To its supporters, the California Environmental Quality Act is a powerful mechanism for protecting air, water, wildlife, land, public health and safety. Critics, on the other hand, regard it as a powerful mechanism for mischief, allowing activists to delay or halt projects they oppose even if the activists’ complaints are without merit.

This long-running argument between CEQA supporters and critics periodically flares up in Sacramento, generally over legislative proposals to make the law less burdensome to builders, farmers and other business interests. Another such confrontation may soon break out, this time over efforts to make CEQA friendlier to housing developers.

Draft versions of a blueprint for CEQA revision have been circulating since midyear, hatched by a working group assembled by Gov. Arnold Schwarzenegger. Although none of those suggestions has yet been incorporated into a bill, the latest draft outlines significant changes in the way CEQA is applied to residential development, such as exempting many housing projects from environmental review and reducing the opportunity for opponents to use litigation to slow or stop projects.

The working group includes the secretaries of state and consumer services; labor and workforce development; food and agriculture; and business, transportation and housing; and the directors of the Environmental Protection Agency and the Office of Planning and Research. Resources Secretary Mike Chrisman, who is heading up the effort, also established a 35-member advisory group to brainstorm ideas and develop recommendations. Its membership represents nearly every conceivable interest: farmers, developers, water agencies, local governments, and an array of environmental organizations.

But if the membership of the group is broad, its mandate is not. Rather than launch a sweeping review of CEQA effects, the governor directed the group to look narrowly at ways the law could be modified to, in Chrisman’s words, “encourage more efficient land use for new housing and infrastructure.”

The focus on housing comes as no surprise. Recently, the Department of Housing and Community Development issued a report titled “California’s Deepening Housing Crisis.” In August, the report notes, only 14% of the state’s households earned enough to buy a median-priced home. That price, $568,890, was 20% higher than the median during August 2004.

The report puts much of the blame for the affordability crisis on the continuing gap between housing production and population growth. The state estimates that to accommodate the 600,000 or so new people in California every year, builders need to construct 220,000 housing units. On average, 170,000 units have been permitted annually since 1999, according to the report.

The state’s calculations are not universally endorsed. A report issued two years ago by the Public Policy Institute of California, a nonpartisan think tank, argued that it is misleading to consider only raw population numbers as a predictor of housing demand. Adding 1,000 children to the population, for example, does not affect housing demand the way that adding 1,000 adults does because infants do not establish households. And adding 1,000 Latin American immigrants, who tend to form larger households than other demographic groups, does not affect demand in the same way as adding 1,000 native-born transplants from other U.S. states.

Many factors influence demand and prices. By singling out CEQA and suggesting it constrains housing production, the governor and his task force are borrowing a page from the playbook of the California Building Industry Association, which recently issued a report calling CEQA “the biggest offender” on the list of policies that discourage such things as higher-density projects.

“For $175 – the cost of a court filing fee – a single individual can at any time in the already lengthy local approval process bring down a multimillion-dollar affordable housing project,” the CBIA report says.

However, in a letter to Chrisman accepting his invitation to join the advisory panel, Sierra Club state legislative director Bill Allayaud offered an opposing view.

“CEQA is frequently unfairly and inaccurately blamed by the development and extraction industries as a main cause of high housing prices,” Allayaud wrote. “We hope you agree that CEQA is not the culprit and actually is a major benefit to Californians and local governments.”

The revisions being circulated by the governor’s task force appear to side with the CBIA.

CEQA requires a complete evaluation and disclosure of the potential adverse consequences of development and other activities, which is typically accomplished through preparation of an environmental impact report. Under one proposal from the governor’s task force, no EIR would be required for a housing project that is consistent with a city or county general plan, as long as that plan had been the subject of its own EIR. This would be the case even for projects likely to have significant effects on their surroundings.

“I think that’s a significant change,’ said San Diego attorney Bill Devine, who specializes in CEQA compliance and development law at Allen, Matkins, Leck, Gamble & Mallory.

Perhaps the most far-reaching proposal is to establish a sort of hybrid specific plan/development agreement process that sidesteps CEQA entirely. Property owners would be able to enter into such agreements with cities and counties to plan particular areas. The agreement would detail the projects to be built in that area, analyze the impacts, describe any mitigation to be undertaken, and specify a public participation process. Once that has been done and the plan has been approved, the individual projects to be built under the plan would be exempt from further review and challenge.

Another of the proposed changes would establish an administrative review process for CEQA disputes, requiring that they be submitted to a specially appointed judge before the parties could proceed with litigation. Although the intent is presumably to reduce the number of CEQA lawsuits and save developers money, that provision could actually make matters worse by adding another step to the process, Devine said. During a panel discussion at the annual meeting of the California Chapter of the American Planning Association, Pasadena Deputy City Attorney Theresa Fuentes offered a similar evaluation. She said that adding another level of review would only delay development further.

By the time any of these revisions surfaces in legislative form, it is likely to have undergone substantial revision itself. Already, CEQA’s defenders have their hackles up, several having issued statements suggesting that efforts to encourage affordable housing and infill development should not focus only on CEQA.

Bill Devine, Allen, Matkins, Leck, Gamble & Mallory, (949) 851-5412.
California Building Industry Association, (916) 443-7933.
Sierra Club, (916) 557-1100.
Governor’s CEQA Improvement Advisory Group: