Yet again, California is ranked the #1 most expensive state to live in America for 2020. And while taxes and childcare costs are also in the top five in the nation, it is housing costs that really stand out. Rent and mortgage payments run an average of $3,000 per month, nearly seventy percent higher than the national average, and this covers the entire state. Major cities such as Los Angeles and San Francisco come with even higher price tags. Taken together, it is clear to see that California has an affordable housing problem. 

A major contributor to the state’s affordable housing crisis is the California Environmental Quality Act (CEQA). Signed by Governor Ronald Reagan in 1970 to protect our state’s vast and beautiful natural resources, the law has instead morphed into a cheap trick for trial lawyers looking to score an easy payday. 

Here is how it works. 

First, trial attorneys, hired by construction unions who want monopolies on construction projects, go on the hunt for new development and infrastructure projects. Next, they file a ridiculous claim related to CEQA against developers—including affordable housing developers. All with the goal of leveraging a settlement that includes a costly union-only Project Labor Agreement. These legal expenses are not just absorbed by developers, though. Instead, in order to cover investment and construction costs and make the whole operation worthwhile, they are passed on to consumers or lower income individuals looking for affordable housing in the form of skyrocketing rent or mortgage payments. 

The losers in this situation are, of course, all Californians. Taken en masse, as countless CEQA lawsuits are filed each year, these increased housing costs are not isolated to any particular area, but spread across the state, increasing everyone’s cost of living and making less and less land available for development. The alternative—builders and developers leaving the state—is no better, either. 

Our state then finds itself between a rock and a hard place without CEQA reform: either continue our unsustainable trajectory of skyrocketing costs of living or watch developers leave the state. In both scenarios, Californians lose. We must not allow these builders to leave, to only hand over a greater market share and higher prices to a select few companies.  

To sweeten the pot when it comes to how urgent this issue really is, California is now home to a quarter of America’s total homeless population, a statistic that goes hand-in-hand with housing affordability. And with the COVID-19 pandemic continuing to work its way through underserved communities, putting businesses and employees out of work by the thousands, immediate action is required to prevent this crisis from taking an exponential turn for the worse. 

A commonsense starting place for enacting necessary reform was Senate Bill 995 from this past session, introduced by Senator Toni Atkins (SD-39). In its original form, it promoted affordable housing by expediting the CEQA review process for housing developments in infill areas to be in line with the favorable treatment that leadership projects and sports arenas currently receive. 

Unfortunately, last minute amendments have now altered this bill to exclude a significant number of contractors from eligibility and add additional hurdles that would cost jobs and raise prices—unnecessary roadblocks that defeat the purpose of this legislation in the first place. This makes bad matters terribly worse for small employers in the building and construction community already struggling with legislation that often gives an unfair advantage to union-only project bids, also known as Project Labor Agreements. Mom and pop companies lose, workers lose, communities lose. 

CEQA reform is straightforward and has received bipartisan support in the past, including from Governor Gavin Newsom. Discouraging frivolous and bad faith lawsuits that spike development costs or prevent them altogether would go a long way toward improving our state’s overall cost of living and making affordable housing truly affordable. If lawmakers in Sacramento are serious about the affordable housing and homeless crisis, they will look to CEQA reform as a necessary first step.