One year later: Are California’s housing reforms working?

The path to ruin is paved with good intentions. That statement could not be more true when it comes to housing and environmental review. Environmental review standards for construction sprang up in the 1970s. At the time, California’s Environmental Quality Act was a beacon of responsible and environmentally sound development. In recent years, environmental reviews have become lengthy roadblocks to developing much-needed housing. Opponents of new or affordable housing in their neighborhood, the NIMBY crowd, have leveraged environmental review processes to delay, stall and raise the cost of new development.

In an effort to rein in the burden of environmental review standards, Gov. Gavin Newsom signed major CEQA reforms in June 2025. A year later, how is the program doing?

The 2025 CEQA reforms are captured in Assembly Bill 130 and Senate Bill 131. These two bills create 10 new exemptions. Exempted projects do not have to go through full environmental reviews, thus reducing the time and money required to build. These exemptions include urban infill housing, childcare centers, clean water infrastructure, broadband, climate adaptation projects, sections of high-speed rail, some advanced manufacturing for policy priorities like electric vehicle development, health clinics, and other specific developments.

The urban infill exemptions apply to developments in dense areas that meet local zoning, density and planning standards. So long as these developments are not located on uniquely sensitive or hazardous sites, they may move forward without the environmental review or associated public comment process. This exemption takes away a massive barrier to development, CEQA lawsuits.

According to a Holland & Knight study on CEQA from 2013 to 2023, nearly two-thirds of projects challenged under the act were infill housing developments. Residential projects represented the largest category of appeals. The projects necessary to make housing affordable are the very projects bogged down in CEQA litigation. By removing these projects from environmental review, they are no longer subject to CEQA lawsuits.

Fewer lawsuits and more construction in 2025.

From 2013 to 2023, the appellate court averaged 45 CEQA-related decisions per year. In 2025, the court only published 8 such opinions. While the CEQA reforms are still very new and housing projects are on multiyear timelines, this statistic already suggests a sea change in litigation related to infill housing development.

While single-family development still lagged due to high interest rates and labor shortages, multifamily developments saw major booms in the months following CEQA reforms. During the six-month period ending in Feb. 2026, multifamily new construction starts were up 74.5% compared to a year earlier.

Despite these early positive trends, some housing proponents in California do not think the CEQA reforms went far enough. Proposition 45 is on the ballot this November and aims to double down on CEQA’s rollback.

Proposition 45 is a doubling down on deregulation.

Prop 45, sponsored by the California Chamber of Commerce, sets specific deadlines for completing environmental review and for resolving lawsuits related to essential projects that are not otherwise exempted under previous reforms. Prop 45 would apply to certain projects within the following categories: housing, water systems, clean energy projects, health facilities, fire and law enforcement stations, wildfire risk reduction projects, broadband projects, educational facilities and transportation projects.

Prop 45 adds to previous CEQA reforms by implementing hard deadlines on the review process. CEQA already has statutory timelines, but they can be extended. Prop 45 makes these deadlines strict. For example, Prop 45 would require agencies to determine whether an application is complete within 30 days of filing, and would limit how much additional information can be requested once an application is deemed complete. This prevents unexpected delays during the process, but would tie the hands of agencies that may need follow up information they did not anticipate. Prop 45 would also limit how many alternatives project designs or medication strategies must be proposed, but applicants can elect to propose more alternatives if they so choose.

Prop 45 would also set fixed public review periods. Neither the agency nor the applicant would be permitted to extend these public review periods, which range from 20 to 45 days depending on the documents included. Only a court would be permitted to extend the public review period.

In terms of judicial review, lawsuits against projects must be filed within 30 days of the public notice regarding its eligibility under the proposition. The trial and appellate process would have to be completed within 270 calendar days. The proposition would also limit the scope of judicial review. If a court finds a violation, it could only stop the affected part of the project while the issue is being corrected.

While initial CEQA reforms passed by a wide margin of support, Prop45 goes much further and is facing more resistance, even from pro-housing groups.

Early trends show that Newsom’s CEQA reforms have increased new housing starts and cut down on lengthy and costly litigation. This November we will find out if Californians believe this deregulation went far enough, or whether they want even more.