The Supreme Court, in a much-anticipated decision, in California Building Industry Association v. Bay Area Air Quality Management District, Case No. S213478 (December 17, 2015), held that public agencies subject to CEQA are not required to analyze whether existing environmental conditions may impact a proposed project’s future users or residents – also known as “reverse CEQA” or “CEQA in reverse” – as opposed to the more traditional analysis of a proposed project’s impact on the environment, unless:
- The proposed project risks exacerbating existing environmental hazards – in which case, it is the proposed project’s impact on the environment not the environment’s impact on the proposed project, which compels the evaluation; or
- A reverse CEQA analysis is already required under statute, for example, on certain airport, school and housing projects.
The Supreme Court’s decision is a blow to reverse CEQA advocates who contend that analyzing the environment’s impact on proposed projects is often just as important as analyzing a proposed project’s impact on the environment. Reverse CEQA supporters point to examples of projects built in hazardous environmental areas, such as areas where the sea level is expected to rise, areas where there is existing high air pollution, and areas with high subsidence, mud displacement, etc.
Reverse CEQA is not just important, they argue, but permitted under CEQA. In support they point to Public Resources Code section 21083, which requires the California Office of Planning and Resources (“OPR”) to prepare guidelines for public agencies to follow in determining whether a proposed project may have a “significant impact on the environment,” and the guidelines themselves under 14 California Code of Regulations section 15126.2, which provides by way of example “a subdivision astride an active fault line” which could pose a “seismic hazard to future occupants of the subdivision” and which “would have the effect of attracting people to the location and exposing them to the hazards found there.”
The Supreme Court Decision
The case had its beginnings in 2009 when the Bay Area Air Quality Management District (“BAAQMD”), the regional agency authorized to adopt and enforce regulations governing air pollutants from stationary sources such as factories, refineries, power plants and gas stations in the San Francisco Bay Area, drafted regulations which set proposed thresholds at which toxic air contaminants and certain type of particulate matter would be deemed environmentally significant.
The California Building Industry Association (“CBIA”), a statewide trade association representing homebuilders, architects, trade contractors, engineers, designers and other building industry professionals, raised concerns that the proposed thresholds would make it difficult to develop urban infill projects located near existing sources of air pollution.
When BAAQMD adopted the regulations anyway CBIA filed a writ of mandate challenging the thresholds on the ground that CEQA does not require an analysis of the impacts that existing hazardous conditions will have on a new project’s occupants, or “reverse CEQA.” What followed was years of litigation in which the trial court sided with CBIA only to be reversed later by the California Court of Appeal. Ultimately, it ended in the hands of the California Supreme Court which granted review.
While the Supreme Court refused to adopt the CBIA’s term “reverse CEQA,” finding the term misleading because CEQA does in certain cases require an analysis of the effect of existing environmental conditions on a proposed project’s future residents or users, the Supreme Court nevertheless found that CEQA does not “generally” require an analysis of the impacts of existing environmental conditions on a proposed project’s future users or residents as opposed to an analysis of a proposed project’s impact on the existing environment.
Thus, OPR’s guidelines (remember those) which gives as an example of a “significant impact on the environment” “a subdivision astride an active fault line,” the Supreme Court held, are both “clearly erroneous and unauthorized under CEQA.” The Supreme Court did not go so far as to invalidate “reverse CEQA” in its entirety (remember “reverse CEQA” only “generally” does not apply), however.
The Supreme Court noted CEQA does call for “reverse CEQA” in certain contexts such as certain airport, school, and housing projects:
Section 21096 requires a lead agency to use certain technical resources when addressing airport-related safety hazards and noise problems in EIRs for projects near airports (§ 21096, subd. (a)), and prohibits a lead agency from adopting a negative declaration without considering ―whether the project will result in a safety hazard or noise problem for persons using the airport or for persons residing or working in the project area.‖ (§ 21096, subd. (b).) Section 21151.8 mandates certain methods to determine if school sites are located on or near sources of hazardous substances or waste or in close proximity to freeways or other operations that might emit hazardous emissions. (§ 21151.8, subd. (a), (a)(2)(A) [detailing health and safety risks and hazardous conditions and setting forth the process for consulting with air quality districts and other agencies].)
A separate cluster of statutes limits the availability of CEQA exemptions where future residents or users of certain housing development projects may be harmed by existing conditions. These limits on exemptions extend to projects located on sites that will expose future occupants to certain hazards and risks — including the release of hazardous substances and sites subject to wildland fire, seismic, landslide or flood hazards — unless (in some cases) the hazards and risks can be removed or mitigated to insignificant levels. (E.g., §§ 21159.21, subds. (f), (h), 21159.22, subds. (a), (b)(3) [agricultural employee housing], 21159.23, subd. (a)(2)(A) [affordable to low-income housing], 21159.24, subd. (a)(1), (3) [infill housing].) Transit priority projects are treated in similar fashion, subject to the same health and safety constraints that limit exemptions for other housing projects. (E.g., § 21155.1, subd. (a)(4), (6) [project meeting same environmental criteria, including where the project site is not subject to onsite hazardous substances or fire or seismic risk, may qualify as a sustainable communities project, which excuses further CEQA compliance].) Like the statutes governing certain school and airport construction projects, these statutes reflect an express legislative directive to consider whether existing environmental conditions might harm those who intend to occupy or use a project site.
In addition, explained the Supreme Court, CEQA also mandates “an analysis of how a project might exacerbate existing environmental hazards,” not because of the existing environment’s potential impact on a proposed project, but rather, because of the proposed project’s potential impact on the environment.
While the Supreme Court’s decision clarifies, at least partially (the “exacerbation of existing environmental hazards” exception may lead to its own interpretive disagreements), when a public agency is required to conduct a “reverse CEQA” analysis, the Court noted in a footnote that CEQA does not “prohibit an agency from considering – as part of an environmental review for a project it proposes to undertake – how existing conditions might impact a project’s future users or residents” (emphasis in original). So, is the decision just a pyrrhic victory for developers? We’ll have to see.