STAFF REPORT
Meeting Date: July 15, 2025
To: Honorable Mayor & City Council
From: Michael Forbes, AICP, Director of Community Development Masa Alkire, AICP, Assistant Director of Community
Development/City Planner
David M Snow, Assistant City Attorney
Subject: New Statutory Exemption from the California Environmental Quality Act for Housing Development Projects (Public Resources Code Section 21080.66)
Attachments: None
INTRODUCTION
In conjunction with the passage of the state budget, the legislature adopted a new California Environmental Quality Act (CEQA) statutory exemption for any aspect of a housing development project. The exemption will likely have broad applicability to housing projects in Beverly Hills, including pending builder’s remedy projects. This report is intended to inform the City Council and the public about the new exemption.
DISCUSSION
On June 30, 2025, Governor Newsom signed Assembly Bill 130, which took immediate effect.
AB 130 includes many legislative amendments, however this report will focus on the new CEQA exemption that is included in the bill,1 and codified at Public Resources Code Section 21080.66.
In summary, the new CEQA exemption applies to any aspect of qualifying “in-fill” single-unit and multi-unit residential projects, mixed-use projects with residential and nonresidential components that meet certain requirements, transitional and supportive housing, and farmworker housing located within an incorporated municipality or an urban area. The exemption extends to any permits, approval, or public improvements required for the project. 1 The new exemption is set forth in Section 59 of AB 130.
Meeting Date: July 15, 2025
Eligibility Criteria
To qualify for the exemption, housing development projects must meet all of the site and project criteria set forth in Public Resource Code Section 21080.66, including, but not limited to:
• The site is not greater than 20 acres in size, except for builder’s remedy projects, which cannot exceed 5 acres in size
• The site is located in an incorporated City or within an urban area • The site meets one of the following:
o It has been previously developed with an urban use [which will be the case for most sites in the City]; or
o At least 75 percent of the perimeter of the site adjoins parcels that are developed with urban uses; or,
o At least 75 percent of the area within a one-quarter mile radius of the site is developed with urban uses; or,
o For sites with four sides, at least three out of four sides are developed with urban uses and at least two-thirds of the perimeter of the site adjoins parcels that are developed with urban uses.
• The project is consistent with the applicable general plan, zoning ordinance and applicable local coastal program; density bonuses and related concessions, waivers, and reductions in parking requirements shall not be grounds for determining that a project is inconsistent.
• The project must meet certain minimum density requirements, which for Beverly Hills will be 15 dwelling units per acre.
• The project site is not located in:
o certain coastal zones
o areas of prime farmland or farmland of statewide importance o wetland areas
o very high fire hazard severity zones (unless certain fire hazard mitigation measures are adopted and in place)
o hazardous waste sites
o designated earthquake fault zones (unless certain seismic protection building code standards are met)
o flood hazard areas or regulatory floodway areas
o lands identified for conservation in a Natural Communities Conservation Planning Act or habitat conservation plan under federal law o habitat for protected candidate, sensitive, or special status species as identified by a state of federal agency pursuant to endangered species regulations
o lands under conservation easements.
• The project will not require demolition of any national, state, or local designated historic structure that was designated prior to the date of a preliminary application filed for the project.
• The project does not include a hotel use, if the project was deemed complete on or after January 1, 2025.2
2 For purposes of the hotel use limitation, “deemed complete” means that the applicant has submitted a preliminary application pursuant to Government Code Section 65941.1 or, if the applicant has not submitted a preliminary application, has submitted a complete application pursuant to Government Code Section 65943.
Meeting Date: July 15, 2025
Tribal Consultation
The exemption includes a requirement to engage in tribal consultation with California Native American Tribes that are traditionally and culturally affiliated with the project site. The consultation must be commenced within 14 days after a project is deemed complete, or for certain pipeline projects, within 14 days of the City receiving notification that the project is eligible to be exempt under Section 21080.66. Tribes would have 60 days from notification to request consultation, and if requested must be commenced within 14 days, and concluded within 45 days, subject to a single 15-day extension if requested by the Tribe. Any project approval must include certain conditions relating to tribal monitoring during ground disturbance, and avoidance of tribal cultural resources.
Phase 1 Environmental Assessment
Projects using the exemption must be conditioned to complete a Phase 1 environmental assessment, and address any recognized environmental conditions that may be identified.
Development Standards for Projects within 500 feet of a freeway The statute requires certain minimum heating, ventilation, air conditioning, and balcony standards for projects near freeways, however, because there is no freeway in Beverly Hills, these will not apply to projects in the City.
Prevailing Wages /Skilled and Trained Workforce Requirements Certain housing development projects utilizing this CEQA exemption must meet specified labor standards. Projects in which 100% of the units are dedicated to lower income housing must pay prevailing wages, and buildings over 85 feet in height must pay prevailing wages and use a skilled and trained workforce. In Beverly Hills, projects that are under 85 feet in height would not be subject to any of these requirements, unless consisting of 100% lower income units.
Scope of Applicability
Staff expects that most housing development projects are likely to meet the foregoing criteria to be eligible for the 21080.66 exemption. Consistent with this expectation, the Community Development Department has already received correspondence from several project applicants asserting the applicability of the exemption to their projects. A lead agency that does not utilize the exemption in situations where it clearly applies, could face penalties under the Housing Accountability Act.
Unlike “categorical” CEQA exemptions, this exemption is not subject to exceptions, including: (1) where there are unusual circumstances that could result in environmental impact, (2) where there is the potential for cumulative impacts, and (3) impacts to historic resources.
Permit Streamlining Act Amendment
It is important to note that AB 130 also amended the Permit Streamlining Act to require. among other things, that public agencies approve or disapprove projects that rely on this exemption within 30 days of the conclusion of the tribal consultation process noted above. This means projects that qualify for and rely on this exemption will need to be moved through the decision Meeting Date: July 15, 2025
making process very quickly upon conclusion of tribal consultation. Staff expects most of these projects will be considered by the Planning Commission, and the Commission’s decisions would be subject to appeal to the City Council, or City Council ordered review.
FISCAL IMPACT
This new CEQA exemption will require staff time and resources to complete the tribal consultation process. When required for a housing development project in the past, the tribal consultation process has been completed as part of the more exhaustive CEQA review. The cost of the associated staff time has been offset by the administrative overhead fees paid by the applicant for the CEQA consultant contract. The new CEQA exemption will eliminate the need to retain a consultant to complete the environmental review, so the City will no longer collect an administrative overhead fee. Staff will evaluate the time and resources that are required for tribal consultations under the new exemption and if appropriate will recommend establishing a new fee to offset the staff time and resources required.
RECOMMENDATION
Receive and file the report.
Michael Forbes, AICP
Director of Community Development
Approved By