Newsom Sign: “The Most Consequential Housing Reform in Modern History”
Gov. Gavin Newsom has signed two housing bills to make it easier and faster to build new homes by reducing environmental regulations.
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California lawmakers have approved two new bills that are expected to jumpstart the stagnant housing market that has long been stumped by residents and employers, leading to a major overhaul of the state’s groundbreaking environmental protection law.
A major change to the California Environmental Quality Act, known as the CEQA, was attached to two bills in a massive $321 billion state budget bill that was eventually easily passed. California Governor Gavin Newsom signed the law on June 30th.
“This is the most consequential housing reform in California’s modern history. Will it be postponed for a long time? Absolutely,” Newsom said at a press conference signing the law.
Supporters said reforms to CEQA’s intense review process will help to alleviate the state’s ongoing housing shortage and the chronic homeless crisis. Some environmental advocates call backdoor deals for the movement.
Congressional Bill 130, created by D-Oakland’s California Congress member Buffy Wicks, exempts most urban housing projects from environmental reviews. Another bill by California Senator Scott Wiener and D-San Francisco, Senate Bill 131, waives environmental restrictions on other buildings, including clinics, childcare and food banks.
Legal Newspaper: “Too urgent, too important”
California has been considered a national pioneer in environmental action. That change in Signature Impact Review Act comes at a time when it could potentially change the landscape within the country’s most populous state.
It is estimated that California needs 3.5 million housing units more than it has. This shortage is one reason why people and businesses have fled as homes in popular cities such as San Francisco and Los Angeles.
The changes are intended to begin home construction. This is often strangled by the signature of the Environmental Act of 1970. Critics say the law is being used by groups that aim to stop buildings rather than conserve the environment.
The bill went into law after threatening to reject the state budget passed last week, unless there is a CEQA overhaul. The process can take months to years, allowing you to add costs and uncertainty to your project.
For years, these environmental impact studies have been known to delay and even halt new developments by CEQA, considered one of the strictest laws in the United States. During a press conference after signing the law, Newsom said the issue was “urgent, too important, the process unfolds like the last generation, and always preys on all sorts of Platfall.”
Behind the bill
Two new laws exempt nine projects from the environmental impact review. They include child care centres, health clinics, food banks, farm worker housing, broadband, wildfire prevention, water infrastructure, parks or trails, and advanced manufacturing.
“It coincides with what I know about history and reform measures,” Mark Bardasare, director of research at the California Institute of Public Policy, a nonpartisan research institute, told USA Today. “We’re watching what happens. Keep waiting.”
Bardasare said that for at least 10 years there have been under intense debate. Newsom and other state lawmakers are aware that voters nationwide criticised politicians, particularly Democrats, during last year’s election, Baldassare added.
Baldassare said PPIC-wide voting for California voters in both 2023 and June 2025 revealed that the cost of living and affordable housing was calling last year’s election a “wake-up call.”
“The idea of reforming CEQA has been around for a long time,” Baldasare said. “Our votes support reforming CEQA across party boundaries despite the strong environmental attributes of the state, and that doesn’t happen very often, especially given today’s polarization.”
California Environmental Law
The 54-year-old California law signed by then-Governor Ronald Reagan was intended to protect wildlife and natural resources in forests, mountains and coastal spaces.
The law requires state and local governments to study and publish the environmental impacts of any decision they make, including permitting new housing, as California home values and rent are the most expensive in the country, according to the California Institute of Public Policy.
This requirement is known as the Environmental Impact Report and can take up to a year to complete.
Aiming to streamline and lower California’s construction costs, the new law limits legal challenges under the CEQA by narrowing the documents that courts can consider. Additionally, there is limited environmental reviews of projects that are not considered to be influential.
California Sen. Scott Winner wrote one of two bills, but told reporters on June 30 that the change would not happen in three years next year, but would occur in the next few decades. He called it a bold step towards addressing the root causes of California’s affordable price crisis.
“The devastating high costs for our community are directly caused by an extreme shortage of housing, childcare and affordable healthcare. Much of what other families need to thrive,” Democrat Winner said in a statement. “These invoices will get red tape, keeping the major processes out of the way, and ultimately addressing these shortages, ensuring an affordable California and a brighter future.”
Weiner added that if the economic situation is correct, the state is prepared to “build a large number of housing” and the structure is in place to promote it.
“The bill was passed in the most undemocratic way possible.”
State Policy Manager Asha Sharma, with Leadership Council for Justice and Accountability, described the change as a “backroom, last minute deal,” hanging the national budget into balance, leaving little time for the opposition to public scrutiny.
“The bill was passed in the most undemocratic way possible. It was conditional on the entire state budget,” Sharma told USA Today. “We really couldn’t hear the voice. This had little public process.”
She was not alone. Raquel Mason, senior legislator of the California Environmental Justice Alliance, said her group was opposed to Weiner’s bill. Sharma and Mason said there are 23 super fund sites in Santa Clara County, with tech-rich Silicon Valley there. They say many of those sites are linked to semiconductor manufacturing.
“By moving forward with this bill, Congress has sent a clear message. The right to participate in decisions that affect our health, safety and our lives is disposable,” Mason said in a statement to USA Today. “This bill will guide industrial development without the opportunity to advocate for the mitigation that our community needs to protect themselves.”
Newsom forced the hand of California lawmakers
Weiner wrote a bill that would exempt several types of projects from environmental reviews, but Newsom forced an overhaul of state environmental laws to change.
The governor told lawmakers he would not approve California’s $321 billion budget without them. Last week, the budgetary law provisions approved said that if changes to the state’s environmental review process are not finalized by June 30, the spending plan will be abolished.
On June 30, Newsom said on social media that it has enacted “the most game-changing housing reform” in recent California history.
“We are urgently embracing a rich agenda by demolishing barriers that have been slowing down new affordable housing and infrastructure for decades,” Newsmom wrote.
The governor later mentioned reporters at a press conference on June 30, saying his administration’s goal was to build 2.5 million homes by 2030. Newsmom said it’s left to state leaders to use the new tool to achieve their goals.
“If we can’t address this issue, we lose trust. It’s just the truth,” Newsom said. “And this is very much in many ways than the problem itself. It’s about Sacramento and legislative leadership and executive leadership, as well as the reputation of California.”
Contribution: Elizabeth Weise, USA Today
