By Miles Imwalle, Megan Jennings, and Alyssa Netto
Following up on our earlier coverage of the new California Environmental Quality Act (CEQA) exemption passed as part of budget trailer bill AB 130, another significant CEQA pathway was created through its companion legislation, SB 131. Among other things, SB 131 includes a new CEQA process that limits the environmental review required for “near-miss” housing development projects—those projects that meet all criteria for a CEQA exemption, except for a single disqualifying condition. Specifically, the environmental review in these instances is restricted to analyzing impacts stemming exclusively from the single condition that disqualifies the project from receiving a statutory or categorical exemption.
Which exemptions form the basis for “near-miss” streamlined review?
Housing development projects may qualify for streamlining if they meet all but one condition for the following exemptions:
- Any statutory exemption, including the new exemption for housing development projects created by AB 130
- Certain categorical exemptions, including in-fill development projects, as follows:
- Class 1: Existing Facilities
- Class 2: Replacement or Reconstruction
- Class 3: New Construction or Conversion of Small Structures
- Class 4: Minor Alterations
- Class 5: Minor Alterations in Land Use Limitations
- Class 12: Surplus Government Property Sales
- Class 15: Minor Land Divisions
- Class 20: Changes in Organization of Local Agencies
- Class 27: Leasing New Facilities
- Class 30: Minor Actions to Prevent, Minimize, Stabilize, Mitigate, or Eliminate the Release or Threat of Release of Hazardous Waste or Hazardous Substances
- Class 32: In-fill Development Projects
Which projects qualify?
This process is only available for “housing development projects” as defined under the Housing Accountability Act. This definition includes mixed-use projects, which typically means that two-thirds of the square footage must be dedicated to residential use (although for projects with over 500 units, this is reduced to 50% and can be less for certain redevelopment projects). Projects must also meet the following conditions:
- Must not include a distribution center
- Must not include oil and gas infrastructure
- Must not be located on specified natural or protected lands
- Must be “similar in kind” to projects described in the exemption
What constitutes a “condition” for purposes of nearly missing an exemption?
SB 131 defines a “condition” as a physical or regulatory feature of the project or its setting or an effect upon the environment caused by the project. The “effect on the environment” category is a familiar concept that should be straightforward to implement. For example, the Class 32 infill exemption requires that projects not have certain impacts, such as to traffic, noise, or air quality; an impact in one of those categories would be a “condition” that disqualifies a project from using the exemption. The exceptions under CEQA Guidelines Section 15300.2 that bar the use of all categorical exemptions in certain situations, such as when there are impacts to historical resources, would also be familiar “conditions” that relate to environmental impacts.
The term “condition” is broader, as it also includes “physical” or “regulatory” features of the project or the “setting,” which are new concepts. For example, the Class 32 exemption has a 5-acre limit, so if a project’s size is the one reason it does not qualify for the exemption, that would qualify as the single physical “condition.” Or the AB 130 statutory exemption prohibits hotels; including a hotel within a mixed-use project that otherwise meets the definition of a housing development project would likely qualify as a single “condition.” But qualifying conditions are limited by the other requirement that projects must be “similar in kind” to those described in the exemption. Presumably that language was added so that projects could not point to a totally unrelated exemption as the basis for streamlining (as an extreme example, using the Olympic Games statutory exemption, and claiming the one disqualifying “condition” is not being the Olympic Games).
What type of environmental analysis is required?
An initial study or environmental impact report must be prepared, but it is only required to examine impacts resulting solely from the disqualifying condition. If an EIR is necessary, it need not address project alternatives or growth-inducing impacts, which would typically be included in an EIR.
The scope and depth of analysis required will vary depending on the nature of the disqualifying condition. When the condition is an impact on the environment, such as impacts to air quality or historical resources, or the “unusual circumstances” exception to categorical exemptions, the review would focus only on these environmental issues and because the “condition” is an environmental impact, how to conduct that analysis would be relatively straightforward. The result would be a narrow environmental analysis that could be completed more quickly and would generally be more legally defensible because it would cover a single topic.
However, if the disqualifying condition is not due to an environmental impact, but instead is “physical” or “regulatory” or relates to the “setting,” how to conduct the analysis may be less straightforward. For example, the new AB 130 exemption has a maximum project size of 20 acres, and minimum residential density requirements. It is unclear how to analyze the impacts caused solely by a project being 21 acres instead of 20, or having insufficient density. Or infill projects sometimes meet the criteria for a Class 32 exemption but for the fact that they are located outside of city limits; it is unclear how to address the impacts caused solely by lying in an urbanized but unincorporated area. In practice, the answer may often be that these kinds of conditions do not cause any unique environmental impacts, and the resulting initial study may be brief.
While this “near-miss” streamlined review is promising, and should help to avoid some full-blown EIRs for projects that are otherwise close to qualifying for an exemption, it creates a new process and raises questions that will require careful consideration for individual projects.
