This 1972 State statute, much amended over the years, requires that all but small development projects be evaluated for their impacts on the environment. “Project” is defined as any change to the pre-existing environment – such as new structures, simply paving a parking lot, or re-grading a hillside – and also includes changes or amendments to land use regulations, such as zoning codes and general plans. “Environment” was originally intended to apply only to the physical world, but over time, it has come to include traffic and public services.

CEQA is similar to but not exactly the same as the federal National Environmental Policy Act (NEPA) of 1970. The potential environmental impacts of developments funded with HOME, CDBG or other federal funding sources are evaluated under NEPA as well as CEQA in a single set of documents.

CEQA exempts certain small projects from requiring environmental review. Examples include: building additions that add no more than 50% of the original square footage; replacement or reconstruction of certain types of buildings; up to three single-family homes in urban areas; a duplex, a triplex and a fourplex; and small stores, motels, offices or restaurants under 2,500 square feet. Such small projects are called “Categorially Exempt.” Under certain circumstances, other small infill and/or affordable housing projects are also exempt. Larger projects also do not need further environmental review if they fall within the parameters of a previously approved “master EIR” (such as one prepared for all development in a Specific Plan area).

All other projects must have an Initial Study (or draft EIR) prepared. This document evaluates the potential environmental impacts of the project, usually involving analyses prepared by various professionals (traffic engineers, biologists, geologists, etc.). Typically, jurisdictions will not accept applications for land use entitlements that are not accompanied by an Initial Study.

Based on a jurisdiction’s review of the Initial Study and the project’s size, location, type (i.e, seniors vs. family housing), and design, it can take one of two courses of action:

  • The first is to issue a Negative Declaration (ND), which is a written statement that the project will not have a significant effect on the environment. Under NEPA, this document is called a Finding of No Significant Impact, or FONSI (pronounced “fonzie”).


  • Require the preparation of an Environmental Impact Report (EIR) if there is the potential for significant environmental effects. Under NEPA, this document is called an Environmental Impact Statement (EIS). In many cases, a project proponent and the city’s environmental review staff agree, even before the project application is filed, that an EIR will be necessary, in which case the Initial Study phase of the project can be bypassed and a draft of the EIR is submitted instead. An EIR includes: impacts and mitigation measures, by topic area (air quality, water quality; wildlife, traffic, etc.); growth-inducing impacts; significant and irreversible environmental changes; significant and unavoidable impacts; and alternatives.

There are several points in the CEQA process that provide opportunities for the public to be engaged.

  • Notice must be provided of the proposed approval of a Negative Declaration.
  • Negative Declarations can be appealed based on the alleged inadequacy of the Initial Study or the conclusion that the project will not have a significant effect on the environment.
  • A Notice of Preparation alerts the public that an EIR is going to be prepared, and that the public can attend a “scoping” session which is held to insure that all areas of potential environmental impact will be addressed.
  • A Notice of Availability alerts the public that a draft EIR has been published, is available for public review, and that the public can submit written comments on the adequacy or accuracy of the environmental analysis. Such comments and written responses from the jurisdiction are incorporated into the Final EIR along with any modifications to the text in the draft EIR.
  • Some jurisdictions also hold a public hearing at the conclusion of the comment period and before the EIR is finalized.

Anyone can request to be put on a list of individuals to receive direct, personal notification of any and all of the notifications outline above for projects in particular neighborhoods or parts of a city, or for projects citywide.

In the case of either an ND or an EIR, the size of the project being evaluated (be it the number of units or square footage of non-residential structures) is an absolute cap on how much development can subsequently be approved (though a smaller project can be). In cases where higher densities are contemplated and desired, the highest possible density should be addressed in the environmental analysis; otherwise, if later there is interest in increasing the size or density of the project, the environmental review process will need to be repeated.

EIRs, in particular, involve a considerable amount of time and money, and can add significantly to the costs of completing a project. Generally, an Initial Study that leads to an ND does not necessarily add time to the development review process since the Initial Study can be prepared at the same time that the developer is drawing up plans for submittal of the zoning-permit application.

CEQA poses challenges to developers aside from time and money, even in the best of circumstances, to ensure that the environmental analysis is accurate and transparent.  Actual or purported inadequacy of a project’s environmental review can form the basis for legal challenges to the approval of the development, even if the underlying motivation for the challenge is something other than environmental protection.  Clearly, litigation will add extra costs and considerably extra time expended that could well render the project infeasible.

Such CEQA challenges have been identified by many parties as one of the contributing, root causes of the shortage of housing, and particularly affordable housing, throughout California. In its response to the State-wide housing crisis, the Legislature has approved many bills to streamline the local development review process. One such measure was SB 35 (2017 Session) which mandated that housing development proposals that meet a jurisdiction’s objective written criteria must no longer be the subject of a discretionary approval process but instead be considered “ministerial” projects (that is, must be approved if conforming to those objective criteria). Since CEQA applies only to discretionary-approval projects, this new requirement could exempt many more housing projects from environmental review requirements.

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