Proponents and opponents of the ballot proposition that would rewrite the state’s environmental law to expedite the review of so-called essential housing and infrastructure projects agree on one thing: The future of California is on the line.

The existential nature of Proposition 45, the camps say, is either a rare opportunity to make blanket reforms to a law that has hamstrung development and made life in California unaffordable, or it’s a snake-in-the-grass attempt to unravel the state’s primary way of protecting people from disastrous environmental consequences.

Placed on the November ballot by the California Chamber of Commerce, Proposition 45 seeks to amend the California Environmental Quality Act with new procedures for the environmental review of projects defined as essential.

The state law, enacted in 1970, requires public agencies to study and disclose the environmental impacts of projects before approval. The proposition, if approved by voters, would allow project applicants to opt into a revised CEQA process that includes tighter, enforceable timelines for permitting and review periods, shorter windows for public input and changes to how courts consider legal challenges.

Specifically, public agencies would be required to certify final environmental impact reports within 365 business days. Today, agencies have a one-year timeline to complete the reports, but the deadline is not strictly enforced. The proposition would allow project applicants to compel agencies to finish the work and schedule a hearing on a project decision if there is a delay.

Proposition 45 also replaces minimum periods for public review with a maximum of 20 calendar days for comments on a mitigated or negative declaration, and 45 calendar days for a draft environmental impact report. And applicants would only need to identify a single project alternative to study, as opposed to a range of project alternatives.

In addition, courts would have to resolve legal challenges, including appeals, within 270 calendar days, although the parties could agree to a 90-day extension.

The projects that would qualify for the expedited review process run the gamut.

The measure broadly defines essential projects across eight categories, including housing, clean energy, water, public health, public safety, broadband internet access, education facilities and transportation. Jails, oil and natural gas facilities, high-speed rail and some water conveyance projects are explicitly excluded. The provisions may apply, however, to data centers — the Yes on Prop 45 camp maintains they do not — depending on how the measure’s language is interpreted.

Proposition 45 is backed by prominent tech leaders, top homebuilders, major utility companies and real estate organizations. As of Oct. 22, supporters have raised $38.6 million, with the largest donor, the Building a Better California political action committee funded partly by tech billionaires Sergey Brin and John Doerr, contributing $10 million.

The measure is opposed by environmental advocacy philanthropists, groups and law firms, as well as labor unions. Opposition campaigns have raised $31.2 million through Oct. 22, with billionaire philanthropist Wendy Schmidt contributing $10 million.

The sword and the cleaver

The change in state law would have important implications for projects in the San Diego area, where it routinely takes several years for large developments to navigate the state-mandated environmental review process. Projects can be further held up in court if opponents take issue with the sufficiency of the environmental work.

“(Prop. 45) is a once-in-a-generation opportunity to have some meaningful change to CEQA,” said Heather Riley, a local land-use attorney and the general counsel for the Building Industry Association of San Diego, which is backing the proposition. “CEQA has become more of a sword as opposed to a shield for the environment, and I think the latter was the original intent of the legislation. It’s used now to prevent really good projects from moving forward. Sometimes at all.”

The proposition keeps the essential elements of CEQA in place, but introduces “guardrails” and “shot clocks” to add a layer of certainty to a review process that can otherwise feel like a black box, she said.

But Proposition 45 opponents view the measure as a fundamental shift in the balance of power, with developers getting the upper hand at the expense of real environmental concerns.

“(Prop 45) takes a meat cleaver to the existing environmental and community protections, and it would dismantle CEQA,” said attorney Douglas Carstens, whose firm Carstens, Black & Minteer LLP specializes in environmental law. “The way it does that is it changes everything, beginning with the administrative review, all the way through judicial review, if necessary. … It changes the philosophy and the ethos of protection.”

The latter concern is reflected in language that states the new provisions should “be interpreted and implemented to afford the fullest possible weight to the interest of, and the approval and realization of, essential projects.” That’s in contrast to current CEQA guidelines, which require the law to be interpreted in favor of environmental protections.

The existing process is playing out in various forms and stages across the county.

California lawmakers just helped insulate the not-yet-approved Midway Rising mega project from CEQA-related litigation, preemptively seeking to eliminate legal road blocks that could delay for years the construction of 4,254 apartments and a new arena.

Meanwhile, the recently approved Starlight Solar Project, a renewable energy solar and battery storage project on 588 acres in unincorporated East County, is being sued for alleged CEQA violations.

And last year, environmental groups and the state attorney general settled a CEQA lawsuit with the developer behind the Otay Ranch Village 13 project over wildfire concerns. The settlement reduced the project’s footprint by 300 acres, which is now set aside as open space.

The 453-home Harmony Grove Village South project near Escondido, initially approved eight years ago, is a poster child for the proposition, proponents say.

The San Diego County Board of Supervisors first OK’d the project in 2018, but residents and environmental groups concerned about fire safety issues sued, alleging CEQA violations. Portions of the EIR had to be recirculated to correct a mitigation measure around greenhouse gas emissions. The county supervisors approved the project again last year, but new lawsuits continue to thwart the development.

Proponents believe the revised judicial review provisions in Proposition 45 would ensure that litigation on projects like Harmony Grove is resolved much faster. The law would have also allowed the county to address the greenhouse gas mitigation measure without having to set aside its approval of the entire project.

“There were errors in (the Harmony Grove) analysis, according to a judge, and they had to go back and fix it. And it’s been taking such a long and tortuous process that the housing has been delayed and raised costs,” Riley said. “I do feel very strongly that if these provisions are put into place, I think it would be a little bit harder for the opposition to become as difficult and intractable as they have.”

The ramifications of delayed or blocked projects are felt most by area workers and employers, said Chris Cate, who is the president of the San Diego Regional Chamber of Commerce.

“Today we have over 140,000 people who drive from outside of San Diego County into San Diego every day for their jobs. So these are employees who are on the road multiple hours a day. That’s time away from their families that impacts their quality of life,” Cate said.

“From a business standpoint, if you’re looking for employers to start or grow their companies in San Diego, the first thing they’re going to look at is the quality of life for their employees and where they’re going to live,” he said. “And this makes it difficult for employers to locate, grow and expand in San Diego when their employees are spending a good amount of time in their cars every day to get to their jobs.”

Counting the costs

The Harmony Grove and Otay Ranch projects are, to the contrary, examples of how CEQA is working as intended when it comes to “sprawl” development, Carstens said.

Sprawl typically refers to the expansion outward from city centers into suburban and rural areas. It is viewed negatively by environmentalists because it comes at the expense of natural habitats and requires people to drive more miles, leading to more carbon emissions.

“Those types of developments can still go forward so long as they disclose to the public and to decision makers their impacts and how those impacts would be mitigated, so it doesn’t come as a surprise to people that their house was built in a wildfire hazard area,” Carstens said. “CEQA and environmental review doesn’t necessarily stop or prevent these things from being built there. It requires accountability, and it requires consideration of other ways to go about it that may be less dangerous for the public and for future users.”

San Diego Councilmember Sean Elo-Rivera called Proposition 45 a “wolf in a sheep’s clothing” because he believes it will produce sprawl, could allow for the fast-tracking of data centers and is backed by special interest groups who are not trustworthy.

“What is aiming to be built through Prop. 45 is sprawl, and it’s sprawl that will obviously have environmental impacts and be at higher risk of fire danger, potentially increasing insurance costs for regular people (and requiring) enormous costs in terms of building out the infrastructure,” he said.

Data centers are not mentioned in the measure. But the specter of them has surfaced as a rallying cry for opponents. There is a larger debate around the controversial facilities, which house the computer systems needed to train generative AI models and require a lot of water and electricity.

“I think most people could see a situation where supporters of a data center would say that it is ancillary to a telecommunications project or a utility,” Elo-Rivera said. “It is foreseeable that a case would be made for that, and it would be a very well-funded case with very high-priced attorneys.”

Ultimately, he said, it comes down to who is backing the proposition.

“I am very, very, very skeptical,” the city leader said. “Billionaires and data center developers and oil companies should not be writing the rules for how they bypass environmental review.”

Cate said that businesses have essentially been forced into action.

“If you look at the proponents of the measure, they’re trying to solve a problem that we have in San Diego,” he said. “When we look at affordability, when we look at the cost of living in San Diego, unfortunately, those who are in charge, our policymakers at the statewide level, haven’t done their jobs. And now it’s incumbent upon those who are employers and people who run businesses in San Diego who are trying to take up the cause.”

And the data center rhetoric is disingenuous, proponents say.

“The people who put this together tried to find the pieces that are truly ‘essential’ to how California develops. Data centers don’t fit within that category. That’s our belief. That’s our understanding. That’s how this was written. It’s not the intent,” Riley, the land-use attorney, said. “I think it’s fearmongering on the other side.”

The proposition is written to support high-speed internet access projects, like upgraded fiber, in places where there’s limited service today, she said.

Proposition 45 would come with increased costs — potentially more than $100 million per year — for state and local governments tasked with implementing its provisions, according to an analysis by the nonpartisan Legislative Analyst’s Office. But costs, which could partially be recovered through applicant or court fees, are expected to decline over time, especially if there are fewer CEQA lawsuits, the analysis states.

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