California policy makers are seemingly getting serious about solving the state's housing crisis by passing a bevy of laws that ease restrictions on new development. But the benefits of this deregulation are often undone by environmental lawsuits, and there's evidence that the problem is getting worse.
In 2020, almost 48,000 new housing units were targeted with lawsuits, according to a new report from the law firm Holland & Knight. That's roughly 50 percent of the 110,784 annual housing units the state has built on average over the past six years.
Two-thirds of these anti-housing lawsuits filed under the California Environmental Quality Act (CEQA) allege that new residential development violates state targets on reducing greenhouse gases and vehicle miles traveled.
"CEQA has indeed become a population control (aka reduction) statute," writes the report's author Jennifer Hernandez. "California is losing people, and the people being expelled are our families, our kids and grandkids, our favorite young teacher, our most compassionate nurse, our lifeline electricians and carpenters, our first responders, and our future caregivers."
CEQA, passed in 1970, requires that governments study and mitigate the environmental impacts of new developments they have discretion over. The law also gives third parties the ability to sue governments for approving projects without allegedly studying them enough or requiring sufficient mitigation of their environmental effects.
That setup has made the law a go-to tool for anti-development Not in my Backyard (NIMBY) activists, who can hold up new projects for years with (often very flimsy) CEQA lawsuits. Despite its original purpose of protecting the environment, CEQA enables reams of litigations targeting everything from new apartments to new solar panels.
One state lawmaker described it as "the law that swallowed California." A recent law paper called it a "super-statute" that has serious implications for all other laws in the state.
Hernandez argues in the Holland & Knight report that the state's ambitious plans for achieving reductions in greenhouse gas emissions through reductions in vehicle miles traveled are leading to an increase in CEQA litigation.
The report notes that the impact of CEQA lawsuits on new housing is probably greater than the mere 47,999 that have been explicitly challenged. These legal challenges also target upzoning measures that would allow developers to propose more housing.
That's helped to keep California's housing production numbers flat over the past few years, despite the passage of nearly 80 laws aimed at boosting housing production or bringing housing costs down.
The Holland & Knight report argues that the mandates on greenhouse gas and vehicle miles traveled are also environmentally counterproductive. Rising housing costs are forcing more families to move from California, which has the lowest greenhouse gas emissions per capita, to states with far higher per capita emissions.
This is a common criticism leveled at CEQA: It requires policy makers to consider the immediate environmental impacts of a project without considering the wider state, national, or even global impacts of new development.
University of California, Davis Law School professor Christopher Elmendorf made this point to The New York Times when local NIMBYs successfully used CEQA to force U.C. Berkeley to freeze student enrollment because of the alleged environmental impacts of those young scholars.
"Someone in Berkeley — a city with great public transit, in a temperate climate with minimal heating and cooling costs — is going to have less of an environmental footprint than if they were living elsewhere in California," said Elmendorf. "But CEQA pretends that if those people weren't living in Berkeley they wouldn't be living on planet Earth, where they'll be driving or making trash or noise or starting wildfires or bulldozing habitat."
The California Legislature this week passed a bill to exempt campus housing from CEQA. This is one of many amendments and exemptions that lawmakers have passed to try and par back the breadth of the law. Last year, the state also exempted upzonings near transit from CEQA.
The Holland & Knight report makes clear that more sweeping, wholesale reform is necessary if the state wants to bring housing costs down. The only downside of that would be improving the environment as well.
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