Real CEQA Reform May Have Arrived, At Least for Infill Development

For a lot of planners, the idea of an "infill exemption" to the California Environmental Quality Act has been a kind of holy grail over the past few years. CEQA is a fact of life in California and unlikely to go away. But having to run though the entire CEQA process for a project a quarter-acre infill site just as you might for a project on 5,000 acres of raw land has been more than a little frustrating for developers and planners alike. Sure, an infill project has an impact. But if getting environmental clearance is a hassle, then what's the point?

CEQA's previous infill exemption was narrow and carried a lot of conditions with it so it wasn't easy to use. But now the holy grail appears to be within grasp. SB 226 promoted heavily by Gov. Jerry Brown and signed by him earlier this fall creates the first comprehensive CEQA infill exemption. So, will this exemption do the trick? Or will CEQA continue to be used to hang up even worthwhile infill projects?

SB 226 carried by Sen. Joe Simitian, D-Palo Alto sure looks like the realization of a longtime dream. Brown, though an ardent defender of the environment, has always promoted a slightly different view of CEQA than other environmentalists. As mayor of Oakland, he pushed through a strong infill exemption that applied only to certain locations in Oakland. And even before taking office, he placed a high priority on CEQA reform for infill projects and small-scale rooftop solar. SB 226 moves the ball forward on infill and rooftop solar both.

On the infill front, SB 226 contains two important provisions.

First, it greatly limits CEQA review of infill projects under certain circumstances and those circumstances are much broader than under the previous infill exemption.

Second, it prohibits a finding of significance on greenhouse-gas emissions from overriding any categorical exemption under CEQA. Dealing with GHG emissions are part-and-parcel of CEQA analysis these days thanks in large part to the actions of Jerry Brown when he was attorney general so this is no small matter. 

SB 226 also creates a statutory exemption for rooftop solar facilities on industrial and commercial facilities and, under some circumstances, parking lots and parking garages as well.

The absence of a strong alternative CEQA process for infill development has been frustrating to planners and developers for many reasons but the main one has simply been that neighbors and other project opponents can use CEQA's many procedures to slow down or even stop a worthy infill project. NIMBYs have used the greenhouse gas issue extensively to slow projects down. Traffic is almost always an issue under CEQA, and of course an infill project is likely to have localized traffic impacts. And project alternatives may well include either sites or densities that would kill the project. 

All of these stall tactics, of course, depend on the idea that even a worthy infill project must be judged on its own merits. There is no mechanism in CEQA for determining whether the environmental impact of an infill project would be less than a project of equivalent size in some greenfield location an analysis that would almost always make the infill project look good rather than bad.

The new infill rules contained in a new Section 21094.5 of CEQA contain several provisions that should help infill projects in the CEQA process.

First, the new law says that if an infill project was covered by a programmatic environmental impact report for a General Plan Update or a Specific Plan, for example, subsequent CEQA review is limited only to (a) effects specific to the project of its site; or to (b) "substantial new information" that suggests the project's effects will be more significant than the prior EIR suggested.

Second, CEQA review would not be required at all if (a) the previous EIR did not consider the project's likely effect to be significant; or (b) the lead agency finds that development policies and standards previously adopted which apply uniformly to this project and others will substantially mitigate the impacts identified in the previous EIR.

And third, even if an EIR is required for an infill project, that EIR would not need to consider growth-inducing impacts and would not require the alternatives analysis to deal with alternative locations, densities, and building intensities.

When you add it all up, these are pretty significant changes. If you did a plan-level EIR and incorporated mitigation measures into the development standards that implement the plan, your infill project is exempt. If analysis is needed, it's limited to new information or the project's site only. And even if you have to do an EIR, you're freed up from doing two significant back-of-the-book analyses that have the potential to shoot down a project growth inducement and lower densities.

Now that the bill has been signed, the action moves to the Governor's Office of Planning & Research, which is charged in the law with revising the CEQA Guidelines to implement the infill exemption. (CEQA Guidelines are ultimately issued by the Natural Resources Agency, but OPR must write the actual Guidelines amendments.) More than in most administrations, OPR is heavily loaded with lawyers these days partly because Brown bought over an assistant from the Attorney General's Office, Ken Alex, to run OPR and partly because legalistic CEQA reform was a high priority. So it will be interesting to see whether OPR's new Guidelines actually help simplify environmental review of infill projects or whether the involvement of so many lawyers makes the infill exemption/streamlining more complicated. (Another question is how much effort OPR will put into the infill reform as opposed to the rooftop solar exemption, considering that streamlining permitting processes for renewable energy is Alex's top priority.)

And, of course, it remains to be seen whether cities and counties will actually use the truncated review in a meaningful way. As is so often the case with CEQA, that will depend on the jurisdiction's underlying philosophy toward growth. If a jurisdiction is pro-infill, this will help; if a jurisdiction is anti-growth, they'll likely find a way around this.

One thing is for sure, however: SB 226 is a lot more powerful than the previous CEQA exemption and more powerful than the exemption contained in SB 375, which exempts projects compliant with Sustainable Communities Strategies but which also must meet a laundry list of other requirements. The history of CEQA reform is more like 375 than 226 with environmental lobbyists in Sacramento circumscribing exemptions and streamlining very carefully so that they usually don't make much difference. With Jerry Brown, however, CEQA has reached its Nixon-goes-to-China moment, and the broad and simple nature of SB 226 may be far more important than the exemptions that have come before.