In a major shift aimed at alleviating California’s housing crisis, Gov. Gavin Newsom has signed legislation scaling back the California Environmental Quality Act (CEQA), raising hopes for faster construction of high-density housing in urban areas.

“This is going to change completely the face of how we get housing built,” said Mark Rhoades, a Berkeley-based planning consultant. He expects cities like San Francisco and Los Angeles to benefit most, as CEQA has often deterred developers due to the high cost and legal risks associated with environmental reviews.

The law, once seen as a pillar of environmental protection, has frequently been used to challenge housing projects. In San Francisco, for example, a townhouse development faced delays over concerns it would cast shadows on a nearby playground. “Practically speaking, that’s huge for project developers and also for public agencies,” said Phillip Babich, a land use and zoning attorney.

One of the key bills signed by Newsom exempts infill housing — projects on previously developed land — from CEQA, potentially clearing the way for quicker approvals in downtown neighborhoods. But critics argue the reform doesn't go far enough. “It’s a good bill that moves the ball forward a few yards,” said Jonathan M. Zasloff, a UCLA law professor, who noted that restrictive zoning laws still limit the reach of the changes.

Mary Creasman, CEO of California Environmental Voters, warned the rollback could weaken protections without solving core issues like zoning, construction costs, and interest rates. “Thinking the new laws are a silver bullet to solve our state’s housing issues — that’s just silly,” she said. She also expressed concern over losing a key avenue for public input: “There’s going to be really serious dangerous consequences.”

Jim Wunderman of the Bay Area Council, a co-sponsor of the bill, sees the changes as a step toward reversing decades of underbuilding. “We’ve really gone the wrong direction on this... We’ve got this amazing place... but we can’t build any housing to support it,” he said.

While the CEQA reforms have the potential to accelerate housing in California’s densest urban cores, industry leaders and analysts say the legislation is only one piece of a broader solution. Persistent cost pressures — including skyrocketing labor, materials, and land prices — continue to weigh on developers' ability to build affordably.

The rollback comes at a time when California faces steep housing goals. San Francisco alone must approve 82,000 new housing units by 2031. The CEQA changes may make that more feasible, especially for infill projects that could now bypass extensive reviews.

Still, without significant zoning reform and financial incentives to offset building expenses, experts say only a portion of the state’s housing backlog will be addressed. The real test of the new law’s effectiveness will come in the months ahead, as developers assess whether the reduced legal burden is enough to reignite construction in cities long plagued by bureaucratic inertia and local opposition.

Originally reported by Soumya Karlamangla in NY Times.