The Golden State’s tug-of-war between environmental advocacy and a worsening housing crisis came to a head Monday evening when Gov. Gavin Newsom signed into law two bills that will overhaul the landmark California Environmental Quality Act in an effort to ease new construction in the state.

The two pieces of legislation, Assembly Bill 130 and Senate Bill 131, were linchpins in the approval of a proposed $320-billion annual state budget deal; the governor’s signature was conditional on their passage. Together they will exempt a broad array of housing development and infrastructure projects from CEQA — a law dating back to 1970 that requires government agencies to identify and mitigate the environmental impacts of their actions.

Newsom said the bills will break down long-standing barriers to development, speeding up production, cutting costs and allowing the state to address its housing scarcity.

“Today’s bill is a game changer, which will be felt for generations to come,” the governor said in a statement. Development experts agreed, saying it is among the most significant reforms to CEQA in its 55-year history.

But its passage sparked fierce backlash from environmental groups who say it marks a sweeping reversal of essential protections for the state’s most vulnerable landscapes, wildlife and communities.

“This bill is the worst anti-environmental bill in California in recent memory,” a coalition of more than 100 organizations wrote in a letter to the governor ahead of Monday’s decision. “It represents an unprecedented rollback to California’s fundamental environmental and community protections at a time in which the people of California grapple with unprecedented federal attacks to their lives and
livelihoods.”

CEQA was designed to provide greater transparency and public engagement in land-use decisions across California. Third-party experts have credited the bills with mandating that public agencies consider and address the environmental consequences of their projects, and with protecting ecosystems, preserving scenic vistas and waterways, and safeguarding community health throughout the state.

But CEQA has also faced considerable criticism over the years, in part because its cumbersome environmental impact reports have delayed and even halted projects like housing and high-speed rail development.

AB 130 and SB 131 will address some of those concerns. Specifically, the Assembly bill will exempt most urban infill housing from CEQA, meaning most housing projects built in already-developed areas will no longer be required to undergo environmental review.

The Senate bill will exempt an even broader range of projects from CEQA review, including segments of the high-speed rail and projects geared toward wildfire mitigation, water infrastructure and electric vehicle production, according to Sen. Scott Wiener (D-San Francisco), who led the bill.

“These bills get red tape and major process hurdles out of the way, allowing us to finally start addressing these shortages and securing an affordable California and a brighter future,” Wiener said in a statement.

Jakob Evans, senior policy strategist with the Sierra Club California, was among those opposed to the legislation. He noted that it comes as the federal government rolls back environmental protections including some aspects of NEPA, the National Environmental Policy Act on which CEQA was modeled.

“This is California deregulating a strong transparency law in a completely opaque process at a time when we’re also losing protections nationwide,” Evans said.

Among opponents’ chief concerns are exemptions for advanced manufacturing facilities, which could allow semiconductor plants, nuclear facilities, industrial factories and other entities that handle high-risk hazardous material to be permitted in vulnerable communities without any environmental review.

Semiconductor facilities in particular have been associated with groundwater contamination from chemical solvents, with Silicon Valley’s Santa Clara County home to 23 active Superfund sites — more than any other county in the country. The facilities are already exempt from NEPA, so exempting them from CEQA would mean they receive almost no environmental review, said opponents of AB 130 and SB 131.

“SB 131 will undo decades of environmental protections in the name of expediting industrial development at tremendous cost to public health and the environment,” read a statement from Asha Sharma, state policy manager at the Leadership Counsel for Justice & Accountability. “It’s not a question of if, it’s a question of when a public health disaster will occur.”

Opponents were also concerned about provisions in the legislation that would allow agencies to exclude some staff notes and internal agency communications from public records requests, which they said could make it easier for government employees to “cherry pick” what information is made public, and obscure concerns or risks around projects.

What’s more, they noted, the legislation contains no protections for sensitive and endangered species, which could expose hundreds of thousands of acres of forests, chaparral, deserts and coastal areas to relatively unchecked construction.

“Exempting a broad swath of development with no consideration of habitat for imperiled species will decimate the state’s natural heritage and unique biodiversity,” said Frances Tinney, an attorney with the nonprofit Center for Biological Diversity.

Raquel Mason, senior legislative manager with the California Environmental Justice Alliance, said it’s not only threatened species that could potentially suffer under the new rules, but also low-income communities, communities of color and other groups who have historically been disproportionately burdened by pollution and other environmental harms.

“By advancing this bill, the Legislature sent a clear message: our health, our safety, and our right to participate in decisions that impact our lives are disposable,” Mason said in a statement. “This bill will usher [in] industrial development without any opportunity for our communities to advocate for needed mitigations to protect ourselves. And all this was done behind closed doors without public input.”

Indeed, several opponents were concerned with the bills’ provenance. The legislation was hasty — SB 131 was introduced Friday and then passed on Monday, with little time for input or amendments.

What’s more, the governor’s strategy to hinge the state budget deal on the bills was rare. The move — a political tactic sometimes referred to as a “poison pill” — would have invalidated the entire spending plan had the Senate bill not been approved, allowing Newsom to advance his priority of accelerating development.

At a press conference Monday evening where he signed the bills, Newsom said he hoped to not have to tie the fate of the state budget to legislation again.

“I’m not trying to create any precedent here,” Newsom said. “I just think we have an unprecedented crisis of affordability in the state, and it’s just growing.”

The governor was supported by housing advocates who championed the bills as essential reforms to address the state’s housing crisis.

“AB 130 and SB 131 ensures that the state’s environmental review process works better — not just for housing, but for climate action and equity,” said Corey Smith, executive director of the Housing Action Coalition, in a statement. “California’s current CEQA framework is too often misused to block exactly the kinds of infill, affordable, and sustainable housing our communities desperately need.”

Assemblymember Buffy Wicks (D-Oakland), who led AB 130, said in a statement that “this is what we’ve all been waiting for — a long-overdue step to stop CEQA from being weaponized against housing.”

“With AB 130, we’re taking a major step toward building desperately-needed homes faster, fairer, and with more certainty. This is what our working class families deserve and how we move California’s housing goals from promise to reality,” Wicks said.

However, environmental groups said they’re not done fighting. They urged legislators to enact “clean-up legislation”— or follow-up laws to clarify, correct and address their myriad concerns — in the weeks ahead.

Times staff writers Taryn Luna and Liam Dillon contributed to this report.