Why this article is important: Understand the steps required for a CEQA review of a proposed project — and when a project is exempt.
The CEQA maze for new development
In 1970, the California Environmental Quality Act (CEQA) became law, but applied only to public projects. Soon, the CEQA review process was expanded to cover all types of projects and developments, public and private.
The intent of CEQA is to assist public agencies in systematically identifying both the:
- significant environmental effects of proposed projects; and
- feasible alternatives or mitigation measures available. [Calif. Public Resources Code 21002]
For developers, the intent of CEQA evolved into uncertainty of a useful permit, a reduction in profit margins and the costs of litigious delay. CEQA reviews literally add years between concept and completion of a development.
The cumulative result?
Fewer housing developments, and consequentially, damage from an increasing statewide housing shortage.
Exemptions from CEQA
Eligible housing developments now go through a fast-track approval process — including bypassing a CEQA review. Exempt projects are approved based on an administratively objective zoning and design compliance, providing the project has a minimum percentage of low-income units and complies with labor and wage law. [Calif. Government Code §65913.4]
CEQA exemptions are of two types:
- statutory (created by the legislature); and
- categorical (embedded in the CEQA regulations, e.g. when there are no significant environmental impacts anticipated by the lead agency).
Legislation now curbs CEQA abuses
CEQA has long been the method of choice from not-in-my-backyard (NIMBY) advocates who seek to derail a project through exercise of local politics. They became very successful at curbing new development to maintain the status quo in an otherwise changing population.
The reason for NIMBY success? CEQA adds a lot of time and expense — costs — to a developer’s permitting process, making new housing more costly, less profitable for builders and pricing out end users.
CEQA is used obstructively by local advocates to litigate and delay developments. In turn, developers and their bankers and investors are subjected to uncertainty of future success as any delay drives up the costs of projects, often to infeasible levels which quickly halt developments completely.
As a result, legislators in the past decade have sought to establish a uniformity for local permitting of development necessary to meet the demands of the public, not the noisy few. To this end, new legislation is continually passed to streamline CEQA review (or bypass it entirely), remove subjective review by local councils, boards and committees, and increase urban density in housing projects.
In a word, legislation is putting our underutilized lands to their highest and best use, an objective routinely targeted by NIMBYs.
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For example, a 2025 law ensures CEQA does not apply to housing projects that:
- are no more than 20 acres (or, for a builder’s remedy project, no more than five acres);
- are located within an incorporated municipality or an urban area as defined by the U.S. Census Bureau;
- have been previously developed with an urban use; or
- at least 75 percent of the perimeter adjoins urban use parcels;
- at least 75 percent of the area within a ¼ mile radius is developed as urban use; or
- for sites with four sides, at least three sides are developed with urban uses and at least two-thirds of the perimeter adjoins urban parcels;
- show substantial evidence that the housing project is consistent with the local plan and zoning ordinances (or at least one when the general plan and zoning are inconsistent);
- consist of at least 15 units per acre in a metropolitan area or at least 7.5 units per acre in an incorporated municipality in a non-metropolitan area;
- have no portion of the project for hotel use or other transient housing; and
- do not require the demolition of an historic structure. [Calif. Public Resources Code §21080.66(a)
Editor’s note — A “builder’s remedy” project is deemed compliant with local zoning regulations and general plan when the local housing element is not in compliance with California housing law. In other words, builders receive a preemptive pass to build taller, denser projects than local ordinances allow.
To qualify for CEQA avoidance, the project needs to provide housing for very-low, low- or moderate-income households at the rate of at least:
- 7% for extremely low-income households;
- 10% for very low-income households;
- 13% for low-income households; or
- 100% for moderate-income households. [Calif. Government Code §65589.5(h)(3)]
When a project bypasses CEQA review under these exceptions, the developer completes its own assessment for environmental hazards and takes necessary mitigation efforts. [P R C §21080.66(c)(1)]
Further, to qualify for the CEQA exemption, developments located within 500 feet of a freeway must include air filtration mitigation efforts, including the installation of centralized air and heat in each unit. [P R C §21080.66(c)(2)]
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Further exemptions from CEQA
Another statutory exemption from CEQA is property damaged or destroyed as a result of a disaster in a disaster-stricken area in which a state of emergency has been proclaimed. Here, the project needs to maintain, repair, restore, demolish, or replace the damaged or destroyed improvements to be exempt. [PRC § 21080(b)(3)]
Further, a project which involves the refurbishment, conversion, repurposing or replacement of an existing building and meets the following requirements does not require a CEQA review of its aesthetic impacts:
- the current building is abandoned, dilapidated or has sat vacant for more than one year;
- the building site is immediately adjacent to parcels developed with qualified urban uses;
- the project involves the construction of housing;
- any new structure doesn’t substantially exceed the height of the current structure; and
- the new structure will not create a new source of substantial light. [PRC §21081.3(a)]
However, a CEQA review for aesthetic impacts is still required for projects which meet these repurposing requirements when they impact an official state scenic highway or a historic or cultural resource. [PRC §21081.3(b)]
Further, residential projects do not require CEQA review of its transportation (noise) impacts when they are:
- located within ½ mile of a transit stop in an urban area; and
- contain 100 or fewer units with a minimum density of 20 units per acre. [PRC 21081.2(a)]
Steps for a CEQA review
1) The project developer’s first step in a CEQA review is to submit an application and supporting materials to the lead agency locally responsible for approving a project.
2) The lead agency determines whether the project qualifies for CEQA review — or is subject to a statutory exemption as noted below).
3) When the project is not exempt, the agency prepares an initial study to determine whether the project will have a potential environmental impact. At that time, the agency either:
- issues a negative declaration when no environmental impact is foreseen, a categorical exemption; or
- begins preparation of an Environmental Impact Report (EIR).
When an agency finds no substantial evidence the project will have a significant effect on the environment, the agency declares their findings and does not prepare an EIR. They file a Notice of Exemption (NOE) with the Office of Land Use and Climate Innovation as well as the local county clerk. [P R C §§21080(c); 21080.25(h)]
The NOE contains:
- a project description, including the location of the project;
- the agency’s finding that the project is exempt;
- a citation of the exemption which applies; and
- a brief statement of why the exemption applies. [Calif. Code of Regulations 15062(a)]
4) When substantial evidence indicates the project may have a significant effect on the environment, an EIR is prepared by the agency. [P R C §21080(d)]
Editor’s note — With a tip of the hat to the legislature, “public controversy” surrounding the project in and of itself does not constitute substantial evidence of the project’s potential impact on the environment. We’re looking at you, NIMBYs. [PRC 21082.2(b)]
The EIR process is detailed below, and it includes:
- scoping;
- a draft EIR;
- a public comment period; and
- a final EIR.
The final step of the CEQA process is for the lead agency to file a Notice of Determination within five business days of the approval or determination becoming final. [P R C §21152]
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The environmental impact report
The purpose of an EIR is to provide public agencies and members of the public with details about a proposed project’s likely effect on the environment. The EIR also lists ways to minimize any significant effects of the project, including alternatives to the project. [P R C §21061]
The EIR covers the project’s environmental impacts, including its potential effects on the area’s:
- land;
- air;
- water;
- minerals;
- flora;
- fauna;
- noise (typically involving the likelihood of increased traffic); and
- objects of historical or aesthetic significance. [P R C 21060.5]
When the EIR identifies mitigation measures, the agency may condition permits on the completion of the mitigation efforts. [P R C §21081.6(b)]
EIRs can be conducted on a variety of projects and plans, including (but not limited to):
- housing projects;
- commercial projects;
- mixed-use projects;
- transportation projects;
- agricultural projects;
- general and community plans;
- zoning ordinances; and
- housing elements. [PRC 21081.2(f)]
When the agency determines an EIR is necessary, the lead agency immediately sends notice by certified mail or email to each agency responsible for contributing to the EIR. [PRC §§21080.4(a); 21067]
Within 30 days of receipt of the lead agency’s notice, each agency details to the lead agency the scope and content of the environmental information to be covered in the EIR. This process is called scoping. [PRC §21080.4(a); Regs §§15082, 15083]
Next, the agency prepares a draft EIR. Or, when the developer hires a CEQA consultant, the consultant may prepare the CEQA documents, which the agency reviews.
The draft EIR is released for public comment for a minimum of 30 days but typically no longer than 60 days (unless it is a significant project, when the comment period may be extended up to 90 days). The draft EIR is posted within 24 hours of receipt in-person and on the website of the County Clerk, as well as on the state’s Office of Planning and Research website. [P R C §21152(c) Regs §15105]
Finally, the final EIR is released, which contains:
- the draft EIR;
- comments and recommendations received on the draft;
- responses from the lead agency to significant points raised during the comment and review process;
- a list of persons and agencies which commented on the draft; and
- any other information added by the lead agency. [P R C §21061; 21104; Regs §15132]
The EIR has an index or table of contents, and a summary. [P R C §21061]
The main substance of the EIR is a detailed statement of:
- the proposed project’s significant effects on the environment;
- any significant effects of the project which cannot be avoided and are irreversible;
- proposed mitigation measures to minimize the environmental effects of the proposed project, including measures to reduce energy consumption;
- alternatives to the proposed project;
- the project’s potential impact on local growth;
- the reasoning of the report’s omission of any environmental effects the EIR determines are not significant enough to include in the report (for example, an EIR will not evaluate the agriculture or forestry impacts of a project when it is located in an urbanized area); and
- any previously approved land use documents for the site. [P R C 21100]
Upon completion of the EIR, the lead agency files a Notice of Completion of EIR with the county clerk and State Office of Planning and Research. [P R C §21161]
When a project receives approval subject to mitigation measures, the agency is responsible for monitoring mitigation efforts to ensure the developer is following all agreed-to procedures. [P R C §21081.6]
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