Date of Hearing: July 9, 2019

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

SBPCA Bill Id:SB 621

Author:(Glazer) – As Amended Ver:June 17, 2019

SENATE VOTE: 30-5

SUBJECT: California Environmental Quality Act: expedited judicial review

KEY ISSUE: SHOULD HOUSING PROJECTS THAT PROVIDE 30 PERCENT OF UNITS FOR AFFORDABLE HOUSING BE PROVIDED WITH AN EXPEDITED 270-DAY JUDICIAL REVIEW OF CALIFORNIA ENVIRONMENTAL QUALITY ACT CLAIMS, DESPITE THE SIGNIFICANT IMPACT TO COURT RESOURCES AND CORRESPONDING LIMITATIONS ON ACCESS TO JUSTICE FOR ALL CALIFORNIANS?

SYNOPSIS

There is little question that California is facing a critical shortage of affordable housing. There are numerous factors that are contributing to the crisis including high material and land costs across the state, as well as statewide tax policies that incentivize commercial development over housing. Nonetheless, many in the development community blame litigation related to the California Environmental Quality Act, or at least the threat of such litigation, for impeding housing construction. Accepting this premise, this bill provides an expedited, 270-day, judicial review for California Environmental Quality Act litigation that involves housing projects deemed “affordable” by this bill. This bill applies this streamlined judicial review despite the significant, and detrimental, impact that fast-tracking litigation has on the courts and the harms to court users caused by prioritizing one form of litigation over another.

This measure is supported by a coalition of business, housing, development organizations who contend that litigation streamlining is provided to certain economic benefit projects, and therefore should be applied to affordable housing as well. The supporters also contend expediting the litigation process is needed to provide developers the legal certainty necessary to tackle an affordable housing project. This measure is opposed by a coalition of environmental justice, labor, and judicial organizations. These groups astutely point out that several exemptions to the California Environmental Quality Act already exist for affordable housing. Furthermore, the opposition bemoans the impact that this bill would have on California’s overburdened court system and highlights the significant risk that this bill poses to efficient and adequate access to justice for the thousands of Californians that utilize the court system every year.

SUMMARY: Provides for an expedited, 270-day, judicial review of housing projects deemed “affordable” that are subject to litigation regarding the California Environmental Quality Act. Specifically, this bill:

1. Defines, for the purpose of this bill, “affordable housing project” as a project that meets all of the following requirements:
   1. The project receives LEED Gold certification.
   2. If the project is mixed-use, at least two-thirds of the square footage is designated for residential use.
   3. At least thirty percent of the housing units are affordable, to individuals or households with an income level at or below eighty percent of area median income, for at least 30 years.
   4. The project consists of no more than 200 residential units.
   5. The project site is not more than five acres.
   6. The project is on an infill site in close proximity to a major transit stop.
   7. The project replaces any demolished existing affordable housing units as prescribed.
   8. The project is not in a very high fire hazard severity zone as designated by the Department of Forestry and Fire Protection or a locally-designated high or very high fire hazard severity zone, unless the project is on a site that has adopted fire hazard mitigation measures pursuant to existing building standards or if state fire mitigation measures are applicable to the development.
2. Requires the courts to resolve lawsuits stemming from violations of the California Environmental Quality Act against eligible affordable housing projects within 270 days from the date the certified record of proceedings is filed with the court, to the extent feasible.
3. Requires the Judicial Council, in coordination with the Office of Planning and Research to report to the Legislature by July 1, 2024 both of the following:
   1. A comparison of the litigation timelines for California Environmental Quality Act actions that are subject to expedited judicial review to the litigation timelines for California Environmental Quality Act actions that are not subject to expedited judicial review.
   2. The extent, if any, to which the expedited California Environmental Quality Act actions have delayed the adjudication of other civil litigation.
4. Requires the Judicial Council, in coordination with the Office of Planning and Research, to report to the Legislature by January 1, 2021, and annually thereafter, on the number of California Environmental Quality Act actions that involve a development project compared to the total number of development projects undertaken in the prior fiscal year.
5. Provides that the exemption provided in this bill is to remain in effect until January 1, 2025, and is repealed as of that date.
6. Declares the intent of the Legislature to enact subsequent legislation that would provide additional funding to the courts to enable the courts to adjudicate, in an expeditious manner, actions or proceedings filed pursuant to the California Environmental Quality Act.

EXISTING LAW:

1. Establishes the California Environmental Quality Act that, generally, requires a public agency to prepare, or cause to be prepared, and to certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have significant effects. (Public Resources Code Section 21100 et seq.)
2. Defines a “project” for the purpose of the California Environmental Quality Act ” as an activity that may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and includes any of the following:
   1. An activity directly undertaken by any public agency;
   2. An activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans, or other forms of assistance from one or more public agencies; or
   3. An activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies. (Public Resources Code Section 21065.)
3. Provides that an action or proceeding to attack, review, set aside, void, or annul the acts or decisions of a public agency on the grounds of noncompliance with the California Environmental Quality Act may be commenced when it is alleged that:
   1. A public agency is carrying out or has approved a project that may have a significant effect on the environment without having determined whether the project may have a significant effect on the environment;
   2. A public agency has improperly determined whether a project may have a significant effect on the environment;
   3. An environmental impact report prepared by, or caused to be prepared by, a public agency does not comply with the California Environmental Quality Act;
   4. A public agency has improperly determined that a project is not subject to the California Environmental Quality Act; or
   5. Any other act or omission of a public agency does not comply with the California Environmental Quality Act. (Public Resources Code Section 21167.)
4. Requires the superior court and court of appeal to provide lawsuits related to the California Environmental Quality Act preference over all other civil actions therein, in the matter of setting the same for hearing or trial, and in hearing the same, to the end that the action or proceeding shall be quickly heard and determined. (Public Resources Code Section 21167.1 (a).)
5. Requires counties with a population of over 200,000 to designate one or more judges to develop expertise concerning the California Environmental Quality Act and related land-use and environmental matters, and then assign such matters to that judge or those judges. (Public Resources Code Section 21167.1 (b).)
6. Provides for categorical exemptions to the California Environmental Quality Act for actions that include the following:
   1. Ministerial projects proposed to be carried out or approved by public agencies;
   2. Emergency repairs to public service facilities necessary to maintain service.
   3. Projects undertaken, carried out, or approved by a public agency to maintain, repair, restore, demolish, or replace property or facilities damaged or destroyed as a result of a disaster in a disaster-stricken area in which a state of emergency has been proclaimed by the Governor;
   4. Specified actions necessary to prevent or mitigate an emergency;
   5. Actions undertaken by a public agency relating to any thermal powerplant site or facility, as specified;
   6. Activities or approvals necessary to the bidding for, hosting or staging of, and funding or carrying out of, an Olympic games under the authority of the International Olympic Committee, except for the construction of facilities necessary for the Olympic games;
   7. The establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges by public agencies, as specified;
   8. A project for the institution or increase of passenger or commuter services on rail or highway rights-of-way already in use, including modernization of existing stations and parking facilities;
   9. A project for the institution or increase of passenger or commuter service on high-occupancy vehicle lanes already in use, including the modernization of existing stations and parking facilities; and
   10. A project for the development of a regional transportation improvement program, the state transportation improvement program, or a congestion management program. (Public Resources Code Section 21080 (b).)
7. Provides that any residential development project, including any subdivision, or any zoning change that is undertaken to implement and is consistent with a specific plan for which an environmental impact report has been certified after January 1, 1980, is exempt from the requirements of the California Environmental Quality Act. (Government Code Section 65457.)
8. Provides that the California Environmental Quality Act does not apply to any development project that consists of the construction, conversion, or use of residential housing consisting of 100 or fewer that is affordable to low-income households, as specified. (Public Resources Code Section 21159.23.)
9. Provides that the California Environmental Quality Act does not apply to certain urban residential projects, as specified. (Public Resources Code Section 21159.24.)

9) Provides that the California Environmental Quality Act does not apply to urban residential or mixed use-housing projects on unincorporated land subject to county oversight, as specified. (Public Resources Code Section 21159.25.)

1. Provides that the California Environmental Quality Act does not apply to residential, employment center, or mixed-use development projects in a transit priority-area, as specified. (Public Resources Code Section 211595.1)
2. Provides that the California Environmental Quality Act does not apply to urban infill projects, as specified. (Public Resources Code Section 15332.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: Despite the provisions of existing law that provide for several California Environmental Quality Act (CEQA) exemptions for affordable housing, infill housing, and transit-oriented development, this bill seeks to provide a project deemed an “affordable housing project” additional special consideration under the law. This bill proposes to permit these affordable housing projects to seek judicial review of a project within 270 days of the filing of the certified record of proceeding with the court. In spite of the impacts such a timeline places on the courts the author of the bill states:

After nearly a decade since the passage of AB 900 (Buchanan), which granted expedited judicial review of developments that invested at least $100 million into a project, the Legislature has passed numerous pieces of legislation granting expedited judicial review to billionaires and their projects. During the State of the State Address, Governor Newsom said, “In recent years, we’ve expedited judicial review on CEQA for professional sports. It’s time we do the same thing for housing.” SB 621 (Glazer) finally provides affordable housing this same streamlined process. By establishing a process that requires CEQA challenges to affordable housing to be adjudicated within 270 days, SB 621 (Glazer) allows affordable housing to be built at a more rapid rate, without undermining the environmental review process. SB 621 (Glazer) advances California’s housing goals, while making sure California remains a state that is affordable for everyone to live in.

The root of California’s housing deficiencies. There is little dispute that California is experiencing a significant shortage in housing, particularly for lower and middle income residents. The proponents of this bill, highlight that the state’s existing deficit in affordable housing has forced hundreds of thousands of Californians out of their homes. The proponents also appear to blame, without tangible evidence, CEQA for the lack of affordable housing. Between 1954 and 1989 California constructed an average of 200,000 homes or more every year. CEQA was enacted in 1970, and thus for 19 years the landmark environmental law clearly had no discernable impact on housing construction. Beginning in the 1990s the amount of new housing starts in California started to decline. Although there is no clear evidence of any significant revisions to the CEQA statute impacting housing around this time, it should be noted that by the late 1980s and early 1990s California’s local governments were grappling with the budget impacts of several anti-tax propositions that resulted in commercial development being far more beneficial to municipal tax bases than residential housing. In recent years the lack of new housing starts has grown worse. According to the data from the Department of Housing and Community Development, the state has only averaged 80,000 new housing units constructed per year over the past decade. Some of this decline is likely traceable to the Great Recession in 2008 and the dramatic collapse in housing prices. Interestingly, over the past decade several CEQA exemptions targeted at new housing, discussed in greater detail below, were enacted and yet there appears to be no significant increases in the amount of new housing starts as a result.

The process of CEQA litigation. At its core, CEQA seeks to ensure that public agencies do not approve projects without considering the negative impacts a project may inflict on the environment. The review required by CEQA is designed to steer agency decision makers into approving projects in a manner that utilizes feasible alternatives and mitigation measures to lessen the project’s impact on the environment. The consideration of the impacts of a project is to be analyzed in the agency’s environmental impact report. The failure to properly consider a project’s impacts is what typically results in litigation.

The process of finalizing an environmental impact report requires several steps. First the local lead agency must determine if a project qualifies for one of the many exemptions to CEQA provided in statute and the Office of Planning and Research’s regulations, more commonly known as the CEQA Guidelines. If no exemption exists, the lead agency must then begin to initially study the project in order to determine the scope of the project and associated environmental review. At this point if the agency believes no environmental impacts exist they may opt to file a negative declaration stating as much and proceed to approve the project. Once the scope of the project and review is properly determined, the environmental review is conducted and a draft environmental impact report is submitted for public comment. A lead agency must respond to all written comments on the environmental impact report received during the public comment period, and revise the environmental impact report as necessary. The responses to comment should explain why the comments are rejected or if the comment resulted in the adoption of a mitigation measure. Once the public review is completed the agency can certify the final environmental impact report.

Once a final environmental impact report is certified, and a project is subsequently approved, any litigation over the environmental review of the project can begin. Courts require an environmental impact report to make a good faith effort at fully disclosing the impacts of the project, provide a detailed set of information about project impacts and serve as the foundation for agency review. The court must review the environmental impact report in two ways. First a court must determine if the environmental impact report was prepared in a procedurally sufficient manner, as described above, and contains the proper content as required by law. Secondly, the court must determine the substantive aspect of its review and determine whether the conclusions and decisions made by the lead agency are based on substantial evidence in the record. (Vineyard Area Citizens v. City of Rancho Cordova (2007) 40 Cal.4th 412.) Similar to current laws aiming to expedite CEQA, all procedural and substantive questions would be subject to expedited review by a court.

Existing law provides several means for local agencies to facilitate a streamlined process. Existing law, notwithstanding the general process for CEQA, provides local agencies with several opportunities to simplify the preparation of the environmental impact report. For example, existing law provides an exemption to housing projects, including associated subdivisions or any zoning changes, that is undertaken to implement and is consistent with a specific plan for which an environmental impact report has been certified after January 1, 1980. Additionally, existing law provides for tiering the environmental review of larger, more complex development projects. The existing tiering provisions permit developers to deploy residential development on a rolling basis, thereby expediting the review process. All of these measures are aimed at expediting the development of much needed housing and reducing the impact of litigation without mandating review timelines on the courts.

This bill. Adopting the belief that CEQA, opposed to high land prices, high materials costs, or inadequate local initiative, contributes to California’s lack of affordable housing, this bill aims to adopt the expedited judicial review provisions afforded to “environmental leadership projects” onto specified affordable housing projects. This bill would enable qualifying affordable housing projects to seek CEQA review by the superior court within 270 days from the date the certified record of proceedings is filed with the court, to the extent feasible. This bill also requires the Judicial Council to work with the Office of Planning and Research and submit a report to the Legislature regarding the number of California Environmental Quality Act actions that involve a development project compared to the total number of development projects undertaken in the prior fiscal year.

What would constitute affordable housing pursuant to this bill? This bill ostensibly aims to boost the production of affordable housing in California. The bill provides that a project is deemed an “affordable housing project” so long as 30 percent of the housing units are reserved for those with household incomes at or below 80 percent of the area median income and the housing project agrees to maintain these affordable units in various covenants for 30 years. Additionally, although unrelated to affordability, the bill provides that the project can be no bigger than five acres, consist of no more than 200 residential units, achieve a minimum Leadership in Energy and Environmental Design designation of Gold level certification (LEED Gold) as determined by the US Green Building Council, and be in “close proximity” to a “major” transit stop. As discussed below, these provisions are somewhat ambiguous and provide potential logistical challenges to the courts.

Expedited CEQA review places extreme burdens on California courts. Existing law already requires California courts to prioritize CEQA cases. This bill would explicitly require litigation surrounding qualifying projects to be placed on a 270 day fast-track. In order to ensure that the courts can meet this timeline, the Judicial Council of California notes that this bill would require significant court resources. CEQA cases can be highly complex, and in order to facilitate proper review of the cases staff assets may be pulled from other judicial departments. Given that this bill provides no additional resources to the courts, there is little chance that these staffers can be backfilled given existing budget constraints.

Existing law places preferences on several types of critical civil cases. For example, existing law priorities cases involving a party that is at least 70 years old and in ill health, a party in a personal injury or wrongful death matter is under the age of 14, or a party that is unlikely to survive beyond another six months. (Code of Civil Procedure Section 36.) This bill appears to bump CEQA challenges above all of these parties. Additionally, certain actions receive calendar preference, including appeals in probate proceedings, contested election cases, and actions for libel or slander by a person who holds any elective public office or a candidate for any such office alleged to have occurred during the course of an election campaign. (Code of Civil Procedure Section 44.) Thus, it appears that this bill prioritizes CEQA cases over significant public concerns including the outcome of elections.

Furthermore, especially in smaller jurisdictions without judicial departments designated to handle CEQA matters, the requirements of this bill may force courts to delay other court proceedings, including family and juvenile cases. Ironically, given this bill’s goals of assisting lower income Californians obtain housing, this bill may in fact hamper the court’s ability to hear unlawful detainer cases in a timely manner and exacerbate the risk that low income Californians could face wrongful evictions.

It has been noted by several supporters of this measure that the 270 day timeline has been provided to several sporting venues, and was generally provided as a part of the state’s efforts to promote “environmental leadership” projects. (AB 900 (Buchanan) Chap. 354, Stats. 2011.) Although this point is quite valid, it should be noted that, to date, 12 projects have been fast-tracked using AB 900 authority and only a handful of additional stadium projects have received special treatment. Further, these projects were all high-profile matters, thus enabling the court to predict when litigation would arrive at the courthouse door. Conversely, this bill would authorize a much broader set of projects, many of which lack the high-profile status of a stadium or Apple’s headquarters, to seek expedited review thus adding significantly more cases to the court’s docket and doing so in a manner that is far less predictable than the existing projects eligible for 270 day review. With the increased caseloads and lack of predictability, the likelihood that this bill would require significant and unpredictable reallocation of court resources is significant. Thus, the Committee should consider whether or not expediting CEQA litigation to benefit housing projects and developers is worth undermining ordinary Californians timely access to justice.

Can the Legislature dictate to the judicial branch how to manage its internal affairs? Article III, Section 3 of the California Constitution explicitly provides for a clean separation of powers between the executive, legislative, and judicial branches. Notwithstanding the Constitution, the Legislature provides significant statutory guidance to the operation of both branches and can condition budgetary appropriations on the branches carrying out the Legislature’s edicts. Nonetheless, the courts have limited certain legislative encroachment into the judicial branch noting the separation of powers “prohibits the legislative branch from abrogating to itself core functions of the executive or judicial branch.” (Carmel Valley Fire Protection Dist. v. State of California (2001) 25 Cal.4th 287, 298.) However, the California Court of Appeal has concluded that a similar 270-day review provision under CEQA did not amount to such an invasion. (Saltonstall v. City of Sacramento (2014) 231 Cal.App.4th 837, 855-856.)

To ensure that courts are not completely hamstrung, like several of its predecessors, this bill provides that the court must comply with the 270-day timeline, “if feasible.” It should be noted that due to the increased caseload this bill may produce and the lack of any accompanying budget appropriation, it is unclear if the 270 timeline is feasible. Given the flexibility provided to the court, the clarity in litigation the proponents seek may become significantly muddied.

Is litigation the largest impediment to residential development in California? As the number of bills aiming to streamline CEQA litigation have been introduced in recent years, several legislative committees and non-partisan researchers have sought to determine the true impact that litigation plays in delaying development. Between 2010 and 2015, several studies conducted an inquiry into the impact on CEQA litigation and noted that CEQA litigation tends to target infill development. (Hernandez, Jennifer California Environmental Quality Act Lawsuits and California’s Housing Crisis (2018) 24 Hastings Envtl. L.J. 21 (2018); Jennifer Hernandez, David Friedman & Stephanie Deherrera, In the Name of the Environment, Holland & Knight (2015).) Further, as a percentage of all projects approved statewide, the number subjected to litigation is quite low, as only 0.7 percent of all CEQA projects under environmental review faced litigation. (BAE Urban Economics, CEQA in the 21st Century (August 2016) <https://rosefdn.org/ wp-content/uploads/2016/08/CEQA-in-the-21st-Century.pdf> (as of Apr. 30, 2018). That report further suggested that CEQA in fact “assisted affordable housing advocates ensure that housing was constructed in a way that does not compromise the health and safety of an already vulnerable population.” (Ibid.)

The independent results mirror inquiries conducted by legislative committees. In 2017, the Senate Environmental Quality Committee published the results of a survey it had conducted of state agencies regarding CEQA, and noted that out of a total of 15,783 projects conducted by state agencies, only 207 CEQA cases were brought against those projects within those five years. The proponents of this bill would suggest that the threat of litigation and lack of certainty is what is driving up housing costs. If that is the case, it should be noted that nothing in this bill would preclude any party from threatening a project with a lawsuit. In fact, if it is true, as supporters of the bill argue that this bill makes CEQA litigation faster, easier, or cheaper, the bill may have the unintended consequence of actually increasing the frequency with which CEQA cases involving housing projects are litigated as the parties would have less incentive to settle their disputes out of court to avoid costs.

Just how golden is LEED certification? One of the critical components of the definition of “affordable housing” adopted by this bill requires any project to obtain a rating of LEED Gold from the United States Green Building Council. The entire LEED certification process scores developments on a range of criteria to assess the potential environmental impact of the development. Of note to this bill, significant portions of the LEED certification process require an evaluation of a development’s building materials, HVAC system, and eventual operation of the premises. Accordingly, the LEED certification process cannot commence until a development is completed. Thus, as currently in print, a local lead agency is forced to simply rely on the assurances of a developer to certify an environmental impact report providing that a building will meet LEED Gold certification. A court would then be required to provide the project expedited review whether or not the project ever achieves the distinction. Nothing in the bill provides recourse for parties who are forced to litigate a CEQA claim on an expedited basis and lose that claim, only to then discover that a project fails its LEED certification, and thus should have been ineligible for expedited review. This Committee should consider the merits of imposing significant logistical hardships on the court and forcing parties to fast track litigation on the basis of what is little more than an illusory promise.

How much “affordable” housing is sufficient to award a development with the ability to fast-track CEQA litigation? This bill provides that 30 percent of available units in any development receiving the CEQA fast-track provided by this bill must be affordable to individuals or households with an income level that is at or below 80 percent of the area median income. This provision places far less emphasis on affordable housing than the provisions in existing law that provide a CEQA exemption for the construction, conversion, or use of residential housing consisting of 100 or fewer units that are affordable to low-income households if the project meets certain criteria. (Public Resources Code Section 21159.23.) That exemption requires all units to be affordable. In justifying the discrepancy, the proponents of this measure contend such limits are necessary to assist developers offset the cost of providing low income units. It should be noted that this bill, unlike the full exemption, would still require the production of an environmental impact report and potential litigation, even if it is significantly fast-tracked. Nonetheless, this Committee should consider that if CEQA litigation costs prove such a deterrent to affordable housing projects as to justify the introduction of legislation, in a bill purporting to lower litigation costs, should more than 30 percent of housing units be set aside for working class Californians?

Vehicle miles traveled, transit oriented developments, and CEQA streamlining. In addition to the LEED certification and marginal requirements for affordable housing, this bill requires a development to be, “close proximity to a major transit stop.” These provisions appear designed to reduce the amount of vehicle miles traveled by the development’s residents, one of the leading environmental impacts posed by most new residential developments. The bill provides little additional guidance as to the actual proximity to transit a development must be to qualify for this bill, nor does the bill detail just how “major” a transit stop must be. Several of the existing CEQA exemptions related to housing require the development to be within one-half mile of transit, thus ensuring that residents can utilize transit without facing a significant first mile- last mile issue. Furthermore, there is little in this bill to ensure that the residents of the development would be able to drive less, thereby lowering environmental impacts to a degree that would justify the CEQA litigation streamlining. The Committee should consider whether streamlining CEQA litigation is justified for projects that, due to statutory ambiguity, may not provide significant environmental benefits.

By excluding very high fire severity zones from the provisions of this bill, several areas with significant housing shortages would be omitted from CEQA streamlining. The recent catastrophic wildfires that have destroyed several communities in the wildland-urban interface have brought fire prevention planning to the front of legislative debate. Accordingly, this bill provides that the CEQA streamlining provisions of this bill would be inaccessible to any project developed in a very high fire severity zone as designated by the Department of Forestry and Fire Protection. A brief survey of the Department’s fire severity maps reveals that this provision would prevent jurisdictions facing some of the state’s most critical housing shortages from accessing any benefits that this bill may confer. (California Department of Forestry and Fire Protection's Fire and Resource Assessment Program, Fire Severity Maps available at: https://egis.fire.ca.gov/FHSZ/.) For example many portions of the foothill areas of Southern California are deemed to be high fire severity zones, including significant sections of medium to large sized cities such as Los Angeles, Pasadena, San Bernardino, and Riverside. Additionally, many coastal cities abutting mountains contain large areas deemed high fire severity zones including much of the City of San Diego and large portions of Coastal Orange County. The bill does not only leave out Southern California cities, large percentages of the land within cities along the eastern and southern shores of the San Francisco Bay are deemed very high fire severity zones as well.

By excluding very high fire severity zones from the bill, not only does the bill somewhat arbitrarily determine which cities may benefit, the bill also directs impacts to some courts and not others. As noted large portions of many of the state’s more populous coastal counties will see none of the alleged benefits of this bill. However, non-mountainous inland counties are likely to qualify. Many of these counties also have some of California’s smaller superior courts, the very courts least able to spare the additional resources necessary to implement this bill.

California is confronting an extraordinary risk of wildfire, however, fire is not the only natural hazard to threaten development. Understandably, wildfire is the natural hazard at the forefront of recent legislative discussions. Nonetheless, wildfire is hardly the only natural hazard that impacts planning for housing. The recent swarm of moderately sized earthquakes that impacted Southern California on July 4^th is a reminder of the constant threat seismic hazards pose to this state. Nonetheless, unlike projects at risk of wildfires, this bill would permit streamlining a project built in a fault zone or other seismic hazard zone mapped by the California Geological Survey. In fact, litigation surrounding the construction of the Millennium Tower project in Hollywood included questions surrounding the adequacy of the environmental impact report’s consideration of the projects potential to be built directly on top of the Hollywood Fault (Rong-Gong Il, et.al, Judge Halts Millennium Hollywood skyscraper project, Los Angeles Times (Apr. 30, 2015).)

Similarly, many portions of California face significant flood risks. Large areas of the City of Sacramento are built within the 100 year floodplain. Much like earthquake risks, this bill would enable CEQA litigation to be streamlined despite the potential risk of catastrophic flooding. The Committee should consider why some natural hazards related issues are severe enough to warrant denying expedited CEQA litigation but others, including earthquakes and floods, can be evaluated in 270 days.

ARGUMENTS IN SUPPORT: This bill is supported by a coalition of business and affordable housing organizations. In support of the bill, and representative of the coalition, the California Council for Affordable Housing states:

It is necessary for the state to consider providing the same streamlined process [afforded to some stadium projects] for affordable housing. A lack of housing options has forced 114,000 Californians into homelessness and strained families into spending larger portions of their income on rent.

This bill simply expedites the entire time period in which a court overseeing a CEQA challenge to an affordable housing project must be completed.

ARGUMENTS IN OPPOSITION: The bill is opposed by a coalition of environmental organizations, organized labor, and the judges. Regarding the impact to the courts, the Judicial Council of California states:

SB 621’s requirement that any CEQA lawsuit challenging specified affordable housing projects, including any appeals therefrom, be resolved within 270 days is problematic for a number of reasons. First, CEQA actions are already entitled under current law to calendar preference over all other civil actions pursuant to section 21167.1 (a) of the Public Resources Code in both the superior courts and the Courts of Appeal. Imposing a 270-day timeline on top of the existing preference is arbitrary and likely to be unworkable in practice.

Second, the expedited judicial review for all of the projects covered by SB 621 will likely have an adverse impact on other cases. Like other types of calendar preferences, which the Judicial Council has historically opposed, setting an extremely tight timeline for deciding this particular type of case has the practical effect of pushing other cases on the courts’ dockets to the back of the line. This means that other cases, including cases that have statutorily mandated calendar preferences, such as juvenile cases, criminal cases, and civil cases in which a party is at risk of dying, will take longer to decide.

Additionally, a coalition of environmental and environmental justice organizations state:

As environmental justice and affordable housing advocates, we care deeply about affordable housing. However, CEQA is not the problem to affordable housing production, and the solutions will not come from further weakening this important law. CEQA lawsuits are rare. Many housing projects are already exempt from environmental review all together through the infill exemption as well as tiering from specific or community plans.

Yet the housing crisis persists due to several factors, including high building costs, non-CEQA related neighborhood opposition, and lack of available sites. Lack of affordable housing financing and loss of redevelopment agencies are also key constraints to affordable housing production

REGISTERED SUPPORT / OPPOSITION:

Support

Anaheim Chamber of Commerce

Burbank Housing

California Apartment Association

California Association of Relators

California Chamber of Commerce

California Council for Affordable Housing

California Housing Consortium

Civil Justice Association of California

Habitat for Humanity California

Orange County Business Council

San Gabriel Valley Economic Partnership

South Bay Association of Chamber of Commerce

Southwest California Legislative Council

SV@Home

Rural County Representatives of California

The Two Hundred

Opposition

Asian Pacific Environment Network

California League of Conservation Voters

Catholic Charities, Diocese of Stockton

California Environmental Justice Alliance

California Judges Association

California Labor Federation

Center for Biological Diversity

Center for Community Action and Environmental Justice

Center for Race Poverty and the Environment

Central Coast Asthma Collaborative

Citizens Advocating for Roblar Rural Quality

Communities for a Better Environment

Endangered Habitats League

Environmental Health Coalition

Fathers and Families of San Joaquin

Friends of Loma Alta Creek

Greenspace- the Cambria Land Trust

Hills for Everyone

Judicial Council of California

Leadership Council for Justice and Accountability

Natural Resources Defense Council

Petaluma River Council

Physicians for Social Responsibility- Los Angeles

Planning and Conservation League

PODER

Save Our Heritage Organization

Sierra Club California

State Building and Construction Trades Council of California

The River Project

Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334

Date of Hearing: July 8, 2019

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Laura Friedman, Chair

SBPCA Bill Id:SB 621

Author:(Glazer) – As Amended Ver:June 17, 2019

SENATE VOTE: 30-5

SUBJECT: California Environmental Quality Act: expedited judicial review: affordable housing projects: reports

SUMMARY: Establishes expedited judicial review procedures for housing projects that include at least 30% affordable units and meet other specified conditions, requiring the courts to resolve lawsuits within 270 days, to the extent feasible, from the date the certified record of proceedings is filed with the court. Requires the Judicial Council to prepare specified reports regarding California Environmental Quality Act (CEQA) litigation.

EXISTING LAW:

1. CEQA requires lead agencies with the principal responsibility for carrying out or approving a proposed project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines).
   
2. Authorizes judicial review of CEQA actions taken by public agencies, following the agency's decision to carry out or approve the project. Challenges alleging improper determination that a project may have a significant effect on the environment, or alleging an EIR doesn't comply with CEQA, must be filed in the Superior Court within 30 days of filing of the notice of approval. The courts are required to give CEQA actions preference over all other civil actions.
3. Pursuant to AB 900 (Buchanan), Chapter 354, Statutes of 2011, establishes procedures for expedited judicial review (i.e., requiring the courts to resolve lawsuits within 270 days, to the extent feasible) for "environmental leadership" projects certified by the Governor and meeting specified conditions, including Leadership in Energy and Environmental Design (LEED) Gold-certified infill site projects achieving transportation efficiency 15 percent greater than comparable projects and zero net additional greenhouse gas (GHG) emissions. AB 900 sunsets January 1, 2021.
4. Exempts from CEQA any residential development project, including any subdivision, or any zoning change that is undertaken to implement and is consistent with a specific plan for which an EIR has been certified after January 1, 1980, unless substantial changes or new information require the preparation of a supplemental EIR for the specific plan, in which case the exemption applies once the supplemental EIR is certified.
5. Exempts from CEQA specified residential housing projects which meet detailed criteria established to ensure the project does not have a significant effect on the environment. [SB 1925 (Sher), Chapter 1039, Statutes of 2002] The SB 1925 exemptions are available to:
   
   1. Affordable agricultural housing projects not more than 45 units within a city, or 20 units within an agricultural zone, on a site not more than five acres in size;
      
   2. Urban affordable housing projects not more than 100 units on a site not more than five acres in size; and,
      
   3. Urban infill housing projects not more than 100 units on a site not more than four acres in size which is within one-half mile of a major transit stop.
6. Requires metropolitan planning organizations (MPOs) to include a sustainable communities strategy (SCS), as defined, in their regional transportation plans, or an alternative planning strategy (APS), for the purpose of reducing GHG emissions, aligns planning for transportation and housing, and creates specified incentives for the implementation of the strategies, including CEQA exemption or abbreviated review for residential or mixed-use residential "transit priority projects" if the project is consistent with the use designation, density, building intensity, and applicable policies specified for the project area in either an approved SCS or APS. [SB 375 (Steinberg), Chapter 728, Statutes of 2008]
   
7. Establishes abbreviated CEQA review procedures for specified infill projects, where only specific or more significant effects on the environment which were not addressed in a prior planning-level EIR need be addressed. An EIR for such a project need not consider alternative locations, densities, and building intensities or growth-inducing impacts. Infill projects may include residential, retail, commercial, transit station, school, or public office building projects located within an urban area. [SB 226 (Simitian), Chapter 469, Statutes of 2011] SB 226 requires the Office of Planning and Research (OPR) to develop CEQA guidelines to implement its infill provisions, including statewide standards to promote smart growth, reduction of GHG emissions, reduction in water use, energy efficiency improvements and protection of public health.
8. Exempts from CEQA residential, mixed-use, and "employment center" projects, as defined, located within "transit priority areas," as defined, if the project is consistent with an adopted specific plan and specified elements of an SCS or APS adopted pursuant to SB 375. [SB 743 (Steinberg), Chapter 386, Statutes of 2013]
9. Establishes a ministerial approval process (i.e., not subject to CEQA) for certain multifamily affordable housing projects that are proposed in local jurisdictions that have not met regional housing needs. [SB 35 (Wiener), Chapter 366, Statutes of 2017]
10. Authorizes a city or county to establish a Workforce Housing Opportunity Zone (WHOZ) by preparing an EIR and by adopting a specific plan. Once a WHOZ is established, and for five years thereafter, requires approval of eligible housing developments within a WHOZ within 60 days without requiring the preparation of an EIR or negative declaration under CEQA. [SB 540 (Roth), Chapter 369, Statutes of 2017]
11. Authorizes a city or county to create a "housing sustainability district" (HSD) to complete upfront zoning and environmental review in order to receive incentive payments for residential and mixed-use development projects with an affordable housing component. Requires the city or county to prepare an EIR when designating an HSD, then "housing projects" within, and consistent with, a designated HSD are exempt from CEQA. [AB 73 (Chiu), Chapter 371, Statutes of 2017]
12. Exempts from CEQA multi-family residential and mixed-use housing projects on infill sites within cities and unincorporated areas that are within the boundaries of an urbanized area or urban cluster. [AB 1804 (Berman), Chapter 670, Statutes of 2018]
13. Defines “infill site” as a site in an urbanized area that meets either of the following criteria:
    1. The site has not been previously developed for urban uses and both of the following apply:
       1. The site is immediately adjacent to parcels that are developed with qualified urban uses, or at least 75% of the perimeter of the site adjoins parcels that are developed with qualified urban uses, and the remaining 25% of the site adjoins parcels that have previously been developed for qualified urban uses.
       2. No parcel within the site has been created within the past 10 years unless the parcel was created as a result of the plan of a redevelopment agency.
    2. The site has been previously developed for qualified urban uses.
14. Defines "major transit stop" as a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.

THIS BILL:

1. Defines “affordable housing project” as follows:
   1. The project receives LEED Gold certification.
   2. If the project is mixed-use, at least two-thirds of the square footage is designated for residential use.
   3. At least 30% of the housing units are affordable, to individuals or households with an income level at or below 80% of area median income, for at least 30 years.
   4. The project consists of no more than 200 residential units.
   5. The project site is not more than five acres.
   6. The project is on an infill site in “close proximity” to a major transit stop.
   7. The project replaces any demolished existing affordable housing units as prescribed.
   8. The project is not in a CalFIRE-designated very high fire hazard severity zone or a locally-designated high or very high fire hazard severity zone, unless the project is on a site that has adopted fire hazard mitigation measures pursuant to existing building standards or if state fire mitigation measures are applicable to the development.
2. Requires the courts to resolve CEQA lawsuits against eligible affordable housing projects within 270 days from the date the certified record of proceedings is filed with the court, to the extent feasible.
3. Requires the Judicial Council, in coordination with the Office of Planning and Research (OPR), to report to the Legislature by July 1, 2024 both of the following:
   1. A comparison of the litigation timelines for CEQA actions that are subject to expedited judicial review to the litigation timelines for CEQA actions that are not subject to expedited judicial review.
   2. The extent, if any, to which the expedited CEQA actions have delayed the adjudication of other civil litigation.
4. Requires the Judicial Council, in coordination with OPR, to report to the Legislature by January 1, 2021, and annually thereafter, on the number of CEQA actions that involve a development project compared to the total number of development projects undertaken in the prior fiscal year.
5. Sunsets each of the above provisions on January 1, 2025.
6. Declares the intent of the Legislature to enact subsequent legislation that would provide additional funding to the courts to enable the courts to adjudicate, in an expeditious manner, actions or proceedings filed pursuant to CEQA.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. However, Judicial Council estimates this bill could have a fiscal impact of between $5.8 million to $17.5 million annually through increased trial court workloads.

COMMENTS:

1. CEQA exemptions for housing. CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA Guidelines, for housing projects. For example, any residential development project, including any subdivision, or any zoning change that is consistent with an adopted specific plan is exempt from CEQA pursuant to a statute enacted in 1984.

In 2002, SB 1925 established CEQA exemptions for certain residential projects providing affordable urban or agricultural housing, or located on an infill site within an urbanized area, and meeting specified unit and acreage criteria.

Since SB 1925, additional legislation has provided CEQA exemptions and streamlining for residential (including, but not limited to, affordable housing) and certain other projects in infill areas. SB 375 provided a CEQA exemption for a narrow set of eligible residential projects in infill areas adjacent to transit. SB 226 provided abbreviated CEQA review procedures for a broader set of urban infill projects, including retail, commercial, and public buildings. SB 743 established a new exemption for residential, mixed-use and "employment center" projects located within one-half mile of a major transit stop, if the project is consistent with an adopted specific plan and specified elements of an SB 375 strategy. SB 743 also required OPR to propose revisions to the CEQA Guidelines for transportation impacts to better support infill development.

In 2017, the Legislature passed three bills to streamline the CEQA process for affordable housing projects. SB 35 established a ministerial approval process (i.e., not subject to CEQA) for certain multifamily affordable housing projects that are proposed in local jurisdictions that have not met regional housing needs. SB 540 authorizes a city or county to establish a WHOZ by preparing an EIR and by adopting a specific plan. Once a WHOZ is established, and for five years thereafter, eligible housing developments within a WHOZ must be approved within 60 days without requiring the preparation of an EIR or negative declaration under CEQA. AB 73 authorizes a city or county to create an HSD to complete upfront zoning and environmental review in order to receive incentive payments for residential and mixed-use development projects with an affordable housing component. Once the city or county has prepared an EIR for the HSD, then housing projects within, and consistent with, a designated HSD are exempt from CEQA.

In 2018, AB 1804 codified an existing categorical exemption for infill projects, expanding the exemption to apply to multi-family residential and mixed-use housing projects on infill sites in unincorporated urbanized areas or urban clusters.

1. CEQA judicial review. CEQA is enforced through judicial review. CEQA actions taken by public agencies can be challenged in Superior Court once the agency approves or determines to carry out the project. CEQA appeals are subject to unusually short statutes of limitations. Under current law, court challenges of CEQA decisions generally must be filed within 30 to 35 days, depending on the type of decision. The courts are required to give CEQA actions preference over all other civil actions. The petitioner must request a hearing within 90 days of filing the petition and, generally, briefing must be completed within 90 days of the request for hearing. There is no deadline specified for the court to render a decision.

In 2011, AB 900 and SB 292 (Padilla), Chapter 353, Statutes of 2011, established expedited CEQA judicial review procedures for a limited number of projects. For AB 900, it was large-scale projects meeting extraordinary environmental standards and providing significant jobs and investment. For SB 292, it was a proposed downtown Los Angeles football stadium and convention center project achieving specified traffic and air quality mitigations. For these eligible projects, the bills provided for original jurisdiction by the Court of Appeal and a compressed schedule requiring the court to render a decision on any lawsuit within 175 days. This promised to reduce the existing judicial review timeline by 100 days or more, while creating new burdens for the courts and litigants to meet the compressed schedule. AB 900's provision granting original jurisdiction to the Court of Appeal was invalidated in 2013 by a decision in Alameda Superior Court in Planning and Conservation League v. State of California. AB 900 was subsequently revised to restore jurisdiction to superior courts and require resolution of lawsuits within 270 days.

Three projects have been subject to 270-day judicial review procedures: the Sacramento Kings arena project, under SB 743, the Warriors arena project, and the 8150 Sunset Boulevard project, both under AB 900. The first two cases were resolved, in favor of the applicants, within the 270-day timeline. The last case included review by the California Supreme Court and took more than 270 days to resolve. The latter two projects were also challenged by opponents under non-CEQA causes of action that were not subject to the 270 day process.

1. Author’s statement:

After nearly a decade since the passage of AB 900, which granted expedited judicial review of developments that invested at least $100 million into a project, the Legislature has passed numerous pieces of legislation granting expedited judicial review to billionaires and their projects. During the State of the State Address, Governor Newsom said, “In recent years, we’ve expedited judicial review on CEQA for professional sports. It’s time we do the same thing for housing.” SB 621 finally provides affordable housing this same streamlined process. By establishing a process that requires CEQA challenges to affordable housing to be adjudicated within 270 days, SB 621 allows affordable housing to be built at a more rapid rate, without undermining the environmental review process. SB 621 advances California’s housing goals, while making sure California remains a state that is affordable for everyone to live in.

1. What’s the point? Many housing projects eligible for this bill may be exempt from CEQA under at least one of the statutory exemptions listed in the Existing Law section above. This bill creates an expedited judicial review process which requires the housing project to have a certified EIR and receive LEED Gold certification. For housing project developers and the lead agencies reviewing them, this may not be an appealing alternative to claiming an exemption.
2. LEED follows. LEED is a voluntary, third-party certification where buildings are evaluated on a point scale based on a variety of factors, including construction practices, materials, design, and energy efficiency. LEED certification necessarily follows CEQA review, project approval, any litigation, and construction. It is not possible for a project to meet the LEED certification requirement at the time CEQA determinations are made by the lead agency. By the time LEED certification is, or is not, received, the opportunity to review the lead agency’s determination will have passed, so there is no clear way to enforce a project proponent’s pledge, or a lead agency’s determination, that a project will be certified by LEED.

If the author and the committee wish to retain this requirement, and assure it is implemented as intended, the author and the committee may wish to consider amendments to require the lead agency to determine that LEED Gold certification has been received prior to the issuance of a certificate of occupancy, to file notice of that determination with OPR, and to provide that the lead agency’s determination may be enforced by an action commenced pursuant to Section 21167 within 30 days of filing the notice.

In addition, because this bill applies to projects that may consist of multiple buildings, amendments are needed to clarify that each building in a project must receive LEED certification.

1. It’s the cars. LEED certification does not address significant effects commonly associated with large housing projects – vehicle emissions and traffic. In order to assure that projects eligible for expedited judicial review under this bill reduce vehicle trips and support achieving the state’s air quality and climate goals, the author and the committee may wish to consider amendments to require an eligible project to include an analysis of transportation impacts that demonstrates the project will achieve 15% lower per capita vehicle miles traveled (VMT) than existing development.
2. What is “close proximity”? Several existing provisions of CEQA related to transit-oriented development include the requirement that the project lie within one-half mile of a major transit stop. This bill substitutes the term “close proximity” (page 3, line 11), which is likely to lead to confusion, disputes, and more lawsuits. To be clear and consistent with existing provisions of CEQA, the author and the committee may wish to consider amendments to specify the maximum distance from major transit stop is one-half mile.
3. Focus on fire risk. This bill generally excludes housing in any CalFIRE-designated very high fire hazard severity zone or a locally-designated high or very high fire hazard severity zone. The intent of this provision is reasonable – to avoid encouraging housing construction in areas at high risk of wildfire. However, reviewing the maps of these designations (http://www.fire.ca.gov/fire_prevention/fire_prevention_wildland_zones_maps) indicates that this condition excludes many developed areas close to jobs and transit, including within cities in the Bay Area and Los Angeles region. The focus on fire risk also does not account for other housing sites where people and/or property may be at risk, such as low-lying parcels susceptible to sea-level rise or parcels near freeways, ports, or industrial sources of air pollution.
4. Double referral. This bill has also been referred to the Assembly Judiciary Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Anaheim Chamber of Commerce
Burbank Housing
California Apartment Association
California Association of Realtors
California Chamber of Commerce
California Council for Affordable Housing
California Housing Consortium
Civil Justice Association of California
Habitat for Humanity California
Orange County Business Council
Rural County Representatives of California
San Gabriel Valley Economic Partnership
South Bay Association of Chambers of Commerce
Southwest California Legislative Council
SV@Home
The Two Hundred

Opposition

Asian Pacific Environmental Network
California Association of Professional Scientists
California Environmental Justice Alliance
California Judges Association
California Labor Federation, AFL-CIO
California League of Conservation Voters
Catholic Charities Diocese of Stockton
Center for Biological Diversity
Center for Community Action and Environmental Justice
Center on Race, Poverty & the Environment
Central Coast Asthma Collaborative
Citizens Advocating for Roblar Rural Quality
Communities for a Better Environment
Endangered Habitats League
Environmental Health Coalition
Greenspace – The Cambria Land Trust
Judicial Council of California
Leadership Counsel for Justice and Accountability
Natural Resources Defense Council
Physicians for Social Responsibility - Los Angeles
Planning and Conservation League
PODER
Save Our Heritage Organization
Sierra Club California
State Building and Construction Trades Council
The River Project

Analysis Prepared by: Lawrence Lingbloom / NAT. RES. /

Date of Hearing: June 24, 2019

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Laura Friedman, Chair

SBPCA Bill Id:SB 621

Author:(Glazer) – As Amended Ver:June 17, 2019

SENATE VOTE: 30-5

SUBJECT: California Environmental Quality Act: expedited judicial review: affordable housing projects: reports

SUMMARY: Establishes expedited judicial review procedures for housing projects that include at least 30% affordable units and meet other specified conditions, requiring the courts to resolve lawsuits within 270 days, to the extent feasible, from the date the certified record of proceedings is filed with the court. Requires the Judicial Council to prepare specified reports regarding California Environmental Quality Act (CEQA) litigation.

EXISTING LAW:

1. CEQA requires lead agencies with the principal responsibility for carrying out or approving a proposed project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines).
   
2. Authorizes judicial review of CEQA actions taken by public agencies, following the agency's decision to carry out or approve the project. Challenges alleging improper determination that a project may have a significant effect on the environment, or alleging an EIR doesn't comply with CEQA, must be filed in the Superior Court within 30 days of filing of the notice of approval. The courts are required to give CEQA actions preference over all other civil actions.
3. Pursuant to AB 900 (Buchanan), Chapter 354, Statutes of 2011, establishes procedures for expedited judicial review (i.e., requiring the courts to resolve lawsuits within 270 days, to the extent feasible) for "environmental leadership" projects certified by the Governor and meeting specified conditions, including Leadership in Energy and Environmental Design (LEED) Gold-certified infill site projects achieving transportation efficiency 15 percent greater than comparable projects and zero net additional greenhouse gas (GHG) emissions. AB 900 sunsets January 1, 2021.
4. Exempts from CEQA any residential development project, including any subdivision, or any zoning change that is undertaken to implement and is consistent with a specific plan for which an EIR has been certified after January 1, 1980, unless substantial changes or new information require the preparation of a supplemental EIR for the specific plan, in which case the exemption applies once the supplemental EIR is certified.
5. Exempts from CEQA specified residential housing projects which meet detailed criteria established to ensure the project does not have a significant effect on the environment. [SB 1925 (Sher), Chapter 1039, Statutes of 2002] The SB 1925 exemptions are available to:
   
   1. Affordable agricultural housing projects not more than 45 units within a city, or 20 units within an agricultural zone, on a site not more than five acres in size;
      
   2. Urban affordable housing projects not more than 100 units on a site not more than five acres in size; and,
      
   3. Urban infill housing projects not more than 100 units on a site not more than four acres in size which is within one-half mile of a major transit stop.
6. Requires metropolitan planning organizations (MPOs) to include a sustainable communities strategy (SCS), as defined, in their regional transportation plans, or an alternative planning strategy (APS), for the purpose of reducing GHG emissions, aligns planning for transportation and housing, and creates specified incentives for the implementation of the strategies, including CEQA exemption or abbreviated review for residential or mixed-use residential "transit priority projects" if the project is consistent with the use designation, density, building intensity, and applicable policies specified for the project area in either an approved SCS or APS. [SB 375 (Steinberg), Chapter 728, Statutes of 2008]
   
7. Establishes abbreviated CEQA review procedures for specified infill projects, where only specific or more significant effects on the environment which were not addressed in a prior planning-level EIR need be addressed. An EIR for such a project need not consider alternative locations, densities, and building intensities or growth-inducing impacts. Infill projects may include residential, retail, commercial, transit station, school, or public office building projects located within an urban area. [SB 226 (Simitian), Chapter 469, Statutes of 2011] SB 226 requires the Office of Planning and Research (OPR) to develop CEQA guidelines to implement its infill provisions, including statewide standards to promote smart growth, reduction of GHG emissions, reduction in water use, energy efficiency improvements and protection of public health.
8. Exempts from CEQA residential, mixed-use, and "employment center" projects, as defined, located within "transit priority areas," as defined, if the project is consistent with an adopted specific plan and specified elements of an SCS or APS adopted pursuant to SB 375. [SB 743 (Steinberg), Chapter 386, Statutes of 2013]
9. Establishes a ministerial approval process (i.e., not subject to CEQA) for certain multifamily affordable housing projects that are proposed in local jurisdictions that have not met regional housing needs. [SB 35 (Wiener), Chapter 366, Statutes of 2017]
10. Authorizes a city or county to establish a Workforce Housing Opportunity Zone (WHOZ) by preparing an EIR and by adopting a specific plan. Once a WHOZ is established, and for five years thereafter, requires approval of eligible housing developments within a WHOZ within 60 days without requiring the preparation of an EIR or negative declaration under CEQA. [SB 540 (Roth), Chapter 369, Statutes of 2017]
11. Authorizes a city or county to create a "housing sustainability district" (HSD) to complete upfront zoning and environmental review in order to receive incentive payments for residential and mixed-use development projects with an affordable housing component. Requires the city or county to prepare an EIR when designating an HSD, then "housing projects" within, and consistent with, a designated HSD are exempt from CEQA. [AB 73 (Chiu), Chapter 371, Statutes of 2017]
12. Exempts from CEQA multi-family residential and mixed-use housing projects on infill sites within cities and unincorporated areas that are within the boundaries of an urbanized area or urban cluster. [AB 1804 (Berman), Chapter 670, Statutes of 2018]
13. Defines “infill site” as a site in an urbanized area that meets either of the following criteria:
    1. The site has not been previously developed for urban uses and both of the following apply:
       1. The site is immediately adjacent to parcels that are developed with qualified urban uses, or at least 75% of the perimeter of the site adjoins parcels that are developed with qualified urban uses, and the remaining 25% of the site adjoins parcels that have previously been developed for qualified urban uses.
       2. No parcel within the site has been created within the past 10 years unless the parcel was created as a result of the plan of a redevelopment agency.
    2. The site has been previously developed for qualified urban uses.
14. Defines "major transit stop" as a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.

THIS BILL:

1. Defines “affordable housing project” as follows:
   1. The project receives LEED Gold certification.
   2. If the project is mixed-use, at least two-thirds of the square footage is designated for residential use.
   3. At least 30% of the housing units are affordable, to individuals or households with an income level at or below 80% of area median income, for at least 30 years.
   4. The project consists of no more than 200 residential units.
   5. The project site is not more than five acres.
   6. The project is on an infill site in “close proximity” to a major transit stop.
   7. The project replaces any demolished existing affordable housing units as prescribed.
   8. The project is not in a CalFIRE-designated very high fire hazard severity zone or a locally-designated high or very high fire hazard severity zone, unless the project is on a site that has adopted fire hazard mitigation measures pursuant to existing building standards or if state fire mitigation measures are applicable to the development.
2. Requires the courts to resolve CEQA lawsuits against eligible affordable housing projects within 270 days from the date the certified record of proceedings is filed with the court, to the extent feasible.
3. Requires the Judicial Council, in coordination with the Office of Planning and Research (OPR), to report to the Legislature by July 1, 2024 both of the following:
   1. A comparison of the litigation timelines for CEQA actions that are subject to expedited judicial review to the litigation timelines for CEQA actions that are not subject to expedited judicial review.
   2. The extent, if any, to which the expedited CEQA actions have delayed the adjudication of other civil litigation.
4. Requires the Judicial Council, in coordination with OPR, to report to the Legislature by January 1, 2021, and annually thereafter, on the number of CEQA actions that involve a development project compared to the total number of development projects undertaken in the prior fiscal year.
5. Sunsets each of the above provisions on January 1, 2025.
6. Declares the intent of the Legislature to enact subsequent legislation that would provide additional funding to the courts to enable the courts to adjudicate, in an expeditious manner, actions or proceedings filed pursuant to CEQA.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. However, Judicial Council estimates this bill could have a fiscal impact of between $5.8 million to $17.5 million annually through increased trial court workloads.

COMMENTS:

1. CEQA exemptions for housing. CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA Guidelines, for housing projects. For example, any residential development project, including any subdivision, or any zoning change that is consistent with an adopted specific plan is exempt from CEQA pursuant to a statute enacted in 1984.

In 2002, SB 1925 established CEQA exemptions for certain residential projects providing affordable urban or agricultural housing, or located on an infill site within an urbanized area, and meeting specified unit and acreage criteria.

Since SB 1925, additional legislation has provided CEQA exemptions and streamlining for residential (including, but not limited to, affordable housing) and certain other projects in infill areas. SB 375 provided a CEQA exemption for a narrow set of eligible residential projects in infill areas adjacent to transit. SB 226 provided abbreviated CEQA review procedures for a broader set of urban infill projects, including retail, commercial, and public buildings. SB 743 established a new exemption for residential, mixed-use and "employment center" projects located within one-half mile of a major transit stop, if the project is consistent with an adopted specific plan and specified elements of an SB 375 strategy. SB 743 also required OPR to propose revisions to the CEQA Guidelines for transportation impacts to better support infill development.

In 2017, the Legislature passed three bills to streamline the CEQA process for affordable housing projects. SB 35 established a ministerial approval process (i.e., not subject to CEQA) for certain multifamily affordable housing projects that are proposed in local jurisdictions that have not met regional housing needs. SB 540 authorizes a city or county to establish a WHOZ by preparing an EIR and by adopting a specific plan. Once a WHOZ is established, and for five years thereafter, eligible housing developments within a WHOZ must be approved within 60 days without requiring the preparation of an EIR or negative declaration under CEQA. AB 73 authorizes a city or county to create an HSD to complete upfront zoning and environmental review in order to receive incentive payments for residential and mixed-use development projects with an affordable housing component. Once the city or county has prepared an EIR for the HSD, then housing projects within, and consistent with, a designated HSD are exempt from CEQA.

In 2018, AB 1804 codified an existing categorical exemption for infill projects, expanding the exemption to apply to multi-family residential and mixed-use housing projects on infill sites in unincorporated urbanized areas or urban clusters.

1. CEQA judicial review. CEQA is enforced through judicial review. CEQA actions taken by public agencies can be challenged in Superior Court once the agency approves or determines to carry out the project. CEQA appeals are subject to unusually short statutes of limitations. Under current law, court challenges of CEQA decisions generally must be filed within 30 to 35 days, depending on the type of decision. The courts are required to give CEQA actions preference over all other civil actions. The petitioner must request a hearing within 90 days of filing the petition and, generally, briefing must be completed within 90 days of the request for hearing. There is no deadline specified for the court to render a decision.

In 2011, AB 900 and SB 292 (Padilla), Chapter 353, Statutes of 2011, established expedited CEQA judicial review procedures for a limited number of projects. For AB 900, it was large-scale projects meeting extraordinary environmental standards and providing significant jobs and investment. For SB 292, it was a proposed downtown Los Angeles football stadium and convention center project achieving specified traffic and air quality mitigations. For these eligible projects, the bills provided for original jurisdiction by the Court of Appeal and a compressed schedule requiring the court to render a decision on any lawsuit within 175 days. This promised to reduce the existing judicial review timeline by 100 days or more, while creating new burdens for the courts and litigants to meet the compressed schedule. AB 900's provision granting original jurisdiction to the Court of Appeal was invalidated in 2013 by a decision in Alameda Superior Court in Planning and Conservation League v. State of California. AB 900 was subsequently revised to restore jurisdiction to superior courts and require resolution of lawsuits within 270 days.

To date, 13 projects have been certified under AB 900:

• McCoy Solar Energy Project in Riverside County.
• Apple Campus 2 in Cupertino.
• Soitec Solar Energy Project in San Diego County.
• 8150 Sunset Boulevard, a mixed-use commercial and residential project in Hollywood.
• Event Center and Mixed-Use Development at Mission Bay Blocks (i.e., Warriors Arena) in San Francisco.
• Qualcomm Stadium Reconstruction Project in San Diego.
• 6701 Sunset/Crossroads, a mixed-use residential, hotel, and commercial project in Hollywood.
• Yucca-Argyle Project, a mixed-use residential, hotel, and commercial project in Hollywood.
• 10 Van Ness Avenue, a mixed-use commercial/residential redevelopment project in San Francisco.
• 1045 Olive Street Project, a mixed-use commercial/residential redevelopment project in downtown Los Angeles.
• Hollywood Center Project, a mixed-use project in Hollywood.
• Potrero Power Station, a mixed-use project in San Francisco.
• 3333 California Street, a mixed-use project in San Francisco.

Three additional projects are currently pending review by OPR and ARB, and certification by the Governor.

Three projects have been subject to 270-day judicial review procedures: the Sacramento Kings arena project, under SB 743, the Warriors arena project, and the 8150 Sunset Boulevard project, both under AB 900. The first two cases were resolved, in favor of the applicants, within the 270-day timeline. The last case included review by the California Supreme Court and took more than 270 days to resolve. The latter two projects were also challenged by opponents under non-CEQA causes of action that were not subject to the 270 day process.

1. Author’s statement:

After nearly a decade since the passage of AB 900, which granted expedited judicial review of developments that invested at least $100 million into a project, the Legislature has passed numerous pieces of legislation granting expedited judicial review to billionaires and their projects. During the State of the State Address, Governor Newsom said, “In recent years, we’ve expedited judicial review on CEQA for professional sports. It’s time we do the same thing for housing.” SB 621 finally provides affordable housing this same streamlined process. By establishing a process that requires CEQA challenges to affordable housing to be adjudicated within 270 days, SB 621 allows affordable housing to be built at a more rapid rate, without undermining the environmental review process. SB 621 advances California’s housing goals, while making sure California remains a state that is affordable for everyone to live in.

1. What’s the point? Many housing projects eligible for this bill may be exempt from CEQA under at least one of the statutory exemptions listed in the Existing Law section above. This bill creates an expedited judicial review process which requires the housing project to have a certified EIR and receive LEED Gold certification. For housing project developers and the lead agencies reviewing them, this may not be an appealing alternative to claiming an exemption.
2. LEED follows. LEED is a voluntary, third-party certification where buildings are evaluated on a point scale based on a variety of factors, including construction practices, materials, design, and energy efficiency. LEED certification necessarily follows CEQA review, project approval, any litigation, and construction. It is not possible for a project to meet the LEED certification requirement at the time CEQA determinations are made by the lead agency. By the time LEED certification is, or is not, received, the opportunity to review the lead agency’s determination will have passed, so there is no clear way to enforce a project proponent’s pledge, or a lead agency’s determination, that a project will be certified by LEED.

If the author and the committee wish to retain this requirement, and assure it is implemented as intended, the author and the committee may wish to consider amendments to require the lead agency to determine that LEED Gold certification has been received prior to the issuance of a certificate of occupancy, to file notice of that determination with OPR, and to provide that the lead agency’s determination may be enforced by an action commenced pursuant to Section 21167 within 30 days of filing the notice.

In addition, because this bill applies to projects that may consist of multiple buildings, amendments are needed to clarify that each building in a project must receive LEED certification.

1. It’s the cars. LEED certification does not address significant effects commonly associated with large housing projects – vehicle emissions and traffic. In order to assure that projects eligible for expedited judicial review under this bill reduce vehicle trips and support achieving the state’s air quality and climate goals, the author and the committee may wish to consider amendments to require an eligible project to include an analysis of transportation impacts that demonstrates the project will achieve 15% lower per capita vehicle miles traveled (VMT) than existing development.
2. What is “close proximity”? Several existing provisions of CEQA related to transit-oriented development include the requirement that the project lie within one-half mile of a major transit stop. This bill substitutes the term “close proximity” (page 3, line 11), which is likely to lead to confusion, disputes, and more lawsuits. To be clear and consistent with existing provisions of CEQA, the author and the committee may wish to consider amendments to specify the maximum distance from major transit stop is one-half mile.
3. Focus on fire risk. This bill generally excludes housing in any CalFIRE-designated very high fire hazard severity zone or a locally-designated high or very high fire hazard severity zone. The intent of this provision is reasonable – to avoid encouraging housing construction in areas at high risk of wildfire. However, reviewing the maps of these designations (http://www.fire.ca.gov/fire_prevention/fire_prevention_wildland_zones_maps) indicates that this condition excludes many developed areas close to jobs and transit, including within cities in the Bay Area and Los Angeles region. The focus on fire risk also does not account for other housing sites where people and/or property may be at risk, such as low-lying parcels susceptible to sea-level rise or parcels near freeways, ports, or industrial sources of air pollution.
4. Double referral. This bill has also been referred to the Assembly Judiciary Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Apartment Association
California Association of Realtors
California Chamber of Commerce
California Council for Affordable Housing
California Housing Consortium
Civil Justice Association of California
Habitat for Humanity California
Orange County Business Council
Rural County Representatives of California
San Gabriel Valley Economic Partnership
South Bay Association of Chambers of Commerce
Southwest California Legislative Council
SV@Home
The Two Hundred

Opposition

Asian Pacific Environmental Network
California Environmental Justice Alliance
California Judges Association
California Labor Federation, AFL-CIO
California League of Conservation Voters
Catholic Charities Diocese of Stockton
Center for Biological Diversity
Center for Community Action and Environmental Justice
Center on Race, Poverty & the Environment
Central Coast Asthma Collaborative
Citizens Advocating for Roblar Rural Quality
Communities for a Better Environment
Endangered Habitats League
Environmental Health Coalition
Greenspace – The Cambria Land Trust
Judicial Council of California
Leadership Counsel for Justice and Accountability
Natural Resources Defense Council
Physicians for Social Responsibility - Los Angeles
Planning and Conservation League
PODER
Save Our Heritage Organization
Sierra Club California
The River Project

Analysis Prepared by: Lawrence Lingbloom / NAT. RES. /

 THIRD READING  

Bill No: SB 621

Author: Glazer (D) and Caballero (D), et al.

Amended: 4/30/19

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/10/19

AYES: Allen, Bates, Hill, Skinner, Stone

NOES: Stern, Wieckowski

SENATE JUDICIARY COMMITTEE: 5-1, 4/23/19

AYES: Borgeas, Allen, Caballero, Jones, Umberg

NOES: Wieckowski

NO VOTE RECORDED: Jackson, Monning, Stern

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: California Environmental Quality Act: court actions or proceedings: affordable housing projects

SOURCE: Author

DIGEST:

This bill establishes expedited judicial review of environmental review and approvals granted for an “affordable housing project,” as defined, and requires Judicial Council to submit reports to the Legislature pertaining to California Environmental Quality Act (CEQA) litigation.

ANALYSIS:

Existing law, pursuant to CEQA:

1. Requires lead agencies with the principal responsibility for carrying out or approving a proposed discretionary project to prepare a negative declaration (ND), mitigated negative declaration (MND), or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). (Public Resources Code (PRC) §21000 et seq.). If there is substantial evidence, in light of the whole record before a lead agency, that a project may have a significant effect on the environment, the lead agency must prepare a draft EIR. (CEQA Guidelines §15064(a)(1), (f)(1)).
2. Sets requirements relating to the preparation, review, comment, approval and certification of environmental documents, as well as procedures relating to an action or proceeding to attack, review, set aside, void, or annul various actions of a public agency on the grounds of noncompliance with CEQA.

This bill:

1. Establishes, until January 1, 2025, expedited judicial review of environmental review and approvals granted for an “affordable housing project.” Defines “affordable housing project” as a housing project that meets specified requirements, including specified environmental criteria and inclusionary housing criteria.
2. Requires Judicial Council, by September 1, 2020, to adopt a rule of court applying to an action or proceeding brought to attack, review, set aside, void, or annul the certification of an EIR for an affordable housing project or the granting of any project approvals that requires the action or proceeding to be resolved, to the extent feasible, within 270 days of the filing of the certified record of proceedings.
3. Requires Judicial Council, in coordination with the Office of Planning and Research, to submit certain reports to the Legislature relating to CEQA litigation rates and expedited judicial review.
4. Declares the intent of the Legislature to enact subsequent legislation that would provide additional funding to courts to enable courts to adjudicate, in an expeditious manner, actions of proceedings filed pursuant to CEQA.

Background

1. CEQA.
   1. Overview of CEQA Process. CEQA provides a process for evaluating the environmental effects of a project, and includes statutory exemptions, as well as categorical exemptions in the CEQA guidelines. If a project is not exempt from CEQA, an initial study is prepared to determine whether a project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the project may have a significant effect on the environment, the lead agency must prepare an EIR.

Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Prior to approving any project that has received environmental review, an agency must make certain findings.

• 1. What is analyzed in an environmental review? An environmental review analyzes the significant direct and indirect environmental impacts of a proposed project and may include water quality, surface and subsurface hydrology, land use and agricultural resources, transportation and circulation, air quality and greenhouse gas emissions, terrestrial and aquatic biological resources, aesthetics, geology and soils, recreation, public services and utilities such as water supply and wastewater disposal, and cultural resources. The analysis must also evaluate the cumulative impacts of any past, present, and reasonably foreseeable projects/activities within study areas that are applicable to the resources being evaluated. A study area for a proposed project must not be limited to the footprint of the project because many environmental impacts of a development extend beyond the identified project boundary. Also, CEQA stipulates that the environmental impacts must be measured against existing physical conditions within the project area, not future, allowable conditions.
  2. CEQA provides hub for multi-disciplinary regulatory process. An environmental review provides a forum for all the described issue areas to be considered together rather than siloed from one another. It provides a comprehensive review of the project, considering all applicable environmental laws and how those laws interact with one another. For example, it would be prudent for a lead agency to know that a proposal to mitigate a significant impact (i.e. alleviate temporary traffic congestion, due to construction of a development project, by detouring traffic to an alternative route) may trigger a new significant impact (i.e. the detour may redirect the impact onto a sensitive resource, such as a habitat of an endangered species). The environmental impact caused by the proposed mitigation measure should be evaluated as well. CEQA provides the opportunity to analyze a broad spectrum of a project’s potential environmental impacts and how each impact may intertwine with one another.

1. CEQA streamlining provisions. CEQA has been amended over the years to provide several tools to expedite the review of, or altogether exempt from CEQA, various types of projects.
   1. Projects Eligible for Exemptions

Numerous types of projects may be eligible for an exemption from CEQA review pursuant to either a statutory exemption or a “categorical” exemption in the CEQA Guidelines. In general, if a project meets certain specified criteria, it is not subject to CEQA review. There are numerous categories of housing projects that, subject to specified criteria and exceptions, are eligible for exemptions:

• Residential projects
• Projects in housing sustainability districts
• Agricultural housing projects
• Affordable housing projects
• Urban residential projects
• Urban residential or mixed-use housing projects in unincorporated counties
• Urban infill projects
• Residential, employment center, or mixed-use development project in a transit priority-area and
• Transit-priority and residential projects
  1. Streamlined Judicial Review

Several provisions which streamline judicial review of challenges to projects under CEQA, including housing projects, including:

• Concurrent preparation of the record of proceedings to enable judicial review to occur sooner;
• Counties with a population of over 200,000 must designate one or more judges to develop expertise on CEQA and hear CEQA;
• Both the Superior Court and the Court of Appeal must give CEQA lawsuits preference over all other civil actions; and
• If feasible, the Court of Appeal must hear a CEQA appeal within one year of filing.

1. AB 900 projects. Existing law provides a framework for expediting CEQA review of major projects. AB 900 (Buchanan, Chapter 354, Statutes of 2011), the Jobs and Economic Improvement Through Environmental Leadership Act of 2011, established specified administrative and judicial review procedures for the review of the environmental review documents and public agency approvals granted for designated residential, retail, commercial, sports, cultural, entertainment, or recreational use projects, known as Environmental Leadership Development Projects (ELDP). To qualify as an ELDP, the project must meet specified objective environmental standards. The Legislature has also applied similar expedited frameworks for specific sports stadiums.
2. California’s housing shortage. California is in the midst of a serious housing crisis. California is home to 21 of the 30 most expensive rental housing markets in the country, which has had a disproportionate impact on the middle class and the working poor. Housing units affordable to low-income earners, if available, are often in serious states of disrepair. A person earning minimum wage must work three jobs on average to pay the rent for a two-bedroom unit. The Department of Housing and Community Development (HCD) estimates that approximately 2.7 million lower-income households are rent-burdened (meaning they spend at least 30 percent of their income rent), 1.7 million of which are severely rent-burdened (spending at least 50% of their income on rent). Not a single county in the state has an adequate supply of affordable homes.

A major factor in this crisis is the state’s housing shortage. From 1954-1989, California constructed an average of more than 200,000 new homes annually, with multifamily housing accounting for the largest share of housing production. Since then, however, construction has dropped significantly. HCD estimates that approximately 1.8 million new housing units – 180,000 new homes per year, are needed to meet the state’s projected population and housing growth by 2025. Even when housing production rose in the mid-2000’s, it never reached the 180,000 mark, and over the last 10 years, construction averaged just 80,000 new homes per year.

1. CEQA and housing development. A pair of studies from the firm Holland & Knight reviewed CEQA lawsuits filed between 2010-2012 and 2013-2015, respectively. The studies conclude that CEQA litigation is disproportionately directed towards the types of projects that the state encourages, such as infill, and that infill housing is a top target of CEQA lawsuits.

However, overall litigation rates regarding CEQA are low. In 2016, BAE Urban Economics did a quantitative analysis of the effects of CEQA on California’s economy generally, including the specific effects on housing development. The report found “no evidence” to support the argument that CEQA represents a major barrier to development. To the contrary, the report found that only 0.7 percent of all CEQA projects undergoing environmental review were involved in litigation. To help put this in perspective, the total number of CEQA cases filed make up approximately 0.02% of 1,100,000 civil cases filed annually in California. The report indicated that California’s affordable housing production ranked 9th among the 50 states. In fact, the report concluded that the CEQA process also helped ensure that affordable housing is developed in a way that does not compromise the health and safety of an already vulnerable population.

The Association of Environmental Professionals recently surveyed 46 cities and counties throughout the state to determine CEQA’s impact on housing production. The survey found that under 6% of the housing projects in those jurisdictions were required to undergo a full EIR, which took 15 months on average to complete. Instead, the survey found that cities and counties are successfully using alternatives to EIRS that expedite housing projects: 35.9% of projects were reviewed by MNDs, which took just eight months to complete, while 42.3% were reviewed under streamlining provisions or exemptions for affordable housing, infill, and transit-priority projects, which took just six months to complete. Another 9.3% were determined to be eligible for other exemptions. The survey found that cities and counties were not fully utilizing the affordable housing exemption, often opting for a full EIR for projects that were eligible for the exemption. The survey respondents also indicated that, among the barriers to increased housing production in California, CEQA is not a major cause. The costs of building, lack of available sites, and lack of financing for affordable housing were all cited as primary barriers for housing production.

Comments

1. Purpose of Bill. According to the author, “After nearly a decade since the passage of AB 900 (Buchanan), which granted expedited judicial review of developments that invested at least $100 million into a project, the Legislature has passed numerous pieces of legislation granting expedited judicial review to billionaires and their projects. During the State of the State Address, Governor Newsom said, ‘In recent years, we’ve expedited judicial review on CEQA for professional sports. It’s time we do the same thing for housing.’ SB 621 (Glazer) finally provides affordable this same streamlining process. By establishing a process that requires CEQA challenges to affordable housing to be adjudicated within 270 days, SB 621 (Glazer) allows affordable housing to be built at a more rapid rate, without undermining the environmental review process. SB 621 (Glazer) advances California’s housing goals, while making sure California remains a state that is affordable for everyone to live in.”
2. The affordable housing exemption. As discussed above, CEQA already provides for several streamlining provisions and exemptions, especially in the context of housing. Further, an exemption already exists for affordable housing projects. Under that exemption, CEQA does not apply to projects that consist of the construction, conversion, or use of residential housing consisting of 100 or fewer units that are affordable to low-income households if the project meets certain criteria. This exemption would require that 100% of the development’s residential housing is affordable to low-income households. However, according to the AEP study discussed above, the affordable housing exemption is underutilized.
3. Expanding the AB 900/sports stadium model. Some have argued that if the expedited judicial review can be given to certified ELDPs and billionaires’ sports stadiums, it can also be done for Californians.

This bill applies similar expedited judicial review procedures to projects that contain at least 30% affordable housing and that meet certain environmental standards, such as the project being in an infill site in close proximity to a major transit stop. This bill applies to an unknown number of future projects with unknown impacts. Since the projects are undefined, it’s difficult to evaluate their merits, much less whether those merits justify preferential treatment. If the Legislature considers granting preferential treatment to certain types of projects, perhaps those projects ought to directly address the state’s housing crisis and provide for superior environmental standards.

Related/Prior Legislation

SB 25 (Caballero and Glazer, 2019) establishes expedited administrative and judicial review of environmental review and approvals granted for projects that are funded, in whole or in part, by specific public funds or public agencies and that meet certain criteria, including specified environmental standards and inclusionary housing requirements. SB 25 is on the Senate Floor.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 5/14/19)

Burbank Housing

California Apartment Association

California Association of Realtors

California Chamber of Commerce

California Council for Affordable Housing

California Housing Consortium

Habitat for Humanity California

Rural County Representatives of California

SV@Home

The Two Hundred

OPPOSITION: (Verified 5/14/19)

California Environmental Justice Alliance

California Judges Association

California Labor Federation

Center for Biological Diversity

Center for Community Action and Environmental Justice

Center on Race, Poverty, and the Environment

Judicial Council of California

Physicians for Social Responsibility-Los Angeles

Sierra Club California

Prepared by: Genevieve M. Wong / E.Q. / (916) 651-4108

5/15/19 15:21:19

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2019-2020 Regular Session

Bill No: SB 621 (Author:Glazer & Caballero)

Version: April 11, 2019

Hearing Date: April 23, 2019

Fiscal: Yes

Urgency: No

Consultant: JDT

SUBJECT

California Environmental Quality Act: court actions or proceedings: affordable housing projects

DIGEST

This bill, until 2025, provides for expedited judicial review of California Environmental Quality Act (CEQA) challenges to “affordable housing projects,” as defined, and prohibits courts from staying or enjoining challenged projects, with narrow exceptions.

EXECUTIVE SUMMARY

For a small handful of major projects—particularly, large “environmental leadership” projects and stadiums in Oakland and Inglewood—existing law provides that, to the extent feasible, courts must resolve CEQA challenges to those projects within 270 days of the filing of the record of administrative proceedings. These provisions were the subject of protracted policy battles over concerns regarding the burden on courts, diminished access to justice for other litigants, and the potential for insufficient environmental review. Citing the state’s housing crisis, several authors this session have introduced bills proposing to extend this 270-day review provision to much broader classes of projects. The widespread application of this provision magnifies the concerns described above. Additionally, it could have diminishing returns for project developers: at some point, if the burden is too great, courts will fail to meet this deadline or even ignore it altogether. This bill—which applies to certain affordable housing projects—and another bill by the same joint authors, SB 25, are two such bills pending before this Committee. The Senate Environmental Quality Committee passed both by votes of 5-2.

The bill is author-sponsored and supported by organizations involved in real estate development and affordable housing. It is opposed by the Judicial Council and environmental organizations. The author has agreed to amendments to remove limitations on the court’s power of injunction and provide for a study on CEQA litigation.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Establishes CEQA, which requires a public agency to prepare, or cause to be prepared, and to certify the completion of, an environmental impact report (EIR) on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. (Pub. Res. Code § 21100 et seq.; all further references are to the Public Resources Code unless otherwise stated.)
2. Defines “project” as an activity that may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and that is any of the following:
   1. an activity directly undertaken by any public agency;
   2. an activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans, or other forms of assistance from one or more public agencies; or
   3. an activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies. (§ 21065.)
3. Provides that an action or proceeding to attack, review, set aside, void, or annul the acts or decisions of a public agency on the grounds of noncompliance with CEQA may be commenced when, among other things, it is alleged that:
   1. a public agency is carrying out or has approved a project that may have a significant effect on the environment without having determined whether the project may have a significant effect on the environment;
   2. a public agency has improperly determined whether a project may have a significant effect on the environment;
   3. an EIR prepared by, or caused to be prepared by, a public agency does not comply with CEQA;
   4. a public agency has improperly determined that a project is not subject to CEQA; or
   5. another act or omission of a public agency does not comply with CEQA. (§ 21167.)
4. Requires both the Superior Court and the Court of Appeal to give CEQA lawsuits “preference over all other civil actions therein, in the matter of setting the same for hearing or trial, and in hearing the same, to the end that the action or proceeding shall be quickly heard and determined.” (§ 21167.1(a).)
5. Requires the Court of Appeal to regulate briefing schedules such that, to the extent feasible, the appeal is heard within one year of filing. (§ 21167.1(a).)
6. Requires counties with a population of over 200,000 to designate one or more judges to develop expertise concerning CEQA and related land-use and environmental matters, and then assign such matters to that judge or those judges. (§ 21167.1 (b).)

This bill:

1. Establishes expedited judicial review of environmental review and approvals granted for an “affordable housing project,” defined as a housing project that:
   1. received Leadership in Energy and Environmental Design (LEED) Gold certification;
   2. contains only residential units;
   3. consists of at least 30 percent units for individuals or households with an income level that is at or below 80 percent of the area median income level, which must continue to be so for at least 30 years;
   4. is no more than 200 units;
   5. is not more than five acres in area; and
   6. is on an infill site in close proximity to a major transit stop.
      
2. Requires the Judicial Council, by September 1, 2020, to adopt a rule of court applying to an action or proceeding brought to attack, review, set aside, void, or annul the certification of an EIR for an affordable housing project or the granting of any project approvals that requires the action or proceeding to be resolved, to the extent feasible, within 270 days of the filing of the certified record of proceedings.
   
3. Prohibits, generally, a court, in granting relief, from staying or enjoining the construction or operation of an affordable housing project and provides that a court may only enjoin those specific activities associated with the qualified project that (1) present an imminent threat to public health and safety or (2) materially, permanently, and adversely affect unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values.
4. Declares the intent of the Legislature to enact subsequent legislation that would provide additional funding to courts to enable courts to adjudicate, in an expeditious manner, actions of proceedings filed pursuant to CEQA.

COMMENTS

1. Stated need for the bill

The authors write as follows:

After nearly a decade since the passage of AB 900 (Buchanan, 2011), which granted expedited judicial review of developments that invested at least $100 million into a project, the Legislature has passed numerous pieces of legislation granting expedited judicial review to billionaires and their projects. During the State of the State Address, Governor Newsom said, “In recent years, we’ve expedited judicial review on CEQA for professional sports. It’s time we do the same thing for housing.” SB 621 finally provides affordable housing this same streamlined process. By establishing a process that requires CEQA challenges to affordable housing to be adjudicated within 270 days, this bill allows affordable housing to be built at a more rapid rate, without undermining the environmental review process. This bill advances California’s housing goals, while making sure California remains a state that is affordable for everyone to live in.

2. California’s housing shortage

California is in the midst of a housing crisis. The state is home to 21 of the 30 most expensive rental housing markets in the country, which has had a disproportionate impact on the middle class and the working poor. Housing units affordable to low-income earners, if available, are often in serious states of disrepair. On average, a person earing minimum wage must work three jobs to pay the rent for a two-bedroom unit. The Department of Housing and Community Development (HCD) estimates that approximately 2.7 million lower-income households are rent-burdened (meaning they spend at least 30 percent of their income on rent), 1.7 million of which are severely rent-burdened (spending at least 50 percent of their income on rent). Not a single county in the state has an adequate supply of affordable homes. According to a 2015 study by the California Housing Partnership Corporation, California has a shortfall of 1.5 million affordable homes and 13 of the 14 least affordable metropolitan areas in the country.

A major factor in this crisis is the state’s housing shortage. From 1954-1989, California constructed an average of more than 200,000 new homes annually, with multifamily housing accounting for the largest share of housing production. Since then, however, construction has dropped significantly. HCD estimates that approximately 1.8 million new housing units—180,000 new homes per year, are needed to meet the state’s projected population and housing growth by 2025. Even when housing production rose in the mid-2000’s, it never reached the 180,000 mark, and over the last 10 years, construction averaged just 80,000 new homes per year.

3. CEQA generally

Enacted in 1970, CEQA requires state and local agencies to follow a set protocol to disclose and evaluate the significant environmental impacts of proposed projects and to adopt feasible measures to mitigate those impacts. CEQA itself applies to projects undertaken or requiring approval by public agencies, and, if more than one agency is involved, CEQA requires one of the agencies to be designated as the “lead agency.” The environmental review process required by CEQA consists of: (1) determining if the activity is a project; (2) determining if the project is exempt from CEQA; and (3) performing an initial study to identify the environmental impacts and, depending on the findings, prepare either a Negative Declaration (for projects with no significant impacts), a Mitigated Negative Declaration (for projects with significant impacts but that are revised in some form to avoid or mitigate those impacts), or an EIR (for projects with significant impacts).

An EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Before approving any project that has received environmental review, an agency must make certain findings pertaining to the project’s environmental impact and any associated mitigation measures. If mitigation measures are required or incorporated into a project, the public agency must adopt a reporting or monitoring program to ensure compliance with those measures. To enforce the requirements of CEQA, a civil action may be brought under several code sections to attack, review, set aside, void, or annul the acts or decisions of a public agency for noncompliance with the act.

4. The weight of the evidence undermines the perception that CEQA is a major impediment to housing and other important projects in California

A pair of studies from the firm of Holland & Knight reviewed CEQA lawsuits filed between 2010–2012 and 2013–2015, respectively.^[1] The studies conclude that CEQA litigation is disproportionately directed toward the types of projects that the state encourages, such as infill.

However, overall litigation rates regarding CEQA are low. In 2016, BAE Urban Economics did a quantitative analysis of the effects of CEQA on California’s economy generally, including the specific effects on housing development.^[2] The report found “no evidence” to support the argument that CEQA represents a major barrier to development. To the contrary, the report found that only 0.7 percent of all CEQA projects undergoing environmental review were involved in litigation. The report indicated that California’s affordable housing production ranked ninth among the 50 states. In fact, the report concluded that “[t]he CEQA process also helped ensure that affordable housing is develop[ed] in a way that does not compromise the health and safety of an already vulnerable population.”

In October 2017, the Senate Environmental Quality Committee published the results of a survey it had conducted of state agencies regarding CEQA to gain a better understanding of CEQA compliance and litigation.^[3] The survey, covering fiscal years 2011–2012 to 2015–2016, showed over 90 percent of projects lead by state agencies were exempt from CEQA; and only one percent required an EIR. Further, out of a total of 15,783 projects, only 207 CEQA cases were brought against the state agencies within those five years. With multiple cases brought against some of the same projects, it is estimated that less than one percent of projects were litigated. The survey results suggest that CEQA litigation is not a significant burden on projects where the state agency is the lead agency.

Two recent studies conducted by faculty at the University of California, Berkeley illustrate how aspects of the project approval process that are independent of CEQA drive project approval timelines.^[4] CEQA requires project applicants to secure all applicable permits and approvals necessary to carry out the project, as well as to comply with any other environmental review required under applicable federal, state, local laws, regulations, or policies. These requirements apply independently of CEQA, but are also incorporated into the CEQA process. The results of the first study, done in residential development projects in five Bay Area cities, led to the conclusion that, among other factors, “what drives whether and how environmental review occurs for residential projects is local land-use law.” (Emphasis added.) The second study, which focused on the building permit process in four Los Angeles area cities, found that different cities chose to apply CEQA differently with regard to residential development and that overall relatively few projects within the study area required a full EIR. The studies also confirmed that CEQA litigation rates are very low, finding that less than three percent of CEQA-eligible projects (which excludes exempted projects) were litigated.

Finally, the Association of Environmental Professionals recently surveyed 46 cities and counties throughout the state to determine CEQA’s impact on housing production.^[5] The survey found that under six percent of the housing projects in those jurisdictions were required to undergo a full EIR, which took 15 months on average to complete. Instead, the survey found that cities and counties are successfully using alternatives to EIRs that expedite housing projects: 35.9 percent of projects were reviewed by mitigated negative declarations, which took just eight months to complete, while 42.3 percent were reviewed under streamlining provisions or exemptions for affordable housing, infill, and transit priority projects, which took just six months to complete. Another 9.3 percent were determined to be eligible for other exemptions. The survey found that cities and counties were not fully utilizing the affordable housing exemption, often opting for a full EIR for projects that were eligible for the exemption. The survey respondents also indicated that, among the barriers to increased housing production in California, CEQA is not a major cause. The costs of building, lack of available sites, and lack of financing for affordable housing were all cited as primary barriers to housing production.

Thus, the weight of the evidence undermines the perception that CEQA is a major impediment to housing and other important projects in California. Consequently, additional changes to CEQA might do less to promote development and more to undermine the law that helps ensure that development is undertaken responsibly. In opposition, a coalition of environmental justice organizations writes as follows:

EJ communities care deeply about affordable housing. However, CEQA is not the problem to affordable housing production, and the solutions will not come from further weakening this important law. CEQA lawsuits are rare. Many housing projects are already exempt from environmental review all together through using the infill exemption as well as tiering from specific or community plans. Yet the housing crisis persists due to several factors, including high building costs, non-CEQA related neighborhood opposition, and lack of available sites. Lack of affordable housing financing and loss of redevelopment agencies are also key constraints to affordable housing production.

5. CEQA has been extensively streamlined in recent years

CEQA has been amended over the years to provide several tools to expedite the review of, or altogether exempt from CEQA, various types of projects.

• 1. Projects eligible for exemptions

Numerous types of projects may be eligible for an exemption from CEQA review pursuant to either a statutory exemption or a categorical exemption in the CEQA Guidelines. Categorical exemptions are projects determined by the Secretary of the Natural Resources Agency to not have a significant effect on the environment (§ 21084). In general, if a project meets certain specified criteria, it is not subject to CEQA review. Some common exemptions include:

• ministerial actions (§ 21080(b)(1));
• repairs to damaged facilities (§§ 21080(b)(3), § 21060.3);
• mitigation of an emergency (§ 21080(b)(4); Guidelines, § 15269(c));
• existing facilities, replacement, or reconstruction (Guidelines, §§ 15301, 15302);
• small development and construction projects (Guidelines, §§ 15303, 15304, 15311); and
• protection of natural resources (Guidelines, §§ 15307, 15308, 15313, 15316-15318, 15325).

Additionally, there are numerous categories of infill projects that, subject to specified criteria and exceptions, are eligible for exemptions:

• residential projects (Gov. Code, § 65457; Guidelines, § 15182);
• agricultural housing projects (§ 21159.22; Guidelines, § 15193);
• affordable housing projects (§ 21159.23; Guidelines, § 15194);
• urban residential projects (§ 21159.24; Guidelines, § 15195);
• urban residential or mixed-use housing projects in unincorporated counties (§ 21159.25);^[6]
• urban infill projects (Guidelines, § 15332);
• residential, employment center, or mixed-use development project in a transit priority-area (§ 21155.4);^[7] and
• transit-priority and residential projects (§ 21155.1).^[8]
  1. Streamlined administrative review

CEQA provides for streamlined processes for preparing EIRs and other CEQA documents that enable public agencies to “use various special types of EIRs to simplify preparation and avoid duplication.” (Californians for Alternatives to Toxics v. Department of Food & Agriculture (2005) 136 Cal.App.4th 1, 22, fn. 10.) These various documents include “program” EIRs for a series of related actions that can be collectively characterized as a single project, “staged” EIRs for sequential projects, and “master” EIRs for community-level projects. Additionally, CEQA Guidelines section 15183(a) provides that:

CEQA mandates that projects which are consistent with the development density established by existing zoning, community plan, or general plan policies for which an EIR was certified shall not require additional environmental review, except as might be necessary to examine whether there are project-specific significant effects which are peculiar to the project or its site. This streamlines the review of such projects and reduces the need to prepare repetitive studies.

CEQA also provides for “tiering”—the process of analyzing general projects in a broad EIR, followed by focused review of subsequent environmental projects that are narrower in scope, thereby “allow[ing] an agency to defer analysis of certain details of later phases of long-term linked or complex projects until those phases are up for approval.” (Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 431.) Finally, CEQA specifically provides for limited-scope environmental review for certain residential, infill, transit-priority projects, and approvals consistent with community-scale environmental planning documents.

• 1. Streamlined judicial review

Several provisions streamline judicial review of challenges to projects under CEQA, including:

• amendments to provisions governing litigation and mediation;
• discovery is generally not allowed, as CEQA cases are generally restricted to review of the record;^[9]
• concurrent preparation of the record of proceedings to enable judicial review to occur sooner;^[10]
• counties with a population of over 200,000 must designate one or more judges to develop expertise on CEQA and hear CEQA cases (§ 21167.1 (b));
• both the Superior Court and the Court of Appeal must give CEQA lawsuits preference over all other civil actions (§ 21167.1(a));
• if feasible, the Court of Appeal must hear a CEQA appeal within one year of filing (§ 21167.1(a)); and
• if feasible, a 270-day judicial review period for environmental leadership projects,^[11] as well as for specified stadium projects.^[12]

Many of these changes have created efficiencies in the environmental review process overall and have expedited the process for the types of projects encouraged by the state. CEQA has not stayed stagnant since its enactment, but rather has evolved over close to half a century.

6. AB 900 and last session’s stadium bills

AB 900 (§ 21178 et seq.), which sunsets January 1, 2021, establishes procedures for 270-day expedited judicial review for “environmental leadership” projects certified by the Governor and meeting specified conditions, including clean renewable energy projects, clean energy manufacturing projects, and LEED Gold-certified infill site projects achieving transportation efficiency 15 percent greater than comparable projects and zero net additional greenhouse gas (GHG) emissions. AB 900 additionally provides that a leadership project:

• may be certified by the Governor only if it meets specified criteria, including all of the following:
  • the project will result in a minimum investment of $100 million in California upon completion of construction;
  • the project creates high-wage, highly skilled jobs that pay prevailing wages and living wages, provides construction jobs and permanent jobs for Californians, and helps reduce unemployment;
  • the project does not result in any net additional GHG emissions; and
  • the applicant has entered into a binding and enforceable agreement that all mitigation measures required under CEQA are to be conditions of approval of the project, and those conditions will be fully enforceable by the lead agency or another agency designated by the lead agency;
  • the applicant bears the burden of costs for any hearing or decision before the Court of Appeal, as well as the costs of preparing the record of proceedings for the project (§ 21183); and
• upon certification by the Governor, is submitted to the Joint Legislative Budget Committee for review and concurrence or non-concurrence (§ 21184(a)-(c)); and
• upon certification of the EIR or any related project approvals, is subject to review, including any appeals, for 270 days, pursuant to rules adopted by the Judicial Council (§ 21185; Cal. Rules of Court, Rule 3.2220 et seq.).

To date, 12 projects have been certified under AB 900:

• McCoy Solar Energy Project in Riverside County.
• Apple Campus 2 in Cupertino.
• Soitec Solar Energy Project in San Diego County.
• 8150 Sunset Boulevard, a mixed-use commercial and residential project in Hollywood.
• Event Center and Mixed-Use Development at Mission Bay Blocks (i.e., Warriors Arena) in San Francisco.
• Qualcomm Stadium Reconstruction Project in San Diego.
• 6701 Sunset/Crossroads, a mixed-use residential, hotel, and commercial project in Hollywood.
• Yucca-Argyle Project, a mixed-use residential, hotel, and commercial project in Hollywood.
• 10 Van Ness Avenue, a mixed-use commercial/residential redevelopment project in San Francisco.
• 1045 Olive Street Project, a mixed-use commercial/residential redevelopment project in downtown Los Angeles.
• Hollywood Center Project, a mixed-use project in Hollywood.
• Potrero Power Station, a project to convert a closed power station to residential/ mixed-use commercial in San Francisco.

Of these projects, two have been litigated: the Golden State Warriors arena project and the 8150 Sunset Boulevard. The Sacramento Kings arena project, which was not an AB 900 project, but was authorized under a similar framework pursuant to AB 743, was also litigated. As discussed in more detail below, these cases were generally resolved expeditiously, if not quite within the 270-day timeline, providing a significant benefit to the developers. However, it should be noted that according the Judicial Council, the court in the 8150 Sunset Boulevard case bifurcated the non-CEQA claims, which were subject to a normal timeline.

Last year, the Legislature adapted the AB 900 framework for two bills specific to stadiums in Oakland (AB 734, Bonta; Ch. 959, Stats. 2018) and Inglewood (AB 987, (Kamlager-Dove; Ch. 961, Stats. 2018). Broadly, these bills are substantially equivalent to AB 900 on key requirements—including LEED Gold certification, GHG neutrality, traffic efficiency, and construction wages, with limited exceptions. The Assembly Natural Resources Committee analyses of the final versions of these bills stated that they “raise[] the bar on GHG mitigation and clean air.”

7. Projects eligible under this bill

This bill was recently amended in the Senate Environmental Quality Committee to limit the scope of the definition of “affordable housing project,” which now applies to a project that:

• received LEED Gold certification;
• contains only residential units;
• for at least 30 years, consists of at least 30 percent units for individuals or households with an income level that is at or below 80 percent of the area median income level;
• is no more than 200 units;
• is not more than five acres in area; and
• is on an infill site in close proximity to a major transit stop.

These amendments establish standards to help ensure that the projects that receive beneficial treatment under this bill are environmentally sound, reasonably sized, and built on existing footprints with nearby transit infrastructure. Although the projects could be up to 70 percent market-rate units, the authors contend that this is necessary to offset the cost to developers of including units for low-income individuals or households.

This can be contrasted with CEQA’s existing housing exemption for the construction, conversion, or use of residential housing consisting of 100 or fewer units that are affordable to low-income households if the project meets certain criteria. (§ 21159.23.) This exemption requires that 100 percent of the development’s residential housing be affordable to low-income households.

However, as discussed below, studies have found that this exemption is underutilized, although the reasons for this are unclear. One possibility is that affordable housing units may not be sufficiently profitable. Thus, giving preferential treatment to projects with affordable units that also allow for market-rate or mixed-use units may spur the development of a higher number of affordable units overall. That said, it is not clear that 30 percent affordable housing units is the optimal point that most effectively addresses California’s housing crisis.

Writing in opposition, State Building and Construction Trades Council, AFL-CIO states that “the bill only requires a minimal percentage of affordable housing units…” Additionally, they criticize this bill for failing to “include workforce requirements and protections.”

8. Unintended consequences: negative impacts on the courts and the environment

The bill would make two significant changes to the process for challenging applicable projects under CEQA: (1) setting time limits on the actions or proceedings; and (2) eliminating the power of courts to enjoin or stay projects.

1. Sets impractical expectations and prioritizes CEQA cases over other important cases

This bill would require the Judicial Council, by September 1, 2020, to adopt a rule of court applying to an action or proceeding brought to attack, review, set aside, void, or annul the certification of an EIR for an affordable housing project or the granting of any project approvals that requires the action or proceeding to be resolved, to the extent feasible, within 270 days of the filing of the certified record of proceedings. Such a requirement presents several key issues.

First, given the breadth of eligible projects under this bill, this expedited judicial review provision would be impracticable to carry out. Based on information from the Judicial Council, a 270-day timeline triggered at the point of certification of the record is generally infeasible and fails to take into consideration the realities of the court system.

Additionally, such a requirement inherently prioritizes such cases over other critically important ones, further delaying justice for parties to those actions. As pointed out by the Judicial Council, this expedited judicial review undermines equal access: “The courts are charged with dispensing equal access to justice for each and every case on their dockets. Singling out this particular type of case for such preferential treatment appears at odds with how our justice system has historically functioned.”

Under existing law, certain parties are entitled to calendar preference, including a party that is at least 70 years old and in ill health, a party in a personal injury or wrongful death matter is under the age of 14, or a party that is unlikely to survive beyond another six months. (Code of Civ. Proc. § 36). Additionally, certain actions receive calendar preference, including appeals in probate proceedings, contested election cases, and actions for libel or slander by a person who holds any elective public office or a candidate for any such office alleged to have occurred during the course of an election campaign. (Code of Civ. Proc. § 44.) In fact, existing law already provides that both the Superior Court and the Court of Appeal must give CEQA lawsuits preference over all other civil actions. (§ 21167.1(a).) Yet this bill would further prioritize CEQA lawsuits. The Judicial Council states that “[i]mposing a 270-day timeline on top of the existing preference is arbitrary and likely to be unworkable in practice.”

1. Substantially limits a court’s power to remedy environmental impacts

This bill would provide that, notwithstanding any other law, in granting relief in an action or proceeding brought pursuant to CEQA challenging an affordable housing project, the court shall not stay or enjoin the siting, construction, or operation of the housing project. The bill establishes two narrow exceptions if the court finds either of the following:

• the continued construction or operation of the project presents an imminent threat to public health and safety; or,
• the project site contains unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values that would be materially, permanently, and adversely affected by the continued construction or operation of the project unless the court stays or enjoins the construction or operation of the project.

Even if the court finds that one of these conditions is satisfied, the court would only be authorized to enjoin those specific activities associated with the project that present an imminent threat to public health and safety or that materially, permanently, and adversely affect unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values.

The ability to grant injunctive relief is fundamental to the equitable nature of these court proceedings. Generally, injunctive relief is granted by a court to preserve the status quo until a determination of the merits of the CEQA challenge can be made. The ability to stay or enjoin housing projects during the pendency of CEQA actions or proceedings is often necessary to prevent prospective damage as well as to contain ongoing damage. Additionally, under section 21168.9, a court has the authority to leave some project approvals in place when issuing an injunction against a determination, finding, or decision under CEQA, so long as it appropriately finds the portions severable under subdivision (b) of that section. (Center for Biological Diversity v. Department of Fish & Wildlife (2017) 17 Cal.App.5th 1245, 1256.) Thus, courts have the authority to issue targeted injunctions for specific flawed components of a project while allowing the rest of an EIR or other environmental review document to stand. Nevertheless, this bill would strip courts of this equitable power except in limited circumstances, seriously undermining the effectiveness of the state’s preeminent environmental law.

Sierra Club California, writing in opposition to the bill, states as follows:

Because a project can change due to litigation, injunctive relief is often granted by a court to preserve the status quo until a determination of the merits of the CEQA challenge can be made. Staying or enjoining construction of a project is often necessary to prevent potential environmental degradation as well containing any ongoing degradation. Preventing a court from providing injunctive relief leaves plaintiffs in CEQA cases, and the environment, without an appropriate remedy. Without the possibility of stay, construction and development can continue and can further add to potential environmental harms throughout the litigation process.

This highlights a dramatic consequence of removing discretion from judges to stay or enjoin projects. For a project that has serious issues that do not meet the high bar of being an “imminent threat,” the court will no longer be capable of halting or pausing its advance. As indicated, the likelihood of serious and legitimate issues being appropriately dealt with in the wake of a favorable ruling is severely diminished if a project’s construction has significantly advanced in the meantime.

In addition, the Judicial Council, in opposition, states that this bill “significantly limits the forms of relief that the court may use in any action challenging the housing projects covered by this bill, interferes with the inherent authority of a judicial officer, and raises a serious separation of powers question.”

In view of the concerns described above regarding this bill’s limitations on the court’s power of injunction, the author has agreed to amend the bill to strike these provisions, as follows:

Amendment

On page 3, strike lines 11-30. On page 3, line 31, strike “(d)” and replace with “(c)”.

9. How much certainty does the 270-day timeline provide?

1. The Legislature cannot bind courts to resolve cases on a specific timeframe

In mandating that courts endeavor to resolve any CEQA challenges to an affordable housing project on an accelerated timeline, the Legislature, if it adopts this bill, would to a degree intrude on the judiciary’s prerogative to manage its core internal functions. Consequently, this bill, in addition to imposing a potentially substantial and ongoing burden on courts, implicates the doctrine of separation of powers.

Unlike the United States Constitution, in which separation of powers is an implied doctrine, the California Constitution contains a provision that expressly provides for the separation of governmental functions. Article III, section 3 of the California Constitution provides that “[t]he powers of state government are legislative, executive, and judicial. Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution.” Although this provision suggests a sharp demarcation between the branches of governments, courts have long recognized the interrelatedness of the branches’ functions:

Indeed, upon brief reflection, the substantial interrelatedness of the three branches’ actions is apparent and commonplace: the judiciary passes upon the constitutional validity of legislative and executive actions, the Legislature enacts statutes that govern the procedures and evidentiary rules applicable in judicial and executive proceedings, and the Governor appoints judges and participates in the legislative process through the veto power. Such interrelationship, of course, lies at the heart of the constitutional theory of ‘checks and balances’ that the separation of powers doctrine is intended to serve.

(Superior Court v. County of Mendocino (1996) 13 Cal.4th 45, 52–53 (County of Mendocino).) Consequently, courts have held that the doctrine of separation of powers “prohibits the legislative branch from arrogating to itself core functions of the executive or judicial branch.” (Carmel Valley Fire Protection Dist. v. State of California (2001) 25 Cal.4th 287, 298.) Nevertheless, the doctrine “permits actions of one branch that may ‘significantly affect those of another branch.’” (Ibid.) Legislation that would “defeat or materially impair” the court's inherent power to decide cases would be an unconstitutional invasion of judicial power. (Ibid.)

The California Court of Appeal has concluded that a similar 270-day review provision under CEQA did not amount to such an invasion. (Saltonstall v. City of Sacramento (2014) 231 Cal.App.4th 837, 855-856 (Saltonstall).) In Saltonstall, the plaintiff argued, among other things, that the 270-day deadline to review challenges to the Sacramento Kings arena project under SB 743 (Steinberg, 2013) was impossibly short and thus prevented courts from fulfilling their adjudicatory functions. (Ibid.) The court noted, however, that the deadline was not an absolute one; rather, the provision, Public Resources Code section 21168.6.6, required courts to resolve challenges to the project within 270 days “to the extent feasible.” (Id. at p. 856.) The court reasoned as follows:

Section 21168.6.6 does not impose any penalty for review that exceeds the 270 days. For example, the statute does not declare the case to be moot, deprive any court of jurisdiction, or declare a particular winner on a certain date. Saltonstall acknowledges that, even though section 21168.6.6 applies to any appeal, it does not affect the California Constitution's 90-day deadline for issuance of a decision after submission of the case for decision. (Cal. Const., art. VI, § 19.) Because the 270-day period for review is required only “to the extent feasible,” we reject Saltonstall’s contention that section 21168.6.6 materially impairs the core function of the courts. In short, Saltonstall has not shown section 21168.6.6 crosses over the line from reasonable regulation to a material impairment of the courts' exercise of power to adjudicate this case. [Citing County of Mendocino, supra, 13 Cal.4th at pp. 58–59.]

(Ibid.)

This bill contains a similar proviso: courts must resolve challenges to qualified projects within 270 days “to the extent feasible.” As a result, this deadline, like the deadline applicable to the Sacramento Kings arena, would likely survive a constitutional challenge. However, since courts would not be obligated to observe this deadline, the question arises whether this provision would provide developers with the certainty they seek.

1. Diminishing returns?

A recent report entitled Review of Environmental Leadership Development Projects from the Senate Office of Research reviewed litigation under AB 900 and SB 743 in depth and found the following timelines, which under then-existing law began when the administrative record was certified^[13] and include the trial court, court of appeal, and the Supreme Court’s denial of review, for those cases:

The report concludes that these projects were reviewed under a faster timeline than normally would apply, benefiting the developers and providing upfront financial security. The report also states that “the impacts to the court from such a short timeline also should be taken into consideration when determining how fast the Legislature would like [AB 900] cases resolved,” and suggests a longer timeline may be appropriate.^[14]

Unlike AB 900, which has only led to 12 certified projects, and unlike the stadium-specific bills, this bill would apply to a vastly higher number of projects throughout the state until 2025. Although it is impossible to estimate how many projects could ultimately qualify for accelerated review, if numerous projects are propelled to the forefront of judicial calendars across the state, courts may be forced to repeatedly miss the 270-day deadline, and, at some point, altogether ignore it. As noted above, the Judicial Council, writing in opposition, states that imposing this timeline on top of the calendar preference that CEQA cases are afforded under existing law “is arbitrary and likely to be unworkable in practice.”

In a sense, this bill, along with other similar bills proposing expedited judicial review for CEQA challenges, could be a victim of its own success: at some point, the more projects that are eligible to benefit from accelerated judicial review, the smaller the impact of that benefit.

1. Projects subject to CEQA challenges may be subject to other challenges that will not be expedited

As discussed above, less than three percent of CEQA projects are litigated. The projects that do make it to litigation are likely to be among the most complex. Such projects may also be susceptible to legal challenges on grounds not related to CEQA. If so, the 270-day review provision does not apply to the non-CEQA claims,^[15] which will be resolved along a normal timeframe. Parties will surely take this into account when contemplating the range of possible causes of action they might bring against projects that are eligible for expedited CEQA judicial review under this bill.

10. Author’s amendment to add a study regarding CEQA litigation

Although the weight of the evidence indicates that CEQA is not the primary driver of delays in development projects, this evidence is incomplete. To better understand the role that CEQA litigation plays in development, the author has agreed to add a requirement that the Judicial Council, in coordination with the Governor’s Office of Planning and Research, study and report to the Legislature the following:

• The number of CEQA cases involving development projects filed compared to the total number of development projects undertaken for each calendar year. This element would be reported yearly beginning January 1, 2021.
• Litigation timelines for expedited CEQA cases compared to CEQA litigation timelines for comparable projects not eligible for expedited judicial review.
• The extent, if any, to which expedited CEQA cases delay other civil cases.
• These last two elements would be reported by July 1, 2024.

Amendments

Add a study requirement consistent with the description above.

Additionally, the author wishes to add Senator Bates as a co-author.

SUPPORT

California Apartment Association

California Association of Realtors

California Council for Affordable Housing

California Housing Consortium

Civil Justice Association of California

Habitat for Humanity California

Rural County Representatives of California

SV@Home

The Two Hundred

OPPOSITION

California Environmental Justice Alliance

California Labor Federation

California League of Conservation Voters

Center for Biological Diversity

Center for Community Action and Environmental Justice

Center on Race, Poverty, and the Environment

Judicial Council of California

Physicians for Social Responsibility—Los Angeles

Sierra Club California

State Building and Construction Trades Council, AFL-CIO

RELATED LEGISLATION

Pending Legislation:

SB 25 (Caballero and Glazer, 2019) would establish expedited administrative and judicial review of environmental review and approvals granted for projects that are funded, in whole or in part, by an opportunity zone fund or specific public funds or public agencies, provided that the project meets certain labor standards and uses a skilled and trained workforce. The bill also would prohibit courts from staying or enjoining challenged projects with two narrow exceptions. This bill will be heard in this Committee on April 23, 2019.

SB 384 (Morrell, 2019) would establish expedited administrative and judicial review of environmental review and approvals granted for housing development projects with 50 or more residential units. The bill would prohibit courts from staying or enjoining challenged projects with two narrow exceptions. This bill failed passage in the Senate Environmental Quality Committee.

SB 744 (Caballero, 2019) among other things, would establish procedures governing CEQA actions challenging certain “No Place Like Home” supported housing projects, which requires the actions and any appeals therefrom to be resolved, to the extent feasible, within 270 days of the filing of the certified record of proceedings with the court. This bill is pending before the Senate Environmental Quality Committee.

AB 1244 (Fong, 2019) would impose the limits on the court’s ability to issue injunctive relief that were contained in SB 292 or SB 743 in CEQA cases challenging specified housing projects. This bill is pending before the Assembly Natural Resources Committee.

Prior Legislation:

SB 922 (Nguyen, 2018) would have imposed limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified affordable housing projects built upon former surplus state real property. It also would have imposed time limits on the courts for the resolution of such cases. The bill failed passage in the Senate Governmental Organization Committee.

SB 948 (Allen, 2018) would have authorized the Governor to certify updates to a community plan and the accompanying ordinances meeting specified requirements as eligible for the CEQA streamlining benefits provided by AB 900. The bill was held in the Senate Judiciary Committee.

SB 1052 (Bates, 2018) would have required detailed information on any plaintiffs bringing CEQA challenges to acts or decisions of a public agency, including the source and amount of all contributions to the action. This bill failed passage in the Senate Environmental Quality Committee.

SB 1340 (Glazer, 2018) would have required the Judicial Council to adopt a rule of court to establish procedures requiring courts to fully adjudicate CEQA actions and proceedings in connection with any housing projects within 270 days of certifying the record of proceedings, to the extent feasible. This bill would also have prohibited courts from staying or enjoining challenged projects with two narrow exceptions. This bill failed passage in the Senate Judiciary Committee.

SB 1341 (Glazer, 2018) would have required detailed information on any plaintiffs bringing CEQA challenges to acts or decisions of a public agency, including the source and amount of all contributions to the action. This bill was held in the Senate Environmental Quality Committee.

AB 734 (Bonta, Ch. 959, Stats. 2018) establishes special procedures for CEQA review, additional conditions for certification, and expedited judicial review for a proposed baseball park and mixed-use development in the City of Oakland.

AB 987 (Kamlager-Dove, Ch. 961, Stats. 2018) establishes special procedures for CEQA review, additional conditions for certification, and expedited judicial review for a proposed basketball arena and related development in the City of Inglewood.

AB 1905 (Grayson, 2018) would have imposed limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified transportation projects. This bill was held in the Assembly Natural Resources Committee.

AB 2267 (Wood, 2018) would have established, until January 1, 2024, expedited administrative and judicial review for actions or proceedings brought pursuant to the CEQA on the adoption or approval of amendments to the Downtown Station Area Specific Plan for the City of Santa Rosa, as specified, and for the adoption or amendment of the specified planning document for incorporated or unincorporated areas of Sonoma County in the “RED Area,” as defined. The bill was held in the Senate.

AB 2279 (Fong, 2018) would have imposed limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified housing projects. This bill was held in the Assembly Natural Resources Committee.

AB 2856 (Melendez, 2018) would have imposed limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified housing projects. This bill failed passage in the Assembly Natural Resources Committee

AB 30 (Caballero, 2017) would have imposed limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified strip mall conversion housing projects. This bill died in the Assembly Natural Resources Committee.

SB 743 (Steinberg, Ch. 386, Stats. 2013) established specified administrative and judicial review procedures for review of the EIR and public agency approvals granted for a project related to the development of an entertainment and sports center in the City of Sacramento. Additionally, this bill provides that aesthetic and parking impacts of a residential, mixed-use residential, or employment center project on an infill site within a transit priority area shall not be considered significant impacts on the environment under CEQA, as specified.

SB 292 (Padilla, Ch. 353, Stats. 2011) established specified administrative and judicial review procedures for review of the EIR and public agency approvals granted for a project related to the development of a stadium in the City of Los Angeles.

AB 900 (Buchanan, Ch. 354, Stats. 2011), the Jobs and Economic Improvement Through Environmental Leadership Act of 2011, established specified administrative and judicial review procedures for the review of the EIR and public agency approvals granted for designated residential, retail, commercial, sports, cultural, entertainment, or recreational use projects, or clean renewable energy or clean energy manufacturing projects.

PRIOR VOTES:

Senate Enviornmental Quality Committee (Ayes 5, Noes 2)

**************

1. See Hernandez, Jennifer California Environmental Quality Act Lawsuits and California’s Housing Crisis (2018) 24 Hastings Envtl. L.J. 21 (2018); Jennifer Hernandez, David Friedman & Stephanie Deherrera, In the Name of the Environment, Holland & Knight (2015). ↑

2. BAE Urban Economics, CEQA in the 21st Century (August 2016) <https://rosefdn.org/ wp-content/uploads/2016/08/CEQA-in-the-21st-Century.pdf> (as of Apr. 30, 2018). ↑

3. Available at https://senv.senate.ca.gov/sites/senv.senate.ca.gov/files/ceqa_survey_

   full_report_-_final_12-5-17.pdf (as of Mar. 1, 2019). ↑

4. Getting it Right: Examining the Local Land Use Entitlement Process to Inform Policy and Process (2018), available at https://www.law.berkeley.edu/wp-content/uploads/2018/02/

   Getting_It_Right.pdf (as of Mar. 1, 2019); Examining the Local Land Use Entitlement Process to Inform Policy and Process (2019) https://www.law.berkeley.edu/wp-content/uploads

   /2019/02/Examining-the-Local-Land-Use-Entitlement-Process-in-California.pdf (as of Mar. 1, 2019). ↑

5. CEQA’s Impact on Housing Production: 2018 Survey of California’s Cities and Counties. ↑

6. AB 1804 (Berman), Ch. 670, Stats. 2018. ↑

7. SB 743 (Steinberg), Ch. 386, Stats. 2013. ↑

8. SB 375 (Steinberg), Ch. 728, Stats. 2008. ↑

9. See Cadiz Land Co. v. Rail Cycle, LP (2000) 83 Cal.App.4th 74, 122. ↑

10. SB 122 (Jackson, 2015), Ch. 476, Stats. 2016. ↑

11. AB 900 (Buchanan, 2011), Ch. 354, Stats. 2011. ↑

12. SB 292 (Padilla, 2011), Ch. 353, Stats. 2011; SB 743 (Steinberg, 2013), Ch. 386, Stats. 2013 (see Saltonstall v. City of Sacramento (2014) 231 Cal.App.4th 837, 855-856); AB 734 (Bonta, 2018), Ch. 959, Stats. 2018; AB 987 (Kamlager-Dove, 2018), Ch. 961, Stats. 2018. ↑

13. See id. at pp. 6-8 (noting some uncertainties in the calculation methodology). Additionally, the current version of AB 900 and this bill’s timelines commence at a later point: the filing of the administrative record with the court, which makes the 270-day period somewhat less onerous for courts. ↑

14. Id. at p. 15. ↑

15. It has been suggested that the phrase “or the granting of any approval” in similar 270-day review provisions in other bills encompasses challenges to land-use approvals based on violations of statutory requirements not related to CEQA. Consequently, it has been argued that such language applies the expedited review provisions to non-CEQA claims against eligible projects. While the phrase is broad, this interpretation does not comport with the principles of statutory construction, as it ignores the statutory context in which the provision is situated and its implication would be that numerous provisions outside the Public Resources Code have been indirectly amended. (See e.g., Aron v. U-Haul Co. of California (2006) 143 Cal.App.4th 796, 808 [“We construe the language in the context of the statute as a whole and the overall statutory scheme”]; Turner v. Association of American Medical Colleges (2011) 193 Cal.App.4th 1047, 1067 [interpretations that impliedly amend other sections are to be avoided]; see also Cal. Const. art. IV, § 9 [“A section of a statute may not be amended unless the section is re-enacted as amended”].) Additionally, this argument ignores the longstanding contemporaneous administrative construction embodied in the rules adopted by the Judicial Council that govern challenges to projects under AB 900 and SB 743, both of which have similar expedited review provisions. (See Cal. Rules Ct. § 3.2200 [“the rules in this chapter apply to all actions brought under the California Environmental Quality Act”].) Nor has this broad construction been expressly contemplated in the legislative history of similar provisions. Finally, according to the Judicial Council, the court in the 8150 Sunset project under AB 900 bifurcated CEQA claims and non-CEQA claims, resolving the latter on a normal timeline. This indicates that the court did not view the analogous expedited review provision under AB 900 as expansively as this interpretation would suggest. ↑

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2019 - 2020 Regular

Bill No: SB 621

SUBJECT: California Environmental Quality Act: court actions or proceedings: affordable housing projects

DIGEST: Establishes expedited judicial review of environmental review and approvals granted for an “affordable housing project,” as defined by the bill, and prohibits courts from staying or enjoining challenged projects with two narrow exceptions.

ANALYSIS:

Existing law, the California Environmental Quality Act:

1. Requires lead agencies with the principal responsibility for carrying out or approving a proposed discretionary project to prepare a negative

Declaration (ND), mitigated negative declaration (MND), or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). (Public Resources Code (PRC) §21000 et seq.). If there is substantial evidence, in light of the whole record before a lead agency, that a project may have a significant effect on the environment, the lead agency must prepare a draft EIR. (CEQA Guidelines §15064(a)(1), (f)(1)).

1. Sets requirements relating to the preparation, review, comment, approval and certification of environmental documents, as well as procedures relating to an action or proceeding to attack, review, set aside, void, or annul various actions of a public agency on the grounds of noncompliance with CEQA.
   
2. Requires courts to give CEQA-related actions or proceedings preference over all other civil actions so that the action or proceeding is quickly heard and determined. (PRC §21167.1).
   
3. Exempts development projects that consist of the construction, conversion, or use of residential housing consisting of 100 or fewer units that are affordable to low-income householders if certain criteria is met (PRC §21159.23).

This bill:

1. Establishes expedited judicial review of environmental review and approvals granted for an “affordable housing project.”
   
   1. Defines “affordable housing project” as a housing project with at least 30% of the housing units of the project affordable to individuals or households with an income level that is at or below 80% of the area median income level.
      
2. Requires Judicial Council, by September 1, 2020, to adopt a rule of court applying to an action or proceeding brought to attack, review, set aside, void, or annul the certification of an EIR for an affordable housing project or the granting of any project approvals that requires the action or proceeding to be resolved, to the extent feasible, within 270 days of the filing of the certified record of proceedings.
   
3. Prohibits, generally, a court, in granting relief, from staying or enjoining the construction or operation of an affordable housing project and provides that a court may only enjoin those specific activities associated with the qualified project that present an imminent threat to public health and safety or that materially, permanently, and adversely affect unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values.
   
4. Declares the intent of the Legislature to enact subsequent legislation that would provide additional funding to courts to enable courts to adjudicate, in an expeditious manner, actions of proceedings filed pursuant to CEQA.
   

Background

1. Background on CEQA.
   
   1. Overview of CEQA Process. CEQA provides a process for evaluating the environmental effects of a project, and includes statutory exemptions, as well as categorical exemptions in the CEQA guidelines. If a project is not exempt from CEQA, an initial study is prepared to determine whether a project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the project may have a significant effect on the environment, the lead agency must prepare an EIR.
      

Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Prior to approving any project that has received environmental review, an agency must make certain findings. If mitigation measures are required or incorporated into a project, the agency must adopt a reporting or monitoring program to ensure compliance with those measures.

• 1. What is analyzed in an environmental review? An environmental review analyzes the significant direct and indirect environmental impacts of a proposed project and may include water quality, surface and subsurface hydrology, land use and agricultural resources, transportation and circulation, air quality and greenhouse gas emissions, terrestrial and aquatic biological resources, aesthetics, geology and soils, recreation, public services and utilities such as water supply and wastewater disposal, and cultural resources. The analysis must also evaluate the cumulative impacts of any past, present, and reasonably foreseeable projects/activities within study areas that are applicable to the resources being evaluated. A study area for a proposed project must not be limited to the footprint of the project because many environmental impacts of a development extend beyond the identified project boundary. Also, CEQA stipulates that the environmental impacts must be measured against existing physical conditions within the project area, not future, allowable conditions.
     
  2. CEQA provides hub for multi-disciplinary regulatory process. An environmental review provides a forum for all the described issue areas to be considered together rather than siloed from one another. It provides a comprehensive review of the project, considering all applicable environmental laws and how those laws interact with one another. For example, it would be prudent for a lead agency to know that a proposal to mitigate a significant impact (i.e. alleviate temporary traffic congestion, due to construction of a development project, by detouring traffic to an alternative route) may trigger a new significant impact (i.e. the detour may redirect the impact onto a sensitive resource, such as a habitat of an endangered species). The environmental impact caused by the proposed mitigation measure should be evaluated as well. CEQA provides the opportunity to analyze a broad spectrum of a project’s potential environmental impacts and how each impact may intertwine with one another.
     

1. CEQA streamlining provisions. CEQA has been amended over the years to provide several tools to expedite the review of, or altogether exempt from CEQA, various types of projects.
   

Projects Eligible for Exemptions

Numerous types of projects may be eligible for an exemption from CEQA review pursuant to either a statutory exemption or a “categorical” exemption in the CEQA Guidelines. Categorical exemptions are projects determined by the Secretary of the Natural Resources Agency to not have a significant effect on the environment. In general, if a project meets certain specified criteria, it is not subject to CEQA review. There are numerous categories of housing projects that, subject to specified criteria and exceptions, are eligible for exemptions:

• Residential projects
• Projects in housing sustainability districts
• Agricultural housing projects
• Affordable housing projects
• Urban residential projects
• Urban residential or mixed-use housing projects in unincorporated counties
• Urban infill projects
• Residential, employment center, or mixed-use development project in a transit priority-area and
• Transit-priority and residential projects
  

Streamlined Judicial Review

Several provisions which streamline judicial review of challenges to projects under CEQA, including housing projects, including:

• Amendments to provisions governing litigation and mediation;
• Discovery is generally not allowed, as CEQA cases are generally restricted to review of the record;
• Concurrent preparation of the record of proceedings to enable judicial review to occur sooner;
• Counties with a population of over 200,000 must designate one or more judges to develop expertise on CEQA and hear CEQA;
• Both the Superior Court and the Court of Appeal must give CEQA lawsuits preference over all other civil actions;
• If feasible, the Court of Appeal must hear a CEQA appeal within one year of filing; and
• If feasible, a 270-day judicial review period for environmental leadership projects, as well as for specified stadium projects.
  

Many of these changes have created efficiencies in the environmental review process overall and have expedited the process for the types of projects encouraged by the state.

1. AB 900 projects. Existing law provides a framework for expediting CEQA review of major projects. AB 900 (Buchanan, Ch. 354, Stats. 2011), the Jobs and Economic Improvement Through Environmental Leadership Act of 2011, established specified administrative and judicial review procedures for the review of the environmental review documents and public agency approvals granted for designated residential, retail, commercial, sports, cultural, entertainment, or recreational use projects, known as Environmental Leadership Development Projects (ELDP). To qualify as an ELDP, the project must meet specified objective environmental standards. The Legislature has also applied similar expedited frameworks for specific sports stadiums that include mitigation measures and meet certain objective environmental standards.
   
   1. LEED Certification. Leadership in Energy and Environmental Design (LEED) is a widely-used green building rating system that is available for building, community, and home project types. LEED certification is available for six general categories: building design and construction; interior design and construction; building operations and maintenance; neighborhood development; homes; and cities and communities. Projects pursuing LEED certification earn points across several categories such as location and transportation, sustainable sites, water efficiency, energy & atmosphere, materials & resources, indoor environmental quality, and innovation. Based on the number of points achieved, a project can earn one of four LEED rating levels: certified, silver, gold, and platinum. LEED gold certification has been the rating level that has been required of ELDPs and the sports stadiums.
      
      
2. California’s housing shortage. California is in the midst of a serious housing crisis. California is home to 21 of the 30 most expensive rental housing markets in the country, which has had a disproportionate impact on the middle class and the working poor, Housing units affordable to low-income earners, if available, are often in serious states of disrepair. A person earing minimum wage must work three jobs on average to pay the rent for a two-bedroom unit. The Department of Housing and Community Development (HCD) estimates that approximately 2.7 million lower-income households are rent-burdened (meaning they spend at least 30 percent of their income rent), 1.7 million of which are severely rent-burdened (spending at least 50% of their income on rent). Not a single county in the state has an adequate supply of affordable homes. According to a 2015 study by the California Housing Partnership Corporation, California has a shortfall of 1.5 million affordable homes and 13 of the 14 least affordable metropolitan areas in the country.
   

A major factor in this crisis is the state’s housing shortage. From 1954-1989, California constructed an average of more than 200,000 new homes annually, with multifamily housing accounting for the largest share of housing production. Since then, however, construction has dropped significantly. HCD estimates that approximately 1.8 million new housing units – 180,000 new homes per year, are needed to meet the state’s projected population and housing growth by 2025. Even when housing production rose in the mid-2000’s, it never reached the 180,000 mark, and over the last 10 years, construction averaged just 80,000 new homes per year.

1. CEQA and housing development. A pair of studies from the firm Holland & Knight reviewed CEQA lawsuits filed between 2010-2012 and 2013-2015, respectively. The studies conclude that CEQA litigation is disproportionately directed towards the types of projects that the state encourages, such as infill, and that infill housing is a top target of CEQA lawsuits.

However, overall litigation rates regarding CEQA are low. In 2016, BAE Urban Economics did a quantitative analysis of the effects of CEQA on California’s economy generally, including the specific effects on housing development. The report found “no evidence” to support the argument that CEQA represents a major barrier to development. To the contrary, the report found that only 0.7 percent of all CEQA projects undergoing environmental review were involved in litigation. To help put this in perspective, the total number of CEQA cases filed make up approximately 0.02% of 1,100,000 civil cases filed annually in California. The report indicated that California’s affordable housing production ranked 9^th among the 50 states. In fact, the report concluded that the CEQA process also helped ensure that affordable housing is developed in a way that does not compromise the health and safety of an already vulnerable population.

Two recent studies conducted by faculty at UC Berkley illustrate how aspects of the approval process that are independent of CEQA drive project approval timelines. CEQA requires project applicants to secure all applicable permits and approvals necessary to carry out the project, as well as to comply with any other environmental review required under applicable federal, state, local laws, regulations, or policies. These requirements apply independently of CEQA, but are also incorporated into the CEQA process. The results of the first study, done in residential development projects in five Bay Area cities, led to the conclusion that, among other facts “what drives whether and how environmental review occurs for residential projects is local land-use law.” The second study, which focused on the building permit process in four Los Angeles area cities, found that different cities chose to apply CEQA differently with regard to residential development and that overall relatively few projects within the study area required a full EIR.

Finally, the Association of Environmental Professionals recently surveyed 46 cities and counties throughout the state to determine CEQA’s impact on housing production. The survey found that under 6% of the housing projects in those jurisdictions were required to undergo a full EIR, which took 15 months on average to complete. Instead, the survey found that cities and counties are successfully using alternatives to EIRS that expedite housing projects: 35.9% of projects were reviewed by MNDs, which took just 8 months to complete, while 42.3% were reviewed under streamlining provisions or exemptions for affordable housing, infill, and transit-priority projects, which took just 6 months to complete. Another 9.3% were determined to be eligible for other exemptions. The survey found that cities and counties were not fully utilizing the affordable housing exemption, often opting for a full EIR for projects that were eligible for the exemption. The survey respondents also indicated that, among the barriers to increased housing production in California, CEQA is not a major cause. The costs of building, lack of available sites, and lack of financing for affordable housing were all cited as primary barriers for housing production.

Comments

1. Purpose of Bill. According to the author, “After nearly a decade since the passage of AB 900 (Buchanan), which granted expedited judicial review of developments that invested at least $100 million into a project, the Legislature has passed numerous pieces of legislation granting expedited judicial review to billionaires and their projects. During the State of the State Address, Governor Newsom said, ‘In recent years, we’ve expedited judicial review on CEQA for professional sports. It’s time we do the same thing for housing.’ SB 621 (Glazer) finally provides affordable this same streamlining process. By establishing a process that requires CEQA challenges to affordable housing to be adjudicated within 270 days, SB 621 (Glazer) allows affordable housing to be built at a more rapid rate, without undermining the environmental review process. SB 621 (Glazer) advances California’s housing goals, while making sure California remains a state that is affordable for everyone to live in.”
2. Tying the hands of the courts. SB 621 limits the courts’ ability to stay or enjoin the construction or operation of a housing development, with 2 exceptions: (1) where the continued construction or operation of the project presents an imminent threat to the public health and safety, and (2) the project site contains unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values that would be materially, permanently, and adversely affected by the continued construction or operation. Even if the court finds that one of these circumstances exists, the court would only be able to enjoin those specific activities associated with the project that present an imminent threat to the public health or safety or that materially, permanently, or adversely affect unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values.
   

The ability to grant injunctive relief is fundamental to the equitable nature of these court proceedings. Generally, injunctive relief is granted by a court to preserve the status quo until a determination of the merits of the CEQA challenge can be made. The ability to stay or enjoin a qualified project, whatever that project may be, during the pendency of CEQA actions or proceedings is often necessary to prevent prospective damage as well as to contain ongoing damage.

The committee may wish to amend the bill to remove this provisions that would limit injunctive relief.

1. The affordable housing exemption. As discussed above, CEQA already provides for several streamlining provisions and exemptions, especially in the context of housing. Further, an exemption already exists for affordable housing projects. Under that exemption, CEQA does not apply to projects that consist of the construction, conversion, or use of residential housing consisting of 100 or fewer units that are affordable to low-income households if the project meets certain criteria. This exemption would require that 100% of the development’s residential housing is affordable to low-income households. However, according to the AEP study discussed above, the affordable housing exemption is underutilized.
2. Expanding the AB 900/sports stadium model. Some have argued that if the expedited judicial review can be given to certified ELDPs and billionaires’ sports stadiums, it can also be done for Californians. It should be noted that the procedures in AB 900 and for the sports stadiums required the projects to meet certain environmental standards including, among others, to be certified LEED Gold, as well as minimize traffic and air quality impacts through project design or mitigation measures including reducing to at least zero the net greenhouse gas (GHG) emissions from private automobile trips to the sports stadiums, and achieve a 15% reduction in vehicle-miles traveled per attendee.
   

This bill applies similar expedited judicial review procedures to projects, including mixed-use developments, that contain at least 30% affordable housing but does not include any mitigation measures. The bill would apply to an unknown number of future mixed-use and residential projects with unknown impacts. Since the projects are undefined, it’s difficult to evaluate their merits, much less whether those merits justify preferential treatment. If the Legislature considers granting preferential treatment to certain types of projects, perhaps those projects ought to directly address the state’s housing crisis and provide for superior environmental standards.

The committee may wish to amend the bill to make the expedited judicial review process available, until January 1, 2025, to purely residential projects that are LEED Gold certified, have no more than 200 residential units, 30% of which are affordable housing and include certain environmental standards such as the project site being no more than 5 acres, located in an infill site, and in proximity to a major transit stop. Additionally, the developer of the project shall commit to ensuring continued availability of affordable housing units for at least 30 years.

Related/Prior Legislation

SB 25 (Caballero and Glazer) establishes expedited administrative and judicial review of environmental review and approvals granted for projects that are funded, in whole or in part, by specific public funds or public agencies and that meet certain labor standards and use a skilled and trained workforce. Prohibits courts

from staying or enjoining challenged projects with two narrow exceptions. SB 25 is set to be heard in this committee on April 10, 2019.

SB 384 (Morrell) establishes expedited administrative and judicial review of environmental review and approvals granted for housing development projects with 50 or more residential units. Prohibits courts from staying or enjoining challenged projects with two narrow exceptions. SB 384 is set to be heard in this committee on April 10, 2019.

DOUBLE REFERRAL:

If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the Senate Judiciary Committee.

SOURCE:

Author

SUPPORT:

California Association of Realtors

California Council for Affordable Housing (CCAH)

Habitat for Humanity California

Rural County Representatives of California

OPPOSITION:

California Environmental Justice Alliance

California League of Conservation Voters

Center for Biological Diversity

Center for Community Action and Environmental Justice

Center on Race, Poverty, and the Environment

Judicial Council of California

Physicians for Social Responsibility- Los Angeles

Sierra Club California

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