California Gov. Gavin Newsom on June 30 signed two bills into law that overhaul the state’s landmark California Environmental Quality Act (CEQA) as part of an effort to ease the housing crisis and reduce homelessness.
Newsom gave his stamp of approval to Assembly Bill 130 and SB 131, in a move his office described as “the most significant overhaul of California’s housing and environmental review laws in decades.”
CEQA, passed in 1970, requires a thorough review of proposed developments for their environmental impacts and the adoption of measures to reduce or eliminate those impacts.
Specifically, the act established a state policy of sustainability to “create and maintain conditions under which man and nature can exist in productive harmony to fulfill the social and economic requirements of present and future generations,” according to the California Attorney General’s Office.
The new laws modernize the CEQA review process for critical housing and infrastructure, the governor’s office stated. The laws were passed as part of the governor’s 2025–2026 budget.
They include a “comprehensive streamlining package” that will help reduce long-standing development barriers, create new tools to speed up production, cut costs, and improve accountability across the state, according to his office.
Newsom thanked the many housing, labor, and environmental leaders who, in addition to the legislature, helped pass the law.
According to his office, the two bills will streamline the CEQA review to speed up the delivery of housing and infrastructure projects—such as high-speed rail facilities, utilities, broadband, community-serving facilities, and wildfire prevention—while also maintaining protections for natural and sensitive lands.
The bills also exempt local government rezoning procedures from CEQA requirements.
The measures will accelerate the housing permitting and approvals process by expanding the Permit Streamlining Act and limiting certain Coastal Commission housing appeals, according to Newsom’s office. They will also make permanent key provisions of the Housing Accountability Act and Housing Crisis Act.
Newsom’s office stated that the new measures also bolster regulatory stability and help control costs by freezing new residential building standards through 2031, with exceptions for emergency, fire, and conservation-related updates.
They boost accountability and enforcement by requiring annual inspections at local homeless shelters—to be conducted by cities and counties regardless of whether complaints have been received—and authorizing the state to withhold funding from cities or counties that fail to comply, according to the governor’s office.
The measures also double the Renters Tax Credit, increasing it to up to $500 for qualified individuals, and establish the creation of a revolving fund to reinvest equity from stabilized affordable housing into new developments, Newsom’s office stated.
A homelessness crisis persists in California, despite the state spending $24 billion in taxpayer money over the past five years to address the issue.
While the bills garnered support from both sides of the political aisle, they’ve been opposed by a coalition of environmental groups, who branded SB 131 “the worst anti-environmental bill in California in recent memory” in a June 27 letter to Newsom.
“It represents an unprecedented rollback to California’s fundamental environmental and community protections at a time in which the people of California grapple with unprecedented federal attacks to their lives and livelihoods,” the letter from more than 100 organizations reads.
“This CEQA exemption is incredibly broad, includes some of the most polluting projects in California, and puts the health and safety of Californians directly at risk, especially environmental justice communities.”
The groups said the legislation “clears the way for a massive loss of habitat, an abandonment of protections for endangered species, and the inevitable decline of even healthy populations of biodiversity.”
Newsom’s office did not respond to a request for comment.
