California's housing crisis has put enormous pressure on lawmakers to strike a balance between speeding up development and preserving environmental protections. Two recent laws—SB 131 and AB 130—continue that trend, introducing changes to how the California Environmental Quality Act (CEQA) and local housing regulations interact with project approvals.
We checked in with attorneys Amara Morrison and Darien Key, who work out of Fennemore's Oakland office in our Land Use and Natural Resources practice groups, for insights to help developers understand what these laws mean in practice.
What are SB 131 and AB 130, and why were they introduced?
SB 131 and AB 130 are part of the most recent budget bills, which include housing reforms designed to cut through red tape that has slowed housing production in California. The bills add new statutory exemptions to the California Environmental Quality Act (CEQA), a state law enacted in 1970, that requires California local agencies to identify and disclose the potential environmental impacts of projects they approve, and to mitigate those impacts where feasible. Under CEQA, state law permits streamlining certain types of projects environmental reviews to limit local governments' ability to block housing that meets state criteria. In short, they're intended to make housing approvals more predictable for developers.
How do these bills change the CEQA review process for housing projects?
CEQA has long been criticized for enabling delays through litigation. AB 130 and SB 131 shorten judicial review timelines and tighten procedural rules to discourage frivolous lawsuits. AB 130 expands legally authorized exemptions and streamlining for certain infill and affordable housing projects, particularly those aligned with transit and climate goals.
While CEQA still applies to most developments, the process is now more efficient for qualifying projects.
Do these laws mean all projects are exempt from CEQA?
No. Developers still need to prepare environmental documentation in most cases. The new laws simply create fast tracks for projects that meet specific standards, such as:
- Infill housing on previously developed land
- Affordable or mixed-income projects
- Developments near public transit that reduce vehicle dependency
How do these laws affect housing regulatory requirements?
SB 131 and AB 130 dovetail with existing mandates like SB 330, SB 35, and other streamlined housing approval statutes. They reduce local governments' discretion to deny compliant projects and make it harder for cities to hide behind process delays. For developers, this means more certainty and less risk of projects dying in the entitlement phase.
How can developers benefit from these laws?
By planning strategically, developers can benefit from:
- Faster approvals and reduced CEQA exposure
- Lower carrying costs thanks to shorter timelines
- Leverage in negotiations with local jurisdictions
- Clearer legal protections if challenged in court Projects that align with state housing priorities—particularly those with affordability components—are best positioned to take advantage.
Can you outline the remaining risks and challenges?
These reforms don't eliminate opposition. Community pushback and lawsuits are still possible, especially in gray areas of the law. Local governments may also look for creative ways to push back against state authority and may continue to deny valid projects based on pressure from constituents. Developers should anticipate continued resistance, even with stronger state-level backing.
What advice can you give developers now?
- Audit your pipeline: Flag projects that qualify under SB 131 or AB 130
- Engage legal counsel early: Ensure entitlement strategies align with new rules
- Coordinate with planners: Make sure density, zoning, and affordability requirements are clearly met
- Plan for communication: Community engagement can still make or break a project
How do these laws fit into California's broader housing reform?
SB 131 and AB 130 are significant steps in a decade-long movement toward state-led housing reform. They build on SB 35, SB 330, and AB 2011 by expanding streamlining and shifting power away from local governments. For developers, the direction is clear: California is steadily prioritizing housing production over local control. Developers should watch closely for future legislation that could further compress timelines or broaden exemptions.
California's housing laws are evolving quickly, and SB 131 and AB 130 mark another step toward a more streamlined, state-driven approval process. For developers, the message is clear: align projects with state priorities, understand the new CEQA pathways, and be proactive in planning. Doing so can mean the difference between years of delay and moving projects to groundbreaking on time.
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