What is the role of CEQA in California’s housing crisis?

Ongoing research suggests that CEQA is more a symptom than the cause of the problem.

This blog post was authored by Moira O’Neill, Giulia Gualco-Nelson, and Eric Biber.

Discussions about what laws and regulations might drive up housing costs continue in California. One reoccurring theme in the media is the question of whether the California Environmental Quality Act (CEQA) significantly contributes to the housing crisis in California by either driving up the cost of housing development or stopping residential development altogether. Because this is an ongoing debate that appears to influence policy, we felt it was important to study how CEQA (and other land use regulation) is applied within specific high-cost cities in California. We shared our first report on this research here this past February on the residential projects (of five or more units) entitled within Oakland, Palo Alto, Redwood City, San Francisco and San Jose between 2014 and 2016. Most recently, one of our team, Professor Eric Biber, shared additional findings related to the rate of litigation (CEQA and other litigation) of these same projects in an interview with Capital Public Radio about the role of CEQA in stopping (or delaying) residential development. To quickly summarize what we have found so far—among the 254 projects we studied, nine were litigated. Among the nine lawsuits, seven had CEQA claims.

First, we want to emphasize (again) that these findings are limited to five cities in a single region, and that our work is ongoing.  We are continuing to collect data from other jurisdictions in California, and with additional data, we may find that the results might change.

But as an initial matter, the information from these seven CEQA lawsuits suggests that local politics is a much more likely obstacle than CEQA related litigation to developing more housing in these five cities. For instance, five of the seven lawsuits we found had non-CEQA claims as well, claims that are based on zoning and planning laws developed at the local level, not state law.

One response to our recent findings has been that our research ignores the impact that the threat of CEQA-related litigation has on housing development, which some suggests stops developers from even pursuing a project or leads to long delays and reductions in project size even if a lawsuit is never filed.   This point was raised in the Capital Public Radio article, and reiterated in this blog post, both of which focused on an affordable housing development project in Redwood City that was subject to a CEQA lawsuit (which has since settled with the project proceeding basically as originally approved).  This may well be true, and it is a difficult argument to assess with available data: determining whether threats of CEQA litigation cause developers not to pursue a residential development project through empirical research presents significant methodological and practical challenges.

But we think this critique of our research misses a more fundamental point—that within these five cities CEQA litigation or threat of litigation is symptomatic of an underlying problem that delays or stops residential development, not the cause. If state level reform had eliminated the possibility of suing under CEQA, only two of the seven lawsuits would go away. This indicates that the problem within these cities is much more likely a political one that CEQA reform will do little to resolve. In fact, we understand that the Habitat for Humanity project in Redwood City that serves as a key example within this debate faced considerable political obstacles at the outset that led to reducing its size to less than half of the original proposal to secure City approval. That history suggests the debate should focus on a different question: should this 20-unit affordable housing development in Redwood City have been subject to discretionary review in the first place? (Discretionary review means local governments can make case-by-case decisions about whether to let projects proceed.)

To be clear, we are not suggesting that CEQA reform would have no impact. Instead, we are saying that our current findings suggest that it is still unclear that reforming CEQA will have the impact policymakers hope it might have on the pace and cost of residential development, including affordable housing development. And while the benefits of focusing on CEQA reform are uncertain (and unknown), there are also risks posed by curtailing environmental review.

Again, our research is ongoing, and as we collect more data, our positions on these issues might change.  That is why we are continuing this research in more cities (and different regions) throughout the state.

CEQA, housing costs, housing crisis, land-use law., Residential Development