, thus speeding up projects, Newsom and others said.
“This is what we’ve all been waiting for — a long-overdue step to stop CEQA from being weaponized against housing,” Wicks said in a statement. “With AB 130, we’re taking a major step toward building desperately needed homes faster, fairer, and with more certainty. This is what our working-class families deserve and how we move California’s housing goals from promise to reality.”
The law requires cities to rezone underutilized or non-residential land to allow by-right resident uses at specific densities. The minimum density thresholds are greater than 30 units per acre in urban areas, 20 for suburban and 15 for rural.
Cities must evaluate other zones areas such as commercial, industrial or mixed-use areas with low job activity, underutilized public land and low-density residential, for potential housing rezoning.
AB 130 still requires a project to comply with local objective design and zoning standards.
As for wages and labor, developers are not required to enter into a project labor agreement with a labor union but must pay prevailing wages on certain projects. Prevailing wages are union-level wages for construction workers.
The projects now required to pay prevailing wages include all developments with 25 or more units (10 units or more in San Francisco). Projects can be exempted for those with under 25 units.
Mandatory prevailing wages are required for any project 85 feet or higher or is 100% affordable.
While local zoning and height limits still apply, projects can exceed those using the State Density Bonus Law or Senate Bill 330, as has been done before AB 130 was enacted.
SB 131
Authored by Sen. Scott Wiener (D-San Francisco), SB 131 guts CEQA through numerous carveouts, streamlines a number of processes, exempts rezoning actions from CEQA and bans lawsuits for rezoning tied to the Housing Element or other qualifying uses. The lead agency, such as a city, must certify a rezoning action is tied to a Housing Element program.
Those programs include wildfire risk reduction, farmworker housing, public parks, or advanced manufacturing. However, if a project is seeking an exemption, it must follow the pathways under the two laws. CEQA still applies for historic resources, critical habitats, high wildfire and flood zones, oil and gas infrastructure and distribution centers, among others.
The state, meanwhile, must publish maps of eligible urban infill areas by July 1, 2027.
“With these historic laws, we finally have the tools we need to move the needle on affordability in California,” Wiener said 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.
SB 131 allows cities to rezone land without triggering CEQA only if the rezoning is required by their certified Housing Element, typically to fulfill low- and very-low-income RHNA obligations and the city does so within statutory time limits (usually 3 years from Housing Element adoption).
Also, if rezoning doesn’t meet the zoning capacity requirements set under the law, low-income RHNA units will not count toward a jurisdiction’s RHNA numbers, according to the law. There are exceptions, but those are difficult standards to meet, such as site history, development trends and developer interest.
North County impacts
How the sweeping new laws will impact North County, open and infill spaces and other elements is still unclear. Representatives in Carlsbad and San Marcos declined interviews as their respective staffs were still reviewing and analyzing the new legislation.
However, there are some known aspects under the current state law and the new legislation considering units per acre. North County Pipeline analyzed and reviewed the new laws combined with other housing laws to understand the new density requirements.
In short, all of North County — from Escondido to Valley Center to Oceanside to Del Mar — appears likely to be required to rezone eligible parcels to 30 units per acre to meet affordable housing and Regional Housing Needs Assessment requirements. Poway, meanwhile, is required to meet the 20-unit threshold.
San Diego County is part of a metropolitan statistical area (MSA), which is defined as an area with more than 2 million residents, according to state law. Under state code § 65583.2, those jurisdictions are classified as “metropolitan/urban” for housing purposes.
Eight of the coastal and inland cities are classified as urban areas under state law. If they’ve already met the rezoning requirements, no further action is needed, per the new laws.
If not, and they miss the deadline, they would likely be found in non-compliance with the state, lose CEQA rezoning exemptions and be subject to Builder’s Remedy, according to the law. Builder’s Remedy is a legal provision allowing developers to bypass all local zoning requirements.
According to state law, the coastal cities are formally classified as the San Diego Coastal and Urbanized region, while Vista, San Marcos and Escondido are within the San Diego Urban County.
Despite the small populations of Fallbrook, Bonsall and Valley Center, it appears they are not exempt from the small-jurisdiction rule, according to the interpretation of the law.
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