San Francisco Chronicle - (Sunday)
Newsom, courts can force reform of CEQA law
Environmental statute’s premise that development is always riskier than the status quo makes no sense
The California Environmental Quality Act — colloquially known as CEQA — has long been considered the state’s flagship environmental law. Debate over whether CEQA deserves to retain that status, however, has grown heated in recent years. The nub of the problem is that the law’s central premise doesn’t fit the great environmental problems of our day.
CEQA’s lodestar is that development of any kind is always riskier than doing nothing.
Whether we’re talking big infrastructure, green infrastructure, shelter or even university enrollment, CEQA puts a heavy thumb on the scale in favor of maintaining the status quo. If anyone musters a “fair argument” that any physical change that a project might cause would have any locally adverse effect, then the project can’t proceed unless the sponsor undertakes an exhaustive study and mitigates all physical effects found to be “significant.” Want to build apartments downtown? Better mitigate your shadows first!
By contrast, CEQA gives public agencies a free hand to reject projects without any study of the consequences of saying no.
This paradigm would make sense if humankind inhabited an ecological Eden in which everything was perfect until we touched it. But the world we live in today requires substantial physical changes to remain habitable.
To avoid the worst of climate change, we must rapidly electrify the economy, which entails large-scale development of wind and solar farms, transmission lines and even lithium mines. To avoid catastrophic wildfires, we must set controlled burns over millions of acres annually. To provide affordable shelter — away from wildfires and from tidelands inundated by rising seas — we must build millions of new, denser homes in existing urban and suburban communities.
Energy, fires, housing: One thing these projects have in common is that they usually annoy someone who lives nearby. And thanks to CEQA, any irritated neighbor with a lawyer can tie up a project by filing suit and arguing that the government should have provided more fulsome discussions of alleged impacts or recirculated the environmental review document for additional public comment or demanded further mitigation measures. Even if the plaintiff ’s complaints are frivolous, such a lawsuit may be enough to kill or at least delay a project for years.
It is not hyperbole to suggest that CEQA has brought California to a breaking point. Almost all of the electricity infrastructure we use today was built before CEQA — and it’s not enough. On fires, the state offers funding for controlled burns but land managers often turn it down because CalFire’s putatively streamlined CEQA process is just too onerous. And on housing, CEQA is the mother of all loopholes, enabling cities to delay indefinitely the very projects that state law says they shall not deny.
It wouldn’t be hard for the Legislature to resolve CEQA’s flaws, but there’s no political will to do it. That’s because CEQA, in practice, is not just an environmental protection law. Trade unions have become experts at using the threat of CEQA litigation to extract labor agreements from developers. Time is money — literally — for project investors, and litigation and delay have become so costly that developers of high-value projects will gladly incur substantially higher labor costs to avoid it. On smaller, more financially marginal projects, however, developers can’t afford the extra labor costs or the risk of delay. And so these projects don’t get proposed at all.
Perhaps not surprisingly, the trades have defeated almost every legislative proposal to streamline CEQA review of green projects — unless the bill comes with labor requirements that raise the cost of building the very things we need the most. A couple of years ago, the Planning and Conservation League Foundation convened a group of veteran CEQA attorneys from across the ideological spectrum to develop a consensus proposal for modest procedural reforms. Even this was too much for the trades, which killed it.
Big policy transitions are normally orchestrated by the Legislature. But in the case of CEQA, a gummed-up legislative process means that Gov. Gavin Newsom and the courts have to do what they can around the edges.
The good news is that CEQA’s edges are fertile ground.
CEQA authorizes agencies under the governor’s control to issue guidelines that establish exemptions from the law and prescribe methodologies for how it should be applied. This authority has been used only gingerly in the past.
It’s time to be aggressive. Gov. Newsom should tell his team to craft clear-cut exemptions for infill and green-energy projects. They can also create maps using climate-informed criteria to incentivize development in environmentally beneficial areas.
The guidelines should also narrow CEQA review for projects on infill sites that just miss eligibility for an exemption. Environmental impact reports for such projects ought to address only the impacts that disqualified the project from the exemption, not everything under the sun. For example, infill housing projects are usually eligible for an exemption unless the project is on a contaminated site, alters historic resources or would have significant effects on air, water, noise or traffic. If an infill project on a contaminated site is otherwise eligible for the exemption, its environmental impact report should just address the contaminants, not the many scores of potential impacts that a CEQA study normally must canvass.
As for the courts, they more than any other branch of government are responsible for CEQA as we know it. The courts took a thin, ambiguously worded statute and fashioned “Big CEQA” out of it.
The question now is whether the courts will have a change of heart — and if so, what they can do about it (beyond tolerating robust guidelines updates from the governor’s team).
Recent signals are ambiguous.
The state Court of Appeal in San Francisco has twice warned that CEQA “can be manipulated to be a formidable tool of obstruction.” It recently allowed a private “malicious prosecution” lawsuit against one of the state’s premier CEQA lawyers, waiving off law professors who argued that this would chill CEQA litigation across the state. So much the better, the court seemed to say. In another case, the court sustained a trial court’s order requiring a $500,000 bond from plaintiffs who mounted frivolous CEQA challenges to an affordable housing project.
On the other hand, another panel of the same Court of Appeal just released a tentative opinion (which represents a court’s initial thinking and is subject to revision) that threatens to make Big CEQA a whole lot bigger. The opinion, which concerns UC Berkeley’s plan to expand enrollment and build more dorms, arms NIMBYs with a new set of arguments for treating disfavored classes of people as an environmental harm. The court said that students are, statistically, more likely to make noise than nonstudents, so UC Berkeley had to analyze the “noise impacts” of students whom the university’s housing and enrollment plan would bring into the area. This is a recipe for affluent homeowners to hold up — using stereotypes or statistics — any housing project that would bring a different kind of person into the neighborhood. It should make anyone who knows the racist history of land-use regulation shudder.
Paradoxically, the logic of the UC Berkeley opinion would also require environmental impact reports when cities undertake projects that improve the quality of life in a neighborhood. Want to clean the air? Gotta run the CEQA gauntlet first — like Los Angeles, where a ban on oil drilling is being CEQA-litigated by, you guessed it, an oil company. If you think this sounds topsy-turvy, you’re not alone.
Courts have long construed CEQA broadly so as to give the “fullest possible protection” to the environment. It’s time they acknowledge that more protection sometimes means less interference from the law.
For example, to give the fullest possible protection to the environment, courts should resolve ambiguities about the scope of the governor’s authority to issue guidelines to limit CEQA review of infill housing and green-energy projects.
I, for one, am fervently hoping for a judicial change of heart about CEQA — not because I think courts can fix it singlehandedly, but because courts may hold the secret key to legislative action.
By sanctioning lawyers for frivolous claims, by requiring plaintiffs challenging affordable housing to post bonds, by giving cities the benefit of the doubt in close cases, by resolving open questions of law in ways that reconcile CEQA with other important statutes (rather than subsuming everything to CEQA) and perhaps even by dismissing some claims brought for economic leverage, the courts can chip away at CEQA’s value for private economic gain.
This, in turn, should make the interest groups that have defended Big CEQA so vociferously a little more amenable to legislative compromise. It would set the stage for the branch of government that should be fixing CEQA to do its job.
Let’s get on with it.