The ongoing issues of construction delays have become well-known in San Francisco, a city facing significant housing challenges in California.
Officials halted a project intended to build 10 townhouses due to concerns about potential shadows on a nearby playground. In another instance, a developer in the Mission District was required to produce a 137-page report to demonstrate that a laundromat slated for demolition was not a historic site. Additionally, city leaders rejected a proposal to construct 500 apartments on a Nordstrom parking lot, citing fears of gentrification.
Experts in the construction field believe that similar projects could benefit from recent changes made by Governor Gavin Newsom and state lawmakers, who have significantly reduced the scope of the California Environmental Quality Act (CEQA). This 55-year-old law, which serves as a cornerstone of the state’s environmental protections, has often been used by neighbors and other stakeholders to oppose various projects.
CEQA has been frequently criticized for contributing to California's severe housing shortage, which has led to soaring rents and home prices, as well as a persistent homelessness crisis. San Francisco is often highlighted as a key example of how extensive reviews can impede or prevent housing construction. State officials have mandated the approval of 82,000 new housing units in the city by 2031, a target that remains unmet.
In principle, CEQA requires state and local governments to assess the potential environmental impact of new construction projects. However, the law permits any individual or group to file lawsuits if they believe the initial environmental review is inadequate, which can delay or halt many projects.
One of the new bills signed by Governor Newsom will generally exempt "infill" development, which refers to projects built on land that previously housed other structures. Such development is often viewed as more environmentally sustainable, as it avoids constructing new homes on undeveloped land and fosters denser communities that are more likely to utilize public transportation.
Many densely populated neighborhoods in and around downtown San Francisco may qualify for exemptions under the new infill housing law. Legal experts believe this will encourage city planning officials to approve housing proposals more readily, as concerns about CEQA lawsuits diminish.
Mark Rhoades, a planning and development consultant, anticipates a surge in high-density housing, such as apartment buildings and condominiums, across California's downtown areas. He noted that the high costs associated with environmental analyses under CEQA have discouraged developers from pursuing projects, even in areas where zoning permits dense housing and political support exists.
While developers will still face challenges related to construction costs, labor, and materials, the removal of CEQA-related concerns is expected to significantly alter the landscape of housing development in urban areas statewide.
However, some experts express skepticism about the potential for a substantial increase in housing construction. Jonathan M. Zasloff, a land use and environmental law professor, acknowledges the positive aspects of the changes but emphasizes that they do not override local zoning laws that may restrict apartment complexes.
In cases where local governments fail to meet housing approval targets, state officials may exert pressure. Governor Newsom has previously taken legal action against cities resisting the development of lower-income housing, and the new laws provide CEQA exemptions for governments that rezone land to fulfill housing goals.
Mary Creasman, CEO of California Environmental Voters, expressed concerns that while housing is a critical issue, the new exemptions may weaken environmental protections without significantly addressing housing shortages. She highlighted local zoning laws, fluctuating interest rates, and rising costs as primary barriers to increased housing development.
Creasman also noted that CEQA serves as a vital mechanism for local residents to voice their opinions on development projects, particularly in communities of color that have historically faced industrial development and pollution.
Jim Wunderman, president of the Bay Area Council, expressed hope for increased housing density in the region, drawing comparisons between San Francisco and Paris in terms of population density. He believes that the changes could ultimately lead to a decrease in housing prices in the Bay Area, where the median price of a new home was reported at $1.4 million in May.
Wunderman emphasized the need for more housing development to support the region's growth and potential, stating that the area has not built enough housing in recent generations.