The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and 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 that effect.

Existing law, until January 1, 2025, exempts from CEQA residential or mixed-use housing projects, as defined, located in unincorporated areas of a county meeting certain requirements, except for residential or mixed-use housing projects if certain conditions exist, as specified. Existing law requires a lead agency, if the lead agency determines that a residential or mixed-use housing project qualifies for this exemption from CEQA and determines to approve or carry out the project, to file a notice of exemption with the Office of Planning and Research and the county clerk in the county in which the project is located.

This bill would extend the operation of that exemption until January 1, 2032. By extending the requirement on a lead agency to determine the applicability of the exemption and to file a notice of exemption with the office and the county clerk, this bill would impose a state-mandated local program. The bill would also make this exemption inapplicable to a residential or mixed-use housing project that may cause substantial adverse impact to tribal cultural resources, as defined.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and 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 that effect.

Existing law, until January 1, 2025, exempts from CEQA residential or mixed-use housing projects, as defined, located in unincorporated areas of a county meeting certain requirements, except for residential or mixed-use housing projects if certain conditions exist, as specified. Existing law requires a lead agency, if the lead agency determines that a residential or mixed-use housing project qualifies for this exemption from CEQA and determines to approve or carry out the project, to file a notice of exemption with the Office of Planning and Research and the county clerk in the county in which the project is located.

This bill would extend the operation of that exemption until January 1, 2032. By extending the requirement on a lead agency to determine the applicability of the exemption and to file a notice of exemption with the office and the county clerk, this bill would impose a state-mandated local program. The bill would also make this exemption inapplicable to a residential or mixed-use housing project that may cause substantial adverse impact to tribal cultural resources, as defined.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and 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 that effect.

Existing law, until January 1, 2025, exempts from CEQA residential or mixed-use housing projects, as defined, located in unincorporated areas of a county meeting certain requirements, except for residential or mixed-use housing projects if certain conditions exist, as specified. Existing law requires a lead agency, if the lead agency determines that a residential or mixed-use housing project qualifies for this exemption from CEQA and determines to approve or carry out the project, to file a notice of exemption with the Office of Planning and Research and the county clerk in the county in which the project is located.

This bill would extend the operation of that exemption until January 1, 2035. 2032. By also extending the requirement on a lead agency to determine the applicability of the exemption and to file a notice of exemption with the office and the county clerk, this bill would impose a state-mandated local program. The bill would also make this exemption inapplicable to a residential or mixed-use housing project that may cause substantial adverse impact to tribal cultural resources, as defined.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and 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 that effect.

Existing law, until January 1, 2025, exempts from CEQA residential or mixed-use housing projects, as defined, located in unincorporated areas of a county meeting certain requirements. requirements, except for residential or mixed-use housing projects if certain conditions exist, as specified. Existing law requires a lead agency, if the lead agency determines that a residential or mixed-use housing project qualifies for this exemption from CEQA and determines to approve or carry out the project, to file a notice of exemption with the Office of Planning and Research and the county clerk in the county in which the project is located.

This bill would extend the operation of that exemption indefinitely. until January 1, 2035. By also extending indefinitely the requirement on a lead agency to determine the applicability of the exemption and to file a notice of exemption with the office and the county clerk, this bill would impose a state-mandated local program. The bill would also make this exemption inapplicable to a residential or mixed-use housing project that may cause substantial adverse impact to tribal cultural resources, as defined.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, establishes an integrated waste management program. Existing law prohibits a person from establishing or expanding a solid waste facility in a county after a countywide or regional agency integrated waste management plan has been approved unless the solid waste facility meets specified criteria. Existing law requires a person or agency proposing to establish a solid waste facility to prepare and submit a site identification and description of the proposed facility to a specified county task force convened to assist in coordinating the development of city source reduction and recycling elements. Existing law requires the task force to meet and comment on the proposed solid waste facility, as provided.

This bill would make a nonsubstantive change to the provision requiring the task force to comment on a proposed solid waste facility.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2199

Author:(Berman)

As Amended Ver:June 6, 2024

Majority vote

SUMMARY

Extends the January 1, 2025 sunset on the California Environmental Quality Act (CEQA) exemption for multi-family residential and mixed-use housing projects on infill sites in unincorporated areas until January 1, 2032, and excludes projects that may cause a substantial adverse impact to tribal cultural resources.

Senate Amendments

Revise the sunset from 2035 to 2032.

COMMENTS

CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA Guidelines, for a wide range of residential projects. Since 1978, CEQA has included statutory exemptions for housing. There are now at least 15 distinct CEQA exemptions for housing projects. The majority of residential projects are approved via exemption or negative declaration under CEQA, or through ministerial permits where CEQA does not apply.

Section 15332 of the CEQA Guidelines was adopted in the 1990s. Its stated purpose is to promote infill development within urbanized areas. The exemption consists of environmentally benign infill projects which are consistent with local general plan and zoning requirements. This exemption is not intended to be applied to projects which would result in any significant traffic, noise, air quality, or water quality effects. The Section 15332 is well-known and widely used for infill housing projects in cities. Application of this exemption, as all categorical exemptions, is limited by the exceptions described in Section 15300.2 of the CEQA Guidelines.

This bill is modeled on Section 15332, but applies in Census-designated urbanized areas and urban clusters, which is much broader than the definition of urbanized area in CEQA and includes unincorporated areas around cities as small as 2,500 population. While the bill expands the geographic scope of the of the long-standing categorical exemption, it limits projects that may qualify to multi-family projects of at least six units at a density at least equivalent to the surrounding area, and no less than six units per acre. According to State Clearinghouse data provided by the author, the exemption established by AB 1804 (Berman), Chapter 670, Statutes of 2018, has been used for nine projects, ranging from 10 to 98 units, for a total of 378 units.

According to the Author

CEQA provides a categorical exemption for infill development projects only in cities. As counties have urbanized, it made sense to utilize an exemption to promote infill development in counties as well. Existing law, until January 1, 2025, provides a statutory CEQA exemption for infill residential and mixed-use housing projects occurring within an unincorporated area of a county. This infill housing exemption incorporated the same narrow conditions as the categorical exemption for projects in cities, as well as provided further limitations to promote infill while preventing sprawl.

As California continues to face a housing crisis, infill development is critical to accommodating housing needs in our communities, including in our counties. By removing the sunset date, AB 2199 would continue this existing tool to promote residential and mixed-use housing projects within urbanized areas in our counties and, as a result, help address California's housing crisis without adversely impacting the environment.

Arguments in Support

According to the Rural County Representatives of California (RCRC), AB 2199 will provide both rural and non-rural counties with continued CEQA relief for infill housing projects, will help fuel economic growth, and provide counties with more flexibility to address the state's significant housing shortfall.

According to the Association of Environmental Professionals (AEP), (this) exemption is one that has been relatively widely used, is easy to understand by practitioners, and ensures the project will not result in any significant effects relating to traffic, air quality, or water quality. For these reasons, AEP believes it is prudent and appropriate for the provisions from AB 1804 to be extended, and are pleased to support AB 2199.

Arguments in Opposition

According to CleanEarth4Kids.org, this bill would allow developers to contaminate soil and pollute the air and water in unincorporated areas. Diminished accountability with project developers and their potential mismanagement of limiting greenhouse gas emissions would lead to compromised pedestrian safety and harmful residual shadow impacts on urban playgrounds and parks used by the general public. This bill exempts entire geographic areas from common sense safety protections while putting other nearby developments in an unfair burden for environmental mitigation. AB 2199 insinuates that CEQA is in some way responsible for the current housing situation and that the environmental review process under CEQA slows economic development. This is false.

FISCAL COMMENTS

According to the Senate Appropriations Committee, negligible state costs pursuant to Senate Rule 28.8.

VOTES:

ASM NATURAL RESOURCES: 9-0-2

YES: Bryan, Flora, Friedman, Hoover, Kalra, Muratsuchi, Pellerin, Wicks, Wood

ABS, ABST OR NV: Bauer-Kahan, Mathis

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Pellerin, Ta, Villapudua

ABS, ABST OR NV: Jim Patterson

ASSEMBLY FLOOR: 63-0-17

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bennett, Berman, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Vince Fong, Friedman, Gallagher, Garcia, Gipson, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Soria, Ta, Valencia, Villapudua, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Bains, Bauer-Kahan, Boerner, Cervantes, Megan Dahle, Flora, Gabriel, Grayson, Haney, Low, Mathis, Stephanie Nguyen, Petrie-Norris, Luz Rivas, Schiavo, Ting, Wallis

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

UPDATED

VERSION: June 6, 2024

CONSULTANT: Lawrence Lingbloom / NAT. RES. / (916) 319-2092 FN: 0004348

 THIRD READING  

Bill No: AB 2199

Author: Berman (D)

Amended: 6/6/24 in Senate

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 6/5/24

AYES: Gonzalez, Dahle, Hurtado, Laird, Menjivar, Nguyen, Skinner

SENATE HOUSING COMMITTEE: 10-0, 6/24/24

AYES: Skinner, Ochoa Bogh, Blakespear, Caballero, Cortese, Menjivar, Padilla, Seyarto, Umberg, Wahab

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 63-0, 5/9/24 (Consent) - See last page for vote

SUBJECT: California Environmental Quality Act: exemption: residential or mixed-use housing projects

SOURCE: Author

DIGEST:

This bill extends, until January 1, 2032, the sunset on an existing California Environmental Quality Act (CEQA) exemption for multi-family residential and mixed-use housing projects on infill sites in unincorporated areas established and makes alterations to the exemption.

ANALYSIS:

Existing law:

1. Under CEQA, a lead agency determines whether a project is exempt from CEQA, or if it must do an initial study to determine if a project will have significant effects on the environment. If a project has no effect on the environment or effects that can be mitigated, the lead agency prepares a negative declaration (ND) or mitigated ND (MND). If the project will have significant impacts, the lead agency prepares an environmental impact report (EIR) to evaluate and propose mitigation measures for any effects on the environment, including impacts or likely impacts to land, air, water, minerals, flora, fauna, ambient noise, and historic or aesthetic significance. (Public Resources Code (PRC) §§21000 et seq.)
2. Creates numerous exemptions for residential projects, including an exemption for multi-family residential and mixed-use housing projects on infill sites within cities and unincorporated areas that are within urbanized areas or urban clusters established in AB 1804 (Berman Chapter 670, Statutes of 2018). This exemption sunsets January 1, 2025. Eligibility criteria for this exemption includes:
   1. The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.
   2. The project meets density requirements.
   3. The residential portion of the project is a multifamily housing development that contains six or more residential units.
   4. The proposed development is within an unincorporated area of a county on a project site of no more than five acres substantially surrounded by qualified urban uses. 
   5. The project site has no value as a habitat for endangered, rare, or threatened species.
   6. Approval of the project would not result in any significant effects relating to transportation, noise, air quality, greenhouse gas emissions, or water quality.
   7. The site can be adequately served by all required utilities and public services.
   8. The project is located on a site that is within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.
3. The infill housing exemption created in AB 1804 (Berman Chapter 670, Statutes of 2018) does not apply to a project if any of the following conditions exist:
   1. The cumulative impact of successive projects of the same type in the same place over time is significant.
   2. There is a reasonable possibility that the project will have a significant effect on the environment due to unusual circumstances.
   3. The project may result in damage to scenic resources, including, but not limited to, trees, historic buildings, rock outcroppings, or similar resources, within a highway officially designated as a state scenic highway.
   4. The project is located on a site which is included on the “Cortese” list (i.e., hazardous waste sites).
   5. The project may cause a substantial adverse change in the significance of a historical resource.
4. AB 1804 requires a lead agency claiming the exemption to file a notice with the Office of Planning and Research and with the county clerk in the county in which the project will be located, as specified.
5. The CEQA Guidelines (Class 32 Categorical exemption) include a similar, long-standing exemption for infill development projects within cities, as follows:
   1. The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations;
   2. The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses;
   3. The project site has no value as a habitat for endangered, rare, or threatened species;
   4. Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality; and
   5. The site can be adequately served by all required utilities and public services. (CEQA Guidelines 15332)
      

This bill:

1. This bill extends, until January 1, 2032, a sunset on an existing CEQA exemption for multi-family residential and mixed-use housing projects on infill sites established by AB 1804 (Berman Chapter 670, Statutes of 2018).
2. Amends the AB 1804 (Berman Chapter 670, Statutes of 2018) CEQA exemption to specify that projects are ineligible for the exemption if they cause substantial adverse impact to tribal cultural resources.

Background

1. The A, B, C’s of CEQA. CEQA is designed to (a) make government agencies and the public aware of the environmental impacts of a proposed project, (b) ensure the public can take part in the review process, and (c) identify and implement measures to mitigate or eliminate any negative impact the project may have on the environment. CEQA is enforced by civil lawsuits that can challenge any project’s environmental review. Nonprofits, private individuals, public agencies, advocacy groups, and other organizations can all file lawsuits under CEQA.
2. CEQA exemptions. A project is exempt from CEQA if it is ministerial (i.e., it does not involve discretionary decisions), or if there is a specific statutory or categorical exemption that applies to the project. Statutory exemptions are created by the Legislature and typically apply even if a project has the potential to significantly affect the environment. In contrast, categorical exemptions, which are listed in the CEQA guidelines, generally do not apply if there are significant environmental impacts associated with the project, including if (a) there is a reasonable possibility of a significant effect on the environment due to unusual circumstances; (b) significant cumulative impacts from projects of the same type will result; or (c) the project will have impacts on a uniquely sensitive environment

There are at least 15 distinct CEQA exemptions for housing projects. These include statutory exemptions for affordable housing projects, farmworkers housing projects, and infill residential development that meet certain criteria. Residential development projects or any zoning changes consistent with a specific plan for which an EIR was certified after January 1, 1980, are also statutorily exempt from CEQA. CEQA guidelines include further categorical exemptions for housing projects, including another exemption for infill projects (Class 2 categorical exemption) and New Construction of a Small Number of Housing Units (Class 3 categorical exemption).

In addition to CEQA exemptions, there are explicit ministerial processes established for housing including SB 35 (Wiener, Chapter 366, Statutes of 2017) which created a ministerial process for certain multifamily affordable housing projects in local jurisdictions that have not met regional housing needs. SB 35 was most recently modified in 2023 with the passage of SB 423 (Wiener Chapter 778, Statutes of 2023) from 2023 to expand the ministerial process to include more projects in more areas and specifically to increase the use of the SB 35 for market-rate multifamily housing projects. Projects that are ministerial are not subject to CEQA.

A 2018 study by the California Association of Environmental Professionals finds that the majority of housing projects are CEQA-exempt or only require an ND (42% of projects). 36% of projects require MNDs, and only a small minority, 6%, of projects were subject to the full environmental review of an EIR.

1. Infill CEQA exemptions definition. The statutory exemption created in AB 1804 was modeled closely off of a long-standing categorical exemption for infill projects described and developed in the CEQA Guidelines in the 1990s (Section 15332 CEQA Guidelines: Class 32 Categorical Exemption). The Class 32 exemption consists of environmentally benign infill projects that are consistent with local general plans and zoning requirements. The Class 32 Categorical exemption does not apply in all cases: if the same type of project in the same area would have a cumulative significant impact, if there are significant effects on the environment due to unusual circumstances, if the project damages scenic resources, if the project is on a hazardous waste site identified on the “Cortese” list, or if the project does substantial harm to a historical resource, the exemption does not apply.

AB 1804 differs from the Class 32 Categorical exemption by including a much broader area for potential infill projects. AB 1804 includes infill in census-designated urbanized areas and urban clusters, which is much broader than the definition of urbanized area in the Class 32 exemption and includes unincorporated areas around cities with populations as small as 2,500. AB 1804 thus expands the geographic scope of the long-standing categorical exemption. At the same time, AB 1804 sets density criteria for projects to get this infill exemption, requiring that multi-family projects of at least six units have the same or higher density compared to the surrounding area.

Comments

1. Purpose of Bill. According to the author, “CEQA provides a categorical exemption for infill development projects only in cities. As counties have urbanized, it made sense to utilize an exemption to promote infill development in counties as well. Existing law, until January 1, 2025, provides a statutory CEQA exemption for infill residential and mixed-use housing projects occurring within an unincorporated area of a county. This infill housing exemption incorporated the same narrow conditions as the categorical exemption for projects in cities, as well as provided further limitations to promote infill while preventing sprawl. As California continues to face a housing crisis, infill development is critical to accommodating housing needs in our communities, including in our counties. By removing the sunset date, AB 2199 would continue this existing tool to promote residential and mixed-use housing projects within urbanized areas in our counties and, as a result, help address California’s housing crisis without adversely impacting the environment.”
   
2. Infill by any other name? There are numerous different CEQA streamlining provisions for infill development that use overlapping eligibility criteria and definitions of infill for different projects. The foundational definition for infill for CEQA is found in PRC Section 21061.3, which defines an infill site as a site in an urbanized area that is either completely surrounded by development that has been in place for at least 10 years or where at least 75% of the perimeter of the site adjoins a developed area and the remaining 25% have been previously developed.

This definition has been modified in statute and in the CEQA guidelines for specific CEQA streamlining measures that apply to specific projects. In 2011, the Legislature passed SB 226, which created CEQA streamlining for infill projects for residential, retail or commercial, transit station, school, or public office building using a subset of the definition of infill in PRC Section 21061.3 applied in urbanized areas. The CEQA Guidelines create a definition for residential infill projects using the infill definition in PRC Section 21061.3 but specifying that these residential projects must also be within half a mile of a major transit stop and is a site of four acres or less. The Class 32 Categorical Exemption in the CEQA guidelines uses a definition of infill from PRC Section 21061.3 but further requires projects be substantially surrounded by urban uses and that plots be less than five acres. As discussed in the Background section, AB 1804 (Berman Chapter 670, Statutes of 2018) created a CEQA exemption for residential or mixed-use housing projects that mirrors the Class 32 Categorical exemption but differs from that exemption in that it can be located in either an unincorporated area or an urbanized area or urban cluster as designated by the U.S. Census Bureau.

In a departure from modifications of the infill definition PRC Section 21061.3 for specific project types, in 2023, AB 1449 (Alvarez) created a new definition of urban infill for a CEQA exemption for affordable housing. This definition is broader than the infill definition PRC Section 21061.3 and developed with the intent of keeping vehicle miles traveled (VMTs) low. This definition of infill requires that three sides of a parcel be surrounded by urban use (instead a requirement that projects be on parcels that are 75 percent adjacent to urban areas) and defines infill projects as ones in an urbanized area or urban cluster, or projects within one-half mile walking distance to either a high-quality transit corridor or a major transit stop, in a very low vehicle travel area, or proximal (within one-half mile of a bus station or ferry terminal) or in urban areas, within two miles of a grocery store, public park, community center among other basic community facilities.

1. CEQA exemptions vs. ministerial process. This bill extends the sunset on a CEQA exemption for infill housing projects that are consistent with local plans and that do not have any unique environmental impacts. This path towards waiving CEQA review is distinct from the ministerial pathway for housing projects established in SB 35 (Wiener, Chapter 366, Statutes of 2017) and (AB 2011, Wicks, Chapter 647, Statutes of 2022) which waive CEQA review alongside all other local review, including environmental review. A CEQA exemption does not impact other environmental review requirements, but it can only be applied if local jurisdictions choose to use the exemption to advance infill housing in their jurisdictions. While this bill may not be unique in creating a path for moving a project forward without undergoing CEQA review, it does offer a different path than the by-right process currently in law.

Related/Prior Legislation

AB 1449 (Alvarez, Chapter 761, Statutes of 2023) created a CEQA exemption until January 1, 2033, for planning, funding, and development of infill affordable housing projects, as defined, that meet specified labor requirements.

SB 423 (Wiener, Chapter 778, Statutes of 2023) extended and expanded by right approval (i.e., not subject to the CEQA) for both affordable and market-rate multifamily housing projects pursuant to SB 35 (Wiener, Chapter 366, Statutes of 2017) and changed the labor criteria to allow more projects to move forward under prevailing wage requirements instead of skilled and trained workforce requirements.

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

Assembly appropriations committee writes that the fiscal effects of this bill are negligible, if any.

SUPPORT: (Verified 8/6/24)

Association of Environmental Professionals
California Apartment Association
California Housing Partnership Corporation
Junior Philanthropists Foundation
Los Angeles County
Rural County Representatives of California
Urban Counties of California

OPPOSITION: (Verified 8/6/24)

Cleanearth4kids.org

ASSEMBLY FLOOR: 63-0, 5/9/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bennett, Berman, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Vince Fong, Friedman, Gallagher, Garcia, Gipson, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Soria, Ta, Valencia, Villapudua, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Bains, Bauer-Kahan, Boerner, Cervantes, Megan Dahle, Flora, Gabriel, Grayson, Haney, Low, Mathis, Stephanie Nguyen, Petrie-Norris, Luz Rivas, Schiavo, Ting, Wallis

Prepared by: Brynn Cook / E.Q. / (916) 651-4108

8/7/24 15:18:37

**** END ****

SENATE COMMITTEE ON HOUSING

Senator Nancy Skinner, Chair

2023 - 2024 Regular

Bill No: AB 2199 Hearing Date: 6/24/2024

SUBJECT: California Environmental Quality Act: exemption: residential or mixed-use housing projects

DIGEST: This bill extends the sunset for an exemption the California Environmental Quality Act (CEQA) for multi-family residential and mixed-use housing projects on infill sites from January 1, 2025 to January 1, 2032, and exempts projects from eligibility for the exemption if they cause substantial adverse impact to tribal cultural resources, as specified.

ANALYSIS:

Existing law:

1. Requires, pursuant to CEQA, a lead agency to determine whether a project is exempt from CEQA, or if it must do an initial study to determine if a project will have significant effects on the environment. If a project has no effect on the environment or effects that can be mitigated, the lead agency prepares a negative declaration (ND) or mitigated ND (MND). If the project will have significant impacts, the lead agency prepares an environmental impact report (EIR) to evaluate and propose mitigation measures for any effects on the environment, including impacts or likely impacts to land, air, water, minerals, flora, fauna, ambient noise, and historic or aesthetic significance.
2. Creates numerous exemptions for residential projects, including an exemption for multi-family residential and mixed-use housing projects on infill sites within cities and unincorporated areas that are within urbanized areas or urban clusters established in AB 1804 (Berman, Chapter 670, Statutes of 2018). This CEQA exemption sunsets January 1, 2025.
3. Requires AB 1804 (Berman) projects to meet specified criteria, including but not limited to the following:
   1. The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.
   2. The residential portion of the project is an infill, multifamily housing development that contains six or more residential units.
   3. The project site has no value as a habitat for endangered, rare, or threatened species.
   4. Approval of the project would not result in any significant effects relating to transportation, noise, air quality, greenhouse gas emissions, or water quality, and the site can be adequately served by all required utilities and public services.
4. Provides that a project is not eligible for an AB 1804 (Berman) CEQA exemption if any of the following conditions exist:
   1. The cumulative impact of successive projects of the same type in the same place over time is significant.
   2. There is a reasonable possibility that the project will have a significant effect on the environment due to unusual circumstances.
   3. The project may result in damage to scenic resources, including, but not limited to, trees, historic buildings, rock outcroppings, or similar resources, within a highway officially designated as a state scenic highway.
   4. The project is located on a site, which is included on the “Cortese” list (i.e., hazardous waste sites).
   5. The project may cause a substantial adverse change in the significance of a historical resource.
5. Sunsets the CEQA exemption contained within AB 1804 (Berman) on January 1, 2032.

This bill:

1. This bill extends the sunset AB 1804 (Berman) projects until January 1, 2032.
2. Amends the AB 1804 (Berman) CEQA exemption to specify that projects are ineligible for the exemption if they cause substantial adverse impact to tribal cultural resources, as specified.

COMMENTS:

1. Author’s statement. “The California Environmental Quality Act (CEQA) provides a categorical exemption for infill development projects only in cities. As counties have urbanized, it made sense to utilize an exemption to promote infill development in counties as well. Existing law, until January 1, 2025, provides a statutory CEQA exemption for infill residential and mixed-use housing projects occurring within an unincorporated area of a county. This infill housing exemption incorporated the same narrow conditions as the categorical exemption for projects in cities, as well as provided further limitations to promote infill while preventing sprawl.

As California continues to face a housing crisis, infill development is critical to accommodating housing needs in our communities, including in our counties. AB 2199 would extend this existing tool until January 1, 2035 to promote residential and mixed-use housing projects within urbanized areas in our counties and, as a result, help address California’s housing crisis without adversely impacting the environment.”

1. CEQA. CEQA was enacted by the Legislature and signed into law by Governor Ronald Reagan in 1970. While it has evolved into a very complex Act over the past 53 years, at its core the basic principles of CEQA are relatively simple. It is designed to (a) make government agencies and the public aware of the environmental impacts of a proposed project, (b) ensure the public can take part in the review process, and (c) identify and implement measures to mitigate or eliminate any negative impact the project may have on the environment.

CEQA applies when a development project requires discretionary approval from a local government agency. When a local agency has the discretion to approve a development project, the agency’s CEQA evaluation begins with deciding whether an activity qualifies as a project subject to CEQA review. If the proposed activity is deemed a “project” for the purposes of CEQA review, the agency first decides whether it is exempt from compliance with CEQA under either a statutory exemption or categorical exemption.

1. CEQA exemptions. Statutory exemptions are activities the Legislature has excluded from CEQA despite potential environmental impacts, including Caltrans activities, the adoption of coastal plans and programs, as well as emergency projects. If a project is statutorily exempt, the project can be implemented without a CEQA evaluation. In addition to statutory exemptions, the Legislature specifically directed the Secretary of the California Natural Resources Agency to designate categorical exemptions from CEQA. Categorical exemptions include projects that do not have a significant impact on the environment, as deemed by the Secretary. The CEQA Guidelines set forth 33 categorical exemptions covering a wide range of projects from minor alterations of existing facilities to the construction of certain types of buildings. As with statutory exemptions, if a project is categorically exempt, no formal evaluation is required, and the project can be implemented without a CEQA evaluation.

If a project is not statutorily or categorically exempt, the agency must determine whether the project may have a significant effect on the environment through an Initial Study. The study looks at environmental considerations such as biology, greenhouse gas emissions, and air and water quality, as well as the project’s impact on traffic, noise, and public infrastructure. The study must also consider the cumulative impacts from other ongoing projects.^[1]

Most housing projects that require an approval where a local government exercises discretion must also complete CEQA review. Development opponents can appeal many of individual decisions related to the CEQA review to the planning commission and to the city council or board of supervisors. Finally, litigation over approvals is also common. The building industry points to environmental reviews and other permitting hurdles as a hindrance to housing development. They argue that the high cost of building and delays in the approval process reduce builders’ incentives to develop housing.

1. Recent land use reforms that facilitate more housing supply. A variety of causes have contributed to the lack of housing production, including: (a) restrictive zoning ordinances such as single family zoning and restrictions on development intensity, (b) local permitting processes that provide multiple avenues to stop a project, and (c) fiscal incentives associated with development decisions. Recent reforms to address these challenges have included expediting and simplifying the approval process at the pre-entitlement, entitlement, and post-entitlement phases. Clear timelines for affordable housing permitting is particularly critical as affordable developers often require between 8 and 12 different sources of funding to make an affordable housing development pencil financially, and any delays risk the loss of available public funds.
2. Infill CEQA exemptions definition. The statutory exemption created in AB 1804 was modeled closely off of a long-standing categorical exemption for infill projects (also known as a Class 32 Categorical Exemption). The Class 32 exemption consists of environmentally benign infill projects that are consistent with local general plans and zoning requirements.

AB 1804 differs from the Class 32 Categorical exemption by including a much broader area for potential infill projects, while establishing additional density requirements. AB 1804 includes a broader infill definition, which expands the geographic scope of the long-standing categorical exemption. At the same time, AB 1804 sets density criteria for projects to get this infill exemption, requiring multi-family projects of at least six units to have the same or higher density compared to the surrounding area.

1. Sunrise, sunset. This bill would extend the sunset for AB 1804 (Berman) projects until January 1, 2032. It would also specify that projects are ineligible for the exemption if they cause substantial adverse impact to tribal cultural resources.
2. Opposition. Writing on a prior version of the bill, CleanEarth4Kids.org opposes exempting multifamily residential mixed-use projects from CEQA. They are concerned about the environmental impacts of the application of the bill and reduction of public input in the development process.
3. Incoming! This bill passed out of the Senate Environmental Quality Committee on June 5 on a 7-0 vote.

Related Legislation:

AB 1804 (Berman Chapter 670, Statutes of 2018) — created a statutory exemption for infill development residential and mixed-use housing projects occurring within an unincorporated area of a county and that includes density requirements for the project specifying that the residential portion of a project must be at least six dwelling units per acre and must be a multifamily housing development that contains six or more residential units.

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

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 19, 2024.)

SUPPORT:

Urban Counties of California (UCC) (Sponsor)
American Planning Association California Chapter
Associated General Contractors of California
Association of Environmental Professionals
Bay Area Council
California Apartment Association
California Housing Partnership Corporation
California State Association of Counties
Council of Infill Builders
County of Los Angeles

OPPOSITION:

CleanEarth4Kids.org

-- END --

1. Janet Smith-Heimer et al., supra note 1, at 6. ↑

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2023 - 2024 Regular

SUBJECT: California Environmental Quality Act: exemption: residential or mixed-use housing projects

DIGEST: This bill extends, until January 1, 2035, the sunset on an existing California Environmental Quality Act (CEQA) exemption for multi-family residential and mixed-use housing projects on infill sites in unincorporated areas established and makes alterations to the exemption.

ANALYSIS:

Existing law:

1. Under CEQA, a lead agency determines whether a project is exempt from CEQA, or if it must do an initial study to determine if a project will have significant effects on the environment. If a project has no effect on the environment or effects that can be mitigated, the lead agency prepares a negative declaration (ND) or mitigated ND (MND). If the project will have significant impacts, the lead agency prepares an environmental impact report (EIR) to evaluate and propose mitigation measures for any effects on the environment, including impacts or likely impacts to land, air, water, minerals, flora, fauna, ambient noise, and historic or aesthetic significance. (Public Resources Code (PRC) §§21000 et seq.)
2. Creates numerous exemptions for residential projects, including an exemption for multi-family residential and mixed-use housing projects on infill sites within cities and unincorporated areas that are within urbanized areas or urban clusters established in AB 1804 (Berman Chapter 670, Statutes of 2018). This exemption sunsets January 1, 2025. Eligibility criteria for this exemption includes:
   1. The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.
   2. The project meets density requirements.
   3. The residential portion of the project is a multifamily housing development that contains six or more residential units.
   4. The proposed development is within an unincorporated area of a county on a project site of no more than five acres substantially surrounded by qualified urban uses. 
   5. The project site has no value as a habitat for endangered, rare, or threatened species.
   6. Approval of the project would not result in any significant effects relating to transportation, noise, air quality, greenhouse gas emissions, or water quality.
   7. The site can be adequately served by all required utilities and public services.
   8. The project is located on a site that is within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.
3. The infill housing exemption created in AB 1804 (Berman Chapter 670, Statutes of 2018) does not apply to a project if any of the following conditions exist:
   1. The cumulative impact of successive projects of the same type in the same place over time is significant.
   2. There is a reasonable possibility that the project will have a significant effect on the environment due to unusual circumstances.
   3. The project may result in damage to scenic resources, including, but not limited to, trees, historic buildings, rock outcroppings, or similar resources, within a highway officially designated as a state scenic highway.
   4. The project is located on a site which is included on the “Cortese” list (i.e., hazardous waste sites).
   5. The project may cause a substantial adverse change in the significance of a historical resource.
4. AB 1804 requires a lead agency claiming the exemption to file a notice with the Office of Planning and Research and with the county clerk in the county in which the project will be located, as specified.
5. The CEQA Guidelines (Class 32 Categorical exemption) include a similar, long-standing exemption for infill development projects within cities, as follows:
   1. The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations;
   2. The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses;
   3. The project site has no value as a habitat for endangered, rare, or threatened species;
   4. Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality; and
   5. The site can be adequately served by all required utilities and public services. (CEQA Guidelines 15332)
      

This bill:

1. This bill extends, until January 1, 2035, a sunset on an existing CEQA exemption for multi-family residential and mixed-use housing projects on infill sites established by AB 1804 (Berman Chapter 670, Statutes of 2018).
2. Amends the AB 1804 (Berman Chapter 670, Statutes of 2018) CEQA exemption to specify that projects are ineligible for the exemption if they cause substantial adverse impact to tribal cultural resources.

Background

1. The A, B, C’s of CEQA. CEQA is designed to (a) make government agencies and the public aware of the environmental impacts of a proposed project, (b) ensure the public can take part in the review process, and (c) identify and implement measures to mitigate or eliminate any negative impact the project may have on the environment. CEQA is enforced by civil lawsuits that can challenge any project’s environmental review. Nonprofits, private individuals, public agencies, advocacy groups, and other organizations can all file lawsuits under CEQA.
2. CEQA exemptions. A project is exempt from CEQA if it is ministerial (i.e., it does not involve discretionary decisions), or if there is a specific statutory or categorical exemption that applies to the project. Statutory exemptions are created by the Legislature and typically apply even if a project has the potential to significantly affect the environment. In contrast, categorical exemptions, which are listed in the CEQA guidelines, generally do not apply if there are significant environmental impacts associated with the project, including if (1) there is a reasonable possibility of a significant effect on the environment due to unusual circumstances; (2) significant cumulative impacts from projects of the same type will result; or (3) the project will have impacts on a uniquely sensitive environment

There are at least 15 distinct CEQA exemptions for housing projects. These include statutory exemptions for affordable housing projects, farmworkers housing projects, and infill residential development that meet certain criteria. Residential development projects or any zoning changes consistent with a specific plan for which an EIR was certified after January 1, 1980, are also statutorily exempt from CEQA. CEQA guidelines include further categorical exemptions for housing projects, including another exemption for infill projects (Class 2 categorical exemption) and New Construction of a Small Number of Housing Units (Class 3 categorical exemption).

In addition to CEQA exemptions, there are explicit ministerial processes established for housing including SB 35 (Wiener, Chapter 366, Statutes of 2017) which created a ministerial process for certain multifamily affordable housing projects in local jurisdictions that have not met regional housing needs. SB 35 was most recently modified in 2023 with the passage of SB 423 (Wiener Chapter 778, Statutes of 2023) from 2023 to expand the ministerial process to include more projects in more areas and specifically to increase the use of the SB 35 for market-rate multifamily housing projects. Projects that are ministerial are not subject to CEQA.

A 2018 study by the California Association of Environmental Professionals finds that the majority of housing projects are CEQA-exempt or only require an ND (42% of projects). 36% of projects require MNDs, and only a small minority, 6%, of projects were subject to the full environmental review of an EIR.

1. Infill CEQA exemptions definition. The statutory exemption created in AB 1804 was modeled closely off of a long-standing categorical exemption for infill projects described and developed in the CEQA Guidelines in the 1990s (Section 15332 CEQA Guidelines: Class 32 Categorical Exemption). The Class 32 exemption consists of environmentally benign infill projects that are consistent with local general plans and zoning requirements. The Class 32 Categorical exemption does not apply in all cases: if the same type of project in the same area would have a cumulative significant impact, if there are significant effects on the environment due to unusual circumstances, if the project damages scenic resources, if the project is on a hazardous waste site identified on the “Cortese” list, or if the project does substantial harm to a historical resource, the exemption does not apply.

AB 1804 differs from the Class 32 Categorical exemption by including a much broader area for potential infill projects. AB 1804 includes infill in census-designated urbanized areas and urban clusters, which is much broader than the definition of urbanized area in the Class 32 exemption and includes unincorporated areas around cities with populations as small as 2,500. AB 1804 thus expands the geographic scope of the long-standing categorical exemption. At the same time, AB 1804 sets density criteria for projects to get this infill exemption, requiring that multi-family projects of at least six units have the same or higher density compared to the surrounding area.

Comments

1. Purpose of Bill. According to the author, “CEQA provides a categorical exemption for infill development projects only in cities. As counties have urbanized, it made sense to utilize an exemption to promote infill development in counties as well. Existing law, until January 1, 2025, provides a statutory CEQA exemption for infill residential and mixed-use housing projects occurring within an unincorporated area of a county. This infill housing exemption incorporated the same narrow conditions as the categorical exemption for projects in cities, as well as provided further limitations to promote infill while preventing sprawl. As California continues to face a housing crisis, infill development is critical to accommodating housing needs in our communities, including in our counties. By removing the sunset date, AB 2199 would continue this existing tool to promote residential and mixed-use housing projects within urbanized areas in our counties and, as a result, help address California’s housing crisis without adversely impacting the environment.”
   
2. Infill by any other name? There are numerous different CEQA streamlining provisions for infill development that use overlapping eligibility criteria and definitions of infill for different projects. The foundational definition for infill for CEQA is found in PRC §21061.3, which defines an infill site as a site in an urbanized area that is either completely surrounded by development that has been in place for at least 10 years or where at least 75% of the perimeter of the site adjoins a developed area and the remaining 25% have been previously developed.

This definition has been modified in statute and in the CEQA guidelines for specific CEQA streamlining measures that apply to specific projects. In 2011, the Legislature passed SB 226, which created CEQA streamlining for infill projects for residential, retail or commercial, transit station, school, or public office building using a subset of the definition of infill in PRC §21061.3 applied in urbanized areas. The CEQA Guidelines create a definition for residential infill projects using the infill definition in PRC §21061.3 but specifying that these residential projects must also be within half a mile of a major transit stop and is a site of four acres or less. The Class 32 Categorical Exemption in the CEQA guidelines uses a definition of infill from PRC §21061.3 but further requires projects be substantially surrounded by urban uses and that plots be less than five acres. As discussed in the Background section, AB 1804 (Berman Chapter 670, Statutes of 2018) created a CEQA exemption for residential or mixed-use housing projects that mirrors the Class 32 Categorical exemption but differs from that exemption in that it can be located in either an unincorporated area or an urbanized area or urban cluster as designated by the U.S. Census Bureau.

In a departure from modifications of the infill definition PRC §21061.3 for specific project types, in 2023, AB 1449 (Alvarez) created a new definition of urban infill for a CEQA exemption for affordable housing. This definition is broader than the infill definition PRC§21061.3 and developed with the intent of keeping vehicle miles traveled (VMTs) low. This definition of infill requires that three sides of a parcel be surrounded by urban use (instead a requirement that projects be on parcels that are 75 percent adjacent to urban areas) and defines infill projects as ones in an urbanized area or urban cluster, or projects within one-half mile walking distance to either a high-quality transit corridor or a major transit stop, in a very low vehicle travel area, or proximal (within one-half mile of a bus station or ferry terminal) or in urban areas, within two miles of a grocery store, public park, community center among other basic community facilities.

1. CEQA exemptions vs. ministerial process. AB 2199 extends the sunset on a CEQA exemption for infill housing projects that are consistent with local plans and that do not have any unique environmental impacts. This path towards waiving CEQA review is distinct from the ministerial pathway for housing projects established in SB 35 (Wiener, Chapter 366, Statutes of 2017) and (AB 2011, Wicks, Chapter 647, Statutes of 2022) which waive CEQA review alongside all other local review, including environmental review. A CEQA exemption does not impact other environmental review requirements, but it can only be applied if local jurisdictions choose to use the exemption to advance infill housing in their jurisdictions. While AB 2199 may not be unique in creating a path for moving a project forward without undergoing CEQA review, it does offer a different path than the by-right process currently in law.
2. Sunset on Repeat. Since AB 1804 passed in 2018, it has been used nine times according to State Clearinghouse data provided by the author. The exemption established 378 new units. AB 1804 created a six-year exemption from January 1, 2018, to January 1, 2025. Given the new pathways and new exemptions available for housing and the new definition of infill introduced in AB 1449 (Alvarez), it may be most prudent to shorten the sunset to re-evaluate this exemption rather than extend it for ten years.

The author and committee may wish to shorten the sunset from January 1, 2035, to January 1, 2032, and more closely mirrors the initial six-year sunset in AB 1804.

Related/Prior Legislation

AB 1449 (Alvarez, Chapter 761, Statutes of 2023) creates a CEQA exemption until January 1, 2033, for planning, funding, and development of infill affordable housing projects, as defined, that meet specified labor requirements.

SB 423 (Wiener, Chapter 778, Statutes of 2023) extends and expands by right approval (i.e., not subject to the CEQA) for both affordable and market-rate multifamily housing projects pursuant to SB 35 (Wiener, Chapter 366, Statutes of 2017) and changes the labor criteria to allow more projects to move forward under prevailing wage requirements instead of skilled and trained workforce requirements.

AB 1804 (Berman Chapter 670, Statutes of 2018.) creates a statutory exemption for infill development residential and mixed-use housing projects occurring within an unincorporated area of a county and that includes density requirements for the project specifying that the residential portion of a project must be at least six dwelling units per acre and must be a multifamily housing development that contains six or more residential units.

SOURCE:

SUPPORT:

Junior Philanthropists Foundation
Los Angeles County
Rural County Representatives of California (RCRC)
Urban Counties of California (UCC)

OPPOSITION:

None received

Positions reflect letters received by noon one week prior to the hearing.

-- END --

Date of Hearing: May 1, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2199

Author:(Berman) – As Amended Ver:April 18, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill extends until January 1, 2035 the sunset on the California Environmental Quality Act (CEQA) exemption for multi-family residential and mixed-use housing projects on infill sites in unincorporated areas established by AB 1804 (Berman), Chapter 670, Statutes of 2018. This bill also adds an additional condition that makes a project ineligible for the CEQA exemption, namely that the project may cause a substantial adverse impact to tribal cultural resources.

FISCAL EFFECT:

Negligible, if any, state costs.

COMMENTS:

1) Purpose. According to the author:

As California continues to face a housing crisis, infill development is critical to accommodating housing needs in our communities, including in our counties. By removing the sunset date, AB 2199 would continue this existing tool to promote residential and mixed-use housing projects within urbanized areas in our counties and, as a result, help address California’s housing crisis without adversely impacting the environment.

2) Background. CEQA provides a process for evaluating the environmental effects of applicable projects undertaken or approved by public agencies. If a project is not exempt from CEQA, the lead agency prepares an initial study to determine whether the project may have a significant effect on the environment. If the initial study shows the project would not have a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that project may have a significant effect, the lead agency must prepare an environmental impact report (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, the lead agency must make certain findings. If mitigation measures are required or incorporated into a project, the lead agency must adopt a reporting or monitoring program to ensure compliance with those measures.

CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA Guidelines, for a wide range of residential projects. There are at least 15 distinct CEQA exemptions for housing projects. The majority of residential projects are approved via exemption or negative declaration under CEQA, or through ministerial permits where CEQA does not apply.

AB 1804 established a CEQA exemption for multi-family residential and mixed-use housing projects meeting specified conditions, thereby expanding an existing exemption for infill projects within cities to apply in unincorporated areas that are within the boundaries of an urbanized area or urban cluster, as designated by the U.S. Census Bureau. AB 1804 limits projects that may qualify for the exemption to multi-family projects of at least six units at a density at least equivalent to the surrounding area, and no less than six units per acre. AB 1804 includes other conditions, such as requiring that approval of the project would not result in any significant effects relating to transportation, noise, air quality, greenhouse gas emissions, or water quality. According to State Clearinghouse data provided by the author, the exemption established by AB 1804 has been used for nine projects, ranging from 10 to 98 units, for a total of 378 units.

This bill extends the current January 1, 2025, sunset date for this exemption to January 1, 2035. In addition, since the categorical exemption in AB 1804 was established, tribal cultural resources has been added to the categories of environmental factors that must be considered in CEQA review, along with a tribal consultation process to determine the existence of cultural resources. However, when a project is exempt from CEQA, there is no tribal consultation specific to the project site. Therefore, this bill adds an additional condition that makes a project ineligible for the CEQA exemption, namely that the project may cause a substantial adverse impact to tribal cultural resources, as defined.

The Urban Counties of California, the sponsor of this bill, writes:

While most Californians live within cities, counties have the same responsibilities as cities to plan to accommodate housing needs at all income levels. AB 2199 offers a regulatory incentive that counties can use to encourage growth required under the Regional Housing Needs Allocation process within infill areas, thereby supporting state and local climate, conservation, and housing production goals.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 15, 2024

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Isaac G. Bryan, Chair

ABPCA Bill Id:AB 2199 (

Author:Berman) – As Amended Ver:March 18, 2024

SUBJECT: California Environmental Quality Act: exemption: residential or mixed-use housing projects

SUMMARY: Repeals the January 1, 2025 sunset on the California Environmental Quality Act (CEQA) exemption for multi-family residential and mixed-use housing projects on infill sites in unincorporated areas established by AB 1804 (Berman), Chapter 670, Statutes of 2018, extending the exemption indefinitely.

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. (Public Resources Code (PRC) 21000 et seq.)
   
2. CEQA includes many statutory exemptions for housing projects, including AB 1804, which exempts 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, subject to the following conditions:
   1. The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.
   2. The public agency approving or carrying out the project determines, based upon substantial evidence, that the density of the residential portion of the project is not less than the greater of the following:
      1. The average density of the residential properties that adjoin, or are separated only by an improved public right-of-way from, the perimeter of the project site, if any.
      2. The average density of the residential properties within 1,500 feet of the project site.
      3. Six dwelling units per acre.
   3. The residential portion of the project is a multifamily housing development that contains six or more residential units.
   4. The proposed development occurs within an unincorporated area of a county on a project site of no more than five acres substantially surrounded by qualified urban uses.
   5. The project site has no value as habitat for endangered, rare, or threatened species.
   6. Approval of the project would not result in any significant effects relating to transportation, noise, air quality, greenhouse gas emissions, or water quality.
   7. The site can be adequately served by all required utilities and public services.
   8. The project is located on a site that is a legal parcel or parcels wholly within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.
3. The AB 1804 exemption does not apply to a project if any of the following conditions exist:
   1. The cumulative impact of successive projects of the same type in the same place over time is significant.
   2. There is a reasonable possibility that the project will have a significant effect on the environment due to unusual circumstances.
   3. The project may result in damage to scenic resources, including, but not limited to, trees, historic buildings, rock outcroppings, or similar resources, within a highway officially designated as a state scenic highway.
   4. The project is located on a site which is included on the “Cortese” list (i.e., hazardous waste sites).
   5. The project may cause a substantial adverse change in the significance of a historical resource.
4. AB 1804 requires a lead agency claiming the exemption to file a notice with the Office of Planning and Research and with the county clerk in the county in which the project will be located, as specified.
5. AB 1804 sunsets January 1, 2025.

(PRC 21159.25)

1. The CEQA Guidelines include a similar, long-standing exemption for infill development projects within cities, as follows:
   1. The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations;
   2. The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses;
   3. The project site has no value as habitat for endangered, rare, or threatened species;
   4. Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality; and,
   5. The site can be adequately served by all required utilities and public services.

(CEQA Guidelines 15332)

FISCAL EFFECT: Unknown

COMMENTS:

1. CEQA exemptions for housing. CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA Guidelines, for a wide range of residential projects. Since 1978, CEQA has included statutory exemptions for housing. There are now at least 15 distinct CEQA exemptions for housing projects. The majority of residential projects are approved via exemption or negative declaration under CEQA, or through ministerial permits where CEQA does not apply.

A few existing CEQA exemptions are specific to projects with an affordable housing fraction, the rest are available to affordable and market-rate projects alike. Each exemption includes a range of conditions, including requirements for prior planning-level review, as well as limitations on the location and characteristics of the site. These conditions are intended to guard against the approval of projects with significant environmental impacts that go undisclosed and unmitigated – endangering workers, residents and the greater environment. More recently, bills such as SB 35 (Wiener) and AB 2011 (Wicks) have established ministerial approval for housing projects, where local discretionary review, including CEQA, is replaced with construction labor requirements and exclusion of specified sensitive sites.

Section 15332 of the CEQA Guidelines was adopted in the 1990s. Its stated purpose is to promote infill development within urbanized areas. The class consists of environmentally benign infill projects which are consistent with local general plan and zoning requirements. This class is not intended to be applied to projects which would result in any significant traffic, noise, air quality, or water quality effects. The Section 15332 is well-known and widely used for infill housing projects in cities. Application of this exemption, as all categorical exemptions, is limited by the exceptions described in Section 15300.2 of the CEQA Guidelines.

This bill is modeled on Section 15332, but applies in Census-designated urbanized areas and urban clusters, which is much broader than the definition of urbanized area in CEQA and includes unincorporated areas around cities as small as 2,500 population. While the bill expands the geographic scope of the of the long-standing categorical exemption, it limits projects that may qualify to multi-family projects of at least six units at a density at least equivalent to the surrounding area, and no less than six units per acre. According to State Clearinghouse data provided by the author, the exemption established by AB 1804 has been used for nine projects, ranging from 10 to 98 units, for a total of 378 units.

1. Author’s statement:

CEQA provides a categorical exemption for infill development projects only in cities. As counties have urbanized, it made sense to utilize an exemption to promote infill development in counties as well. Existing law, until January 1, 2025, provides a statutory CEQA exemption for infill residential and mixed-use housing projects occurring within an unincorporated area of a county. This infill housing exemption incorporated the same narrow conditions as the categorical exemption for projects in cities, as well as provided further limitations to promote infill while preventing sprawl.

As California continues to face a housing crisis, infill development is critical to accommodating housing needs in our communities, including in our counties. By removing the sunset date, AB 2199 would continue this existing tool to promote residential and mixed-use housing projects within urbanized areas in our counties and, as a result, help address California’s housing crisis without adversely impacting the environment

1. Old school CEQA streamlining. Like AB 1804, this bill continues a time-tested approach to promote infill housing projects that are unlikely to have significant environmental impacts: confirm that the project is consistent with local plans and that it does not have any unique environmental impacts. While this approach has a successful track record, it only works in jurisdictions that want to plan for and approve infill housing.

The more recent genre of by-right housing bills address those jurisdictions that don’t want to use existing CEQA tools to plan for and streamline approval of housing projects. As noted above, the by-right approach eliminates all local discretionary review, including environmental review. These by-right bills attempt to avoid project environmental impacts by excluding environmentally sensitive sites. In addition, a common feature of virtually all CEQA streamlining bills since AB 1804 passed in 2018 is specific requirements governing wages and benefits for construction workers.

1. Suggested amendments. Since the categorical exemption that this bill is based on was established, tribal cultural resources has been added to the categories of environmental factors that must be considered in CEQA review, along with a tribal consultation process to determine the existence of cultural resources. However, when a project is exempt from CEQA, there is no tribal consultation specific to the project site. The author and the committee may wish to consider adding a provision requiring the lead agency to confirm no impacts to tribal cultural resources prior to applying this exemption.

In addition, the author and the committee may wish to consider extending, rather than repealing, the sunset to preserve legislative oversight.

REGISTERED SUPPORT / OPPOSITION:

Support

Association of Environmental Professionals
Rural County Representatives of California
Urban Counties of California

Opposition

None on file

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