California’s 2025 legislative cycle includes another ambitious package of housing bills as the state continues to look for ways to ease the housing crisis amidst continued political and economic uncertainty. Reforming the California Environmental Quality Act (“CEQA”) is a perennial focus among developers and housing advocates, although the state has enacted only narrowly targeted measures in recent years to streamline certain types of projects. Two pieces of pending legislation—Senate Bill 607 and Assembly Bill 609—take a bigger swing at CEQA in ways that could have a meaningful impact on the long-stated goal of reducing redundant environmental review for infill housing and other projects, largely by expanding exemptions and making negative declarations and mitigated negative declarations (“MNDs”) more defensible.
Overview of SB 607
Senator Scott Wiener introduced this bill, the “Fast and Focused CEQA Act,” as a good government measure that would create opportunities for more streamlined environmental review through common sense amendments. Although these provisions are not limited to housing projects, none would apply to projects involving distribution centers, oil and gas infrastructure, or those located on “natural and protected lands.” Key provisions include:
- Targeted Review for “Nearly” Exempt Projects: For projects that fail to qualify for a categorical or statutory exemption due to a single “condition,” the bill creates a new CEQA review process that limits CEQA review to the environmental effects caused by that single condition. It is not unusual for a project to barely miss qualifying for an exemption, so this creates a new, narrowly tailored CEQA process. This option is not available if a project does not qualify due to two “conditions.”
- Replacement of the “Fair Argument” Standard: Courts have interpreted CEQA in a way that favors preparation of a full Environmental Impact Report (“EIR”) by applying what is called the “fair argument” standard of review to negative declarations and MNDs. This standard of review sets a relatively low bar to challenge MNDs in court, often causing lead agencies to prepare EIRs even for projects that meet the criteria for MNDs. SB 607 would alter the status quo by applying the more deferential “substantial evidence” standard to MNDs. The bill also provides that an EIR would be required if the lead agency determines that it is “more likely than not” that the project will have a significant effect on the environment—raising the threshold for preparing an EIR from the current “may have a significant effect” standard. These changes will make lead agencies more confident in preparing MNDs for projects that qualify, and make them more widely available as a result.
- Infill Project Provisions: Directs the Governor’s Office of Land Use and Climate Innovation (formerly known as the Office of Planning and Research) to expand means of compliance with the urban infill categorical exemption (Class 32), and to map urban infill sites that are eligible for the exemption.
- Housing Element Rezoning Exemption: Exempts any rezoning that implements an approved housing element, except for rezonings that would allow distribution centers, oil and gas infrastructure, or development on natural and protected lands.
- Record of Proceedings: Narrows the scope of the administrative record for CEQA litigation by excluding certain internal agency communications that were not presented to the final decision-making body. Currently, internal communications are included, which can make preparation of the administrative record a lengthy and expensive process, resulting in protracted litigation timelines.
- Judicial Remedies: If a court finds a CEQA exemption was improperly issued, the court’s remedy is limited to addressing only the condition(s) that made the project ineligible for the exemption.
Overview of AB 609
Assemblymember Buffy Wicks’ bill, the “Environmentally Beneficial Housing Exemption,” is designed to exempt additional urban multi-family housing projects from CEQA review. The qualifying criteria expand on the existing Class 32 categorical exemption, which is only available for smaller infill projects. The Class 32 exemption is currently one of the more widely used exemptions for infill projects, so AB 609 would expand the types of infill housing projects that are exempt. And by making it a statutory exemption, projects would not be subject to the “exceptions” that apply to categorical exemptions. Key criteria include:
- Project Size and Location: The project site must be no larger than 20 acres, located either within the boundaries of an incorporated municipality or within a census-designated urban area. The existing infill exemption is limited to sites no larger than 5 acres and within city limits, so is not available to sites that are “urban” but unincorporated.
- Urban Development Criteria: The project site must either have been previously developed with an urban use or at least 75 percent of the perimeter of the site adjoins parcels that are developed with urban uses.
- Consistency with Local Plans: Projects must be consistent with the applicable general plan, zoning ordinance, and local coastal program. If the general plan and zoning are inconsistent, consistency with either is sufficient.
- Density Requirements: The project must provide at least half the minimum density specified for housing element sites under state law.
- Tribal Cultural Resource Protections: For sites not previously developed with urban uses, the project must not create an impact to tribal cultural resources that cannot be mitigated.
- Historical Resources: The project does not require the demolition of a historic structure that has been placed on a national, state, or local historic register.
- Environmental Assessment: As a condition of approval, the local government must require a Phase I environmental site assessment. If contamination is found, further assessment and remediation are required before occupancy.
- Additional Requirements for Sites Adjacent to a Freeway: Housing projects within 500 feet of a freeway must contain certain design features that address air quality impacts, including (1) centralized HVAC, (2) outdoor air intakes that face away from the freeway, (3) air filtration that provides a minimum efficiency reporting value of 16, and (4) no balconies that face the freeway.
CEQA reform elicits strong reactions, as evidenced by the lengthy list of supporters and opponents who have already weighed in, so the fate of these two bills is uncertain at this time.
- SB 607 is co-sponsored by the Bay Area Council, Housing Action Coalition, Prosperity California, and Rural County Representatives of California, with additional supporters including California YIMBY, SPUR, and other pro-housing and business groups. The bill is opposed by a number of environmental and interest groups, such as the Sierra Club California, Center for Biological Diversity, and Natural Resources Defense Council.
- AB 609 is also co-sponsored by the Bay Area Council along with California YIMBY, with additional support from a range of business and trade groups, the City of San Diego, and a few local elected officials. AB 609 is opposed by Livable California, the State Building & Construction Trades Council of California, and other environmental and environmental justice groups.
The specifics of each bill will likely change as they work their way through the Legislature, but both promise meaningful improvement for infill projects if passed in their current, or substantially similar, form. We will be monitoring both bills, as well as other efforts to streamline and incentivize housing production in this legislative session.
