California just demolished a major obstacle to housing construction within its borders — and provided Democrats with a blueprint for better governance nationwide.
On Monday, Governor Gavin Newsom signed a pair of housing bills into law. One exempts almost all urban, multifamily housing developments from California’s environmental review procedures. The second makes it easier for cities to change their zoning laws to allow for more homebuilding.
Both these measures entail restricting the reach of the California Environmental Quality Act (CEQA), a law that requires state and local governments to research and publicize the ecological impacts of any approved construction project. Individuals and groups can then sue to block these developments on the grounds that the government underestimated the project’s true environmental harms.
At first glance, these events might seem irrelevant to anyone who is neither a Californian nor a massive nerd. But behind the Golden State’s esoteric arguments over regulatory exemptions lie much larger questions — ones that concern the fundamental aims and methods of Democratic policymaking. Namely:
In making it easier to build urban housing — despite the furious objections of some environmental groups and labor unions — California Democrats put material plenty above status quo bias, and the public’s interests above their party’s internal harmony.
Too often in recent decades, Democrats have embraced the opposite priorities. And this has led blue cities and states to suffer from exceptionally large housing shortages while struggling to build public infrastructure on time and on budget. As a result, Democratic states have been bleeding population — and thus, electoral clout — to Republican ones while the public sector has fallen into disrepute.
California just demonstrated that Democrats don’t need to accept these failures. Acquiescing to scarcity — for the sake of avoiding change or intraparty tension — is a choice. Democrats can make a different one.
California Democrats were long hostile to housing development. That’s finally changing.
Critics of California’s CEQA reforms didn’t deny their state needs more housing. It might therefore seem fair to cast the debate over those reforms as a referendum on the importance of building more homes.
But the regulatory regime that the opponents of CEQA reform sought to preserve is the byproduct of an explicitly anti-development strain of progressivism, one that reoriented Democratic politics in the 1970s.
The postwar decades’ rapid economic progress yielded widespread affluence, ecological degradation, and disruptive population growth. Taken together, these forces spurred a backlash to building: Affluence led liberal reformers to see economic development as less of a priority, environmental decay prompted fears that humanity was swiftly exhausting nature’s bounty, and the swift growth of booming localities led some longtime residents to fear cultural alienation or displacement.
California was ground zero for this anti-growth backlash, as historian Yoni Appelbaum notes in his recent book Stuck. The state’s population quintupled between 1920 and 1970. And construction had largely kept pace, with California adding nearly 2 million units in the 1950s alone. As a result, in 1970, the median house in California cost only $197,000 in today’s dollars.
But millions of new people and buildings proved socially disruptive and ecologically costly. Many Californians wished to exclude newcomers from their towns or neighborhoods, so as to preserve their access to parking, the aesthetic character of their area, or the socioeconomic composition of their schools, among other concerns. And anti-growth progressivism provided both a high-minded rationalization for such exclusion and legal tools with which to advance it.
In 1973, consumer advocate Ralph Nader and his team of researchers prepared a report on land-use policy in California. Its overriding recommendation was that the state needed to make it easier for ordinary Californians to block housing construction. As one of the report’s authors explained at a California Assembly hearing, lawmakers needed to guard against both “the overdevelopment of the central cities” and “the sprawl around the cities,” while preserving open land. As Appelbaum notes, this reasoning effectively forbids building any housing, anywhere.
The California Environmental Quality Act emerged out of this intellectual environment. And green groups animated by anti-developed fervor quickly leveraged CEQA to obstruct all manner of housing construction, thereby setting judicial precedents that expanded the law’s reach. The effect has been to greatly increase the amount of time and money necessary for producing a housing unit in California. Local agencies take an average of 2.5 years to approve housing projects that require an Environmental Impact Report. Lawsuits can then tie up those projects in court for years longer. Over the past decade, CEQA litigation has delayed or blocked myriad condo towers in urban centers, the construction of new dormitories at the University of California, Berkeley (on the grounds that the state’s environmental impact statement failed to account for noise pollution), and even a bike lane in San Francisco.
CEQA is by no means the primary — let alone, the only — reason why the median price of a California home exceeded $900,000 in 2023. But it is unquestionably a contributor to such scarcity-induced unaffordability. Refusing to amend the law in the face of a devastating housing shortage is a choice, one that reflects tepid concern for facilitating material abundance.
Anti-growth politics left an especially large mark on California. But its influence is felt nationwide. CEQA is modeled after the National Environmental Policy Act, which enables the litigious to obstruct housing projects across the United States. And many blue states — including Massachusetts, Minnesota, and New York — have their own state-level environmental review laws, which have also deterred housing development.
In sum, California Democrats’ decision to pare back the state’s environmental review procedures, so as to facilitate more urban housing, represents a shift in the party’s governing philosophy — away from a preoccupation with the harms of development and toward a greater sensitivity to the perils of stasis. Indeed, Governor Newsom made this explicit in his remarks on the legislation, saying, “It really is about abundance.”
Democrats elsewhere should make a similar ideological adjustment.
California Democrats put the public above “the groups”
If anti-growth progressivism helped birth CEQA’s excesses, Democrats’ limited appetite for intraparty conflict sustained the law’s defects.
In recent years, the Yes in My Backyard (YIMBY) movement has built an activist infrastructure for pro-development reform. And their cause has been buttressed by the energetic advocacy of myriad policy wonks and commentators. One of this year’s best-selling books, Abundance by Ezra Klein and Derek Thompson, is dedicated in no small part to making the case against California’s housing policies.
Nevertheless, environmental organizations and labor unions have long boasted far greater scale and influence than “pro-abundance” groups.
And past efforts to curtail CEQA’s reach have attracted vigorous opposition from some greens and unions. Democrats typically responded by scaling back their reform ambitions to better appease those constituencies.
The hostility of green groups and the building trades to CEQA reform is as much instrumental as ideological. Some environmentalists retain the de-growth impulses that characterized the 1970s left. But environmental review lawsuits are also the stock and trade of many green organizations. CEQA litigation provides these groups with a key source of leverage over ecologically irresponsible developers and — for environmental law firms — a vital source of billings.
The building trades unions, meanwhile, see CEQA as a tool for extracting contracts from housing developers. Such groups have made a practice of pursuing CEQA lawsuits against projects until the builders behind them commit to using union labor.
For these reasons, many environmentalists and labor leaders fiercely condemned this week’s CEQA reforms. At a hearing in late June, a representative of Sacramento-Sierra’s Building and Construction Trades Council told lawmakers that their bill “will compel our workers to be shackled and start singing chain gang songs.”
Roughly 60 green groups published a letter condemning the legislation as a “backroom Budget Trailer Bill deal that would kill community and environmental protections, even as the people of California are faced with unprecedented federal attacks to their lives and livelihoods.”
The opposition of these organizations was understandable. But it was also misguided, even from the standpoint of protecting California’s environment and aiding its construction workers.
The recently passed CEQA bills did not weaken environmental review for the development of open land, only for multifamily housing in dense urban areas. And facilitating higher rates of housing development in cities is vital for both combating climate change and conserving untouched ecosystems. All else equal, people who live in apartment buildings by mass transit have far smaller carbon footprints than those who live in suburban single-family homes. And increasing the availability of housing in urban centers reduces demand for new exurban housing development that eats into open land.
Meanwhile, eroding regulatory obstacles to housing construction is in the interest of skilled tradespeople as a whole. A world where more housing projects are economically viable is one where there is higher demand for construction labor. This makes CEQA reform unambiguously good for the 87 percent of California construction workers who do not belong to a union (and thus, derive little direct benefit from the building trades CEQA lawsuits). But policies that grow California’s construction labor force also provide its building trades unions with more opportunities to recruit new members. Recognition of that reality led California’s carpenters’ union to back the reforms.
Therefore, if Democrats judged those reforms on the basis of their actual consequences — whether for labor, the environment, or the housing supply — they would conclude that the policies advanced progressive goals. On the other hand, if they judged the legislation by whether it attracted opposition from left-coded interest groups, then they might deem it a regressive challenge to liberal ideals. Too often, Democrats in California and elsewhere have taken the latter approach, effectively outsourcing their policy judgment to their favorite lobbies. But this time, the party opted to prioritize the public interest over coalitional deference.
Importantly, in doing so, California Democrats appeared to demonstrate that their party has more capacity to guide its stakeholders than many realized. In recent years, Democratic legislators have sometimes credited their questionable strategic and substantive decisions to “the groups” — as though the party were helplessly in thrall to its advocacy organizations.
But these groups typically lack significant political leverage. Swing voters do not take their marching orders from environmental organizations. And in an era of low union density and education polarization, the leaders of individual unions often can’t deliver very many votes.
This does not mean that Democrats should turn their backs on environmentalism or organized labor. To the contrary, the party should seek to expand collective bargaining rights, reduce pollution, and promote abundant low-carbon energy. But it should do those things because they are in the interests of ordinary Americans writ large, not because the electoral influence of green groups or building trades unions politically compel them to do so. Of course, all else equal, the party should seek to deliver victories to organizations that support it. But providing such favors should take precedence over advancing the general public’s welfare.
And pushing back on a group’s demands will rarely cause it to abandon your party entirely. After seeing that Democrats would not abandon CEQA reform, California’s Building Trades Council switched its position on the legislation to “neutral,” in exchange for trivial concessions.
Rome wasn’t upzoned in a day
It is important not to overstate what California Democrats have accomplished. Housing construction in the Golden State is still constrained by restrictive zoning laws, various other land-use regulations, elevated interest rates, scarce construction labor, and a president who is hellbent on increasing the cost of lumber and steel. Combine these constraints on housing supply with the grotesque income inequalities of cities like San Francisco and Los Angeles, and you get a recipe for a sustained housing crunch. CEQA reform should reduce the cost and timelines of urban homebuilding. But it will not, by itself, render California affordable.
Democrats cannot choose to eliminate all of blue America’s scarcities overnight. What they can do is prize the pursuit of material abundance over the avoidance of disruptive development and intraparty strife. And California just provided the party with a model for doing precisely that.
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