As published in the Salinas Valley Business Journal, September 2025
By Jeff Tuttle, Law Clerk
Noland, Hamerly, Etienne & Hoss
Recent changes to California’s environmental laws make it easier for developers to build housing projects. Two new laws effective June 20, 2025, roll back some of the requirements imposed by the California Environmental Quality Act (CEQA).
CEQA requires government agencies to review the environmental effects of certain projects and withhold approval of those projects if significant environmental effects are not mitigated. The law was intended to prevent significant, avoidable environmental damage caused by construction and other activities. Legislators have started to rethink how far its requirements should reach due to concerns about how it may be contributing to California’s housing crisis. This article outlines some of the changes implemented by the new laws:
AB 130-Multifamily Infill Housing Developments
Assembly Bill 130, passed June 30, 2025, no longer requires qualifying multifamily “infill” housing developments to undergo CEQA’s environmental review process. To qualify for the exemption, a development project site must:
- not exceed 20 acres in size;
- be located either within the boundaries of an incorporated municipality or within an urban area, as defined by the U.S. Census Bureau;
- either have been previously developed with an urban use or be located around parcels that are developed with urban uses;
Additionally, the project must also be consistent with the applicable general plan and comply with local zoning laws, as well as any applicable local coastal program.
The new law also contains provisions to protect historic sites and the interests of local Native American tribes. To qualify for the exemption, a project must not require the demolition of a historic structure that was placed on a national, state, or local historical register before the date a preliminary application was submitted for the project. Additionally, if there is a California Native American tribe that is affiliated with the project site, the local government must give that tribe notice of the potentially exempt project and allow it an opportunity to consult on the proposed project, its location, and the project’s potential effects on tribal cultural resources. A tribe wishing to give its input must notify the local government within 60 days of receiving such notice.
SB 131—Employee Housing
Among other things, Senate Bill 131 exempts from CEQA specified new agricultural employee housing projects and projects consisting exclusively of the repair or maintenance of an existing farmworker housing project. The law previously exempted projects consisting of the construction of residential housing for agricultural employees if certain requirements were met. Those provisions still exist, but SB 131 provides an additional exemption for projects that meet the requirements of the old statute and also either receive specified public funding or are owned or operated and funded by a public or nonprofit entity. The new law also provides that CEQA categorically does not apply to projects consisting exclusively of the repair or maintenance of an existing farmworker housing project, regardless of whether it satisfies the requirements that were previously in place.
Additionally, SB 131 will simplify and expediate the CEQA review process for certain housing projects that do not meet all the requirements to qualify for an exemption. If a proposed project would otherwise be exempt from CEQA pursuant to a specified exemption, but for a single condition, the new law provides that CEQA review will be limited to the effects upon the environment that are caused solely by that single condition. This will speed up the review process for such projects because rather than requiring an extensive review of the entire project, CEQA will only apply to a single part of the project.
Varying Opinions on the New Laws
Sentiment regarding the changes implemented by AB 130 and SB 131 is mixed. Proponents argue that the exemptions will encourage developers to create more housing projects to help solve California’s housing crisis. Those who support this view believe a streamlined permitting process, shorter construction timelines, and lower risk of litigation will spur housing development. Additionally, proponents say that environmental concerns associated with these projects, such as noise and air pollution, are overblown because other regulations and ordinances are already in place to protect against those things.
Detractors of these new laws are skeptical about whether CEQA was really to blame for California’s housing crisis in the first place. They identify other factors, such as high rates of unemployment and the ever-increasing cost of living, as more significant contributors to the housing problems facing California. Other critics of these new CEQA exemptions question how in-fill developments will manage to provide parking for new residents in already densely populated cities like San Francisco. Finally, environmental groups lament the possibility that rolling back CEQA requirements could harm sensitive ecosystems and make it too easy for developers to engage in activities that will pollute the environment.
Only time will tell what effect the new changes actually have on the environment and California’s housing market. As developers navigate the new laws and the courts delineate the finer points of what projects qualify for the exemptions, we will all have a clearer picture of how beneficial the new legislation will be for the state.
This article is intended to address topics of general interest and should not be construed as legal advice. © 2025 Noland, Hamerly, Etienne & Hoss
Jeff Tuttle was a summer law clerk with Noland, Hamerly, Etienne & Hoss in 2025. He is currently pursuing his Juris Doctor at Santa Clara University. Prior to law school, Jeff worked for five years as a legal assistant in NHEH’s litigation department. He has assisted as a volunteer at California Rodeo Salinas. Born and raised in Salinas, Jeff has close ties to the Salinas Valley and looks forward to returning to practice law here.
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