Gov. Gavin Newsom signed legislation Monday night enacting what is being called as the most consequential housing reform in recent state history by overhauling the California Environmental Quality Act (CEQA) to expedite housing and infrastructure projects.
The reform, passed as part of the 2025–26 state budget, consists of two trailer bills—Assembly Bill 130 and Senate Bill 131, authored by Assemblymember Buffy Wicks and Sen. Scott Wiener, respectively. AB 130 and SB 131 broadly exempts infill housing from CEQA review and extends exemptions to childcare centers, food banks, health clinics, farmworker housing, wildfire mitigation, advanced manufacturing, broadband, parks and trails, sewer systems, and high‑speed rail infrastructure.
At a Sacramento ceremony, Newsom said the reforms reflect simple economic logic: “We have too much demand chasing too little supply,” adding that bureaucratic delays had strangled much‑needed development.
The fundamental reforms included in this housing and infrastructure package will help remove structural obstacles and guarantee that California can accommodate the housing demands of both present and future generations.
Senator Scott Wiener said, “With these historic laws, we finally have the tools we need to move the needle on affordability in California.”
Proponents, including housing advocates and business groups, hailed the action as essential to tackling California’s entrenched housing shortage—estimated at 3.5 million units statewide—alongside a homelessness crisis that has placed nine of the nation’s ten least affordable cities within the state.
Nevertheless, environmental and labor groups voiced strong opposition. Sierra Club California criticized the bills’ drafting as “half-baked” and warned of harmful consequences for environmental justice communities and endangered species. Some labor unions also expressed concerns that the bills would undercut prevailing wage standards.
Newsom tied passage of the CEQA changes to approval of the fiscal year budget, saying it was a necessary condition for signing.
Supporters believe the streamlining measures—especially for multifamily housing in urban infill areas—could incrementally boost production, even as hurdles like financing, labor costs, and construction supply remain.
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