In a bold move to tackle California’s housing crisis, Governor Gavin Newsom has greenlit a significant update to a decades-old environmental law that has long hindered development across the state.
According to Fox News, in late June 2025, Newsom approved changes to the California Environmental Quality Act (CEQA), aiming to streamline environmental reviews and exempt major infrastructure projects from outdated regulations while addressing pressing issues like housing shortages and soaring real estate costs.
The California Environmental Quality Act, commonly known as CEQA, was first enacted in the 1970s as a safeguard to ensure that building projects undergo thorough environmental assessments.
Under the original law, developers and even individual homeowners faced costly and time-consuming reviews before they could break ground on any construction. Over the years, this process has been blamed by critics, including the homebuilding industry, for exacerbating the state’s severe housing shortage and driving up real estate prices to unaffordable levels.
Newsom’s reform, signed into effect in late June 2025, seeks to modernize CEQA by simplifying the environmental review process for certain projects. It specifically targets urban apartment complexes and large-scale infrastructure initiatives, exempting them from some of the older, more restrictive regulatory requirements. This change is seen as a step toward easing the path for much-needed construction in a state grappling with a scarcity of homes.
California’s housing woes have deep roots, with many pointing fingers at CEQA for contributing to the problem. High real estate costs and a persistent lack of available homes have fueled homelessness and driven millions of residents to leave for more affordable states like Texas, Arizona, and Tennessee over recent decades. The high cost of living remains a primary factor in the state’s population decline, pushing both current and former residents to seek better opportunities elsewhere.
While Newsom’s update to CEQA has been welcomed by some, it falls short of addressing all concerns surrounding the law. One major issue left untouched is the so-called “CEQA abuse” loophole, which allows labor unions and neighborhood activists to file environmental lawsuits that often delay projects unnecessarily. These lawsuits, critics argue, are frequently used to target companies for reasons unrelated to genuine environmental protection, inflating development costs in the process.
Back in 2022, a court ruling shed light on how CEQA has been misused to block essential housing projects for years. The court found that two local governments had exploited the law to prevent construction, stalling progress on addressing California’s low housing supply. The ruling emphasized that CEQA was meant for limited, specific use, not as a broad tool to hinder growth and development.
Newsom’s reform, while focused on urban housing and infrastructure, does not tackle the broader systemic issues tied to California’s expensive housing market. Allowing developers to build more single-family homes could potentially draw residents back to the state or encourage current ones to stay, but such measures are not part of the current changes. The governor’s efforts, though significant, are seen by some as only a partial solution to a much larger problem.
Beyond housing, California faces additional regulatory challenges, such as those related to waste management, which also impact the cost of living. The California Department of Resources Recycling and Recovery, or CalRecycle, oversees trash collection with a complex set of greenhouse gas emission standards and penalties for privately owned landfills. These rules have driven up the cost of transporting garbage to distant disposal sites, burdening taxpayers with higher fees.
In late 2024, the Chiquita Canyon Landfill, a key facility for Los Angeles residents, announced it would stop accepting waste, further limiting disposal options. This closure has compounded the difficulties faced by communities already struggling with waste management under strict state regulations. Some landfills have even been forced out of business due to the financial strain imposed by CalRecycle’s policies.
While Newsom holds significant influence as governor, he cannot single-handedly resolve the state’s landfill and waste disposal challenges. Regulations vary widely at the county level, creating a patchwork of rules that complicate statewide solutions. However, his leadership could inspire local lawmakers to work toward more affordable and accessible waste management services.
The broader context of Newsom’s CEQA reform is a state in flux, with millions of residents having left over the past few decades due to dissatisfaction with high living costs and heavy regulations. This exodus reflects deep-rooted frustration with the state’s economic environment, which continues to push people toward more affordable regions. Addressing housing and other cost-of-living factors remains critical to reversing this trend and keeping California an attractive place to live.
Newsom’s update to CEQA represents a delicate balancing act between fostering development and maintaining environmental protections. While the reform aims to cut through red tape for key projects, critics argue that deeper, more comprehensive changes are still needed to address systemic issues. The future of California’s growth hinges on finding solutions that can satisfy both economic and ecological priorities.