California voters have rejected a ballot measure to speed environmental review of housing and other projects.
Proposition 45 would have consolidated a patchwork of legislative fixes to the California Environmental Quality Act, aimed largely at reducing a costly hurdle to building housing. The Associated Press called the race over the weekend, though the state is still counting votes. Unofficial returns showed about 56% of voters opposed and 44% in favor, a spread too large to overcome with the remaining votes.
It failed decisively across populous coastal counties, where housing affordability is a pressing concern. Voters in Santa Cruz, Marin and Sonoma counties rejected the measure by the widest margins.
Opponents tied the measure to data center development, an influential argument in midterm races nationwide.
“Californians have sent a clear message to corporate developers, utilities and data center builders that they will not stand for a broad assault at the ballot box on state law protecting our air, water and natural resources,” the Vote No on Prop 45 campaign released in a statement.
Proponents dubbed that an inaccurate scare tactic.
“The opposition relentlessly lied, falsely claiming that Prop 45 covered data centers when non-partisan experts agreed it did not – and used smokestack images and scare tactics about air and water pollution when the ‘essential projects’ included in Prop 45 did not include smokestack industries and also excluded mining, port, and other controversial projects,” Jennifer Hernandez, who leads Holland & Knight’s West Coast land-use and environmental group, told HousingWire TBD.
Lack of support from housing advocates
Opponents also countered the claim that the measure would help create affordable housing. They cited housing groups that urged a no vote or declined to endorse. Abundant Housing LA and California YIMBY, both of which endorsed L.A. Mayor-elect Nithya Raman, did not endorse the measure.
Opponents included the California Democratic Party, the League of Women Voters and the American Lung Association. Sierra Club California and the California Federation of Labor Unions also opposed it.
The California Chamber of Commerce sponsored the measure, with backing from home-builder groups and some affordable housing advocates.
“We were outspent but not outgunned, thanks to a broad bipartisan coalition that understood that Californians know we can have progress and safeguard our environment at the same time,” the campaign noted in its statement.
What the measure would have done
Had it passed, the measure would have capped full environmental impact reports at 365 business days. Court challenges would have faced a 270-day limit.
Covered “essential” projects included housing, water, energy, schools, health facilities and transportation. Applicants could have chosen the new procedures or the existing ones.
The Legislative Analyst’s Office said the measure could cost local governments up to $100 million a year at first. Long-term financial effects were unclear. A Chamber-commissioned analysis projected $1.5 billion in savings and added revenue over 10 years.
Prop. 45 followed a run of legislative changes that limited CEQA reviews of housing proposals. Gov. Gavin Newsom signed Assembly Bill 130 and Senate Bill 131 in 2025. They exempted qualifying infill housing from CEQA and narrowed review for some projects falling short of an exemption.
A newer round of bills signed this fall targets more permitting delays. Some shield specific developments from further CEQA challenges. One is a major mixed-use development in San Diego.
Backers argued those fixes helped only some projects. They said project-specific exemptions left other developments exposed to years of delay. Prop. 45 would have applied common deadlines to all eligible projects.
Arguments for and against
Supporters said predictable timelines would help California build homes and the infrastructure that serves them. They said CEQA lawsuits add tens of millions of dollars in costs, and thwart efforts to increase housing supply by escalating entitlement risk. They also argued that the measure could cut delays by two to 10 years.
“Not-in-my-backyard” and environmental groups have long sued local governments under CEQA. Those suits typically argue agencies did not properly handle environmental impact reviews.
A study by Hernandez and other researchers reviewed 498 CEQA appellate decisions from 2013 through 2023. Agencies prevailed in 75%. But the study said prolonged litigation still stalls financing and raises costs. It covers appellate decisions only and predates the 2025 reforms.
Opponents said the 2025 reforms already addressed much of CEQA’s housing problem. They said Prop. 45 would cap public-comment periods, narrow tribal consultation and limit judicial review. They also argued that affordability was being used as cover for a developer advantage.
Critics said “essential” was defined so broadly that it could fast-track freeways, power plants and pipelines.
The fight to streamline CEQA may now shift back to the Legislature and a new governor.
“We know this fight is not over,” the No on Prop 45 campaign wrote in its statement.
Proponents are ready, too.
“The good news is that many millions of Californians voted for Prop 45, and do want timely, accountable, and predictable outcomes in CEQA,” Hernandez said. “Our legislative supporters saw the dirty trick campaign tactics unfold, and now have the opportunity to adopt these important CEQA reforms for the ‘essential projects’ that California needs to restore affordability to our state.”
