Major CEQA Shift: AB 130 and SB 131 Explained

AB 130 and SB 131: Key CEQA Changes Impacting Local Review of Housing Projects

On June 30, 2025, Governor Newsom signed Assembly Bill (AB) 130 and Senate Bill (SB) 131 that will streamline the California Environmental Quality Act (CEQA) review process for specified housing development projects.
 
The first bill, AB 130, exempts from CEQA housing developments that meet local zoning, density, and objective planning standards so long as they are not located on a site where a “recognized environmental condition is found.” The second bill, SB 131, broadens the exemptions and establishes a process for reviewing housing development projects that meet all but one eligibility criterion for the specified CEQA exemptions, with a specified exclusion. These changes will take effect immediately.

Changes Made by AB 130

AB 130 exempts certain housing development projects from CEQA if the housing development project meets certain conditions relating to size, density, location, and use, including additional requirements for housing located within 500 feet of a freeway. It requires local governments to notify California Native American tribes affiliated with the project site and invite consultation within set timeframes. As a condition of approval and before the issuance of the certificate of occupancy, developers must complete an environmental assessment for hazardous substance release, and if contamination is found, conduct a preliminary endangerment assessment and specified mitigation based on that assessment.
 
AB 130 also requires that prevailing wage requirements apply to 100% affordable housing projects, even if the project is not classified as a public work. Additionally, the bill mandates the use of a skilled and trained workforce for any buildings exceeding 85 feet in height.
 

Changes Made by SB 131

SB 131 establishes a new review process for housing projects that meet all but one of the criteria for a CEQA exemption. Under this process, the environmental review, whether an EIR or initial study, is limited to analyzing only the impacts directly related to the single disqualifying condition. It also eliminates the requirement to evaluate project alternatives, cumulative impacts, or growth-inducing effects that are typically part of a full EIR.
 
Amongst other changes, SB 131 expands CEQA exemptions to cover a broad range of project types. Some include new and existing farmworker housing projects; certain wildfire risk reduction efforts, and nonprofit food banks and pantries. This bill also exempts from CEQA any rezoning that implements an approved housing element. These exemptions do not apply to a project located on “natural and protected areas.”
 
AB 130 and SB 131 bring substantial changes to CEQA procedures and impose new responsibilities on local agencies in reviewing and approving housing projects. A key takeaway for local agencies is the need to review and potentially revise internal processes to ensure compliance with these new requirements. If your agency needs guidance implementing these changes or evaluating project eligibility under the new laws, please contact the authors or another member of our team—we are here to help.