from Mark Smith, Advocate, California Builders Alliance
The “California Assembly Select Committee on Permitting Reform Final Report – March 2025” (the “Report”), published earlier this month, sounds an alarm bell regarding the need to overhaul the state’s “failed approach to permitting” if it is to have any hope of addressing its interconnected housing and climate crises. Citing a housing shortage of 2.5 million units, 200,000 homeless persons, unaffordable rents, and increasing temperatures, droughts, flooding, and wildfires, the 35-page Report observes that “California will need to facilitate new construction [of housing, clean energy generation, storage and transmission infrastructure, and climate resiliency projects] at an unprecedented scale” – something achievable “only if governments consistently issue permits in a manner that is timely, transparent, consistent, and outcomes-oriented[.]”
The Report, which purports to express only the perspective of the Committee Chair, Assemblymember Buffy Wicks, and which can be found here is organized into sections addressing best practices, success stories, and permitting reform by topic (covering housing, electricity, water, and transportation projects). It liberally intersperses “notable quotes” which are excerpts from stakeholder testimony provided at the Assembly Select Committee’s hearings.
As pertinent here, the Report consistently acknowledges negative aspects of CEQA bearing on permitting reform. For example, its post-application “best practices” include focusing environmental review on aspects of projects that are actually potentially harmful to the environment:
The California Environmental Quality Act (CEQA) is a centerpiece of any discussion of permitting reform. CEQA is the state’s premier environmental law for minimizing the negative environmental impacts of new development. However, CEQA determinations of harmful impacts are often highly subjective – anyone is allowed to contest the conclusions of a CEQA document in court. As such, in its 50+ years of existence, CEQA has proven highly susceptible to being leveraged to prevent development projects for non-environmental reasons, such as dislike of development by those living near the proposed project, desire to lock in labor agreements by labor unions, desire for community benefits by community groups, and as a way for businesses to hurt their competitors. To facilitate the best environmental outcomes, and facilitate necessary projects, the environmental review of projects must be focused on those aspects of the project that are potentially harmful to the environment.”
(Report, p. 7.)
In connection with its best practice of emphasizing outcomes over process, and obviously contemplating if not expressly referencing CEQA, the Report asserts that:
… every aspect of permitting should emphasize outcomes over process. This will admittedly require a shift in mindset in this state. We have grown accustomed to a regulatory regime that emphasizes caution and thoroughness, even when such an approach does not improve outcomes and can even undermine a project’s positive benefits. We have also grown accustomed to enabling ongoing deliberation, even when that public deliberation is clearly being used as a stall tactic by decision makers or other stakeholders. It is not a best practice for the pendulum to swing completely the other way, such that process is ignored. However, process must be undertaken in the service of addressing our crises.”
(Ibid.)
The Report’s cited “success stories” of increased ADU production, expanded EV charging stations, and the California Natural Resources Agency’s (CNRA) “Cutting the Green Tape” initiative for ecological restoration and forest fuel reduction projects all prominently feature CEQA-exempt ministerial processes, streamlined and limited-scope CEQA review, or a statutory CEQA exemption for qualifying projects, respectively, as key components of getting those types of projects done. (Id. at pp. 8-11.)
With respect to housing permitting reforms, the Report observes that the necessary entitlements now depend on completion of the CEQA process, and states that:
… there are no timeframes for completing the CEQA process. Additionally, any individual or organization can legally challenge the conclusions of the CEQA analysis, which means that the process is highly susceptible to being leveraged to prevent development of projects for non-environmental reasons. Both the lack of a timeframe and the ease of legal challenge greatly increase the risk involved in building housing. [¶] Additionally, while the CEQA process is good at stopping negative environmental impacts, it is not designed to facilitate projects that are inherently good for the environment. For example, infill housing projects close to jobs, schools, and amenities need to go through the same process as housing projects that might require long commutes.”
(Id. at p. 14.)
Even apart from – and perhaps even dwarfing – CEQA’s identified role as an obstacle to permitting reform, is the sheer audacity of the daunting tasks our state has set for itself. For example, to achieve CARB’s ambitious climate goals – reduction of GHG emissions to 40% below 1990 levels by 2030 and 85% below 1990 levels by 2045 – would require “widespread electrification in nearly all sectors of the economy” plus transitioning to nearly carbon-free state electricity sources while at the same time accommodating the considerably increased demand. Per the Report:
To successfully pull off this policy two-step, California must deploy new electricity infrastructure at a scale and speed never before seen. Solar and wind resources will need to be built and interconnected at three times the historical rate, while the rate at which battery storage facilities are installed will need to increase eightfold. Production of renewable hydrogen will need to increase a whopping 1,700 times! [¶] Just as critically, the state will need to undertake an unprecedented buildout of electricity transmission and distribution infrastructure [estimated to cost between $43.8 billion and $63.2 billion over the next 20 years].”
(Id. at p. 18.)
Can California really pull off its policy goals and solve its housing and climate “crises”? Regarding that, I retain a healthy skepticism. But of one thing I’m certain: without serious CEQA reform it has no chance at all. And on the “glass half full” side, there have recently been a number of signs that meaningful CEQA reform might actually be politically feasible at this point in time. These include not only the growing number of legislative exemptions, exclusions, and ministerial “work-arounds” for favored projects, but increasing public, executive branch, and legislative recognition of the very real problems posed by CEQA’s abuse and scope. Consider, to cite a few recent examples, the Little Hoover Commission’s report recommending targeted CEQA reforms, the Governor’s Executive Orders suspending CEQA and Coastal Commission requirements to facilitate rebuilding after the LA wildfires (blogged on here and here), and the recently introduced SB 607 (blogged on here), which aligns in many respects with the Assembly Select Committee’s Report. So, perhaps “hope springs eternal” – but, when it comes to meaningful CEQA reform, it’s also clear that “winter is coming.”
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MARK SMITH
Smith Policy Group
1001 K Street, 6th Floor
Sacramento, CA 95814
(916) 335-5072
mark@smithpolicygroup.com
smithpolicygroup.com