Proposition 45: No Recommendation

by Max Dubler

Introduction

While Proposition 45 meaningfully touches on housing, it will have a much more significant impact on non-housing projects. Pro-housing voters should consider the arguments for and against the measure and make their own decision based on their values.

Analysis

Background: The California Environmental Quality Act

Passed in 1970 and signed into law by then-Governor Reagan, the California Environmental Quality Act (CEQA, say “SEE-kwah”) required government agencies to study and publicize the potential environmental impacts of public projects like dams, highways, and power plants, and gave the public the right to sue if they do not believe the impact analysis is sufficient. The scope of the law was massively expanded when the courts ruled that any project that requires public approval is a “public project.” This empowered a wide variety of interests to use the CEQA process to delay or block projects they don’t like.

Last year, the state legislature passed AB 130, which exempted “infill” housing, broadly defined [1] as homes in existing developed areas, from environmental review under CEQA. This was a major victory for California YIMBY, which has long sought this exemption and sponsored AB 609, which was incorporated into AB 130.

What does Prop 45 do?

• Creates an alternative, opt-in process with strict “shot clocks” for environmental review for “essential” housing, water, transportation (excluding high speed rail), clean energy, transmission, broadband, and healthcare infrastructure. Environmental review for these projects must be completed within 365 business days, or about a year and a half. There are shorter timelines for determining application completeness (30 days) and lesser levels of environmental review (180 days for a negative declaration or a mitigated negative declaration).
• Creates a 90-day shot clock for “any and all” public agency approvals required for essential projects besides CEQA, including building permits, Coastal Development Permits, and utility approvals.
• Requires tribal consultation for all projects, AB 130 labor standards for housing projects (except 100% affordable projects under 85’), and Section 21183.5 labor standards for other projects that use this environmental review pathway.
• Limits public comment on environmental reviews to 45 days.
• Limits the scope of “alternative projects” that must be analyzed in the environmental review process to one alternative proposed by the applicant and a “no project” alternative.
• Creates a new evidentiary standard for environmental impacts requiring that they only be found significant if they violate objective, quantifiable standards already in existing law when a project is proposed, and freezes those standards on the date a project application is filed. This would eliminate public agencies’ broad discretion to explore project alternatives and negotiate environmental mitigations.
• Curtails courts’ ability to block projects in their entirety. If a legal challenge to a project’s environmental review is successful, the remedy is limited to the specific issue identified in the lawsuit. The courts can’t order an agency to rescind its approval of the broader project.

Broadly, Prop 45 tightens up the environmental review process. It will make it easier to build infrastructure and other large scale projects by curtailing potential litigants’ ability to slow down and block construction by filing lawsuits challenging projects’ environmental impact analyses.

How does this affect housing?

Prop 45 would affect housing in two major ways: first, it would make it easier to build housing projects [2], mostly new subdivisions, that do not qualify for the AB 130 infill exemption, as well as the infrastructure necessary to service those housing projects. Second, it would significantly speed public agency approvals for housing projects that use this environmental review process.

The labor provisions in AB 130, the existing CEQA infill exemption, would apply to projects that use the Prop 45 environmental review process unless they are also using a different streamlining law that mandates prevailing wages or a project labor requirement, in which case they would have to abide by those requirements.

While Prop 45 will speed public agency approvals for all housing, it will also make it easier to build car-dependent sprawl housing and the freeways and water infrastructure necessary to serve that sprawl.

What does California YIMBY think of this?

While this measure does affect housing, it’s not primarily about housing. Rather, it’s about reining in an out of control CEQA process that has ballooned far beyond what the legislature intended in 1970 and made building large projects slow and expensive. 

Prop 45 would reform CEQA by bringing policy ideas that have worked to streamline housing permitting—shot clocks, objective standards that vest at the time of an application, limited agency discretion to expand the scope of review, narrow remedies, etc—to the environmental review process.

Whether this is a good idea depends on how you weigh the tradeoffs: is permitting new wind and solar energy infrastructure faster worth making it easier to build freeways? Should we make it easier to build transmission lines to carry that clean energy to consumers, even if it means potentially impacting wildlife habitat? Zooming out, is litigation about the public disclosure of environmental impacts really the best way to weigh the environmental costs of large projects against their potential public benefits and ensure that communities have a voice in what’s built near them?

These are big fundamental questions about growth, sustainability, and the proper structure of democratic decision-making.

Narrowing the focus to housing, the central question here is how you feel about sprawl. California YIMBY works to make it easier to build new homes in our existing cities and towns, where we already have infrastructure to serve them. As we have said before:

“When it comes to solving our housing crisis, our focus remains on making it easier to build housing in existing cities—near quality jobs and public services. Toward this end, we have worked to liberalize zoning, streamline permitting, and reduce costs. We believe we can (and must) solve the housing and climate crises simultaneously. That means building communities with denser housing and alternatives to automobile dependence.”

That said, we support building well-designed new cities and we realize that some greenfield development will necessarily be part of solving our housing shortage. Given the scale of the housing crisis, we need all the new housing we can get. Further, lots of people want single family homes on larger lots; and they should be able to have them, to the extent that is sustainable and feasible.

Still, our friends in the environmental movement have raised significant substantive concerns about this measure. Most relevant to housing voters: we should not be building new homes in the fire-prone wildland urban interface because doing so puts people in harm’s way and exacerbates our insurance crisis. The fact that Prop 45 makes it easier to build freeways but not high speed rail also gives us pause.

The bottom line: there are good reasons to support this measure and good reasons to oppose it. Housing voters should consider it in light of broader concerns about climate and sustainability.

Recommendation: Neutral

Further Reading

Ballotpedia analysis, “yes” endorsement from Circulate Planning and Policy, “no” endorsement from Greenbelt Alliance, annotated measure text from GrowSF, Legislative Analyst’s Office analysis, Public Citizens: The Attack on Big Government and the Remaking of American Liberalism (book)

Notes

[1] AB 130 defines an “infill” project as one where the project site meets any of the following criteria:

(A) Has been previously developed with an urban use.

(B) At least 75 percent of the perimeter of the site adjoins parcels that are developed with urban uses.

(C) At least 75 percent of the area within a one-quarter mile radius of the site is developed with urban uses.

(D) For sites with four sides, at least three out of four sides are developed with urban uses and at least two-thirds of the perimeter of the site adjoins parcels that are developed with urban uses.

”Urban use” means any current or previous residential or commercial development, public institution, or public park that is surrounded by other urban uses, parking lot or structure, transit or transportation passenger facility, or retail use, or any combination of those uses.

[2] The measure’s definition of “essential housing projects” is extremely broad, encompassing residential projects; mixed-use projects; transitional housing, emergency shelters, and supportive housing; farmworker housing; group living accommodations like monasteries; student housing of all types; senior housing; new subdivisions; and adaptive reuse of commercial buildings.