Budget Deal’s Housing Provisions Give Counties A Big Win

California’s environmental review process just got a lot easier for counties to navigate under key provisions of the state budget deal that emerged in the final hours of negotiations. 

The changes mark the most sweeping overhaul of the California Environmental Quality Act (CEQA) since then-Gov. Ronald Reagan signed it in 1970. 

CSAC strongly supports the CEQA provisions, which are contained in two budget trailer bills: AB 130, which exempts infill housing developments from CEQA, and SB 131, which does the same for many other types of projects. 

“No longer will CEQA be leveraged to stall critical county wildfire, water and housing projects,” says CSAC President and Inyo County Supervisor Jeff Griffiths. “This legislation will make California more affordable for families by helping to alleviate our housing crisis and, in turn, reducing homelessness.” 

The Legislature passed the measures Monday and Gov. Newsom signed them shortly after, ahead of a midnight deadline. Because of a “poison pill” inserted into the budget deal Newsom reached with Democratic legislative leaders, the entire budget package would have been null and void if had the bills not been enacted Monday, 

Parts of these bills had previously been moving through the Legislature in AB 609 by Asm. Buffy Wicks and SB 607 by Sen. Scott Wiener — both CSAC-supported measures. 

Because these measures are part of the budget package, they take effect immediately. 

Into the weeds: Which projects are now exempted? 

AB 130 includes provisions that modify the California Environmental Quality Act (CEQA) process, building standards development, and create a Vehicle Miles Traveled (VMT) mitigation program. Specific aspects of this trailer bill include: 

• Elements of AB 609 (Wicks), which facilitate increased housing production for infill sites in urban areas by providing exemptions to CEQA procedures.  

• Elements of AB 306 (Rivas/Schultz), which limit state and local government ability to modify portions of state and local building standards and codes, from October 2025 through June 2031.  

• The creation of a voluntary VMT mitigation bank that allows counties to direct their required transportation VMT mitigation funding to a program that funds infill affordable housing projects and related infrastructure projects in their region.  

SB 131 reduces the complexity and costs of CEQA analysis for housing projects that meet all but one eligibility criteria for a CEQA exemption. Proponents of such a housing project will only need to study the impact it would have on that single criteria, instead of a complete analysis of all criteria as required under current law.  

Additionally, the trailer bill extends CEQA exemptions for a variety of projects that are critical to counties, including: 

• Projects to provide sewer service to a disadvantaged community served by one or more inadequate sewage treatment systems,  

• Wildfire risk reduction projects, including those that utilize prescribed fire, engage in defensible space clearance, and create fuel breaks,  

• Rezonings that are needed to implement an approved housing element under certain conditions. (The bill would still allow counties to determine if a project pursued as a result of the rezoning is exempt from CEQA.) 

• New agricultural employee housing projects and projects consisting exclusively of the repair or maintenance of an existing farmworker housing project, 

• Linear broadband projects that occur in the right-of-way of existing county roads, 

• A project to construct a federally qualified health center or a rural health clinic, 

• Most daycare center projects