Is CEQA the problem?


(First published October 1, 2017)

The stakes here are high. Misguided CEQA reform could undermine environmental protection throughout the state, without meaningful improvements to our housing crisis.

On Friday [September 29, 2017], the Governor signed a package of housing bills intended to help address the soaring costs of housing in many metro areas in California. Follow-up coverage of that bill package has (rightly) indicated that those bills are a drop in the bucket in terms of addressing California’s housing crisis. One theme that emerges in that coverage and also coverage of other CEQA legislation (as well as a recent op-ed by two economists) is an argument that the California Environmental Quality Act (CEQA), is a significant contributor to the housing crisis. The question is, is that really correct? The answer is fairly important if the legislature is (appropriately) going to continue looking at this issue in the next legislative session.

The main argument goes along these lines – there is a lot of regulation of housing development in California. More regulation increases the cost of supplying housing, and therefore the cost of housing. Less regulation would facilitate more housing supply, and lower costs.

It may be that overall, regulation of land-use development in California is a significant contributor to the state’s housing crisis. But CEQA is only a part of the overall regulation of California’s land-use development, as I’ve noted in an earlier post. If CEQA is a significant obstacle to housing development, then I would argue that changing CEQA in ways that minimize the loss in environmental protection and maximize the benefits in increased housing production should be our goal. But in order to determine whether changing CEQA is a prudent strategy, we need to understand in a better way how local land-use processes are affecting housing production in California.