If Bay Area housing stakeholders are to ever address factors that have led to construction delays and the rise in costs for constructing desperately needed housing, we must delve deeper into how a well-intentioned law has inadvertently led to difficulty in producing sufficient housing. The California Environmental Quality Act, better known as CEQA, was adopted under Gov. Ronald Reagan in 1970. The law was meant to mitigate the environmental impacts of public projects.
CEQA requires state and local agencies to deliver an Environmental Impact Report, or an EIR, to document all possible harms of a proposed land use project. It also requires decision-makers to seek out alternatives to reduce adverse impacts and to conduct public hearings for formal comment. Over time, the courts decided this law applied to all land use development projects—both public and private. As a result, projects ranging from low-income housing developments to hotel construction are required to conduct costly and time-consuming EIR studies. Even inner city infill development projects are subject to this expensive and lengthy process that can result in EIR studies that are thousands of pages in length and can take six months to over a year to complete.
In my years as a council member, I have seen CEQA abused to prevent development projects from proceeding. Examples include a disgruntled neighbor who did not want a proposed development next door to “block their view,” a convenience store owner who filed a lawsuit against the expansion of a competing gas station, a union that used CEQA to extract valuable contracts, and cities that sued to halt housing and hotel construction near their borders. It is these types of abuses and frivolous lawsuits that hold up projects until the courts decide the validity of the studies. These delays are all factors leading to higher construction costs in the form of labor contracts and materials, unnecessary legal fees as appeals take up to two years or more to resolve, and interest and loan fees accumulating as projects are placed on hold.
A 2015 Holland & Knight study on CEQA abuses concluded that, “The largest single target of CEQA lawsuits… are residential projects,” and these projects, “overwhelmingly [involve] non-polluting land uses.” The study found that of all CEQA lawsuits filed between 2013 and 2015, more than 14,000 were challenges to housing construction. If we really want to start addressing the causes of our housing crisis we must work on CEQA reforms. Some fixes that have been discussed but have yet to be implemented include:
1. Requiring all entities that file CEQA lawsuits to fully disclose their identities and their environmental interests. Currently, claims can be filed anonymously.
2. Disallowing procedural gamesmanship that pushes CEQA proceedings past a year and beyond.
3. Ordering the losing party to pay court costs on CEQA lawsuits.
4. Making infill land development in urban non-riparian areas exempt from challenges.
In recent years, CEQA exemptions and streamlining legislation have passed, highlighting the need for larger comprehensive reform. Just last week, Gov. Gavin Newsom signed Senate Bill 7 into law at the site of Google’s proposed Downtown West project in San Jose. SB 7 will allow dense affordable housing projects to move through the CEQA process at an exponentially faster rate. Although this bill received overwhelming bipartisan support, overarching reform to streamline the arduous CEQA process rarely gains much support.
It is often said that the road to hell is paved with good intentions. California is losing businesses and housing costs are out of control. We cannot afford to ignore CEQA reforms any longer. Let’s take this well-intentioned law and make it work for California.
Johnny Khamis is a former San Jose councilmember who is currently running for the Santa Clara County Board of Supervisors District 1 seat.
