Does Contra New Industry Lawsuit Have Merit?

GUEST OPINION

(Photo – Pasadena, staff).

The Two Hundred is a new industry-backed group with a familiar refrain: California’s housing shortage (and overall low level of affordability) is caused by out-of-control environmental laws. The group is now suing the State of California for pursuing “racist” climate policies that they claim primarily displace people of color by driving up basic living expenses.

By Ethan Elkind

They have a website, some prominent civil rights advocates that have joined them, and a professional video to make the case that California’s housing production is stymied solely due to environmental review under the California Environmental Quality Act (CEQA). Specifically, they allege that the need to reduce greenhouse gas emissions under the state’s climate “scoping plan” is exacerbating environmental review by saddling new housing projects with requirements to reduce on-site energy usage and vehicles miles traveled. (They also blame high electricity costs for making the state unaffordable, as a result of mandates to procure more renewables and reduce on-site energy usage, even though these policies are enacted under separate statutes from the state’s climate law.)

Does this lawsuit have merit?

No, but the group has correctly identified a major problem in California: the state is unaffordable for too many residents, almost exclusively due to high housing costs resulting from a decades-long history of under-building homes relative to job and population growth.

But the problem with their lawsuit is that they are blaming the wrong policies and decision-makers. Instead of starting by identifying what actions most constrain housing growth and affordability in the state, and then asking how the state is addressing or exacerbating these barriers, the lawsuit assumes (without evidence) that CEQA is the prime barrier to housing.

But study after study has debunked the idea that CEQA lawsuits are a major factor impeding new housing. Instead, the real culprit is restrictive local zoning and burdensome permitting processes.

So why isn’t the group suing every NIMBY-captured local government in the state for preventing housing, which drives up costs and forces long commutes? First, they probably don’t have a great legal cause of action against all these cities — or a convenient way to sue hundreds of them — whereas they can go after a state agency like the California Air Resources Board (CARB) more easily in court. Second, given their industry-backed leadership, I suspect that they don’t really care about local barriers to housing. Instead, they are exercising a longstanding beef against CEQA for its role in slowing megaprojects, especially sprawl development.

Yet the lawsuit is worth keeping an eye on, given the savvy of the industry lawyers behind it and the underlying truth of the problem they’ve identified, if not the remedy to address it.