By: Christopher Smith, Esq ., Steven Werth, Esq. , and Katherine Meek, Esq.
On June 30, 2025, Governor Gavin Newsom signed two bills into law, AB 130 and SB 131, overhauling the California Environmental Quality Act (“CEQA”) review process for certain housing projects. These reforms take effect immediately and apply not only to new projects, but projects currently undergoing CEQA review. This alert provides an overview of key provisions of these recent changes.
AB 130: Establishes Statutory CEQA Exemption for Infill Housing Projects in Urban Areas
AB 130 creates a CEQA exemption for certain “infill” housing projects, which includes mixed-use projects where 2/3 of the square footage is designated for residential use. The housing projects can be up to 20 acres and must be located within an incorporated city or urban area. There is no affordable housing requirement. Project density must be at least 50 percent of a jurisdiction’s Mullin Density which ranges between 10 and 30 units per acre. The project site must satisfy an “urban use” requirement, either by being previously developed for “urban use,” or substantially surrounded by such sites. In other words, pursuant to AB 130, most housing projects built in already-developed areas will no longer be required to undergo environmental review under CEQA.
However, the benefits of AB 130 do not extend to certain sensitive areas, such as coastal zones, farmland, wetlands, conservation/species habitat areas, fire hazard and earthquake fault zones, hazardous waste sites, and flood areas. Nor does it permit the demolition of structures on any historic register or use for temporary lodging.
Project proponents must still complete a Phase I Environmental Site Assessment and implement mitigation measures should certain environmental conditions be identified. Projects must also conform to local zoning rules, general plan standards, and local coastal programs. Finally, projects within 500 feet of a freeway are subject to additional air filtration and air quality requirements and cannot have balconies facing a freeway.
Because AB 130 creates a statutory exemption to CEQA, if specified criteria are met, then the exemption applies with no other exceptions. For instance, there is no exception for “unusual circumstances.” AB 130 also imposes a 30-day deadline on an agency to act to approve or disapprove a qualifying project. The 30-day deadline begins following satisfactory completion of the Tribal consultation process.[1] Project- and site-specific criteria for qualifying projects under AB 130 are summarized in Table 1 below.
Table 1: Project- and Site-Specific Criteria for Qualifying Projects under AB 130
Criteria Description
Project Site Size ≤ 20 acres (or ≤ 5 acres for Builder’s Remedy Projects)
Project Location Within the boundaries of an unincorporated municipality or “urban area” as defined by the U.S. Census Bureau[2]
Urban Use Requirements Project site previously developed with “urban uses” or substantially surrounded by sites developed with urban uses
Project Density ≤ 50% of a jurisdiction’s “Mullin density” specified in Gov. Code § 65583.2(c)(3)(B) (Density Range: 10 to 30 units per acre)
Local Rules Satisfactory compliance with local zoning standards, general plan standards, and local coastal programs (subject to deviations allowed by the State Density Bonus Law as specified in Gov. Code §§ 65915-65918)
Excludes Historic Structures Project must not require the demolition of a historic structure placed on a national, state, or local historic register before submission of a preliminary project application
Excludes Temporary Lodging For project applications submitted after January 1, 2025, a project cannot be used as a hotel, motel, or bed and breakfast
SB 35 Site Eligibility Requirements Exclusion of farmland, wetlands, conservation/species habitat areas, coastal sites, fire hazard zones, hazardous waste sites, earthquake fault zones, and flood areas
Freeway Requirements Projects ≤ 500 feet of a freeway are subject to additional air filtration and air quality requirements and cannot have balconies facing a freeway
Phase I Environmental Site Assessment Projects must complete a Phase I Environmental Site Assessment and mitigate any of the environmental conditions identified
SB 131: Streamlines CEQA Review for “Near Miss” Infill Housing Projects
SB 131 simplifies the CEQA review process for “near miss” infill housing projects. The Act defines “near miss” projects as those that otherwise would not qualify for a CEQA exemption by failing to meet a single condition. For example, should an infill housing project qualify for the exemption established under AB 130 but for the demolition of a structure listed on a historic register, then SB 131 would require that the initial study or environmental impact report under CEQA evaluate only those environmental effects caused by the demolition of the historic structure. Should an environmental impact report be required, the Act does not mandate any discussion of alternatives to the project or growth-inducing impacts of the project in the report. Rezonings consistent with the housing element of a local government’s general plan are also exempt from CEQA under SB 131.
SB 131’s statutory exemptions from CEQA include:
Rezoning actions that implement “the schedule of actions contained in an approved housing element”
Community water systems funded by specified state programs
Wildfire risk reduction programs
Broadband deployment within a right of way
Daycare centers in residential areas
Advanced manufacturing facilities (as defined in Pub. Res. Code § 26003), if located on a site exclusively zoned for industrial uses
Transportation infrastructure, such as rail stations serving high-speed rail
However, SB 131 does not apply to housing projects that:
Are “not similar in kind” to projects that typically qualify for the exemption
Fail to satisfy a CEQA exemption due to the presence of two or more conditions
Include a distribution center
Include oil or gas infrastructure
Are on natural and protected lands (e.g., national parks and monuments, conservation easements, state parks, ecological reserves, and wildlife refuges)
Neither AB 130 nor SB 131 imposes Below Market Rate (BMR) affordable housing requirements as preconditions for applicability, nor do they enforce new labor or wage requirements[3] on projects less than 85 feet in height. Additional reforms include eliminating the sunset clause of SB 330[4] , imposing a six-year pause on residential building code changes (e.g., clean energy and all-electric requirements), modifying vehicle-miles-traveled (VMT) mitigation requirements[5] , and limiting appeals to the Coastal Commission for housing projects located in the Coastal Zone[6] . Finally, the CEQA reforms allow agencies to exclude some staff notes and internal agency communications from public records requests.
Conclusion
Recent CEQA reforms may affect potentially qualifying housing projects or projects currently undergoing CEQA review. For project proponents whose housing projects fail to qualify due to a single condition, SB 131 may make such projects subject to a narrower review under CEQA. For more information on California’s recent CEQA reforms, please contact Christopher Smith, Partner and Chair of Greenspoon Marder’s Environmental practice group, at christopher.smith@gmlaw.com .
[1] The consultation process involves notifying each California Native American tribe affiliated with a project site of both the project and the right to consultation. Local governments must offer to consult with Tribes within 14 days of a “complete” application. Should no Tribe request consultation, then the process is complete within 60 days. Conversely, if consultation is requested, then the process is complete within approximately 135 days (Pub. Res. Code § 21080.66(b)(1)(A)).[2] According to the U.S. Census Bureau, “each urban area must encompass at least 2,000 housing units or at least 5,000 people.” [3] AB 130 does, however, impose a prevailing wage requirement for 100% affordable housing projects (Pub. Res. Code § 21080.66(d)).[4] While the Legislature already extended SB 330 (an Act streamlining project approvals) to the year 2030, the amendments in AB 130 make pro-housing protections under SB 330 permanent (Gov. Code § 65589.5).[5] Pursuant to Pub. Res. Code § 21080.44(b)(1)(A), mitigation can be accomplished by “helping to fund or otherwise facilitating vehicle miles traveled-efficient affordable housing or related infrastructure projects” or contributing to the state’s Transit-Oriented Development Implementation Fund. Other mitigation strategies include transit improvements, using local or regional mitigation banks, and mandating a transportation demand management program (Pub. Res. Code § 21080.44(b)(1)(B)).[6] Includes residential projects approved on parcels that do not allow for residential uses under the applicable zoning ordinance or map (Pub. Res. Code § 30603(a)(4)).
