CEQA Infill Exemptions and “Near Miss” Streamlining—A Concrete Fix for California’s Housing Crisis?

Note: This is the second update in our series covering AB 130 and SB 131, two bills that work substantive changes to the California Environmental Quality Act (CEQA) and California housing law. Click here to learn more about other recent updates in these bills.

---

On June 30, 2025, California Gov. Gavin Newsom signed into law budget trailer bills AB 130 and SB 131, which take effect immediately. Together, these bills created several new California Environmental Quality Act (CEQA) exemptions to streamline the approval of housing development projects. The bills mark the state legislature’s latest effort to combat California’s housing crisis.

New Infill Housing CEQA Exemption (AB 130)

AB 130 establishes a new, newsworthy statutory CEQA exemption for qualifying infill housing projects that satisfy the criteria codified in Public Resources Code section 21080.66. To qualify, a housing development project must meet several site criteria:

• No more than 20 acres (or five acres for a builder’s remedy project);
• Within a census-defined urban area or incorporated municipality;
• Surrounded by at least 75% urban use or previously developed with an urban use;
• Consistent with the general plan and zoning requirements; and
• A density of at least half the jurisdiction’s density appropriate for lower income households (i.e., at least 5 to 15 units/acre depending on the jurisdiction).

Importantly, the exemption does not apply if the project would require demolition of a historic structure or is located on a hazardous or sensitive site set forth in SB 35’s eligibility criteria (e.g., prime farmland, wetlands, regulatory floodway, high fire severity zones, protected species habitat, portions of the coastal zone, etc.).

Qualifying projects also must:

• comply with certain California Native American Tribes consultation and compliance requirements;
• perform a Phase I environmental assessment and mitigate identified impacts; and
• implement certain air filtration and air quality requirements.

In a departure from many recent CEQA exemption and streamlining bills, this exemption does not generally require the project to meet certain labor standards unless 100% of the project is for lower income households, the building is over 85 feet in height or the project is located within San Francisco. 

In addition, this infill housing exemption was added to CEQA as a statutory exemption, not a categorical exemption, which means that the exceptions that apply to categorical exemptions––such as the “unusual circumstances” exception––do not apply.

Despite the numerous site criteria and project requirements, many infill development sites may qualify for this exemption. Time will tell if this new statutory exemption will streamline CEQA review for infill housing projects or if this exemption, like many others, remains too onerous to support widespread infill housing development.

“Near Miss” CEQA Streamlining Provides Focused Environmental Review for Housing Development Projects (SB 131)

SB 131 enacts key provisions of Sen. Scott Wiener’s former SB 607 bill, which was designed to streamline the environmental review process for housing projects that almost qualify for a CEQA exemption, but for a single condition.

Specifically, the Public Resources Code Section 21080.1 provides that if a proposed housing development project would otherwise be exempt from CEQA pursuant to a statutory exemption (including the new infill housing exemption above) or a Class 1–5, 12, 15, 20, 27, 30 or 32 categorical exemption, but for a single condition, then the environmental review shall be limited to impacts caused solely by that single condition. Qualifying projects further do not need to include discussion of alternatives or growth-inducing impacts in any environmental impact report prepared under the streamlining provision. 

This streamlining provision notably does not apply to projects that are:

• “not similar in kind” to the projects listed in the missed exemption;
• projects that include distribution centers or oil and gas infrastructure; or
• projects located on “natural and protected lands,” as defined in Public Resources Code section 21067.5.

Though promising, this “near miss” framework is new and untested. Further guidance from the Governor’s Office of Land Use and Climate Innovation and/or the courts will certainly help.

To learn more about whether your housing development project may qualify for the infill housing statutory exemption or “near miss” CEQA streamlining, please contact the authors.

Summer Associate Tessa Kardassakis contributed to this alert.

---

This document is intended to provide you with general information regarding AB 130 and SB 131 in California. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.