Fault lines surface as projects tap California's CEQA exemption law

California’s law shields many apartment and residential projects from lengthy environmental review processes to increase housing supply and affordability. Developers quickly used the new exemptions to pursue projects that previously faced delays or stoppages under the California Environmental Quality Act. The exemptions do not eliminate local opposition, because opponents can still pursue other delay tactics and obstructive strategies. California’s experience serves as a preview for other states considering similar reforms. New York lawmakers are updating the State Environmental Quality Review Act but face resistance from groups that opposed California’s changes. In La Canada Flintridge, a mixed-use project used the exemption shortly after the law took effect, while earlier legal challenges and court disputes continued to shape the project’s timeline.

"Last July, California Gov. Gavin Newsom signed a landmark law shielding apartment and residential projects from lengthy environmental review processes to boost the state's housing supply and improve affordability. It's working but not without a fight. Developers wasted no time seizing the opportunity. A growing list of housing developments are securing exemptions from reviews under the 1970 California Environmental Quality Act, which environmentalists and not-in-my-backyard groups used to stall or stop projects."

"What that does not mean, however, is that local opposition to such projects has no remaining means to ensnare them in a host of other delay tactics and obstructive gambits. California's experience offers a preview of what other states exploring similar reforms should expect. New York lawmakers are in the final stages of revamping the state's 50-year-old State Environmental Quality Review Act, but have faced stiff opposition from the same types of groups that fought the California reform."

"In La Canada Flintridge, Cedar Street Partners used the new exemption for its 600 Foothill mixed-use project as early as July 3, 2025—just three days after Newsom signed the bill—with city planning staff confirming it applied. The project had been tied up in court for several years. Its legal course began in November 2022 when Cedar Street submitted a preliminary application for an 80-unit, mixed-use project, invoking what's known as the builder's remedy—a state provision that allows developers to bypass local zoning restrictions when a city lacks a compliant housing element."

"La Canada Flintridge pushed back. In May 2023, the City Council rejected the proposal, arguing the city had come into compliance with its housing element before Cedar Street filed. Cedar Street sued that July, alleging violations of the Housing Accountability Act. The California Housing Defense Fund and Californians for Homeownership filed separate suits. Courts were not sympathetic."

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