August 15, 2025
In a sweeping political maneuver that bypassed traditional legislative processes, California Governor Gavin Newsom this summer signed the most significant rollback of the state’s environmental review laws in decades. The reforms, embedded within the state’s $321 billion budget package, have sent ripples through the development industry—and no one is more optimistic about the changes than Sean Burton, CEO of multifamily development firm Cityview.
“This is the most consequential change in land use in California, I think, in my career, if not longer,” Burton said in a conversation with The Registry. “We’re really excited about it.”
The legislation, comprising Assembly Bill 130 and Senate Bill 131, exempts most urban infill housing projects from the California Environmental Quality Act (CEQA), a 55-year-old environmental review law that has long been criticized by developers as a tool for delaying projects through costly litigation. For Burton, whose company has been dubbed Los Angeles’ most active multifamily developer of the decade by the Los Angeles Business Journal, the changes represent a fundamental shift in how housing gets built in the nation’s most expensive state.
To understand the significance of these reforms, consider what Burton’s company typically budgeted for environmental compliance on larger projects: between $2 million and $5 million per development. That figure reflects not just direct costs, but the complex ecosystem that CEQA created around housing development.
“You have a lot of legal costs and going through the complex CEQA process,” Burton explained. “There’s a whole cottage industry of consultants involved with all the reports you need for CEQA and all the revisions for all the reports and all the challenges. You’re obviously spending a lot of time working with community groups and different constituencies and special interests.”
But the financial burden was only part of the problem. Burton identified what he called “unpredictable legal threats” as an even bigger deterrent to development. Under the old system, virtually anyone could challenge a project on environmental grounds, regardless of merit, and tie it up in courts for years.
“You could still hold up a project for two or three years while it moves its way through the courts, and eventually the developer would win, but the cost of that delay can be really detrimental to the project,” Burton said. “In many cases, it’s binary. A lot of developers will say, ‘You know, it’s not worth it. I can’t hold on for that long. I’m just going to go build somewhere else.’”
This dynamic, Burton noted, meant that many projects never got off the ground at all. “CEQA has killed projects that we’ve looked at because we’ve made a decision on the front end that there was too much CEQA risk, and so we just passed,” he said.
The reforms took effect immediately upon Newsom’s signature on June 30, and Burton’s company is already applying them to projects in its pipeline. “We’re already taking advantage of it,” he said. “We have a number of projects that we’re entitling in California, and we’re able to shorten the timeline significantly.”
The scope of the changes is substantial. Burton estimates that “the vast majority of housing projects in cities would qualify” for the new exemptions, since most developments work within existing zoning rather than seeking costly and time-intensive zone changes.
While critics have noted that the reforms only apply to urban infill development rather than greenfield projects, Burton sees this as appropriate. “We’re a firm that focuses on building in cities or inner suburbs, and I think that’s all covered here,” he said. “I think the focus was on building housing near where people work and where they socialize, and their restaurants and culture and entertainment [are located].”
The elimination of millions in environmental review costs translates directly to more viable projects and potentially lower rents. “It helps make projects pencil that wouldn’t have penciled before,” Burton explained. “You have to get a certain minimum return for your investors for taking the risk on developing and building these projects. So, I think more projects get built.”
The savings also create a virtuous cycle for affordability. “I think it means that you can underwrite lower rents for your renters, because your costs aren’t as high in order to meet your return expectations,” Burton said. “So, I think it will lead to more housing, which will lead to lower rents, and I think it’ll lead to housing that’s less expensive than it would have been otherwise.”
Perhaps more importantly for California’s broader economic competitiveness, Burton believes the reforms will help attract outside investment that has been scared away by the state’s reputation for regulatory hostility. “It’s a step in changing the brand of California that a lot of investors and businesses think is anti-business,” he said. “California has built this brand over many years, and you can’t change it overnight. But I do think this is positive information that shows that the elected officials are getting serious about building the housing that we need.”
Environmental groups have criticized the reforms as the worst anti-environmental bill in California in recent memory, but Burton argues the legislation maintains important protections while eliminating frivolous challenges.
“Sensitive habitats are still completely protected,” he emphasized. “You’re talking about infill housing here in cities. You’re not talking about building on wetlands or in sensitive areas or where there’s endangered species. Those are all still protected as they should be.”
Instead, Burton contends, the reforms target what he calls “spurious lawsuits and delays” from opponents who used CEQA as a tool to block development rather than protect the environment.
The reforms come as California faces an acute housing shortage. Different studies estimate the state needs between 1.8 million and 3.5 million additional housing units, but current production levels fall far short of demand. Burton cited national statistics showing “about 7 million fewer housing units in the country than we need, and about half of those are in California.”
While CEQA reform addresses one significant barrier to development, Burton acknowledges that other hurdles remain. Interest rates, construction costs, and local taxes like Los Angeles’ mansion tax continue to challenge project economics. “There’s a lot of hurdles to development in California,” he said. “But from an entitlement and approval standpoint, I think CEQA was the biggest.”
Burton was quick to credit state legislators for navigating the complex political dynamics required to pass such controversial reforms. “The elected officials in Sacramento deserve a lot of credit, because this was not an easy lift politically,” he said. “They really had to negotiate a bill that a number of Democratic core constituencies weren’t necessarily comfortable with. But I think they were bold in moving this forward.”
The reforms represent a significant victory for the YIMBY (Yes In My Backyard) movement and housing advocates who have long argued that California’s regulatory environment has prioritized process over outcomes. By embedding the changes in the state budget—with Newsom threatening to reject the entire $321 billion spending plan without them—the governor effectively forced a legislative confrontation that housing reform advocates had been unable to win through traditional channels.
As the dust settles on this legislative achievement, the development industry will be watching closely to see whether the reforms translate into measurably increased housing production. Burton is optimistic that they will, both in terms of attracting new investment and enabling more aggressive development timelines.
“I think we need to get building as a state,” he said. “We’re building a fraction of the number of homes that we need to. I’m excited that this will get investors to take another look at California and get us building again.”
For a state that has long struggled to balance environmental protection with economic development, the CEQA reforms represent a significant recalibration of priorities. Whether they succeed in meaningfully addressing California’s housing crisis will depend not just on regulatory changes, but on the broader economic and political forces that shape where and how Americans choose to live and work.
The ultimate test will be in the numbers: more housing units completed, faster project timelines, and perhaps most importantly, measurable improvements in housing affordability for California’s residents. If Burton and other developers are right, the reforms could mark a turning point in one of the nation’s most intractable policy challenges.
Read more: https://theregistrysocal.com/californias-ceqa-rollback-signals-new-era-for-housing-development/
