What matters to me today is: AB 1751: CEQA Relief Meets the Affordability Test.
California’s latest attempt to liberate housing construction from CEQA’s burdensome processes and litigation may have found a sweet spot. But does the math work?
Too often, CEQA litigation has little to do with environmental protection. Labor interests, business competitors, and NIMBY opponents have weaponized the statute to delay or derail otherwise worthy housing projects.
The Legislature has repeatedly offered targeted CEQA relief, typically accompanied by prevailing wage and other labor mandates that can render otherwise viable market-rate projects economically infeasible.
AB 1751, the Missing Middle Townhome Ownership Act, takes a different approach.
Qualifying townhome projects receive ministerial approval, removing them entirely from CEQA review and its associated litigation risks. Remarkably, there is no prevailing wage mandate.
There are limitations: 150 units maximum, average unit size not exceeding 1,750 square feet, minimum density requirements, and restrictions on eligible sites. But these need not be dealbreakers.
The catch? Projects with 11 or more units must dedicate at least 10% of their homes to lower-income households, with affordability maintained for 45 years. Higher local affordability mandates still apply.
For builders, the calculus is straightforward: Do the savings in entitlement time, litigation exposure, and labor costs outweigh the financial burden of affordable units?
AB 1751 may offer a rare opportunity to make CEQA relief economically meaningful. Whether it succeeds will ultimately depend on project-level economics.
That’s what matters to me today in 250 words or less. What matters to you? I’d really like to know.