California reformed CEQA, a 50-year-old environmental law often used to block housing projects. Governor Newsom exempted certain infill residential projects from costly reviews. San Francisco could see more housing supply as it revises zoning rules, though construction costs and interest rates remain obstacles.
California just drastically overhauled a controversial law that has hindered housing development for decades. California Environmental Quality Act was passed over 50 years ago with the goal of protecting the environment through land use regulation and protocols. The law became a tool to delay and block numerous projects across the state, in particular large residential developments, which has contributed to our housing crisis in California. But in June, Governor Newsom signed a law overhauling CEQA, exempting certain infill residential projects that otherwise comply with zoning regulations as well as certain commercial projects from the costly and timely environmental review process under CEQA. This is especially impactful in San Francisco, which is in the process of overhauling its residential zoning rules, which could alleviate housing pressure in the city by getting more supply. Of course, regulation is just one piece of the puzzle. We're still grappling with extremely high and rising construction costs as well as high interest rates. So there are definitely a lot of other factors, some we can't control, that are contributing to the lack of building in California, but it's definitely a step in the right direction. Let me know what you what you think in the comments and follow me for more Bay Area real estate.
