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Chris Elmendorf

@CSElmendorf

An update on California's CEQA / housing package as we hurtle toward the finish line. tldr:

@BuffyWicks

's CEQA infill exemption is now *even better* than the 6/24 draft

; and it looks like

@Scott_Wiener

will land most of the fish in SB 607 but not the real lunker.

/25

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Chris Elmendorf

@CSElmendorf

Jun 25

Big news from CA: new budget "trailer bill" will effect biggest CEQA reforms ever (should it pass), and points toward plausibly workable detente between key labor unions & housing developers. Kudos to @BuffyWicks, @GavinNewsom & @cayimby.

/18

5:09 AM · Jun 28, 2025

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Chris Elmendorf

@CSElmendorf

16h

The million dollar (million unit?) question about Wicks's infill exemption has always been, "Will labor unions extract wage concessions that render the bill ineffective?" /2

The 6/24 bill draft featured a novel, two-tier minimum wage for construction workers, plus "prevailing wage" requirements for tall projects (>85'), 100% affordable projects, and certain projects / crafts in San Francisco. /3

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Chris Elmendorf

@CSElmendorf

Jun 25

Replying to @CSElmendorf

All construction workers on a CEQA-exempt housing project will have to be paid at least the "low rate" wage, which varies by market tier. Additionally, 60% of the workers must be paid at least the "high rate" wage, which is about 1.5x the low-rate wage. /4

I called it a "plausibly workable compromise," one which might help to cement the coalition between Yimbys, the Carpenters' union, and other unions whose members are housing consumers. /4

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Chris Elmendorf

@CSElmendorf

Jun 25

Further thoughts on the construction-wage provisions of AB 140, the @BuffyWicks & @GavinNewsom budget trailer bill.

/17.

The latest version of the AB 130 *removes* the two-tier minimum wage structure. In exchange, the requirements of SB 423 for "skilled and trained" (i.e., craft union) labor on projects taller than 85' have been incorporated into the bill. This is great news! /5

Projects taller than 85' require costly steel-frame construction and (I am told) are usually built with craft-union labor regardless of legal mandates, b/c the work is tricky. /6

So the "skilled and trained" requirement in the CEQA exemption for >85' buildings probably won't curtail the supply of skyscrapers very much. /7

Projects under 85' are bread-and-butter wood-frame construction, and would constitute the vast majority of all housing built in a deregulated market. (I'm just back from Türkiye, where 6' story apartment buildings are by all appearances more common than single-family homes.) /8

Removing the novel 2-tier wage requirement for projects up to 85' ends a significant source of uncertainty about whether the new CEQA exemption will work smoothly for the vast majority of potential *low cost* infill projects. /9

Now let's take a look at the Senate's housing trailer bill, SB 131, which incorporates much--but not all--of

's SB 607. /10

In brief:

No more CEQA for housing-element rezonings.

Narrow enviro reviews for projects that just miss qualifying for an exemption.

An official statewide map of infill parcels eligible for CEQA streamlining. /11

Simplification of the administrative record for judicial review.

Repeal of "fair argument" standard, in favor of deference to lead agency on whether project may have a significant enviro effect, i.e., warrants an EIR. /12

The biggest, most transformative idea in SB 607 was to cleave CEQA into two CEQAs. - "Old CEQA" would continue to apply on environmentally sensitive lands & to a narrow set of high-risk projects. - "New CEQA" would apply to everthing else. /13

Under New CEQA, courts were not to second guess lead agencies on whether to prepare an EIR, so long as a "reasonable person" could agree w/ agency's determination that project was unlikely to have a sig. enviro impact. (Under old CEQA, any "fair argument" triggers an EIR.) /14

New CEQA is gone from the trailer bill (SB 131). In its place, there's a laundry list of new exemptions for specific kinds of projects on the non-sensitive lands. - daycare - advanced manufacturing - small forest treatments near inhabited places - farmworker housing /15

- broadband - public parks and non-motorized trails - climate plan updates - small water/wastewater projects for poor communities - stations & maintenance shops for high speed rail In short, instead of Old CEQA vs. New CEQA, we get Old 'Swiss Cheese' CEQA With More Holes. /16

SB 607's technical but very important reforms to the "administrative record" in CEQA litigation were also watered down, but not jettisoned entirely. /17

Under SB 607, electronic internal-agency communications were excluded unless "presented" to decisionmaker. In trailer bill, they're excluded only if not "consulted or reviewed" by a supervisory employee. How will agency prove that a document wasn't seen by such employees? /18

Happily, the other significant provisions of SB 607 survived intact. The combined effect of this bill and Wicks's infill exemption is going to make it MUCH easier for local governments to comply with housing-element law. /19

Instead of three rounds of CEQA review and litigation risk (first for adoption of the housing element, then for the rezoning ordinance, and then again for project approvals), it'll be one and done. /20

And the official state map of infill sites should reduce information costs for developers and cities alike (although it's not clear whether the map will be advisory or have legal effect). /21 papers.ssrn.com/sol3/papers.cf

The provision for "mini enviro reviews" for projects that miss qualifying for an exemption b/c of a single project feature or potential impact is also promising. /22

It's a great complement for the new, clean infill housing exemption in Wicks's bill, which excludes sites that meet the GC 65914(a)(6) criteria for sensitivity. To illustrate, if the infill site is a wetland, enviro review would look only at impacts on the wetland. /23

What comes next? Presumably further back-room negotiations and amendments, followed by passage of both housing trailer bills before 11:59 pm on Monday. /24

Technically, it looks like the budget bill was only made contingent on Gov. signing SB 131 (Wiener's bill), not AB 130 (Wicks's bill), but

@CAgovernor

's stated intent is to pass both, and he can "make" the Leg do it by withholding sig. on Wiener's bill until Wicks's pases. /end

Josh Richman

@BayAreaTM

13h

If an infill housing project is CEQA exempt and otherwise consistent with general plan and zoning, does it still have to endure public hearings and a vote? On what basis could an agency deny such a project?

1. yes, if municipal law requires a hearing and it's not preempted by state law 2. on any basis authorized by municipal law that's not preempted by state law (the HAA preempts discretionary disapprovals but not discretionary conditions of approval)