Linking CEQA to California’s Housing Crisis

Holland & Knight's new study, "California Environmental Quality Act Lawsuits and California's Housing Crisis," found that litigation under the California Environmental Quality Act (CEQA) is worsening the state's housing crisis.

The study, which analyzed all CEQA lawsuits filed statewide between 2013 and 2015, revealed that housing remains the top target of such actions. It was published in the Winter 2018 edition of the Hastings Environmental Law Journal.

The new study uses the same methodology as Holland & Knight's earlier three-year study (2010-2012) of statewide CEQA litigation. All CEQA petitions must be sent to the California Attorney General's Office, and the firm was able to obtain copies under the California Public Records Act.

Housing projects were the top target of CEQA lawsuits in both studies, with an increase in the share of CEQA lawsuits shown in the new study. The study also includes a more detailed review of challenged housing projects in the Southern California region (Los Angeles, Orange, Ventura, Riverside, San Bernardino and Inyo counties):

• 14,000 housing units were challenged
• 98 percent of the challenged units were located in existing community infill locations
• 70 percent were located within a half-mile of transit services
• 78 percent were located in whiter, wealthier and healthier areas of the region

"Given California's extraordinary housing crisis and the shame inherent in having the nation's highest poverty rate in one of the world's most successful economies, our latest research clearly demonstrates the need to update CEQA's litigation rules to bring enforcement of the law into alignment with the state's environmental, equity and economic priorities," said Partner Jennifer Hernandez, the head of Holland & Knight's West Coast Land Use and Environmental Group. "CEQA is one of the well-recognized culprits in California's housing supply and affordability crisis. The need to update CEQA litigation rules to end non-environmental abuse of this important California law is stronger than ever."

According to the latest findings, the disproportionate use of CEQA to target housing, especially apartments and condominiums, not only constrains supply, it also perpetuates land use segregation by race and class. California communities have a long history of resisting higher-density housing that is affordable to workers earning lower wages, especially workers from minority groups such as African-Americans, Latinos and Asians. CEQA elevates this legacy bias to the environmental "baseline" against which new housing proposals are all assessed as "impacts" to the environmental character of these communities. Under CEQA's existing lawsuit rules, anyone can sue – anonymously and repeatedly – to challenge new housing, transit, infrastructure, public service plans and projects that change existing neighborhoods.

Additional Key Findings

• After the Great Recession, even more CEQA lawsuits target projects in existing communities, especially housing.
• Overall, the number of CEQA lawsuits aimed at infill projects in existing communities jumped 7 percentage points, to 87 percent. Lawsuits targeting greenfields fell to 12 percent of CEQA lawsuits statewide.
• The majority of challenged housing projects were structures containing multiple housing units such as apartments and condominiums, which are located in more urbanized areas in regions with higher population densities and more high-wage jobs.
• The Bay Area and Los Angeles region accounted for 58 percent of all CEQA lawsuits filed, up from 53 percent in the initial study. The study also notes that longer commutes by people forced to live greater distances from the coastal job centers with the most severe jobs-housing imbalances actually increased transportation-related air pollution and greenhouse gas emissions.
• The top category of CEQA lawsuits were those against new private-sector housing projects, which increased to 25 percent from 21 percent during the previous three-year period, even as California's housing shortage reached crisis dimensions.
• The next-largest category of CEQA lawsuit challenges were agency plans and regulations, primarily local agency plans to increase housing or improve and diversify transportation and infrastructure, accounting for 19 percent of the total.
• Rounding out the top three CEQA lawsuit targets at 15 percent were public service and infrastructure construction projects – taxpayer-funded projects that were mostly located within and designed to serve existing communities.

Suggested Reforms

The study recommends updating CEQA's lawsuit rules to help solve the housing and poverty crisis, while continuing to meet the environmental and climate policy objectives of encouraging higher density, transit-oriented communities. These reforms include:

• end anonymous CEQA lawsuits by requiring disclosure of the identity and environmental (or non-environmental) interests of those filing CEQA lawsuits
• eliminate duplicative lawsuits aimed at derailing plans and projects that have already completed the CEQA process
• expand legislative relief from CEQA lawsuit delays beyond politically favored projects such as sports arenas and instead more broadly limit the judicial remedy of vacating project approvals if a CEQA study is deficient in showing that projects actually could cause harm to the natural environment or public health