In 2024, San Francisco built only 1,735 new homes, the lowest figure in a dozen years. This year, economic uncertainty and Trump tariff pandemonium continue to suppress construction.
It will take a miracle for SF to create a path by 2031 toward 82,000 new homes that the city would like to see. A decade’s worth of changes to state law meant to promote more housing haven’t increased production, thanks in part to the pandemic and post-pandemic economic doldrums.
Two Bay Area lawmakers at the forefront of those changes think one more could do the trick. If their effort works, it would serve as a kind of reverse Jenga move — removing a piece of a longstanding law to encourage thousands of new homes. Perhaps no city in the state would benefit more than San Francisco.
The 55-year-old California Environmental Quality Act (CEQA, pronounced “see-kwah”) requires analysis of the environmental effects of “any activity that has the potential to have a physical impact on the environment,” from a wind farm to an apartment building to a bike path, according to a 2012 legal brief by then-Attorney General Kamala Harris.
But CEQA critics like SF’s state senator Scott Wiener and his frequent Sacramento ally Assemblymember Buffy Wicks say overreach has played a huge role in the state’s housing shortage. CEQA “takes entire neighborhoods off the table” for new housing, Wicks tells The Frisc, because it allows almost anyone to lodge an appeal or file a lawsuit.
Ryan Leaderman, an LA-based attorney who represents developers untangling the CEQA process, tells The Frisc that the “tremendous uncertainty” the law imposes on developers is their No. 1 complaint. A new building could conform to every San Francisco housing rule and receive City Hall approval but still face years of delays from CEQA appeals or lawsuits. “If we’re going to make a dent in our housing crisis, we need to have serious CEQA reforms,” he says.
Wicks and Wiener are pushing parallel bills in their respective chambers. Both aim to exempt “infill” housing projects — nearly all housing in developed urban neighborhoods — from what’s often a long and expensive CEQA review. Wicks’s bill is narrowly focused on infill, which is already supposed to be exempt from CEQA review. But current exemptions are written too vaguely, according to the new legislation, and few projects can take advantage.
Wicks’s bill creates new exemptions from scratch. Wicks’s Assembly committee issued a report last month that said the biggest obstacle to resolving the housing crisis is the long, difficult permitting process in California’s major cities.
Wiener’s bill does similar work, rewriting guidelines on what does and does not have to go through environmental review. But it also extends well beyond housing to transportation, commercial, and civil infrastructure.
Critics of the legislation say it’s too broad. In March, the San Francisco Land Use Coalition and others blasted Wiener’s bill as a “monumental” bid to “gut CEQA across the board.” They acknowledge it won’t ease CEQA regulation of distribution centers and oil and gas infrastructure. But they say it otherwise “weakens CEQA” for a long list of projects including freeways, airports, office buildings, shopping malls, sports complexes, and “massive mixed-use developments on farmland, sensitive habitat, or in high wildfire danger zones.”
In committee debate last week, Wiener denied these charges, insisting such projects would still require thorough review.
When it comes to housing, CEQA would remain in effect in San Francisco and other cities, but it would be harder to apply to individual projects. Every eight years, California cities submit a new housing plan (or Housing Element) to the state. Their Housing Elements would be subject to CEQA review. But once those blueprints pass muster, new projects that abide by the rules wouldn’t have to repeat the process.
Critically, Wiener’s bill also exempts zoning changes from CEQA review, like the new zoning map that could open more than half of San Francisco to higher, denser development.
Both bills passed their first committee votes last week.
Much of CEQA’s purview is important. One area of review is seismic soundness and making sure construction won’t antagonize fault lines, for example. A lot of CEQA opposition comes from right-wing politicians and libertarian think tanks, and CEQA defenders downplay its potential for obstruction.
“Market-rate developers often push for deregulation, claiming it will spur housing production, but the reality is that market conditions — such as interest rates, construction costs, and labor availability — are the primary drivers of whether projects move forward,” says former SF supervisor John Avalos, now executive director of the Council of Community Housing Organizations, which includes SF affordable housing developers and community and tenant groups.
Some sources support Avalos’s opinion. A 2019 study commissioned by a group dedicated to CEQA use surveyed new projects in 54 California cities. Only 6 percent underwent full review, and none ranked CEQA as a major impediment to new housing. A 2013 University of Utah study concluded there was “no sign that [housing production] was weakened by the enactment of CEQA” and hailed its role in promoting “clean energy growth.”
There’s been very little study of CEQA’s housing effect otherwise. (On background, one longtime SF planner now working to loosen the rules expressed shock at the lack of hard data.) Studies or not, public opinion has coalesced around the Wiener-Wicks point of view. A 2023 Public Policy Institute poll found that nearly 60 percent of Californians surveyed wanted to rein in CEQA “as a way to make housing more affordable.”
‘Cover-your-ass exercise’
Ronald Reagan, then California governor, signed CEQA into law in 1970. It was one year after President Richard Nixon signed the Environmental Protection Act and part of a strain of Republican environmentalism that, like the California condor, would soon be nearly extinct.
The lightest CEQA scrutiny usually takes between three and six months. Project sponsors work their way through a 15-page checklist that includes greenhouse gas emissions, seismic safety, construction noise, and a project’s aesthetics. (“Would the project create a new source of substantial light or glare which would adversely affect day or nighttime views in the area?” is one question.) In the section on housing, developers must answer whether the plan “would induce substantial population growth in an area.”
Would the project create a new source of substantial light or glare which would adversely affect day or nighttime views in the area?
one question in the initial 15-page ceqa checklist
After this “Initial Study,” three or four more weeks are set aside for public review and comment. At that point, state regulators either issue a “negative declaration” — the project won’t have “significant impact” and can proceed — or they open a more intensive review. That requires an Environmental Impact Report (EIR) that can span thousands of pages and typically takes a year to complete. More complex projects can go on for years, especially if someone files an appeal or lawsuit, if they aren’t scuttled entirely.
Developers will do preemptive CEQA analysis not to safeguard health and the environment but to protect projects from lawsuits. “It becomes a cover-your-ass exercise,” YIMBY Action director Jane Natoli tells The Frisc.
The most consequential housing vote in San Francisco history might have happened on October 26, 2021. A South of Market nonprofit and its neighborhood allies appealed the Planning Department’s approval of a 500-unit building to be built on the valet parking lot of a department store. (The store has closed.) The appeal, citing seismic and gentrification concerns, went to the Board of Supervisors, which upheld it, triggering yet more scrutiny of the building’s EIR.
The vote was the last straw for state housing regulators, who singled out SF for a first-of-its-kind audit. (The project was approved one year later, but the developer has yet to break ground.)
The residential tower would have included 73 affordable apartments, plus money to build 57 more off-site. It would have been one block from major transit lines and added much-needed foot traffic to a stretch of Market Street decimated by remote work.
Other egregious SF development dramas grew out of CEQA: The “historic laundromat,” for example, or the supervisors’ 2023 rejection of a 10-unit building on Nob Hill in part over concerns about shadows on a playground next door. (SF’s Prop K, passed in 1984, requires shadow analysis when a public park is involved.)
That decision came two years after the board’s 2021 reversal of a CEQA exemption for a Whole Foods grocery, which would have filled a space left empty by a consumer electronics store in a large retail center. (Some appellants were labor unions who also cited Amazon’s ownership of Whole Foods as a sticking point.)
We shouldn’t have to run a bill every time we want to build a project.
california assemblymember buffy wicks
For some CEQA advocates, such maneuverings can provide leverage over a potentially unpopular development. “People use CEQA to block housing, including affordable housing, [but] other people also use CEQA to win affordable housing,” says Shanti Singh, coordinator for SF renters group Tenants Together. Singh says CEQA appeals empower the city and activists to demand valuable concessions from new building projects.
Other than the Stevenson St. tower, no project has spurred Wicks and Wiener’s efforts more than the University of California dormitory in Berkeley, part of Wicks’s district. Neighbors used a CEQA lawsuit to delay the 1,200-bed dorm on the site of People’s Park, arguing the students would constitute noise pollution. (The project also included 100 units for formerly homeless people.) The state Supreme Court overturned the lawsuit after state lawmakers intervened. “We shouldn’t have to run a bill every time we want to build a project,” Wicks said at the time.
Wiener has already had success with a bill that exempts transportation projects from CEQA review. SF-based urbanist think tank SPUR recently released a paper noting San Francisco has invoked the exemption more than any other California city in recent years.
If both CEQA reform bills pass, their authors say they’ll complement each other and provide extra tools for developers. There’s no plan for now to merge the bills, say Wicks and Wiener staff members. Gov. Gavin Newsom has in the past expressed support for a major CEQA overhaul.
Then again, Newsom years ago made a campaign pledge to build 3.5 million new homes on his watch, and the state hasn’t come close to that target. It’s easy to have big ideas in California. It’s harder to turn them into reality.
Update: On June 30, Governor Gavin Newsom signed a budget package that included both Wiener and Wicks’ CEQA reforms. Under the new laws, infill housing (qualified as virtually all housing projects in San Francisco) that meets all of the city’s planning and design standards cannot face a CEQA challenge unless it is located somewhere previously determined to be “environmentally sensitive or hazardous.” The package also exempts projects like parks, daycare centers, and housing for farm workers from environmental challenges under CEQA.
So what happens when we have the next big earthquake? With fewer grocery stores and drug stores in San Francisco? And a 100,000 more people than in 1989?
I love the project at Haight and Stanyan, but permanently low income? Why? Instead of using housing to entrap people into subsidized housing, allow residents (families) to buy their “condo” after some years of residence (3?) and then allow sale at market value after more years (5?) of residence without conditions. Work out the rules so that the city can be free of the rental burden one project at a time. If a struggling young family in mid-20s can sell a well kept dwelling in their mid 30s for a windfall of $800K, let’s call that a success. Let’s help people climb into the middle class.