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A vacant lot located just south of the West Oakland BART station has remained unused for several years, surrounded by abandoned RVs and vehicles. This site was originally designated for a housing project featuring a 222-unit high-rise, of which 16 apartments were intended for low-income renters. However, following the planning commission’s approval, a coalition of trade unions utilized the California Environmental Quality Act (CEQA) to challenge the decision, requiring further investigations into potential soil contamination. This appeal process significantly delayed the project, potentially extending the timeline by months.
Developer Scott Cooper reported that the unions proposed to withdraw their appeal if he agreed to hire union subcontractors, which would increase the project’s labor costs. Notably, he rejected this offer. Ultimately, after a lengthy ten-month appeal, Cooper emerged victorious, but by then, rising interest rates had rendered the project financially unfeasible. “They killed it,” he lamented, noting that the project should have been completed by now.
Established in 1970, CEQA was intended to ensure that any environmental impacts of development projects were thoroughly assessed and addressed. Over the years, however, critics argue that it has morphed into a powerful obstacle, enabling almost any interested party to file suits or appeals that stall essential public infrastructure and housing initiatives, even those aligned with environmental objectives.
In California, around 200 CEQA-related lawsuits are filed annually, with a significant portion targeting housing developments. This figure does not account for preliminary challenges, like the one faced by the West Oakland project, which can unsparingly prolong progress through extensive additional studies and bureaucratic processes.
While there have been recent legislative attempts to amend CEQA—most notably exemptions for specific affordable housing projects—this year could see the most comprehensive reforms yet. A proposed bill by Assemblymember Buffy Wicks aims to exempt most housing built within existing neighborhoods from environmental review requirements. Simultaneously, Senator Scott Wiener has introduced SB 607, which seeks to raise the threshold for appealing environmental reviews.
Wicks stated, “It has been politically difficult to reform CEQA significantly due to the interests that want to maintain the status quo. The current situation makes building in California excessively challenging.” Both Wicks and Wiener sense an opportunity for reform that may not have previously existed.
As the November elections approach, some Democratic lawmakers perceive a pressing need to showcase their ability to effect change. California faces a staggering shortfall of 2 million housing units, and legislators acknowledge that a failure to act may have political repercussions.
However, the potential overhaul of CEQA could alienate crucial allies within the party, particularly trade unions and environmental advocates who have historically defended the law. Jennifer Ganetta, legal director for Communities for a Better Environment, cautioned against neglecting the benefits CEQA has provided: “Projects built under the guidance of CEQA are often better for the environment.”
Trade unions, in particular, are hesitant about reforms, frequently leveraging CEQA to negotiate better terms with developers. Consequently, most CEQA exemption bills that have passed included provisions requiring developers to employ union labor or offer higher wages with benefits, which developers argue substantially inflate their project costs. A report by YIMBY Law reveals that few developers have taken advantage of these exemptions.
In the case of Cooper’s West Oakland venture, union labor requirements would have added approximately $10 million to the total cost. “In the midst of a housing crisis, shouldn’t we focus on constructing as much affordable housing as possible at the lowest cost?” Cooper questioned.
Conversely, union representatives argue that reforms should not compromise labor standards. John Dalrymple, associated with a coalition of Bay Area unions, asserted that the quality of projects has improved through union involvement, and that no projects have been halted due to their interventions.
The legislative landscape regarding CEQA reform is set for intense negotiations, particularly over Wicks’ proposal, which currently omits a prevailing wage requirement—a significant point of contention among unions. Given their substantial influence in California’s Legislature, trade unions are expected to lobby effectively for stronger labor provisions.
The past two election cycles have seen the State Building and Construction Trades Council and its affiliates contributing over $24 million to federal and state candidates, including $8 million to legislative campaigns last cycle—more than any other interest group.
This legislative season has also witnessed an unprecedented turnover, with more new members joining the California Legislature than in the last decade. Wicks, who was recently appointed as chair of the Assembly Appropriations Committee, is perceived as more independent and less reliant on union funding, having received only 8% of her campaign contributions from unions compared to 25% for other Democratic lawmakers in Bay Area districts.
The unions have not publicly expressed their position on either Wicks’ or Wiener’s proposed bills. However, legislators are keen to engage them in discussions, ensuring they feel included in the reform process. Wiener acknowledged the unions as significant stakeholders and affirmed that they will remain part of the conversation.
Beyond union interests, Wicks and Wiener are also facing backlash from local control advocates and environmentalists, who assert that proposed reforms may restrict community voices in the environmental review process, potentially leading to less comprehensible assessments of project impacts. Stuart Flashman, an attorney representing various environmental groups, highlighted the valuable aspects of CEQA that prevent it from becoming too onerous.
The push for reform may culminate in a version of the CEQA exemption bill laden with provisions meant to appease various interest groups. Developer attorney Robert Selna expressed skepticism, asserting that merely tweaking CEQA will not resolve California’s pressing housing crisis. “You can adjust the edges, but meaningful reform to CEQA is essential for addressing the housing shortage,” he declared.
Source
phys.org