California lawmakers exempt their $1.1 billion office from state environmental law

(The Center Square) - California lawmakers added a measure to the state budget exempting their capitol building’s $1.1 billion office renovation from the 1970 California Environmental Quality Act following years of legal delays.

This measure highlights the challenge of building anything in the state under CEQA, which allows projects to be held up nearly indefinitely in courts and has contributed significantly to the state’s 4.5 million home housing shortage. California Republican legislators pointed out the hypocrisy, and called for CEQA reforms instead of the CEQA exemption.

“I think we have a duty to act better when we’re talking about these things,” said California Assembly Minority Leader James Gallagher, R-Yuba City, during an Assembly hearing on the matter. “Or look, let’s do CEQA exemptions across the board instead of just one-offs for state office buildings for ourselves. It’s not the right look.”

Though demolition for the project is complete, years of lawsuits have held up construction since the project was approved in 2018. Under CEQA, anyone, even out-of-state individuals and groups, can hold up projects nearly indefinitely by challenging environmental impact reports in court. In 2022, a court ruled the project violated CEQA, leading to project downsizing.

Reports have found California housing production has fallen substantially since CEQA was passed; because developers pay interest on borrowed money, construction delays exponentially increase developers’ costs.

“With the exception of some periods of somewhat recovering production (e.g., about 1999 through 2005), nominal annual housing production has been in a long, generally downward drift that began in the 1970s,” noted a 2021 report from the Building Industry Association of Southern California.

The San Francisco Chronicle found it typically takes 626 days from a home builder to receive a construction permit in the city.

In response to CEQA difficulties, California passed new legislation empowering the governor to set limits on CEQA challenges to high-priority infrastructure projects, a power California Governor Gavin Newsom used to accelerate authorization of the state’s first new major reservoir since 1978. However, projects without special priority can still face indefinite CEQA challenges, leading California’s Little Hoover Commission, a non-partisan, state-funded body, to recommend major CEQA reforms earlier this year.

Among the proposed reforms were to exempt infill housing (developments where there are already existing buildings) from CEQA review and requiring greater standing to indefinitely challenge new construction.