California Eases Landmark Environmental Rules to Fast-Track Development

California has revised its long-standing environmental law, the California Environmental Quality Act (CEQA), aiming to reduce delays for housing and advanced manufacturing projects. Governor Gavin Newsom signed the rollback into law on June 30 as part of the 2025-2026 state budget.

The new rules exempt various developments from the previously required environmental reviews under CEQA. According to a post by law firm Allen Matkins, exemptions include urban infill housing, broadband and semiconductor infrastructure, high-speed rail, and wildfire mitigation efforts, among others.

CEQA, enacted in 1970, has long been a pillar of California’s environmental oversight, requiring thorough assessments of development impacts. But critics argued that the law was increasingly used to stall projects through litigation and administrative hurdles.

“This bill represents the worst anti-environmental, anti-safety and anti-public health legislation California has seen in recent memory,” said Ana Gonzalez, executive director of the Center for Community Action and Environmental Justice.

Supporters, however, say the rollbacks will streamline approvals without completely abandoning oversight. Phillip Babich, an attorney at Reed Smith in San Francisco, said that before the changes, the CEQA process could drag on for 18 months, not counting appeals or lawsuits.

“I would say that it was happening frequently enough where project developers would be discouraged in terms of moving forward with the proposal, and also public agencies would be shy at approving project applications,” Babich said.

The revised rules eliminate the need for full Environmental Impact Reports for eligible projects. However, Babich noted that a Phase One Environmental Site Assessment is still required to screen for contamination risks. “There will be a fairly thorough look at a property before the housing project qualifies for the exemptions,” he said.

Projects could now move forward in just two to three months, depending on permit backlogs.

The legislative maneuver to push the changes through tied CEQA reform to the $321 billion state budget, avoiding the kind of opposition that blocked similar efforts in 2016.

Tom Soohoo of builder Webcor said that under the old law, “we’ve seen well-conceived projects get delayed for years, driving up costs and pushing much-needed housing further out of reach for Californians.”

He added, “If the recent CEQA changes can strike that balance — ensuring that sustainability and community voices are still prioritized while reducing unnecessary delays — then we see it as a constructive step forward.”

These CEQA rollbacks arrive as California faces a worsening housing crisis and a growing need for modern infrastructure, including semiconductor fabrication and broadband expansion. The exemptions could especially benefit urban areas, where infill housing projects have been stymied by CEQA-related lawsuits.

Analysts say the reforms align with national trends toward deregulation in the face of urgent housing shortages and infrastructure modernization goals.

Still, legal challenges may emerge over how the new exemptions are applied in practice. Environmental justice groups are already preparing to contest what they describe as harmful loopholes.

Meanwhile, developers are cautiously optimistic. If the state can balance speed with safety, many believe this marks a pivotal shift in how California approaches sustainable growth.

Originally reported by Matthew Thibault in Construction Dive.