Governor Newsom recently signed a significant rollback to the California Environmental Quality Act (CEQA), creating a new statutory exemption for urban infill housing projects, effective immediately. Spencer Kallick, a land use attorney who's guided everyone from Blackstone to AvalonBay through California's regulatory maze, breaks down what this actually means for developers reassessing their pipelines.

It's not the free-for-all some headlines make it out to be, but it is a major shift for urban infill housing development. Cities still have discretion and the need for a Phase I Environmental Site Assessment and tribal consultation remains. But traffic studies and air quality analyses have gotten significantly easier to navigate.

Spencer walks through the fine print: projects under 85 feet avoid prevailing wage requirements, sites up to 20 acres qualify, and residential density has to be at least 50% of the minimum density in that jurisdiction. The catch is it only works if you're building on land already zoned for residential use and staying within existing height limits. High-rise towers on industrial land still need full CEQA review.

The conversation digs into the political motivation behind this decision and why Governor Newsom is now championing CEQA reform when it was considered untouchable just years ago. The result is a gradual, but accelerating shift toward abundance policies that Democrats hope will demonstrate they can actually get things done.

Spencer also reveals the practical challenges ahead: planning departments are understaffed and unprepared for immediate implementation, some provisions won't take effect until 2026, and environmental groups are considering lawsuits. But, he's optimistic that momentum is building if construction costs moderate and capital markets improve. 

Episode Outline

(02:21 ) Why CEQA reform is happening now 

(11:25 ) Details of the urban infill statutory exemption requirements

(22:49 ) Understaffed planning departments struggling with immediate implementation

(28:13 ) Delayed provisions and political vulnerability of the new law

(30:15 ) Is this the beginning of broader CEQA reform? 

(33:44 ) Development pipeline outlook and LA's building future 

Resources Mentioned

NYT Article: California Rolls Back Its Landmark Environmental Law

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Disclaimer: The views and opinions expressed in this podcast represent the views of the individual speakers, interviewers, or guests alone, and do not necessarily reflect the official positions, views, or opinions of Lincoln Property Company or any of its affiliates.