California’s Notorious Permitting Bottleneck Gets Major Fix‍

In a state often criticized for its anti-development barriers, real estate and construction leaders now have a rare policy shift to celebrate. Two new laws promise to reshape how quickly high-priority projects can break ground in California — potentially easing the state’s severe housing shortage and boosting local economies.

The California Environmental Quality Act (CEQA) has for decades shaped the state’s development landscape — and often slowed it to a crawl. Lengthy environmental reviews and endless lawsuits have become hallmarks of building anything from apartment complexes to community clinics. But this status quo is about to change in a big way.

In a decisive move to address the housing crisis and spur economic activity, Governor Gavin Newsom signed two landmark bills — AB 130 and SB 131 — into law on June 30. According to land use attorney William Sloan, both measures represent “the most significant overhaul of CEQA in decades,” delivering “a much needed win in California’s building landscape.”

Broad Exemption for Infill Development

‍AB 130 brings sweeping new relief for urban development. It sets up a wide exemption from CEQA for code-compliant, infill multifamily and mixed-use projects located in urban areas under 20 acres. Notably, AB 130 skips past the typical conditions attached to other exemptions: “In a dramatic departure from past rules, AB 130 does not impose affordable housing, labor or wage requirements as conditions for CEQA exemption for most projects under 85 feet in height,” Sloan writes.

Projects still must steer clear of sensitive areas like historic sites, wetlands, or hazardous waste sites. But for many developers, this single change cuts out huge delays and costly litigation.

The existing Class 32 categorical exemption was meant to ease infill approvals — but loopholes have often made it toothless. Opponents frequently weaponize the “unusual circumstances” argument to stall projects in court. AB 130 defuses that strategy: “The big win in AB 130 is that it eliminates this strategy by creating a statutory exemption, which cannot be overturned based on unusual circumstances,” Sloan notes.

This statutory approach means far greater certainty — and fewer headaches — for builders tackling California’s urgent housing needs.

Closing the Loopholes

‍The second measure, SB 131, doubles down on the pro-development push. It clarifies that “CEQA should not be used primarily for economic interests, to stifle competition, to gain competitive advantage, or to delay a project for reasons unrelated to environmental protection.” This language directly targets the tactics that have bogged down countless proposals under the guise of environmental review.

Beyond infill housing, SB 131 also expands CEQA exemptions for a wide range of projects with clear social benefits — from childcare centers and health clinics to food banks, farmworker housing, broadband networks, water systems, public parks, and advanced manufacturing sites.

Crucially, SB 131 brings new efficiency for projects that don’t quite meet the exemption test. Instead of forcing a full-blown environmental report, local agencies must only evaluate the specific impacts tied to why the exemption didn’t apply. This “streamlined CEQA review” removes a major procedural bottleneck.

Hard Deadlines Mean Real Accountability

‍Perhaps the biggest game-changer is the deadline. SB 131 now requires agencies to approve or reject a qualifying project within just 30 days. “This marks a striking departure from the often open-ended review timelines that have historically stalled development,” Sloan explains. By locking in firm timelines, lawmakers hope to ensure that CEQA’s well-intentioned safeguards don’t become roadblocks for urgent urban needs.

Together, these reforms aim to unclog a permitting process long blamed for California’s housing crisis and slow economic growth. Combined with federal updates to environmental rules, AB 130 and SB 131 are already in force — so projects waiting in the pipeline may now leap ahead, provided they haven’t cleared CEQA yet.

For developers and communities alike, that’s welcome news. Sloan concludes: “That’s one more reason for developers to cheer.”

Originally reported by William Sloan in Construction Dive.