Proposition 45 to reform California Environmental Quality Act is likely to fail

Official results have yet to be called, but California’s Proposition 45, which would have dramatically scaled back environmental review requirements for everything from new energy infrastructure to new highways, is looking set for defeat.

With an estimated 65 percent of the vote counted, Proposition 45 is trailing with 45.1 percent of votes in favor and 54.9 percent of votes opposed.

That’s a massive and growing gulf that the measure does not seem likely to overcome.

Should Proposition 45 go down, it will be a major setback for the movement to make California a state that builds.

The target of the measure’s reforms is the California Environmental Quality Act, which requires government agencies to study the environmental impacts of public projects they undertake directly as well as private projects they have some discretionary control over.

In practice, that means everything from a new publicly sponsored highway to a privately built suburban subdivision must be studied for its effects on noise, air quality, traffic, archaeological resources, and more.

Additionally, the law empowers third parties to challenge agency approvals of projects in court by asserting that this or that environmental impact was not studied thoroughly enough.

These features have made CEQA notorious for slowing down development in the Golden State. The most stringent levels of CEQA review can take years. For some major projects, the environmental study phase can stretch out for decades.

The law has also become project opponents’ weapon of choice for slowing down disfavored projects. Everyone from labor unions to rival developers has also used the threat of CEQA litigation to extract concessions from project sponsors.

These problems haven’t gone unrecognized in California. Former Gov. Jerry Brown called CEQA reform “the Lord’s work.” Current Gov. Gavin Newsom has criticized the law for stopping development (although he declined to endorse Proposition 45).

In fits and starts, the Legislature has exempted whole categories of projects (most significantly, urban infill housing) from CEQA reform.

Proposition 45 was an ambitious effort initiated by the state’s Chamber of Commerce to reform core elements of the law for a much broader array of projects.

It would have created an opt-in streamlined CEQA process for “essential” projects, including everything from energy and water infrastructure to highways to suburban housing and more.

This streamlined process would be governed by binding shot clocks. The most stringent forms of CEQA review would have to be completed within a year, for instance. Rather than consider an indeterminate number of environmental impacts, this streamlined process would only require project sponsors to confirm that their project complied with objective, quantifiable existing regulations.

The initiative would also have narrowed the grounds on which project opponents could sue under CEQA. CEQA lawsuits would also have to be decided on an expedited schedule.

Proponents of Proposition 45 pitched their proposition as less radical than the long list of CEQA exceptions that had been passed by the Legislature. The initiative didn’t guarantee any project would get approved. It didn’t allow any projects to fully skip CEQA review.

Nevertheless, there was no getting around the fact that the streamlined opt-in process was far different, and far less rigorous, than what CEQA requires today.

It thus attracted widespread opposition from environmental groups, unions, and Jane Fonda. It also split pro-housing groups who’ve long supported reforming CEQA to make urban housing and transportation development easier.

Some of these groups opposed the measure because it would enable more single-family greenfield development. Some of the state’s biggest YIMBY (“yes in my backyard”) organizations declined to either endorse or oppose it.

Putting ambitious CEQA reform on the ballot was an untested proposition. As the votes come in, Proposition 45 is increasingly looking like a failed proposition.

There are a few takeaways from the initiative’s probable failure. The first is that there really doesn’t seem to be a coherent “abundance” movement. Not all groups that want more apartments want more single-family homes. Many of the people who are frustrated when CEQA stops new bike lanes are still happy to see the law block a highway.

When “build more of everything more quickly” was on the ballot, selective supporters of new development sided with the anti-growth forces. And that’s enough for a majority to take down Proposition 45.

The second takeaway is that, in California at least, the voters don’t see broad-based permitting reform as a cure for widespread anger at rising costs of living.

Poll after poll showed that the midterm electorate was primarily motivated by high and rising prices and government corruption. Despite Proposition 45’s proponents’ best efforts to sell their permitting reform as an affordability measure, a majority of voters didn’t buy it.

That all suggests some hard political limits on the political viability of a broad “abundance agenda,” even if it is the correct policy.

On CEQA specifically, reform advocates will likely have to go back to their old tactics of pushing for specific exemptions and more modest reforms within the state Legislature.