The California Department of Housing and Community Development will compel the city of Fairfax to move forward with approvals for a controversial new 243-unit apartment building, the San Francisco Chronicle reported.

Opponents of the project won't be able to file lawsuits against the project under the California Environmental Quality Act.

The building is slated for a hillside location on the edge of Fairfax, on the site of the former Frogs Hot Tubs complex at 95 Broadway. The developer, Mill Creek Residential, pitched the project as a major opportunity for the city to achieve state-mandated housing requirements.

Fairfax is required to build 490 new housing units by 2031, under the state’s Regional Housing Needs Allocation process, which requires all local governments to adequately plan to meet housing needs. Failure to comply risks the loss of state funding and local control of land use.

The project will move forward in one of the Bay Area’s most gentrified submarkets, where housing prices have skyrocketed along with barriers to building new units. No new units were delivered in Marin County in the first half of 2025, according to CBRE.

Those barriers are set to become a little easier to overcome with the passage of Senate Bill 79, which requires upzoning for more housing density near transit. It also streamlines the permitting process. This follows major changes to CEQA earlier this year.

Those reforms, initially sponsored by Assembly Member Buffy Wicks, of Oakland, and state Sen. Scott Wiener, of San Francisco, are designed to speed up housing construction by exempting certain projects from the environmental review process. Infill housing projects that meet local zoning, density and objective planning standards are among those that qualify for exemption.

Critics of CEQA, enacted in 1970, have argued it has long complicated efforts to address the state’s housing crisis with a time-consuming environmental review process and the risk of legal exposure. It has become a tool for opponents to block development projects for any number of reasons.

The state’s ruling on the Fairfax project closes the door to any remaining challenges on environmental grounds.