Curious who‘s to blame for California’s housing crisis? Just look at who wants to kill the cure.
A measure to reform the chief impediment to building homes in the state just qualified for the November ballot, and the same week, labor unions and environmental groups dumped millions into the effort to defeat it.
Lawmakers in Sacramento often pretend the housing crisis is a mystifying problem, but many admit, some openly and others only by their actions, that the California Environmental Quality Act stands in the way of development.
CEQA, as it’s known, is a labyrinthine process stalked by the three-headed monster of unions, environmental groups and “not in my backyard,” or NIMBY, local opposition. It imposes a lengthy environmental review process that can stretch for years and often cost more than a million dollars, and that’s before the lawsuits, when anyone can object and slow down the process.
Environmental groups and NIMBYs generally want to kill homebuilding outright, while unions might actually want it, but only as long as they can extract labor concessions that drive up project costs while benefiting their members. No one is immune; a local carpenters union (proudly) recently killed Golden State Warriors’ superstar Stephen Curry’s proposal to construct a five-story building in San Francisco to serve as the headquarters of his growing business empire.
Different goals, same overall outcome: a staggering shortage of housing.
Unions and environmental groups are core members of the Democratic coalition, which controls supermajorities in the Legislature and every statewide office, meaning that as long as these groups write checks to politicians and activate their members, change will remain elusive. That’s why even former Gov. Jerry Brown, a Democrat and staunch environmentalist, deemed CEQA reform “the Lord’s work.” The former seminarian never did get the reform he craved, causing him to quip that “unfortunately the Lord’s work doesn’t always get done.”
The size of the state’s housing shortage is a matter for debate. Estimates run from 56,000 units (a number its own authors said was probably too low) to more than 3 million. The most cited figure was Gov. Gavin Newsom’s campaign benchmark of 3.5 million. What’s been built during his governorship has been a small fraction of that. Thanks, CEQA.
The act was signed into law by Gov. Ronald Reagan with the intention of holding government development to a higher standard. It was never intended to regulate all development. But activist judges and state lawmakers felt otherwise and greatly expanded the program in the early 1970s.
The seemingly impenetrable moat around CEQA is the fact that it has the word “environment” in the title. Californians love the environment and balk when they hear something might loosen environmental protection. But a credible study in 2015 found that only 13% of the groups and individuals suing under CEQA have any sort of history in environmental advocacy. The other 87% have other motives.
In fact, CEQA is only rarely used to block projects that many people might associate with pollution, like industrial or manufacturing projects. Instead, it blocks housing, commercial development and public infrastructure projects. It even stalls projects aiming to move the state beyond fossil fuels, like solar projects and grid upgrades. In total, there are approximately 200 CEQA lawsuits each year.
Whenever something high profile — or favored by campaign contributors — must be built, like sports arenas, the Democrat-controlled Legislature moves quickly to issue a CEQA exemption. That’s why the Los Angeles Rams, Sacramento Kings, Golden State Warriors and Los Angeles Clippers all received CEQA exemptions for new stadiums. With the Olympics coming to town in 2028, the Legislature sought exemptions for related projects.
The state fast-tracked water storage projects to clear CEQA lawsuits in record time. The Legislature also enacted CEQA fast-tracking for select renewable energy projects. In 2025, lawmakers finally exempted most urban infill housing from CEQA, but kept the union toll on housing for lower-income families, ironically, by requiring prevailing wages on the projects designated to be 100% affordable units, even as it freed market-rate towers from any wage mandate.
All of this brings us back to the upcoming ballot measure, Proposition 45, which is a modest step in the right direction by simply speeding up the process. Modest as it might be, however, unions and environmental groups will go to the mat to keep their power to veto or extract a toll on what gets built.
The fact pattern is damning: California desperately needs housing and infrastructure, but environmental groups and unions have proven to have entirely self-serving interests that are at times at odds with the needs of the state, and a majority of the Legislature still craves those groups’ support.
This November, voters will have a rare opportunity to rectify a great wrong and start the state on a path to sustainability.
Will they take it?
Matt Fleming is the communications director and a policy fellow at the Pacific Research Institute, a think tank in Pasadena advocating liberty and free-market policy solutions.
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