On June 30, 2025, Governor Newsom signed into law two bills, AB 130 and SB 131, which are intended as a multifaceted approach to address the state’s housing crisis. Among other things, the bills amend CEQA to reduce barriers to constructing new housing in the state.

AB 130

AB 130 exempts infill housing projects from CEQA review. The exemption requires tribal consultation to address impacts to tribal cultural resources. It also includes various requirements related to wages and labor, hazardous material sites, and air quality mitigation for projects near freeways. Projects must meet the following conditions to be exempt under AB 130:

• The project is smaller than 20 acres, or 5 acres if the builder’s remedy applies.
• The project is in an incorporated municipality or US Census-defined urban area.
• The parcel previously had an urban use, 75% of the perimeter is parcels with urban uses, 75% of the area in a quarter mile radius of the site has urban uses, OR 3 out of 4 sides of a quadrilateral parcel and 2/3 of its perimeter have urban uses.
• The project is consistent with the applicable general plan and zoning ordinance, based on substantial evidence that would allow a reasonable person to find the project consistent.
• The project creates minimum housing density consistent with California zoning law. In metropolitan counties this would be at least 15 units per acre.
• The project is not located on protected lands, such as certain coastal zones; prime farmland; wetlands; very high fire hazard severity zones; hazardous waste sites; earthquake fault zones; special flood hazard areas; regulatory floodways; land identified in a natural community conservation plan, habitat conservation plan, or other natural resource protection plan; habitat for protected species under the ESA, CESA, or Native Plant Protection Act; and conservation easements.
• The project does not require demolition of a registered historic structure.
• The project does not include a hotel, motel, bed and breakfast inn, or other transient lodging, other than a residential hotel or short-term lodging (Airbnb and similar).

Additionally, to mitigate transportation impacts, AB 130 allows developers to contribute to a Transit-Oriented Development Implementation Fund, which provides loans for affordable, high-density housing near transit stations. The fund is intended to provide another tool for transportation mitigation, with other options still available.

SB 131

For qualifying housing projects that meet all but one condition of a statutory or categorical CEQA exemption, SB 131 limits the scope of CEQA review to the effects of that single condition. This provision does not apply to housing projects that include a distribution center or oil and gas infrastructure or that are on natural and protected lands.

For most projects (but not those including distribution centers or oil and gas infrastructure), SB 131 also narrows the scope of the administrative record for CEQA litigation to exclude internal agency emails not presented to the final decision-making body or reviewed by a supervisory agency official.

Additionally, SB 131 directs the Office of Land Use and Climate Innovation to identify and map eligible infill sites that are consistent with local general plan land use designations and that: (1) reduce travel-related greenhouse gas emissions, (2) reduce conversion of open space for development, (3) facilitate environmentally friendly active transportation, (4) reduce stormwater runoff, and/or (5) bring vibrancy, community, and social connection to neighborhoods.

Finally, SB 131 creates or expands statutory exemptions for various projects:

• Rezoning to implement a schedule of actions in an approved housing element (which has already gone through CEQA), unless it would allow oil and gas infrastructure or a distribution center, or would allow construction in natural and protected lands.
• New farmworker housing that receives public funding, or maintenance of existing farmworker housing.
• Projects to provide sewer service to disadvantage communities with inadequate sewage treatment programs.
• Community water systems funded by certain programs that (1) result in long term benefits to climate resiliency, biodiversity, and sensitive species recovery, and (2) include procedures and ongoing management for environmental protection.
• Wildfire risk reduction projects, including prescribed fire and fuel reduction projects less than 50 acres in area and within 0.5 miles of a subdivision, defensible space along egress routes, and home hardening, defensible space, and fuel breaks around structures.
• Linear broadband deployment.
• Updates to Natural Resources Agency’s climate adaptation strategy.
• Activities and approvals necessary or incidental to creating, operating, or maintaining public park nonmotorized recreational trail facilities funded at least in part by the Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024.
• Projects that consist exclusively of a day care center not in a residential area, a rural health clinic or federally qualified health center less than 50,000 square feet, a nonprofit food bank or pantry on a site zoned exclusively for industrial use, or an advanced manufacturing facility on a site zoned exclusively for industrial use. The project cannot be on natural and protected lands.
• Heavy maintenance facilities within a mile of rail right of way and passenger rail stations for the California high-speed rail project, if an EIR has already been prepared for a similar maintenance facility or the rail station is within the resource study area of a previous EIR, and the project incorporates applicable mitigation measures. The project cannot be on natural and protected lands.

– Hilary K. Sanders