On January 12, 2025, California Governor Gavin Newsom issued an executive order that suspends the California Environmental Quality Act ("CEQA") and the California Coastal Act ("Coastal Act") for projects to repair, restore, demolish or replace properties and facilities substantially damaged or destroyed as a result of the wildfires in Southern California. 

The suspensions mean that project applications for rebuilding homes, business, and other structures that were damaged or destroyed by the Palisades, Eaton, Hurst, Lidia, Sunset and Woodley fires will not have to undergo environmental review.  Nor, will they have to undergo review for compliance with the Coastal Act, which can limit the extent to which a project can modify land within the coastal zone, typically land along and near the California coast.  Without the Governor's suspension, a project that would have triggered CEQA and/or Coastal Act review could have taken at least 18 months to obtain local approval, which would have been subject to appeals and litigation, tying up a project indefinitely. 

Now, "properties and facilities that are in substantially the same location as, and do not exceed 110% of the footprint and height of, properties and facilities that were legally established and existed immediately before this emergency" will not be subject such uncertainty. 

In addition, the executive order also allows property owners to transfer the base year value of property that is substantially damaged or destroyed by the disaster to the rebuilt property. This could be a significant tax savings, depending on the age of the base year. 

Here are few other details from the executive order:

• The Department of Housing and Community Development ("HCD") will coordinate with local governments to recommend procedures to establish rapid permitting and approval processes to expedite the reconstruction or replacement of residential properties, with the ultimate goal of issuing all necessary permits and approvals within 30 days.     
• HCD, the Office of Land Use and Climate Innovation, the Office of Emergency Services, and the Department of General Services must provide the Governor a report within 30 days identifying other state permitting requirements that may unduly impede efforts to rebuild properties and facilities. 
• The time period under California Penal Code section 396 during which persons, contractors, and businesses are prohibited from increasing the costs of goods and services for emergencies by more than 10 percent is extended until January 7, 2026. 

This executive order comes on the heels of years-long efforts to reform CEQA and streamline the permitting process to increase the rate at which new homes are being built in the state.  The state is facing a serious housing shortage.  Lifting CEQA to rebuild devastated areas in the Los Angeles area will certainly help kickstart the effort to recoup lost housing stock.   

But the executive order may be at tension with a recent Court of Appeal case that punched up CEQA requirements for analyzing a project's impacts on evacuation routes and wildfire risk.  In People v. County of Lake (Oct. 23, 2024, No. A165677) ___Cal.App.5th___ [2024 Cal. App. LEXIS 667] ("Bonta v. Lake"), the Court of Appeal held that a Final Environmental Impact Report for a proposed luxury resort in Lake County failed to, among other things, disclose the project's increased fire risks.  It affirmed the trial court's ruling, which found, among other things, that the FEIR failed to consider the Project's impact on the community's ability to evacuate from a wildfire. 

Given CEQA's requirements for a fire risk analysis and the Bonta v. Lake decision, it's difficult to see how local governments, notwithstanding the Governor's executive order, will approve all projects in fire-destroyed areas without considering the projects' impacts on fire risk and evacuation routes.  Pictures of abandoned, bumper-to-bumper cars on Sunset Boulevard should tell any city planner that a fire risk analysis for projects being rebuilt in fire-prone areas is probably in order.