California’s recent rollback of the California Environmental Quality Act (CEQA) marks a major shift in how the state approaches the dual crises of housing affordability and environmental protection. Touted by Governor Gavin Newsom as a pivotal step toward solving the housing shortage and homelessness crisis, the new legislation aims to fast-track high-density, transit-oriented development by reducing environmental review requirements for many projects. If implemented effectively, this could open the door for more affordable, infill housing near jobs and transit — helping to reduce pollution, lower greenhouse gas emissions, and provide urgently needed homes for Californians.

Yet the impact of these reforms is far from certain. Critics warn that the changes could lead to environmentally damaging development, threatening sensitive ecosystems and vulnerable communities, undermining decades of environmental stewardship.

During a recent discussion at Smart Growth California’s Statewide Steering Committee, funders engaged in a dialogue with the leadership from the California Environmental Justice Alliance and the Planning and Conservation League, both of which surfaced key issues and implications and several themes stood out: 

• Erosion of process and transparency: CEQA has long served as a critical checklist that ensures environmental impacts are disclosed and that marginalized and environmental justice communities have a voice. Weakening it risks unchecked damage and less public accountability. 

• Beyond housing: While CEQA is often blamed for the housing affordability crisis, advocates noted that many of the drivers are economic. The new bill also goes far beyond housing — exempting projects like oil wells, hydrogen facilities, and data centers — raising concerns about fast-tracking projects that are detrimental to both vulnerable communities and ecosystems. 

• Strange bedfellows and new coalitions: While the rollback represents the most serious attack on CEQA in decades, one silver lining is that it has galvanized a diverse set of allies. Environmental Justice advocates, community groups, and unexpected partners are beginning to align in defense of CEQA’s core values of transparency, accountability, and environmental justice. 

Three Ways Philanthropy Can Make a Difference  

Philanthropy has a critical role to play in this moment: ensuring that the benefits of CEQA reform — more equitable, climate-smart urban housing — are fully realized, while minimizing potential harm to California’s biodiversity, watersheds, working lands and disproportionally impacted communities. Strategic investment, community engagement, and watchdog accountability will be key in shaping what this new chapter means for people and the planet. With coalitions mobilizing to respond, there is a pressing need for flexible, multi-year support. Investments in grassroots organizations, communications, and coalition-building are critical to shift from constant defense toward a proactive vision for CEQA’s future. 

1. Support community-led planning and advocacy. Local voices are essential in shaping how CEQA reforms are implemented. Philanthropy can resource grassroots groups and coalitions to influence land-use decisions, advocate for climate-smart infill housing, and prevent harmful sprawl. 
2. Invest in the enabling environment. Beyond individual projects, funders can strengthen the policies, partnerships, and technical capacity that make equitable, transit-oriented development possible. This includes supporting organizations that track implementation, conduct research, and provide tools to help cities pursue climate-resilient, dense, urban infill housing. 
3. Ensure accountability and environmental protections. With fewer regulatory hurdles, philanthropy can help fill the gap by funding community-based groups and independent monitoring. These efforts can ensure new development advances equity and climate goals while protecting sensitive ecosystems and frontline communities. 

Below are links to various perspectives on CEQA from across the state of California. 

In the Media

• Environmental Groups Are Outraged After Newsom Overhauls CEQA (LA Times)  

• California Rolls Back Its Landmark Environmental Law (NY Times)  

• One of the biggest obstacles to building new CA housing has now vanished (CalMatters)  

• California lawmakers roll back environmental law. Why is high-tech manufacturing now exempt? (CalMatters)  

• How Enviros Lost CEQA (Politico)  

Perspectives from Nonprofits  

• RE: OPPOSE AB/SB 131 CEQA Budget Trailer Bill (Letter to Governor Newsom)  

• Now You CEQA, Now You Don’t: Unpacking Major New Reforms to the California Environmental Quality Act (Greenbelt Alliance)  

• PCL’s Statement on the AB 130/SB 131 Backroom Budget Deal (Planning and Conservation League)  

• Landmark CEQA Reform Unlocks New Era for Multifamily Development in California (Urban Land Institute)  

• California Passes Transformational CEQA Reform Law, Ending Decades of Environmental and Housing Policy Failure (YIMBY Action)  

If this is an issue you are following closely, we’d love to hear from you. Please let us know how you and your organization are responding to the CEQA reforms — we’re curious to learn from funders across our network and to lift up strategies that can help advance equitable, climate-smart development across California.