When then-Gov. Ronald Reagan signed into law the California Environmental Quality Act in 1970, he and its authors could not have foreseen what the landmark legislation would become decades later: a law stretched so far beyond its original intent that it threatens to turn the Golden State's economy to lead.
Though conceived as a limited set of rules requiring state and local agencies to identify and study the environmental impacts of their actions and to put in place measures — if feasible — to reduce those impacts, CEQA today is widely used and abused to stall and ultimately thwart public infrastructure projects and private-sector developments, often for entirely non-environmental reasons.
For instance, labor organizations use CEQA litigation to extract wage-and-work-rule agreements from private developers and public agencies. In the private sector, business interests deploy CEQA challenges to derail the projects of their competitors.
Increasingly, California's deepening housing crisis can be attributed to CEQA litigation abuse.
A 2015 report on the problem, from the Los Angeles office of Holland & Knight, an international law firm, concluded that "the largest single target of CEQA lawsuits … are residential projects" and that these projects "overwhelmingly" involve "non-polluting land uses." Abuse of the law, the report concluded, has many guises, including duplicative lawsuits that hamstring projects for years and NIMBY resistance mounted by Citizens for This or That, local groups with little or no interest in the environmental issues the law was supposed to address.
In the Santa Clarita Valley, for instance, the beleaguered Newhall Ranch planned community — a 15,000-acre, 21,500-home collection of villages first proposed in 1994 and the target of multiple CEQA lawsuits — in July won approval from the Los Angeles County Board of Supervisors to begin building the ranch's first two villages. The approval followed nearly five years of enormously expensive wrangling over a handful of earlier CEQA challenges that had wound their way up to the California Supreme Court.
In 2015, the court had decided the project needed to address carbon emissions issues, and the developer, Five Point Holdings, spent the next year modifying its plans to achieve a net-zero impact on greenhouse gases. Nevertheless, barely 30 days after the subsequent July approval, the same consortium of environmental and local advocacy groups dropped yet another CEQA lawsuit on the county, the project and Five Point. More delay.
In Montebello, a June 2015 approval for Cook Hill Properties' Montebello Hills Specific Plan — a 1,200-home planned community with a new public park, trails and more than 260 acres of preserved habitat — remains knotted up in a CEQA challenge brought by Citizens for Open and Public Participation, an unincorporated association with no apparent ties to the city other than a resident it recruited to establish legal standing.
Now parked at the 2nd District Court of Appeal, the complaint has consumed more than two years and has been the subject of motions and counter motions that to any objective observer appear to include tactics designed to delay the project.
That CEQA is being abused with impunity on these and other California housing projects is particularly troubling given the state's housing crisis. The median price for a home in the six-county Southern California region stands at $501,000, according to CoreLogic. That's 2.5 times the national median home price. The median rent for a two-bedroom apartment in California is $2,400 a month. A recent McKinsey Global Institute study found that in every one of the state's metropolitan areas, at least 30% of residents can't afford local rents.
And yet, California slips further behind in delivering new housing to meet the needs of its people. Over the last decade, California has averaged less than half the new housing units needed to match its population.
CEQA reform that faces down special interests, local agitators and organized labor is crucial for California's economic future.
First, the state could put an end to the interminable, costly legal process by disallowing serial, duplicative lawsuits challenging projects that have completed the CEQA process, have been previously litigated and have fulfilled any mitigation orders. It can also require all entities that file CEQA lawsuits to fully disclose their identities and their environmental or, increasingly, non-environmental interest.
California law already sets goals of wrapping up CEQA lawsuits — including appeals — in nine months, but other court rules still leave room for procedural gamesmanship that push CEQA proceedings past a year and beyond. Without harming the ability of all sides to prepare their cases, those delaying tactics could be outlawed.
Now judges can toss out an entire project based on a few deficiencies in environmental impact report. Restraints can be added to the law to make "fix-it ticket" remedies the norm, not the exception.
Finally, the losing party in most California civil actions pays the tab for court costs and attorney's fees, but that's not always the case with CEQA lawsuits. Those who bring CEQA actions shouldn't be allowed to skip out of court if they lose without having to pick up the tab of the prevailing party.
California's economy can ill afford the loss of businesses and the continued erosion of its middle class because of an artificially constrained housing supply. CEQA reform is the first and perhaps most important step in reversing that course.
Byron de Arakal is vice chairman of the Costa Mesa Planning Commission. He worked as a communications consultant on the Montebello Hills Specific Plan from 2007 through 2016.