This week, California Gov. Gavin Newsom signed into law a sweeping set of housing and infrastructure reforms as part of California's 2025-2026 state budget, delivering the state's biggest environmental review and permitting rollbacks in decades, the governor's office said.
The move — via Assembly Bill 130 and Senate Bill 131 — overhauls the state's environmental law, the California Environmental Quality Act (CEQA), and expands other housing-related acts in an effort to reduce the barriers, timelines and costs of new housing across the state.
What the new changes mean: In addition to infrastructure, the new law focuses on infill development, which is desperately needed in California — a state that was already facing a dire housing crisis even before the historic wildfires that destroyed thousands of homes earlier this year.
An important provision of the landmark reform is the exemption of local rezoning efforts from CEQA review for infill housing in areas that are already prepared or well-suited for development and housing. However, protections for natural and protected "sensitive lands" will be maintained.
The new effort also freezes residential building standards through 2031, which will help provide consistency and predictability for new home builders and developers in the immediate future.
What supporters said: "No longer will CEQA be leveraged to stall critical county wildfire, water and housing projects. This legislation will make California more affordable for families by helping to alleviate our housing crisis and, in turn, reducing homelessness," California State Association of Counties President and Inyo County Supervisor Jeff Griffiths said in the announcement.
"This is one of the biggest wins for housing in a generation," said Brian Hanlon, CEO of California YIMBY — a special interest group that is part of a larger national effort to tackle restrictive local zoning and push a housing "abundance" agenda. The legislation "makes it crystal clear: building infill housing is not a threat to the environment — it's how we save it." Are environmental regulations taking too much blame? California's Planning and Conservation League and its PCL Foundation, which were involved in the original effort to draft and pass CEQA in the early 1970s, suggest that environmental review and regulations are being "unfairly scapegoated."
Infill "is a complex issue, with many factors combining to limit our ability to rethink and rebuild California's urban cores," the group wrote in a blog post. "Moreover, based on the evidence we do have, it appears that CEQA receives a disproportionate share of blame and attention when it comes to infill."
In the wake of the devastating Eaton and Palisades wildfires, some economic and housing experts told Real Estate News that environmental protections should be the top consideration for rebuilding — and questioned whether some areas should be rebuilt at all.
"We need to allow nature to regenerate and rejuvenate the environment," Seydina Fall, a senior finance lecturer at Johns Hopkins Carey School of Business, told Real Estate News in January. "I mean, to me, it's just very obvious what's happening — it's nature rebelling against us. We maxed out the credit card."