The People vs. CEQA

Happy Tuesday, and welcome to another edition of Rent Free. This week’s issue includes stories on:

• The major overhaul of California’s development-killing environmental review law heading to the ballot.
• Landlords and the Justice Department’s wrangling over a settlement for eviction moratorium losses.
• President Donald Trump’s newfound opposition to a congressional crackdown on build-to-rent housing.

When people identify reasons why it takes so long to build anything in California, the state’s landmark environmental review law, the California Environmental Quality Act (CEQA), is typically high on the list. Come November, voters will likely be asked whether they want to significantly streamline the law’s requirements.

This past week, the California Chamber of Commerce began submitting signatures to election officials to place a measure overhauling CEQA on the statewide general election ballot.

The chamber says it has collected nearly a million signatures, which is well in excess of the 546,651 it needs to qualify its initiative for the ballot.

CEQA requires government agencies to study and mitigate the environmental impacts of projects they have the discretion to approve or deny. Members of the public are empowered to sue an agency if they believe it approved a project without doing a thorough enough environmental review.

Simple though those requirements might sound, CEQA has become a vast, unpredictable area of law that can see a long list of projects, from housing to bike lanes to state college admission plans, bogged down in years of study and litigation.

The law has enabled a cynical shakedown racket whereby special interests with no real environmental objections to a project will threaten to delay it with CEQA litigation unless the sponsor provides some sought-after concession.

To reduce the burden of CEQA on building new things, the Chamber’s measure would create binding timelines for CEQA reviews and lawsuits for a broadly defined list of “essential projects” that includes housing, transportation infrastructure, water projects, energy projects, wildfire mitigation projects, and more.

Reviews would have to be completed within 365 days. Lawsuits would have to be decided within another 270 days.

That’s significantly faster than the yearslong average timelines of the most stringent forms of CEQA review. Subsequent CEQA litigation adds another two to five years on average to a project’s timeline. In extreme cases, CEQA review can last decades.

The Chamber’s measure would also change the scope of CEQA reviews from studying all “significant” environmental impacts to checking whether projects are in compliance with objective standards of existing environmental laws and regulations.

John Myers of the California Chamber of Commerce says their proposed measure is all about providing certainty to an often unpredictable and indeterminate CEQA process.

The initiative “seeks to provide clarity to the process of building the essential projects California needs,” Myers tells Reason. “We’re not changing a single environmental law. We are not guaranteeing that projects get built. We’re simply trying to provide certainty in how projects get reviewed.”

Even so, changing what is currently an amorphous “study everything” law into a checklist of regulatory compliance “would be a huge change,” says Christopher Elmendorf, a law professor at the University of California, Davis. “Basically it ends CEQA in anything like the form we’ve known it.”

In the past several years, the California Legislature has pared back CEQA largely by excluding certain types of projects from the law’s requirements entirely. But lawmakers have been a lot more reticent to reform what CEQA requires of the projects it still covers.

For instance, last year, lawmakers approved a major CEQA exemption for urban infill housing. But a bill attempting to streamline the CEQA process for projects it still covers died in the Legislature.

“A lot of people saw last year as a huge expenditure of political capital that wouldn’t be easy to repeat,” says Louis Mirante of the Bay Area Council, a business advocacy group supporting the Chamber’s CEQA reforms. “There are more things we should be doing to CEQA than it seems the Legislature is capable of.”

Landlords demanding compensation for the losses inflicted on them by the federal government’s illegal COVID-era eviction moratorium might have to settle for far less than they were expecting.

The Associated Press reported on Monday that property owners are in the midst of negotiating a settlement with the Department of Justice that would see them get $1.5 billion to cover the costs of the moratorium.

This is far less than the $23 billion plaintiffs had initially been asking for.

That landlords would get compensation at all for the federal moratorium was not guaranteed.

When property owners initially sued for compensation on the grounds that the moratorium was an uncompensated taking of their property, the government sought to dismiss the case.

The government paradoxically argued that because the Supreme Court had found the moratorium illegal, it hadn’t been authorized by law, and therefore, Congress couldn’t be held responsible for paying for it.

A federal claims court initially ruled with the government, but that decision was overturned by a panel of the U.S. Court of Appeals for the Federal Circuit. The full Court of Appeals declined to rehear the case, and the federal government chose not to appeal to the U.S. Supreme Court, setting up landlords to get paid something.

While it was widely anticipated that the $20-billion-plus settlement landlords were asking for would get negotiated down, $1.5 billion is a pretty steep discount.

That’s perhaps a relief for taxpayers who’d be on the hook for paying compensation for an illegal eviction ban decided on by government officials. On the other hand, it’s not a great disincentive for the government to adopt a similar moratorium during the next crisis.

President Donald Trump is reportedly having second thoughts about his war on large single-family landlords.

Politico reported yesterday evening that the president is displeased with a provision in the Senate-passed housing bill that requires large investors to sell off their single-family holdings, including build-to-rent housing. He almost posted about it on social media before holding off, according to Politico‘s sources.

If true, it’s an interesting change of pace.

Up to this point, Trump has been an eager combatant in the bipartisan war on large owners of single-family homes. He issued an executive order attempting to limit their activities in the housing market early in the year and called on Congress to go further in his State of the Union address.

The Senate-passed housing bill generally bans investors from owning more than 350 homes. It does allow them to purchase homes above that threshold if they’ve been purpose-built as rental housing. But those rentals would have to be sold off to individual owners within seven years.

Housing supply advocates, who otherwise support the Senate’s bill, have been raising the alarm about these restrictions on build-to-rent housing. They say it could destroy that sector of the housing market, which builds as much as 10 percent of new single-family homes each year.

Trump’s own executive order included a more robust carveout for build-to-rent housing. Even so, the White House had endorsed the Senate bill with its additional restrictions on build-to-rent housing.

The Senate bill has been stalled in the House, where lawmakers have raised complaints about the build-to-rent provisions as well as new grant funding and the exclusion of community banking reforms that were in the initial House bill.

With the exception of the build-to-rent provisions, the Senate-passed housing bill includes a number of grant program tweaks and regulatory changes aimed at increasing housing supply.

The build-to-rent provisions arguably turn the bill into a net negative for new housing supply. If Trump were able to convince both chambers to remove large investor restrictions from the legislation, it would go a long way toward ensuring that a housing bill actually leads to more housing.

• Yet another New Jersey property owner is fending off her local government’s efforts to seize her land. Read some of Reason‘s past coverage of Garden State takings here and here.
• Rep. Rashida Tlaib (D–Mich.) introduces an “unhoused persons bill of rights.”
• The New York Times has a long heave on the difficulty of reclaiming one’s property once squatters move in.
• A well-cited paper finding only a modest supply increase from upzoning turned out to be riddled with basic errors.
• Italy’s prime minister is tired of people not paying their rent.

Per troppo tempo chi metteva in affitto una casa è rimasto senza tutele di fronte a occupazioni abusive, morosità e tempi troppo lunghi per rientrare in possesso del proprio immobile. Questo ha spinto molti proprietari a rinunciare ad affittare, aggravando la carenza di alloggi e…

— Giorgia Meloni (@GiorgiaMeloni) May 5, 2026

• Local governments in Massachusetts pull out the usual tricks to avoid state housing goals.

On its third attempt tonight, Marblehead Town Meeting approved an “MBTA Communities–compliant” district largely centered on the 125-year-old Tedesco Country Club, meeting 3A requirements on paper while all but assuring no new housing would be built.

This comment says it all. pic.twitter.com/2vEK6y8Cwg

— Jonathan Berk (@berkie1) May 5, 2026