This panel discussion at Yimby Action Headquarters in SF included Jennifer Hernandez, a lawyer at Holland and Knight and expert on the California Environmental Quality Act, Annie Fryman, legislative aide to State Senator Scott Wiener, and was moderated by Laura Foote, Executive Director of Yimby Action
While initially passed in 1970 to protect Californian green space from clear-cutting and communities from highway building, CEQA lawsuits have become a tool for labor unions, wealthy NIMBYs, and reluctant communities to block or delay infill projects, particularly housing from being built. Any reform effort must address concerns from labor groups, municipalities, and environmental groups.
What is CEQA?
The California Environmental Quality Act (CEQA) is one of the oldest environmental laws on the books: it was passed in 1970 and predates the Clean Water, Clean Air, and Endangered Species Acts. The law was a reaction to massive amounts of clear-cutting and highway building.
CEQA requires state and municipal governments to consider all the environmental consequences of a project at the discretionary review stage, the point when a city council has the ability to approve or deny a project. The project developer is required to provide an Environmental Impact Report (EIR) outlining the environmental harms created by their project, mitigation strategies they are adopting, and consider environmentally-friendly alternatives. An approving government must ultimately provide a set of "overriding reasons" for harms that have not been addressed.
Compliance with CEQA is only enforced by the courts, so there is a maze of different case law that interprets what constitutes "environmental harm": there are around 1000 published cases interpreting the statute. Jennifer told us that in one case, a three-judge panel of Republican justices concluded CEQA protected views of public spaces, even from parking lots or from the height of children. Anyone can bring a lawsuit under CEQA, challenging a project's EIR and claiming some environmental harm has not been addressed. These lawsuits can also be brought anonymously and any number of times.
As a result, it is difficult for a project developer to insure themselves against a CEQA lawsuit, though they try their best. EIRs run to hundreds of pages in order to cover as much breadth as possible, but forty-three percent of EIRs fail in court. Even without litigation, preparing EIRs can cost millions of dollars. In the event of a litigation loss, the most common remedy is to cancel the entire project because the project's financing can be lost.
What sorts of projects are targeted by CEQA lawsuits?
According to a Holland and Knight report written by Jennifer, from 2013 to 2015, 87% of CEQA lawsuits were filed against infill projects, compared to 13% against greenfield projects. In her analysis, CEQA is being used to prevent building in urban landscapes, rather than protecting wilderness or open space. The three most targeted project types were housing (25%), agency plans and regulations (19%), and public infrastructure (15%).
Many of the projects challenged under CEQA are the ones that would bring environmental benefit. Lawsuits have been filed against bike lane projects despite their obvious environmental benefit through a reduction in car travel. In Los Angeles county, "Seventy percent of the challenged housing units—10,188 housing units—were located within the transit priority areas and high-quality transit corridors where the state’s climate and related environmental policies say we should be building most housing." It's also seldom used to protect communities of color and other frontline communities. The California Environmental Protection Agency mapped out environmentally disadvantaged communities "based on metrics that include higher poverty and unemployment rates, lower educational attainment levels, higher populations of non-English speakers, higher rates of asthma and other health conditions associated with pollution, and more nearby sources of pollution such as freeways and contaminated factories." But Holland and Knight found that 78% of challenged housing in Los Angeles was outside of these community boundaries. Jennifer said one helpful rubric for thinking about whether a CEQA challenge might befall a project is: "Are there wealthy people you can piss off?" She mentioned a southern California group called Golden State Environmental Justice. Developers must pay them $300,000, or they will file a lawsuit under CEQA. Thousands of professionals, whether lawyers, activists, or consultants, make their living on CEQA.
CEQA is an avenue for Labor Unions and Municipalities to Negotiate with Developers
Nonetheless, for many communities and constituencies, CEQA is the only tool available to discover its potential community impacts and ask for mitigation measures. Many cities do not have a process for calculating the impact of a project on parks, schools, or infrastructure other than under CEQA and the EIR process. Furthermore, since CEQA lawsuits can take many forms, it provides lots of gray area for cities and project opponents to justify opposing a project and amending it. Without CEQA, Annie said, municipalities would have to be far more explicit about what qualifies and what does not through their municipal codes.
Organized labor often challenges projects under CEQA because its the only way they can force negotiation with developers. In one example, a union used it to prevent a Walmart from being built because they were not planning to use organized labor. Annie even said that organized labor is the unstated gatekeeper on CEQA reform.
Possible reform idea 1: Streamlining
EIRs must be filed, and can be challenged, both when a zoning change occurs and when a project is proposed that accords with that zoning. One potential idea for reform is to limit it to just the zoning phase, which would bring California in line with every other state. One potential objection from organized labor to this is that when zoning changes are made, governments cannot require a certain labor arrangement from private labor. While unions argue they would like to maintain the ability to challenge projects on an individual basis, reformers argue that neither developers nor labor should have to negotiate on a project by project basis.
One path forward, then, might be the deal being negotiated between the major trade unions and developers: labor would be guaranteed above median wage plus benefits and apprenticeship support for single-family homes and smaller apartments, and in exchange, unions would be less likely to challenge a project under CEQA.
Possible reform idea 2: Do Environmental Review at the Zoning stage
Another path forward would be State Senator Skinner's proposed SB 330. It would severely limit local jurisdiction's ability to deny, delay, or reduce in density projects that complied with their general plan or zoning. It therefore partially neutralizes the threat of project denial beyond the zoning stage.
Hernandez, Jennifer. IN THE NAME OF THE ENVIRONMENT: The Sequel. Holland & Knight, 2018. link.
Dillon, Liam. "California construction workers, builders are near deal that could mean a flood of new building". LA Times. https://www.latimes.com/politics/la-pol-ca-union-developer-housing-deal-20190128-story.html