New Yorkers and Californians have long been connected by a coastal rivalry, but they do have at least one thing in common: a housing crisis exacerbated by bureaucracy. 

Both states passed bedrock environmental review statutes in the 1970s that have been the source of aggravation for developers ever since. But as housing production has stalled, lawmakers in New York and California have pivoted, expanding exemptions and tightening approval deadlines as a way to expedite construction. 

“If you go back 10 years, you could barely change your mailbox without being subject to some kind of review from somebody,” Rosenberg & Estis member David Rosenberg said of California. 

California’s reforms came first and have become increasingly aggressive. As development opponents who have leveraged environmental protections to limit construction zig, officials have been forced to zag. 

New York this year followed suit. Gov. Kathy Hochul signed into law sweeping reforms to the State Environmental Quality Review Act, which her office claims had increased the cost of building in New York City by $82K per unit, equivalent to $8M in additional costs for a 100-unit building.

The changes have been hailed as a way to reduce delays and slash project budgets, but the results have yet to be seen. The Golden State’s rollout of similar reforms, however, could offer a playbook for the Big Apple’s execution. 

CEQA

California has taken a more piecemeal approach to dealing with its California Environmental Quality Act, with streamlining efforts dating back to 2011 with the Jobs and Economic Improvement Through Environmental Leadership Act. The legislation, which was modified in 2021, applied only to “leadership projects” that contributed to the economy and didn’t result in any additional greenhouse gas emissions. 

Legislation in 2017 focused on speeding up construction in cities falling short of state housing targets. The Housing Crisis Act of 2019 made it more difficult for localities to deny or downsize projects, including by lowering density limits or creating new administrative hurdles. 

In 2018, 80 projects were entitled, 507 were permitted and 382 were completed, thanks to the streamlined ministerial approval process, according to the California Department of Housing and Community Development’s annual progress reports. The next year, the pipeline increased to 80, 631 and 419, respectively. 

Despite those efforts, experts say that locals looking to block new construction were able to change tactics and gum up the works.

Discretionary approvals, like a rezoning, would trigger a review under the California Environmental Quality Act. Challengers could argue against projects based on anything from noise to aesthetics. 

Even if a project technically qualified for a review exemption, opponents could still claim that a site had unusual features that disqualify it, kicking off a lengthy process.

A labor union alleged in 2019 that Irvine Cos.’ proposal to build 1,000 new homes on a 34-acre site in Sunnyvale flouted CEQA because it didn’t consider the impacts to indoor air quality and failed to abide by bird-friendly design guidelines. The San Francisco Board of Supervisors ruled against a 63-unit project that would cast a shadow on a nearby basketball court in the late afternoons. Woodside residents declared the town a mountain lion sanctuary to avoid development.

“Labor unions would appeal and then try to get a contract in place in order to walk away or withdraw their appeal, so use [CEQA] as an extortion tool,” Pacific Crest Consultants principal Jeff Allen said. “NIMBYs used it to drag out the housing approval process and add additional costs to the developer.”

As California was trapped in a housing crisis and losing population, Gov. Gavin Newsom last year took the reforms a step further with two bills, Assembly Bill 130 and Senate Bill 131, that reduced development opponents’ leverage. Among the changes are CEQA exemptions for urban infill housing projects and the implementation of a strict deadline for agencies to approve or reject a project.

Greenberg Glusker partner Sheri Bonstelle recalled projects commonly slogging through approval processes, held up by environmental concerns, for two or more years. 

Bonstelle is working on Riverwalk at Studio City, three seven-story buildings with 814 apartments and 76K SF of commercial space. The Los Angeles development benefited from multiple density bonuses and the new CEQA reforms. Despite appeals regarding zoning and environmental impacts, the approval process took less than nine months. 

“AB 130 is the biggest game-changer for housing development, especially large housing development projects,” Bonstelle said.

The number of projects filed for pre-2025 streamlining processes slowed in the years following the pandemic, although a handful of large projects kept unit count high. A real decline appears in city data in 2024 and 2025, amid a period of escalated interest rates and high construction costs. 

However, the decline also shows that developers are switching from previous CEQA tools to the blanketed exemptions passed in the 2025 budget. In the year since AB 130’s passage, 113 projects have received notices of exemption, allowing them to bypass CEQA review, according to a Bisnow review of California data, completed with the assistance of Claude. 

Because the latest reforms are so recent, those projects have yet to appear in annual reports.

“By this time next year, all of these projects that have been filed in the last six months are going to show up in the data, and I think it's going to make a real [difference] for investors,” Bonstelle said, adding that evidence of faster timelines is likely to attract more risk-averse developers. 

Projects so far include AvalonBay’s 323-apartment addition to its 404-unit complex in Mountain View. A similar proposal at the site underwent seven years of negotiations before the city council approved it in 2022. The project then stalled amid soaring construction costs. 

State density bonuses revived the project financially, and AB 130 allowed AvalonBay to avoid another drawn-out review. Still, during a March 24 city council hearing, residents expressed concerns over the development tearing down trees and increasing traffic — some of the same issues that were raised years prior.

This time around, there was little that could be done.

“I'll start with a practical reality that state law has made serving on a city council both easier and harder,” Council Member Lucas Ramirez said during the hearing. “Easier in the sense that we have very little discretion. Many of the decisions are made for us, and this is one of those examples.”

Despite qualifying for CEQA exemptions, AvalonBay — now Vivmark Residential — said it plans to abide by modifications and community benefits it agreed to under the prior review process. A redwood grove will be kept intact, and 212 trees will be planted to replace those that it tears down. The developer has also offered to donate $2M to the city and establish a 1.3-acre public park on the property. 

The three new buildings were approved unanimously. Future projects likely won't come with the same concessions, Ramirez fears.

“This is the kind of project that we would want to encourage,” Ramirez said. “Especially as we see state laws utilized in the future, I think many of us will miss working with an applicant who provides this type of project over the next several years.”

SEQRA

While California has been slicing through CEQA restrictions, SEQRA has been used for years as live ammunition against development in New York.

In the affluent village of Sag Harbor, a three-story, 79-unit affordable housing project was struck down in 2023 after residents accused officials of not properly reviewing the environmental impacts. A group of activists, including labor unions, hurled similar allegations at Micron Technology’s upstate megahub to secure a community benefits agreement. SEQRA was infamously used as one of the many tactics against the failed redevelopment of Elizabeth Street Garden. 

A New York City and New York State Homes and Community Renewal review of a thousand housing projects found that virtually none had significant environmental impacts, yet they were forced to navigate the SEQRA review process nonetheless. 

That process can involve as many as 20 different analyses, including neighborhood character, socioeconomic conditions and natural resources.

But SEQRA's utility as a weapon has been blunted. The state reforms, enacted on May 27 as part of the budget, completed in one broad stroke much of what California has done incrementally.

Citywide, projects up to 250 units can now evade review. In medium- and high-density districts, the threshold is bumped to 500 units. 

Outside of the city, the exemptions apply to projects up to 300 units in urbanized areas, up to 100 in nonurbanized areas, and up to 20 in areas without zoning.

Similar to California’s AB 130, the legislation also set new deadlines for review. There is a 120-day determination period for exemptions, a one-year cap for significance determinations, and a two-year limit on environmental impact statement completion.

In the three months since the reforms' passage, the NYC Department of City Planning has already allowed 12 projects to bypass SEQRA review, cutting those developers’ precertification timelines down from an estimated two years to approximately six months.

But the law's true impact on a city that is setting rent records on a monthly basis is still an open question. 

While the so-called “abundance agenda,” coined in a book by Ezra Klein and Derek Thompson, has motivated New Yorkers to go after archaic and at times unnecessary regulations, reforming SEQRA is not necessarily going to have a large impact on housing production, Rosenberg predicted.

“It was a pretty big set of changes, but even to be designated as what's called a qualifying action is still a bureaucratic lift,” Rosenberg said. “You still need to hire environmental consultants and prepare reports just to prove that you're exempt.”

Between 2010 and 2025, 84% of newly constructed housing units were built as of right, meaning that the projects complied with existing zoning regulations and didn’t require further review, according to a report by City Planning.

Of those, 39% were built following an areawide rezoning. City of Yes, passed in late 2024, made a plethora of new developments as of right, regardless of the SEQRA reforms. 

Rosenberg said that in the city, larger issues come during other parts of the permitting process. Even without SEQRA, developers must abide by building codes and zoning.

A May report by Mayor Zohran Mamdani’s Streamlining Procedures to Expedite Equitable Development task force, referred to as SPEED, found that it takes an average of 16 months to get through the city’s 15 agencies. 

Increasing city staffing by 50% alone would reduce the review process by an estimated two months, according to the report.

Rosenberg said that “on a regular basis,” developers will opt out of the density bonuses provided under the City of Yes’ Universal Affordability Preference — even if they are already providing the necessary affordable housing under other incentives — simply because the amount of time it takes the Department of Housing Preservation and Development to approve the plans makes the extra floor area not worth it.

“Liberals walked away from Abundance, thinking, ‘OK, we need to build more,’” Rosenberg said. “But the point of the book was also that the government needs to do better at just doing things generally.”