Op-Ed: Fake Environmental Reviews are Killing Good Housing Projects. Here’s What California Can Do About it.

overhead view of housing in eureka valley, san francisco

Photo by Sergio Ruiz

This article originally appeared in the San Francisco Chronicle.


Climate change is upon us. Even with Congress finally investing in green energy, Californians face many decades of worsening wildfires and rising seas. These problems would be vastly easier to manage if the state’s housing stock was concentrated in defensible cities. Yet NIMBY activism in already-developed areas is pushing growth farther and farther into the countryside. Today, nearly a third of all California housing is located in the so-called wildland-urban interface.

We don’t have enough homes, and the homes we’re building are in the wrong places. This has to change.

California needs a lot more housing in its temperate cities. Enough to bring down rents, to house the homeless and to accommodate the climate refugees of the future — people who will have been driven from their homes by wildfire, flooding or intolerable heat. This means neighborhoods have to change, too. Not drastically or overnight, but persistently: more duplexes and fourplex intermixed with single-family homes, more apartments in commercial corridors and larger buildings in high-demand locations near transit.

The Legislature and Gov. Gavin Newsom both understand this. In recent years, they’ve greatly strengthened the state’s Housing Accountability Act, which penalizes cities for denying housing projects that comply with objective local standards. A court can require the city to pay the developer’s legal fees, make the city post a bond, and even fine a city and order a project approved if it makes a denial in bad faith.

But as San Francisco’s Board of Supervisors demonstrated a year ago, a serious loophole remains. A city council can skate around the Housing Accountability Act and other housing laws by repeatedly telling a developer that the city isn’t ready to make up its mind about a project, ostensibly because it thinks there’s a potential “environmental impact” that should be studied more for compliance with the California Environmental Quality Act.

It doesn’t matter whether CEQA actually requires the study. The San Francisco Board of Supervisors rejected the environmental impact report for a downtown housing project because it didn’t address potential “gentrification impacts” (even though CEQA is about physical impacts, not speculative socioeconomic impacts) and because it didn’t address whether geotechnical features of the site might cause the building’s foundation to settle unusually (even though CEQA is concerned with effects of the project on the environment, not the other way around).

In a ruling last October, a state court validated the supes’ ruse. The court said that because of CEQA, it can’t do anything to enforce state housing law until after the city wraps up its environmental review. And it also said that under CEQA, the court can’t review anything at all until the city certifies that the CEQA studies are all wrapped up!

In other words, so long as the city is demanding further study, a court is powerless to even review whether the city’s demand is legitimate.

The conceit is that if a city signals to a developer that its real desire is to do what state law forbids — deny the project — and that it, therefore, has no intention of ever finding the CEQA studies to be adequate and complete, the rational developer will simply walk away.

Thankfully, Assembly Member Phil Ting, D-San Francisco, can and should reintroduce a bill that would provide a much-needed remedy for these shenanigans. The bill, AB2656, was developed last year in close consultation with local government advocates. During the 2022 legislative session, it cleared all of the relevant policy committees, only to be killed without a vote in the Senate Appropriations Committee.

Ting’s bill does not shortcut environmental review; CEQA would continue to apply in full force. But CEQA has deadlines for completing environmental reviews, and these deadlines ought to mean something. Gov. Newsom’s housing agency agrees, but the law remains awfully murky.

Ting’s bill would clear it up. It says is that if the applicable CEQA deadline has passed (30 days to one year, depending on the type of CEQA review) and environmental review documentation has been prepared, the developer may call the question. The city will then have 90 days to make up its mind: Either to certify the environmental review so the project can go forward or to reject it and get ready to explain in court why further environmental study is necessary.

If the court agrees that the environmental clearance the city refused to certify was fully compliant with CEQA, the court could then order the project approved.

Ting’s bill is very cautious. To qualify for protection, a housing project must achieve at least townhome-style densities and be located on an environmentally benign infill site in an urban area. In a nutshell: not coastal zone, wetland, farmland, hazardous site, fault zone, special flood hazard area, regulatory floodway, conservation/habitat preservation land or high fire danger.

Even on these sites — which arguably should be excluded from CEQA altogether — current environmental review requirements would still apply.

In the final analysis, Ting’s bill just recognizes that there are real environmental and social costs when cities say no to dense housing on suitably zoned sites in urban areas. These costs are just as real whether the city says no directly (by denying the project) or indirectly (with frivolous and potentially unending demands for make-work “environmental” studies).

Money laundering is illegal. Laundering housing denials through faux environmental review should be illegal, too.

Chris Elmendorf is a professor of law at UC Davis. He provided pro-bono advice on AB2656. Rick Frank is a professor of environmental practice at UC Davis and previously oversaw the environmental law team of the California Department of Justice. Michael Lane is the state policy director of SPUR, a San Francisco think tank that sponsored AB2656.