California Pivots: Cutting CEQA Red Tape To Boost Housing & Climate Goals

In rare good news out of the United States, California’s just passed reform of the California Environmental Quality Act (CEQA) has opened the door for a wave of infill housing development, marking a significant shift in the state’s longstanding approach to urban growth. Signed into law a week ago, the reform exempts many urban multi-unit residential buildings (MURBs) from CEQA’s extensive environmental review process. This change represents a substantial victory for housing advocates, developers, and YIMBY (Yes In My Backyard) activists who have long criticized CEQA as an obstacle to addressing California’s chronic housing shortage.

CEQA was enacted in 1970 during an era when environmental awareness was gaining political traction. Originally intended to ensure environmental protection by requiring comprehensive environmental impact studies, the law provided communities a powerful mechanism to safeguard local ecosystems and quality of life. Over the decades, CEQA has delivered tangible benefits, preserving wetlands, forests, coastal areas, and urban green spaces from potentially harmful projects. The legislation also created a public accountability mechanism, enabling concerned citizens to challenge environmentally irresponsible projects.

However, over the past several decades, CEQA’s original intent has often been overshadowed by its exploitation as a tool to delay or block developments, including many projects widely seen as environmentally beneficial. Analysis of CEQA lawsuits reveals that many were filed by individuals or organizations with minimal environmental credentials. Instead, CEQA became a common legal strategy used by neighborhood groups opposed to density, by competing businesses, or by labor groups seeking project concessions. This misuse imposed long delays, drove up project costs, and created deep uncertainty, particularly impacting housing and transit infrastructure. Urban infill projects, meant to alleviate housing shortages and reduce sprawl, were frequent targets, even when they directly supported California’s broader climate and environmental objectives.

One emblematic case occurred at UC Berkeley, where plans to build new student housing in the already urbanized area of People’s Park were stalled for years under CEQA litigation. Opponents cited noise from future student residents as an environmental harm, a claim that courts initially upheld. The state legislature eventually intervened with a special exemption, but the case illustrated CEQA’s dysfunction, highlighting how the law could delay or halt environmentally sensible, high-density urban housing.

Recognizing these issues, the YIMBY movement arose roughly a decade ago to challenge restrictive local zoning laws, CEQA abuse, and other barriers to housing development. Initially dismissed as marginal and naive, YIMBY activists steadily built momentum and political influence, successfully electing pro-housing legislators and reshaping California’s housing debate. They argued that the state’s housing affordability crisis was partly due to regulatory frameworks that gave disproportionate power to opponents of new housing construction, regardless of the environmental merits of the projects involved.

This grassroots organizing culminated in the successful passage of Assembly Bill 130 in 2025, spearheaded by Assemblymember Buffy Wicks and supported by Governor Gavin Newsom. Under AB 130, urban infill projects located on parcels smaller than 20 acres and meeting specific density requirements no longer require CEQA review, significantly reducing timelines and development risks. To qualify, these projects must be zoned correctly, located within already-developed urban areas, and not situated on environmentally sensitive sites or involving historic structures. Additionally, certain taller projects must comply with labor provisions, reflecting political compromises with influential construction unions.

The reforms are expected to have meaningful impacts on California’s housing market. With CEQA litigation and lengthy environmental review processes largely eliminated for qualified infill housing, developers can now proceed with projects that previously faced years of delays. Economists focused on housing and urbanism widely agree that increased supply, particularly in high-demand urban areas, can moderate housing price growth over time, offering indirect affordability benefits through the process of housing filtering. New units attract higher-income renters, freeing up older units for middle- and lower-income households. Similar housing supply increases have been linked to reduced rent escalation in other high-cost cities, providing optimism that these reforms will contribute positively to California’s challenging housing affordability landscape.

Beyond economic and social considerations, the environmental and climate advantages of dense urban infill development are especially significant. Dense, multi-unit housing located in walkable, transit-accessible urban neighborhoods substantially reduces per-capita vehicle miles traveled (VMT) compared to sprawling suburban or exurban developments. Lower VMT translates directly to fewer greenhouse gas emissions, reduced air pollution, and decreased reliance on fossil fuels. Residents living in dense urban areas typically commute shorter distances, rely more heavily on transit, cycling, and walking, and drive less frequently overall. Each new urban apartment building contributes incrementally to lower regional emissions, supporting California’s ambitious climate targets.

Higher-density residential construction also makes resource efficiency improvements more feasible. Apartments share walls, reducing heating and cooling loads and energy consumption compared to single-family homes. Per-capita water and electricity use tends to be lower, and multi-unit buildings increasingly incorporate rooftop solar installations, battery storage, heat pumps and other advanced efficiency technologies. This further enhances the overall sustainability profile of dense urban neighborhoods.

Additionally, urban infill prevents the conversion of open space and farmland into sprawling subdivisions, preserving biodiversity, ecosystems, and carbon-sequestering lands. Every unit built in existing urban areas reduces pressure to develop undeveloped land at city fringes. The resulting preservation of natural landscapes is integral to broader environmental and climate strategies.

The California reforms, while landmark within the state, reflect a broader trend occurring across several progressive states. Oregon and Washington have already enacted sweeping statewide reforms ending single-family zoning exclusivity, requiring cities to accommodate multi-unit housing in neighborhoods previously restricted to detached homes. Massachusetts has mandated multifamily zoning near transit stations, explicitly linking housing density to its climate and environmental goals. New York continues to debate substantial housing reform proposals, driven by similar affordability and sustainability objectives, though implementation there has proven politically challenging.

Thankfully deregulation has bi-partisan support in the United States at present, with federal streamlining of approvals of major infrastructure projects being one of the few areas of cooperation between the two major parties. That might reduce the roadblocks development faces in the USA, where approvals have been delegated down to the county and often (affluent) individual level.

In California, these recent policy shifts resonate with the concept of “Abundance,” popularized by Ezra Klein and Derek Thompson. Klein’s framework emphasizes removing bureaucratic barriers to building, arguing that an abundance of housing, infrastructure, and clean energy can be unlocked through smart deregulation. The successful CEQA reform can be viewed as a direct reflection of this Abundance framework, prioritizing the efficient provision of critical public goods through streamlined governance.

Interestingly, the Abundance movement, similar to the rallying cry of Kurzweil’s Singularity, has two distinct philosophical threads that are currently somewhat confused with one another. Klein’s smart regulation-focused version contrasts with the technological utopianism articulated by Tony Seba in his latest book, Stellar. Seba argues that exponential advances in renewable energy, battery storage, electric vehicles, and autonomous technology inherently generate abundance through market-driven technological disruption. These two visions of Abundance, regulatory versus technological, differ considerably in mechanisms and pragmatism but share enough that they are often conflated. Exploring how these threads might integrate or diverge further will be a topic for future analysis.one-

This is also part of a trend to smart regulation reform I’m starting to see the outlines of. Most recently, I noted the UK’s revisions related to heat pumps for residential buildings, with elimination of the one-unit per residence rule, the one-meter set back from property lines rule and the elimination of the requirement for fabric upgrades as an eligibility requirement for heat pump grants. Simplifying the ability to do the right things, while making it tougher to do the wrong things is a good regulatory framework.

Critics raise legitimate concerns about California’s new approach. From the left, advocates fear weakening labor standards, undermining local community input, and eroding environmental protections. There is apprehension that the benefits of increased housing supply may primarily serve wealthier residents, exacerbating displacement pressures in historically marginalized communities. Certainly, while the statistical data from efforts globally support infill MURBs’ value propositions in making housing more affordable over time, this is as part of a set of policies, not a silver bullet, and local conditions will vary widely. And as reminder, it usually just slows the rate of rental price increases, it doesn’t decrease rental prices. The benefits will take time to accrue.

Conversely, conservative critics remain skeptical about whether California’s political establishment will maintain the resolve necessary to sustain these reforms. They question whether future administrations will succumb to pressure from traditional interest groups, potentially restoring regulatory barriers under new guises. Certainly CEQA changes did cave to labor demands on a couple of points, with pro and con arguments about how reasonable they were, and unions may continue to push for more.

Nonetheless, California’s CEQA reforms represent a significant departure from previous regulatory frameworks and signal a new chapter for urban development. By removing procedural roadblocks for environmentally beneficial infill housing, the state is aligning its housing policy directly with its climate objectives. The coming years will demonstrate whether this regulatory shift delivers sustained housing supply increases, improved affordability, and meaningful environmental outcomes. As other progressive states observe California’s bold experiment, the long-term results may shape housing and environmental policy nationally, redefining the balance between regulatory oversight and efficient urban development.