The Limits of Implementation for BACA

Potential practical limits on the scope of the initiative to rewrite CEQA

I’ve done a lot of analysis of the potential scope of the Cal Chamber initiative on the ballot this fall to fundamentally rework CEQA.  However, I also want to highlight a range of constraints that I think will limit the practical impact of the initiative.  In doing so, I do not want to minimize the substantial changes the initiative likely will have, both to the law and on the ground.  But legal changes will not always have practical impacts and there are key components of the initiative that will limit its practical impact.

The first, and perhaps most important, is the labor union and pay requirements for eligible projects.  Other than housing projects, the initiative requires compliance with union-equivalent pay rates for projects to be eligible.  That cost is significantly higher than standard labor rates.  (See these two recent studies that find cost differences in the 20-30% range in the context of housing.)  For the projects covered by the initiative that are already primarily done by the public sector, where union-equivalent pay rates are already mandatory, this won’t make much of a difference.  The cost reductions from lower CEQA compliance might, on the margin, facilitate more of those projects.  But for projects not covered by those requirements – for instance private-sector projects that might otherwise be eligible for the initiative – the labor costs from these requirements will offset to at least some extent any savings from CEQA.

Note that this analysis does not apply to housing projects, which are generally exempt from these labor requirements.  Here, the CEQA savings would not be offset by higher labor costs.

Second are local government planning and zoning rules.  In general, development projects in California require approval by local governments pursuant to their zoning ordinances.  And those zoning ordinances must in turn be consistent with the local government’s general plan – and all local governments in California are required under state law to have a general plan.  But, as I noted elsewhere, BACA appears to only apply to specific projects.  A local government that seeks to revise its general plan as a whole, or its zoning plan as a whole (or even for a large area to the extent it is not connected to a specific project) would still go through the old CEQA system.  BACA does not exempt covered projects from those zoning and planning rules, so long as they are in place at the time the project is proposed.  And changing general plans for specific projects is constrained under state law – local governments can only do this a maximum of four times.

The result is that where local governments have general plans and zoning rules that tightly constrain development, BACA will likely have limited impact.  Even if the local government wanted to rezone for a specific project (which would be covered by the new CEQA process under BACA), it would be constrained in how often it can amend its general plan.  That constraint likely binds more tightly in larger jurisdictions that have more projects (think the City of Los Angeles).  (One possibility is whether proponents will band together to propose “omnibus” general plan amendments that cover multiple projects eligible for BACA.  It will be an interesting question of statutory interpretation whether that works.)

Importantly, there is wide variation across California in terms of how binding general plans and zoning rules are – as Chris Elmendorf has noted, some local governments (such as exurban and rural counties) have general plans that allow a wide range of development.  Rezoning for a specific project under these plans would proceed under the new CEQA process under BACA, and thus be exempt from most environmental review.  Here planning would be much less of constraint.

Third is the extent of public control over project approvals separate from CEQA.  General plan amendments and rezones are a subset of this category – but here I am thinking about the construction of major public works projects like reservoirs and freeways that are covered by the initiative but would not occur without funding and explicit authorization by the state legislature and/or major state agencies.

Here I think the main impact of BACA will be to reduce (to some extent) the effective veto that litigation under CEQA posed to those projects that had succeeded in getting elected official support.  This change will matter, but I would not overstate it.  In many ways, I think of the veto that litigation under CEQA provided as a symptom, rather than a cause, of broader public resistance to major public works projects.  Without CEQA litigation, I think that resistance will use other channels, many of which already exist, such as lobbying, ballot initiatives, and litigation under other legal tools.  (For instance, a study we did found that a majority of CEQA lawsuits challenging housing projects in major California cities also challenged the projects for failure to comply with local zoning and planning rules.)  Those approaches may (or may not) be less effective than CEQA lawsuits, but they will not go away.  As an example, consider the multi-front resistance to the Delta conveyance tunnels – a proposal to create a large water diversion from the Sacramento River to southern California that bypasses the California Delta, and so avoids the environmental issues in the Delta.  That project is beset by lots of resistance above and beyond CEQA lawsuits – and interestingly, BACA explicitly excludes the Delta tunnels from coverage under the initiative.

BACA, CEQA, land-use law., planning