Environmental regulations are aimed to preserve ecosystems and improve the quality of the environment, including wildlife. The management of natural resources by the state government and the related environmental regulations can have a significant impact on ranchers, loggers, farmers, and property owners in California.
Impact of Environmental Regulations on Property Prices
Stringent environmental regulations are often imposed on the suppliers of housing and other property. This makes it possible for these laws to have a substantial impact on the housing market. The extent of the overall impact is measurable in terms of the changes in the number of houses available for sale and the property prices.
Environmental laws primarily impact the supply of land, which is a chief input for property development. Some regulations can change the price of lumber and other inputs as well. In this way, the regulatory regime has a major impact on the supply of housing. Prices of property will naturally go up if it takes more time to build housing units. The same holds true if environmental laws increase the likelihood of litigation faced by housing developers.
On the other hand, if environmental regulations are effective, they can improve the quality of the land and its surroundings, giving impetus to property prices and demand. This is particularly true in the case of residential properties.
NIMBY and Anti-Development Quagmire
There is a rise in California’s rental and housing markets. This is particularly true in the Silicon Valley Bay Area, which is the state’s economic engine. With many Not-In-My-Backyard (NIMBY) backlashes, local elected officials and housing advocates are scurrying to find affordable solutions. There is a severe housing supply-demand mismatch because of the California Environmental Quality Act (CEQA.)
Using political pressure and misinformation, housing communities across the Golden State have successfully managed to prevent numerous new development projects. Property owners routinely use the CEQA as an onerous public policy intimidation tool. NIMBYism opposes the development of new projects near one’s own property.
Everything from social noise to developing brownfields is used as an excuse to prevent a new property from getting developed. This has become a huge problem for local governments since it typically forces them to approve non-comprehensive, inefficient, and ad hoc development plans.
All residential property owners are not against development. However, it is still prudent for developers to speak with a skilled local real estate attorney before starting any new projects. NIMBY property owners demand slow growth focusing on the intrinsic feel of the neighborhood and preserving its culture. It flatly opposes any large government or development projects.
Misuse of CEQA by Property Owners
The California Environmental Quality Act was signed by Ronald Reagan in 1970 for protecting the natural environment in the development of both private and public projects. Unfortunately, it is routinely misused for stopping or delaying housing construction.
Anti-housing residential property owners in affluent communities use CEQA to block multi-family and high-density projects. They argue that such projects would alter their neighborhood’s bucolic ambiance. Construction unions routinely extract wage concessions from property developers by misusing CEQA.
Legislators and governors routinely grant CEQA exemptions in the absence of comprehensive reforms for particular projects. This is usually the case for narrow categories of housing or sports arenas. There is an increase in CEQA misuse with courts becoming a battleground over its application.
How Can Property Developers Make the Process Smooth
CEQA should not be treated as a direct land use or zoning regulation. There are no explicit restrictions placed on the development. However, the California Environmental Quality Act has become a major obstacle for property owners, developers, and businesses.
Environmental impact assessments are usually time-consuming and costly. Development can quickly grind to a halt during litigation if a lawsuit gets filed during the process. Developers should ideally do the following to make the process smooth:
- Ensure the administrative record is strong. This will help in dissuading and defending against potential judicial challenges.
- Get involved in the preparation and review of environmental documents (as much as the city allows). This will ensure that the records are accurate and complete.
- Get your project approved faster with recent and developing legislation. This will provide you with better opportunities and standards from a planning perspective. It may also allow for a less rigorous CEQA review.
You should develop a plan for addressing potential environmental challenges before starting any major real estate project. An experienced land use and zoning attorney in California can help you navigate the multiple regulations.
There are several requirements from a CEQA perspective that property developers need to satisfy. In addition, there are also local regulations and planning and zoning laws that can make the task challenging.
Talk to a Skilled and Knowledgeable Real Estate Attorney – Book Your Consultation Today
The attorneys at Peterson, Martin & Reynolds LLP have a history of providing the right advice and solid legal representation to clients and achieving successful outcomes. To request your consultation, call us at (415) 399-2900 or complete this online form.