California is well reputed for its arduous development regulations, and while there are several obligations at both the state and local levels that developers must meet to move a project forward, none is considered more formidable than CEQA. The California Environmental Quality Act was signed into law in 1970 and is intended to protect the environment from new development.
"CEQA, the California Environmental Quality Act, is typically the regulation in California that can pose the most complex obstacles," Sonnet Hui, general manager and VP of Project Management Advisors, tells GlobeSt.com. "CEQA requires developers to assess the environmental impact of a project against economic opportunities, including new housing, jobs and other community benefits."
However, the broad language of the law and what constitutes an environmental protection is sometimes misused and even potentially hinders new development. "In practice, environmental impact can mean any number of things, from ongoing noise and traffic, the shade and shadow considerations, and the effect of construction activities on the surrounding area while the project is in progress. CEQA is a broad, statewide law but it is intended to integrate with local regulations," says Hui. "That often means developers are doubly constrained by environmental and local requirements."
Developers that meet local requirements often see a reduced timeline, as long as there are no environmental challenges. "If the project complies with the local municipality and all their mandates, review and approval can take less time or be more efficient. But if there are environmental challenges or you're not as familiar with the local rules, that process can take years—10 to 15 years isn't outside the realm of possibility, especially in a Coastal setting—and there's no guarantee the developer will prevail," adds Hui.
Even if there are no objections or disputes during the approvals process, a community member can also file an environmental complaint. "Development projects can get through all the necessary approvals and still be held up by public hearings, which come at the very end of the process. Any person or group can challenge a project under consideration, and this has led to some very sophisticated neighborhood groups and even competing development firms challenging projects they don't want to see built, regardless of the merits of their claims," says Hui. "A challenge is not absolute—the developer can continue with the project while the challenge is in progress—but it does introduce an added layer of risk and uncertainty."
However, savvy developers and those with experience navigating the process often understand the limits and how to pass the rigorous requirements. "Knowing how different areas view development and committing to the process early can help manage any issues that arise," says Hui.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Kelsi Maree Borland
