California Overhauls CEQA, Exempting Infill Housing After 55 Years

California Governor Gavin Newsom has signed into law the most significant reforms to the California Environmental Quality Act (CEQA) in over five decades, aiming to accelerate housing development and address the state's severe affordability crisis. The landmark legislation, enacted on June 30, 2025, as part of the state budget through Assembly Bill 130 (AB 130) and Senate Bill 131 (SB 131), primarily exempts infill housing projects from lengthy environmental reviews. This move is hailed by proponents as a crucial step to streamline construction in urban areas.

AB 130 creates a broad CEQA exemption for code-compliant housing developments in already developed or urban-adjacent "infill" locations. SB 131 further expands exemptions to include childcare centers, health clinics, and advanced manufacturing facilities, among others. These reforms are designed to reduce costly delays and litigation that have historically hampered construction, particularly for urban and affordable housing projects. Governor Newsom stated, "This isn't just a budget. This is a budget that builds."

Housing advocates, including the Yes In My Backyard (YIMBY) movement, have championed these changes as a long-awaited victory. Matthew Lewis, a spokesperson for California YIMBY, expressed the sentiment of success on social media, tweeting, "> Unreal. Incredible. Ten years. And ... done." Lewis further emphasized that the legislation "codify[ies] that... these types of homes are good for the environment and therefore do not have to go through these extensive environmental processes."

The state's leadership views these reforms as essential for aligning environmental protection with climate and housing goals. By encouraging development in existing urban cores, the legislation aims to reduce sprawl, traffic congestion, and associated emissions. This approach seeks to leverage existing infrastructure and promote more sustainable growth patterns across California.

Despite widespread support from housing and business groups, the reforms have faced strong opposition. Environmental justice advocates, conservation groups, and some tribal communities criticized the legislative process, arguing it lacked transparency and public input. Critics like Jakob Evans of Sierra Club California warned that the "half-baked policy written behind closed doors will have destructive consequences for environmental justice communities."

The passage of these bills marks a significant shift in California's approach to development, ending a 55-year era where CEQA was frequently used to delay or block projects. While proponents anticipate a substantial increase in housing supply and affordability, the long-term impacts and potential challenges from ongoing opposition remain to be seen. The success of these reforms will depend on effective implementation and continued political will.