This summer, a pair of Bay Area lawmakers did what their predecessors have tried and failed to do for over a decade: pass major reform to the state’s landmark environmental law, which has long been assailed for blocking much-needed housing and infrastructure projects.
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That law — the California Environmental Quality Act, known as CEQA — has been staunchly defended by labor and environmental groups, which have used it as a cudgel to extract higher wages and community benefits from developers.
Both interest groups hold enormous influence over the state’s Democratic majority and they have worked together to quash proposals that would relax the law. Both view CEQA as a tool that forces developers to consider broader impacts beyond profits — whether on workers’ wages or environmental health.
But this year, a coalition of Democratic lawmakers — backed by Gov. Gavin Newsom and new allies in the labor movement — decided those protections weren’t worth the extensive delays to housing and infrastructure.
“The crisis has metastasized to a level that finally politicians like us are acting with courage in a way that we haven’t had the ability to do before,” said Assemblywoman Buffy Wicks of Oakland, who joined state Sen. Scott Wiener of San Francisco to spearhead reforms in the legislature. Both hail from cities with some of the highest housing costs in the country.
The traditional interest-group politics that have long shaped California policy appear to be giving way to a new calculation: that the state’s most pressing problems require challenging even the most loyal political allies. The shift comes as the state, where Democrats hold a supermajority in Sacramento, looks to show voters they can deliver on big promises, including lowering the cost of housing.
“Democratic leaders have come to realize that the short-term benefit of pleasing an interest group is outweighed by the the long-term failure to solve the problem,” said former state Sen. Steve Glazer, who represented the East Bay until 2024.
For decades, Democrats resisted amending CEQA, worried that voters who have endorsed some of the strongest environmental protections in the nation might perceive them as eroding legislation that has helped communities improve projects, and forced developers to be transparent about potential harm to waterways, wildlife and air quality. Last month, for example, community activists in the Central Valley used the CEQA process to persuade a developer to mitigate the dust and additional traffic stemming from construction of a 9,100-acre solar farm.
The two bills passed this summer significantly scale back CEQA, exempting most urban housing development, as well as day cares, high-speed rail and advanced manufacturing sites, like semiconductor facilities.
The Tied Arch Bridge construction site, which will take high-speed trains over State Route 43, is shown in an aerial view Tuesday, April 15, 2025, in Fresno County, Calif. (AP Photo/Godofredo A. Vásquez)
Notably, they do not require developers who take advantage of the exemption to pay union-approved, or “prevailing,” wages, a provision the construction trades have negotiated in almost every other CEQA bill, which advocates for reform say has doomed them to ineffectiveness.
“We’ve put a lot of streamlining bills out into the world, and asked, ‘Are developers going to use these tools to bypass CEQA if they have all these conditions attached?’” Wicks said. “The answer is: Not really.”
In the Bay Area, prevailing wages are $67 an hour for a general laborer, an amount that includes health care and pension benefits — double what non-unionized workers make. For developers, that often meant that CEQA “streamlining” came at a higher cost than just enduring the red tape.
Building the political will to get past the labor blockade has been years in the making, driven by lawmakers like Wiener and Wicks, who have risen to positions of power in their respective chambers in recent years.
“I’m in a position of power as the appropriations chair for a blink of an eye in my lifetime,” Wicks said. “I want to use it for the things that I care about.”
Key to Wicks’ success is the relationships she has cultivated with California Carpenters, a state labor union that has broken in recent years with the state Building and Construction Trades Council over their hardline protection of prevailing wage provisions in CEQA bills. Rather than protecting their existing slice of the pie, the carpenters want to expand it. Their bet: More housing and infrastructure mean more jobs, and therefore more opportunities to expand union membership down the road.
“We have been mission driven at the Carpenters … to push for solutions, to blow through obstacles and to break down politically motivated barriers that forget about the majority of Californians, which is the working class,” said Jay Bradshaw, head of the Nor Cal Carpenters union, at a news conference last month.
Even with the carpenters backing the bill, taking on CEQA required a final source of leverage: the governor.
In May, Newsom announced that he would tie CEQA reform to the state budget — an ultimatum that forced lawmakers to pass the changes to get a spending plan approved.
It was a rare move for Newsom, who typically doesn’t step into the lawmaking process until a bill hits his desk. The approach set Newsom apart from his predecessor, Jerry Brown, who also attempted to reform CEQA in 2016 through the budgetary process, but backed down when the trades and environmentalists mounted fierce opposition.
Newsom is widely expected to launch a bid for the presidency when his term as governor ends in 2027, and he has started to walk a more centrist line on a range of issues.
In June, Newsom stood alongside Wicks and Wiener, as well as Bradshaw, to celebrate the budget’s passage. “It proves what’s possible when we govern with urgency, with clarity and with a belief in abundance over scarcity,” he said.
“Having the weight of the governor’s office come down on this was pivotal, no question,” said Matthew Lewis, a spokesman for the pro-housing group California YIMBY.
Though the consensus around CEQA has been building over the past decade, it’s striking just how much has changed with a single legislative session. Only last year, Wiener proposed a similar CEQA bill that would have exempted housing projects in downtown San Francisco from environmental review. It died in committee. Now, almost all urban housing projects in the state will be exempted.
Strong tailwinds of support were pushing politics that direction over the last decade, including the “Yes In My Backyard” activists coming out of San Francisco in the 2010s who have grown into a professional lobbying group in Sacramento.
But the aggressive push to roll back CEQA has environmental advocates worried that Democrats have become too easily swayed by the “abundance” discourse that has criticized regulation, rather than recognizing all the good that has come from those safeguards.
“I’ve started to question whether we still have shared values with respect to these bedrock environmental protections,” said Jennifer Fearing, an environmental lobbyist in Sacramento. “It’s not going to escape the notice of voters if these projects move forward without an opportunity to engage.”
But to some Democrats, the status quo party line has become a liability in the fight for affordability.
“If we can’t address this issue, we’re going to lose trust,” Newsom said in June. “That’s just the truth.”