Prioritizing Infill Housing Over CEQA – Governor Signs AB 130 and SB 131

The California Environmental Quality Act (CEQA) is often cited as a barrier to addressing California’s housing crisis. On June 30, 2025, the Governor signed AB 130 and SB 131, both effective immediately.  These laws aim to clear regulatory bottlenecks, offer relief from environmental review for qualifying projects, and provide new tools to keep housing development on track.

AB 130 continues the Legislature’s effort to remove barriers to housing development, notably by creating a new statutory housing exemption under CEQA and temporarily pausing changes to building standards for residential construction. The bill also extends SB 330 and makes minor changes to the Permit Streamlining Act, provides an option for VMT mitigation, exempts certain residential projects from Coastal Commission appeals, and makes minor revisions to the Affordable Housing on Faith and Higher Education Lands Act of 2023 and Accessory Dwelling Unit regulations.

SB 131 creates new CEQA exemptions for specific types of projects meeting specified criteria and establishes streamlined environmental review for housing projects that narrowly miss qualifying for an existing exemption under CEQA. In addition, SB 131 requires the Office of Land Use and Climate Innovation to update the guidelines for tiering for infill projects by January 1, 2027, to better incentivize affordable and smart infill housing growth.

AB 130

Housing Development Infill Exemption

Housing development projects, which also includes certain mixed-use projects, are statutorily exempt from CEQA review if they meet the following requirements (PRC § 21080.66(a)):

  1. Size: Project site does not exceed 20 acres (or 5 acres for Builder’s Remedy projects).
  2. Location: Project site is located in an incorporated municipality or urban area as defined by the U.S. Census Bureau.
  3. Urban Development: Project site is developed with urban uses or substantially surrounded by urban uses. Urban use means any current or previous residential or commercial development, public institution, or public park that is surrounded by other urban uses, parking lot or structure, transit or transportation passenger facility, or retail use, or any combination of those uses.
  4. Plan Consistency: Project is consistent with the applicable zoning and general plan, and any local coastal program. If the local zoning and general plan are not consistent, the project would satisfy this requirement if it is consistent with either.
  5. Density: Project’s density will be at least ½ of the jurisdiction’s regional housing need density, ranging from 10 units per acre in unincorporated nonmetropolitan counties to 30 units per acre in incorporated metropolitan counties.
  6. Site Characteristics: Project site satisfies the following characteristics:
    1. Not in specified areas of the coastal zone.
    2. Not prime farmland, farmland of statewide importance, or land zoned or designated for agricultural protection or preservation by an approved local ballot measure.
    3. Not wetlands.
    4. Not within a very high fire hazard severity zone, unless the site has adopted fire hazard mitigation measures pursuant to specified existing building standards or state fire mitigation measures applicable to the development.
    5. Not a listed or designated hazardous waste site, unless specified conditions have been met.
    6. Not within a delineated earthquake fault zone, unless the development complies with applicable seismic protection building code standards.
    7. Not within a special flood hazard area, unless specified conditions have been met.
    8. Not within a regulatory floodway, unless the development has received a no-rise certification.
    9. Not identified for conservation in an adopted natural community conservation plan, habitat conservation plan, or other adopted natural resource protection plan.
    10. Not habitat for protected species identified as candidate, sensitive, or species of special status by state or federal agencies, fully protected species, or species protected by the federal Endangered Species Act, the California Endangered Species Act, or the Native Plant Protection Act.
    11. Not under a conservation easement.
  7. Project does not require demolition of a registered historic structure.
  8. No portion of the Project is designated for use as a hotel, motel, B&B, or other transient lodging.

The exemption requires projects to comply with a tribal consultation process. Local governments must notify tribes within 14 days of project eligibility or completeness. Tribes have 60 days to request consultation. Consultation must be initiated within 14 days of the tribe’s request and conclude within 45 days of initiation, which can be extended 15 days upon the tribe’s request. If consultation occurs, the local government must act in good faith to identify and avoid impacts to tribal cultural resources and impose cultural protections (e.g., tribal monitoring, sacred site avoidance) become binding approval conditions. PRC § 21080.66(b).

The exemption also requires a Phase I environmental assessment. If contamination is found, a preliminary endangerment assessment must be completed. Any hazardous substance must be removed or mitigated before occupancy. PRC § 21080.66(c)(1).

For projects within 500 feet of a freeway, the project must have: no balconies facing the freeway; HVAC systems with MERV 16 filters; outdoor HVAC intakes facing away from the freeway; and air filtration with a minimum efficiency reporting value of 16 that is replaced at the manufacturer’s designated interval. PRC § 21080.66(c)(2).

Project that are 100% affordable, over 85 feet, or located in San Francisco are required to meet certain wage minimums and all projects are subject to enforcement of specified labor standards. PRC § 21080.66(d).

6-Year Pause on Revisions to Building Standards Affecting Residential Construction

From October 1, 2025, through June 1, 2031, revisions to state and local building standards applicable to residential units will be prohibited, with limited exceptions. This includes revisions to the California Building Standards Law by the California Building Standards Commission and local agencies. Additionally, the state and local building standards applicable to a building permit for a model home will apply to all future residential dwellings based on that model home design in the same jurisdiction for 10 years or the design substantially changes at a later date, whichever is first. Health & Safety Code §§ 17958(b), 17958.5(c), 17958.7(c), (d), 18929.1(c), 18930(g), 18941.5(c), 18942(a)(2).

SB 330 Sunset and Permit Streamlining Act Revisions

AB 130 removes the sunset provisions for various limitations on public agency review of housing development projects in the Housing Crisis Act of 2019, Permit Streamlining Act, and Housing Accountability Act, among others.

AB 130 also amends/revises the following provisions of the Permit Streamlining Act:

  • Clarifies that the term “development project” includes a housing development project that requires an entitlement from a local agency, regardless of whether the process for permitting that entitlement is discretionary or ministerial, and excludes a post-entitlement phase permit. Government Code § 65928(b).
  • For projects subject to ministerial review, requires lead agencies to approve or disapprove the project within 60 days of receipt of a complete application. Government Code § 65950(a)(6).
  • For projects exempt under the bill’s new housing exemption described above, the lead agency must dis/approve the project within 30 days of the conclusion of the required tribal consultation. Government Code § 65950(a)(6).
  • Imposes the dis/approval timeframes on the California Coastal Commission in its role as responsible agency under CEQA. Government Code § 65952(b).

Vehicle Miles Traveled (VMT) Mitigation

For projects with a significant transportation impact under CEQA, AB 130 creates an optional mitigation strategy through the Transit-Oriented Development (TOD) Implementation Program and corresponding TOD Implementation Fund. Projects may mitigate a transportation impact to less than significant by helping to fund or otherwise facilitate qualified VMT-efficient affordable housing or related infrastructure projects, including by contributing to the TOD Implementation Fund. The Office of Land Use and Climate Innovation will issue guidance as to methodologies for determining the appropriate funding level to mitigate a project’s VMT impacts, determining qualified VMT-efficient projects, validating a project’s VMT funding contribution, and estimating the anticipated VMT reduction from qualified VMT-efficient projects. The California Department of Housing and Community Development will use the TOD Implementation Fund to award funding for affordable housing or related infrastructure projects, including infrastructure necessary for higher density uses.

California Coastal Act of 1976

  • Exempts defined residential development projects from Coastal Commission appeal. PRC § 30603.

Affordable Housing on Faith and Higher Education Lands Act of 2023

  • Expands ancillary uses allowed on the ground floor of the development to childcare facilities. Government Code § 65913.16(h).
  • Reduces parking requirement to one space per unit, unless state law or local ordinance allows a lower standard of parking. Government Code § 65913.16(k).
  • Clarifies that the development is entitled to a height of one story or 11 feet above the maximum height otherwise applicable to the parcel. Government Code § 65913.16(j).

Accessory Dwelling Units (ADUs)

  • Reasonable restrictions on ADUs no longer include fees or other financial requirements. Civil Code § 714.3(b).
  • Local agencies no longer authorized to impose objective standards on specified types of ADUs. Repeal of Government Code § 66323(g).

SB 131

New CEQA Exemptions for Specific Types of Projects

SB 131 creates new CEQA exemptions for specific types of projects meeting specified criteria:

  • Federally qualified health centers and rural clinics less than 50,000 square feet. PRC § 21080.69(a)(2).
  • Childcare centers not located in a residential area. PRC § 21080.69(a)(1).
  • Advanced manufacturing facilities on lands exclusively zoned for industrial. PRC § 21080.69(a)(4).
  • Nonprofit food banks and food pantries. PRC § 21080.69(a)(3).
  • Agricultural employee/farm worker housing. PRC § 21080.44).
  • Certain community water system projects until January 1, 2030. PRC § 21080.48.
  • Wildfire risk reduction projects. PRC § 21080.49.
  • Broadband deployment in right-of-way. PRC § 21080.51.
  • Public parks and nonmotorized recreational trail facilities funded by the Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024. PRC § 21080.57.
  • Maintenance facilities and passenger rail stations for electrically powered high-speed rail previously reviewed in an EIRs that are not on or within defined natural and protected lands. PRC § 21080.70.

SB 131 also exempts rezonings undertaken to implement an approved Housing Element that has already gone through a CEQA process. The exemption does not apply to rezonings that would allow for the construction of a distribution center or for oil and gas infrastructure, or rezonings that would allow for construction to occur within the boundaries of any defined natural and protected lands. PRC § 21080.085.

Streamlined Environmental Review for Housing Projects with a Single Impact

SB 131 creates a streamlined environmental review for housing development projects that would otherwise be exempt from CEQA pursuant to a statutory or specified categorical exemption but for a single condition (e.g., it meets all but one eligibility criteria for the CEQA exemption – a “near-miss”). In addition to residential only projects, “housing development project” includes mixed-use developments with at least two-thirds of the square footage designated for residential use, or at least 50% if the project includes at least 500 net new residential units; transitional housing or supportive housing; and farmworker housing. The proposed housing development project must be similar in kind to projects listed in the statutory or categorical exemption.

The streamlining consists of an initial study or EIR that examines only those effects that the lead agency determines, based on substantial evidence in the record, are caused solely by the single condition that makes the project ineligible for the exemption. A streamlined EIR is not required to include alternatives analysis or consideration of growth inducing impacts of the project.

The streamlined review does not apply to projects that are ineligible for the statutory or categorical exemption due to two or more conditions; proposed housing development projects that include a distribution center or oil and gas infrastructure; or a proposed housing development project located on defined natural and protected lands

Updated Guidelines for Tiering for Infill Projects

SB 131 requires the Office of Land Use and Climate Innovation to, on or before January 1, 2027, and at least once every two years thereafter, update the guidelines for infill projects eligible for limited CEQA review to better incentivize affordable and smart infill housing growth. SB 131 provides that the updates are “to address any rigid requirements, lack of clarity in vague terminology, and the potential for excessive exposure to frivolous litigation over lead agency determinations to make tiering under Section 21094.5 work more effectively in compliance with this division.” PRC §21094.5.5(c).