California's CEQA Clash: Housing, Industry, and the Battle for Environmental Rules

California is in the middle of a major fight over its environmental rules. At the heart of the debate is CEQA, a law that has been around for over 50 years. Originally signed by Governor Ronald Reagan, this law was meant to protect the environment from harmful projects. But today, it’s become a tool used by both sides in a much bigger political game.

As the state legislature wraps up its session and voters head to the polls in November, two major battles are unfolding. One is happening in the state legislature, and the other is on the ballot. Both are focused on how CEQA should be used, especially when it comes to building more housing. The state has been pushing local governments to build more homes, particularly affordable ones, but many people are using CEQA to stop or slow down these projects. Some say these buildings change the look and feel of their neighborhoods, while others, like construction unions, want developers to hire union workers.

Last year, Governor Gavin Newsom and lawmakers tried to fix the problem by passing new laws that would let some housing projects skip parts of CEQA. Newsom called it a budget that builds, saying it showed what can happen when leaders act fast and with purpose. But the changes didn’t just affect housing. They also opened the door for other big projects, like advanced manufacturing plants, to avoid full environmental reviews. Environmental groups were worried, saying the rules were too broad and could let harmful projects, like mining, slip through without proper checks.

Now, lawmakers are trying to fix things again. A new bill, SB 954, aims to narrow the scope of last year’s changes. Environmental groups support it, but business groups say it goes too far. They worry it will make California less attractive to companies looking to invest in manufacturing. The California Chamber of Commerce says the bill could hurt supply chains and stop factories from upgrading their equipment, which might hurt the state’s own green energy goals. On top of that, the bill would require projects to use union labor, which business groups say adds extra costs and red tape.

That’s why the Chamber of Commerce is taking the fight to voters with Proposition 45. If approved, it would speed up the CEQA review process and make it harder for opponents to challenge projects in court. Supporters say it will cut through bureaucracy and help California grow. But critics, including the Sierra Club, say it’s a backdoor way to weaken environmental protections. With 14 measures on the November ballot, Prop. 45 is one of the most watched. It could bring in millions in campaign money and decide the future of one of California’s most debated laws.