On July 1, 2025, Governor Gavin Newsom signed AB 130 and SB 131, fundamentally reshaping California’s development landscape by reforming the California Environmental Quality Act (CEQA). These changes pave the way for faster delivery of urban infill housing, apartments, condos, and mixed-use projects in established communities across the state. Here’s what you need to know, and how Scout Realty can guide your home search.
Background on CEQA
California’s Environmental Quality Act (CEQA) has long been a cornerstone of environmental protection, mandating thorough reviews before development projects can proceed. While its intentions remain vital, the act’s extensive requirements have often led to protracted timelines and escalating costs. As communities grew, the need for housing intensified, yet CEQA reviews sometimes stretched projects over multiple years. This dynamic has tied environmental oversight to housing scarcity, prompting calls for targeted reform.
• Enacted in 1970 to ensure environmental protection and public transparency
• Over time, project reviews expanded into lengthy Environmental Impact Reports (EIRs) covering noise, traffic, air quality, and more
• CEQA lawsuits and compliance tactics often delay developments by two to five years, worsening California’s housing shortage
Key Provisions of AB 130 & SB 131
AB 130 and SB 131 introduce strategic exemptions and streamlined review processes designed to accelerate infill projects without sacrificing critical environmental safeguards. By focusing on developments within already urbanized areas and supporting public-benefit initiatives, these bills aim to reserve full CEQA scrutiny for the most impactful projects. The legislation balances speed with accountability, requiring sunset clauses and annual reporting. This framework encourages private investment while maintaining transparency.
• Urban Infill Exemption: Developments up to 20 acres in already-developed areas bypass full CEQA review
• Public-Benefit Exemptions: Child care centers, health clinics, food banks, farmworker housing, broadband infrastructure, wildfire prevention, and advanced manufacturing qualify for streamlined approval
• One-Issue Review: Projects missing a single CEQA criterion avoid a full environmental study
• Sunset & Reporting: Exemptions expire after five years and require annual legislative reports on housing starts
Implications for California’s Housing Supply
These reforms are poised to significantly narrow the state’s housing gap by reducing approval timelines and lowering development risks. Shorter CEQA reviews can transform the economics of infill projects, making them more attractive to developers and investors. As carrying costs decrease, savings could trickle down to prospective renters and buyers. However, ongoing monitoring will be crucial to ensure environmental and community standards remain high.
• California needs 3.5 million new homes by 2025, but currently falls short by over 100,000 units annually
• Cutting average CEQA timelines from 30 months to under six months could add more than 150,000 units to the pipeline over two years
• Reduced carrying costs for developers may translate into lower rent or purchase prices
• Reporting provisions help balance accelerated growth with accountability and local oversight
Anticipated Market Trends
Stakeholders are already positioning themselves to capitalize on the new CEQA landscape, signaling a surge in innovative urban developments. The market will likely see a blend of residential, retail, and workspace solutions tailored to walkable neighborhoods. Local governments may introduce complementary incentives, like density bonuses and fee waivers, to further entice builders. Over time, increased supply and diversified offerings could help stabilize housing costs and foster vibrant communities.
• A surge of new apartments and condos in downtown cores, transit hubs, and commercial corridors
• A revival of mixed-use projects featuring street-level retail, co-working spaces, and residences above
• Local incentives, fee waivers, density bonuses, and expedited permitting, paired with state exemptions to attract developers
• Over time, increased supply is the most effective tool for moderating rent and home-price inflation
How Scout Realty Supports Your Search
Navigating a shifting regulatory environment demands expert guidance and timely insights. Scout Realty leverages real-time data and deep market knowledge to pinpoint CEQA-exempt infill projects as they emerge. From personalized property tours to end-to-end transaction support, our team is committed to finding the right fit for your needs. We also coordinate with lenders, title providers, and management partners to streamline your experience.
• Neighborhood Intelligence: Precise insights on where CEQA-exempt infill projects are breaking ground
• Market Forecasting: Data on pre-leasing activity, permitting pipelines, and local incentives to inform your decisions
• Personalized Service: End-to-end support from property tours to closing, focused on your goals and budget
• Ongoing Guidance: Access to mortgage, title, and property-management partners for a seamless experience
Ready to explore California’s newest infill developments? Contact Scout Realty today for a free consultation and priority access to the state’s most desirable urban housing projects. Let us help you find your ideal home or investment with confidence.
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