What do CEQA changes mean for housing in San Diego County?

S1: Welcome in San Diego , it's Jade Hindman. On today's show , the impact of changes to Sequa. On our housing shortage. This is KPBS Midday Edition. Connecting our communities through conversation. Last week , California Governor Gavin Newsom signed into law major changes to the state's environmental protection rules. The California Environmental Quality Act , known as Sequa , has faced criticism , with some saying it's been used as a tool to block housing construction in a state that desperately needs it. Here to talk more about the reforms to Sequa and how likely they are to alleviate the housing shortage across the state , especially here in San Diego , is KPBS Metro reporter Andrew Bowen. Andrew , thanks for joining us today. Hi.

S2: Hi. My pleasure. Jade , thanks.

S1: So at a high level big picture here. What is sequa.

S2: Well , the premise of the law is fairly simple. It basically says when the government does something , it has to analyze the impacts on the environment of that thing that it's doing and , you know , disclose them to the public and study ways to mitigate those environmental impacts. And if the government or , you know , now , a private developer doesn't follow those rules , anybody can sue in order to enforce the law in court. Since this statute was passed in 1970 , the scope of the law has been expanded in many different ways , mainly by court decisions. And so what used to be a fairly straightforward process has since morphed into a very complicated one , in which agencies have to provide and prepare reports that are hundreds of pages long , that are combed through by lawyers that are often backed by powerful special interests , and the law has frankly , been used by organizations and individuals with no apparent concern for what most people would think of as the environment. So that includes labor unions who might sue to extract concessions from developers. It could also include a rival developers who sued to quash the competition. We in San Diego , we saw cannabis dispensaries filing sequa challenges to block competitors from opening up shop nearby. So this law has definitely been weaponized in ways that the original authors did not intend. And while it has certainly been credited with preserving much of California's wilderness , even supporters acknowledge that it did have unintended consequences.

S1: There are so many significant changes to this , though. This is not a complete elimination of the law. But but what changes jump out to you is being most impactful here.

S2: Well , the biggest deal here is the categorical exemption from sequa for urban infill housing. So let me back up and say transportation is the largest source of greenhouse gas emissions in California. And a lot of that comes from people driving very long distances to and from work. Climate change is also arguably the biggest threat to California's environment. So the bill essentially recognizes housing that is close to existing infrastructure that is close to jobs in public transit. Results in lower greenhouse gas emissions and is good for the environment because it means people are driving shorter distances , or perhaps not even driving at all. And , you know , there have been a lot of nonpartisan , objective analyses that have found infill housing , which is what this law really targets , reduces the amount of car travel in California , and is one of the most impactful climate policies that the state can adopt. So the biggest deal here is housing that that meets these criteria for urban infill housing is exempt from this law. And that means , you know , those projects will have a much easier time getting financed and getting actually permitted.

S1:

S2: And that's because San Diego generally prefers to clear large programs and policies from Sequa at the start , and then projects that fit in with those programs and policies are already covered by an environmental clearance under Sequa. Most infill housing in the city of San Diego , as a result , is actually not subject to sequa. And and those projects don't face the same kind of legal challenges or risks that they do in other jurisdictions that are maybe a little less proactive about Ceqa analysis. So I think in San Diego County , we'll probably see a greater impact in the suburbs where governments are less. They're more likely to analyze project by project as opposed to , you know , in big programmatic environmental impact reports. So cities like Encinitas , which has , you know , taken several votes against certain projects that provide housing in these more urban areas , could , you know , could see a big change here. Chula Vista , Oceanside , the cities in San Diego County where where there's opportunity for infill development , I think are where we're going to see the most impact.

S1: And you mentioned infill development , infill housing. What exactly is that ? And is there any kind of housing that will not be impacted by this bill. Yeah.

S2: Yeah. So infill is defined as basically a land that is surrounded by already developed land. So you know , if you're building something out in the backcountry that's far from infrastructure , where , you know , there's not services or amenities nearby that would not qualify for this , this sequa exemption. There's also a distinction in how this law exempts projects that are 85ft or less. So if a project is 85ft or less , that means it's totally exempt. There are no conditions , you know , no extra strings attached , that the project can get its sequa approval much more easily for projects that are above 85ft. Those projects require a developer to pay what's called prevailing wage , which means that the construction workers who are building that project are paid above market salaries , wages , and those are usually negotiated by unions. So it's basically a sort of , um , a acknowledgement that a lot of labor organization , you know , labor unions were were able to use Sequa to as a negotiating tactic , you know , albeit one that isn't necessarily centered on concerns around the environment. But , you know , labor , organized labor is a big power player in Sacramento. And so in order to sort of get those organizations on board , um , they crafted this , uh , you know , language that says for projects above 85ft or projects that are 100% affordable housing , the developer has to pay prevailing wages. Um , so , you know , those projects that are not infill , that are , um , you know , don't meet these criteria or don't want to pay prevailing wages would not be covered by this law. Um , one thing also I'll mention that is covered by the law is rezoning properties. So , you know , when a city , a city has to plan for adequate housing under state law , and when they adopt a plan for that housing that's required by the law , they also very often have to analyze the zoning changes. And so it's sort of like the cities are saying , well , the state is telling us. On the one hand , you have to plan for more housing. On the other hand , they're making us jump through all of these hoops in order to comply with the laws that they've given us. And so , you know , when when a city is rezoning a land in order to comply with the state housing laws , those rezonings are also exempt from sequa.

S1: Well , and , you know , these changes and reforms have been discussed for years , but now we're finally seeing some of those changes actually happen.

S2: And that's , you know , largely driven by people who are seeing the cost of housing going up and are really concerned about their whether or not they can stay in this state. Um , there have been , you know , there was a report recently that found all of the state reforms around housing. So streamlining accessory dwelling units , allowing duplexes where there were previously only single family homes could be built , requiring cities to plan for more housing than they had before. The actual impacts of those policies on actual homes delivered to the market has been fairly minimal. So , you know , the Sequa was kind of held up as one of the big untouched areas , one of those third rails that California or that Sacramento hadn't quite taken on yet. And and so I think , you know , that's a big this is certainly a big turning point. One of the big changes also was the involvement of Governor Gavin Newsom. So you know , previously he he would typically wait for a housing bill to pass the legislature before he officially endorsed it. Um , and this time he took a different approach. He he said , you know what ? These sequa Reforms are so important that I'm going to tie them to the state budget. That means if the legislature does not adopt these laws , then , you know , we're not going to have a state budget , and then lawmakers can't get paid and they have to figure out , you know , another way to pass the budget. And so , you know , he was basically took a more aggressive negotiating tactic with the legislature , which he saw as kind of dragging their feet on these changes. I would say also , you know , Gavin Newsom is widely assumed to be interested in a run for president. And , you know , he probably has an interest in his legacy on this issue , being able to go to the rest of the country and say , you know , I passed this law that led to , you know , lower housing prices in our state and we're capable of fixing these big problems , I think was , you know , a is there something there ? Um , just going back to labor unions , you know , they had previously derailed previous attempts at reforming Sequa , and this time they managed to get to a point where they were neutral. So , you know , all of these factors of just a growing consensus that there needed to be some kind of change. The governor taking a more aggressive stance. And then , you know , labor unions kind of coming on board with it at the very end , were , I think , really the big changes that led to this time actually working well.

S1: Other concerns about this is that , you know , these changes don't just affect housing construction.

S2: And those include childcare centers , health clinics , food banks , farm worker housing , water infrastructure , public parks and trails , and advanced manufacturing. So it's kind of unclear to me at this point what impact those Sequa exemptions might have. How much of a barrier Sequa has been historically to those types of things , like were there people filing Ceqa lawsuits to block a food bank or a public park or advanced manufacturing , I don't know. Water infrastructure is certainly something that can impact the natural environment , depending on what type of infrastructure it is. Even parks , you can imagine , you know , converting native vegetation into non-native landscaping or grass like those things could be environmental impacts that may now not be analyzed or disclosed. Because of this Ceqa exemption , I haven't read the exact statute language and how it deals with those particular types of development. You know whether the these Ceqa exemptions will be allowing things that people actually don't like. We can't really say it's it's going to be , you know , interesting to watch what type of development , you know , sales through the approval process and what types are still bogged down in , you know , that type of analysis that Sequa typically requires. Yeah.

S1: Yeah.

S2: You know , certainly the voices of , of in support of housing , who have been asking for these types of reforms for a long time , are claiming victory. There was a remark that Governor Gavin Newsom said in the press conference where he said , I think he said , go yimby's. You know , that stands for yes , in my backyard. So it's it's a moment , I think , when those advocates for increasing housing supply in California are taking a bit of a victory lap. Um , some folks I've also heard have been saying , hang on , you know , there's stuff in this bill that that you might not be so thrilled about. Um , and , you know , questions about these sort of last minute additions to the bill and what impacts they might have. But overall , I think , you know , there's a general consensus that this is a big deal. And we will probably see some changes in how the market actually delivers housing in California.

S1:

S2: I mean , there , you know , some folks have said Sequoia's impact on housing is is overstated. It's actually not that big a deal. Not many projects end up in lawsuits. That might be true. It's also true that even the whiff or the murmur , or the suggestion of a lawsuit can be enough to scare investors away from a project because they don't want to put their money behind something that might not actually get approved or might get stuck in lawsuits. The analysis on home construction , you know , or the impact of a law on home construction takes years. So , you know , I think it could be a while before we truly have a full picture of what the impact of these laws are. But I would say ultimately , what people care about are housing prices. You know , our housing price is going to start going down. Are we going to see , you know , a flood of new supply in the market in the areas that people want to live , you know , in the heart of cities and everything ? I think , you know , that's that's what we got to be watching for.

S1: I've been speaking with KPBS Metro reporter Andrew Bowen. Andrew , as always , thanks for joining us. Yeah.

S2: Yeah. Thank you. Jade.

S1: That's our show for today. I'm your host , Jade Hindman. Thanks for tuning in to Midday Edition. Be sure to have a great day on purpose , everyone.