A significant piece of federal housing legislation, the 21st Century ROAD to Housing Act, has taken effect but is being criticized for its limited impact on the underlying issues driving housing unaffordability, particularly in California.
While widely described as the most ambitious federal housing legislation in decades, the act does little to address the core problem of insufficient new housing construction. Critics argue it fails to confront the complex web of federal and state environmental regulations that have effectively stalled the development of new suburban neighborhoods in areas with the greatest housing demand.
Historically, population growth in American metropolitan areas was met with outward expansion, with developers building suburbs and new towns. This continued until the early 1970s, when a series of environmental statutes, including the National Environmental Policy Act (NEPA), the Clean Water Act, the Endangered Species Act, and the California Environmental Quality Act (CEQA), began to impede greenfield development. These laws, critics contend, now form a significant barrier to building on undeveloped land.
The impact of these regulations is evident in numerous development projects that have faced protracted legal battles and delays. For instance, the Newhall Ranch project, a planned community of over 21,000 homes northwest of Los Angeles, filed its initial environmental impact report in 1995 and faced invalidation of approvals by the California Supreme Court in 2015 over concerns about greenhouse gases and endangered fish. While parts of the project were re-approved in 2017, it took 22 years from the original filing.
Smaller projects have also encountered similar challenges. In Tiburon, California, a proposal for 300 single-family homes on a 110-acre parcel overlooking San Francisco Bay, first initiated in 1974, eventually resulted in zero homes being built after nearly 50 years of litigation and reduced proposals. A neighborhood group sued the project under CEQA, and a court ruling in 2022 noted CEQA's potential for obstruction.
Similarly, the Fanita Ranch project in Santee, near San Diego, which proposed approximately 3,000 homes on 2,638 acres, has undergone four rounds of CEQA litigation since its initial approval in 2007. The project, which should have been completed years ago, remains tied up in legal proceedings.
These stalled projects on undeveloped land are distinct from the debates over upzoning existing neighborhoods. Critics argue that by preventing development on the periphery, housing demand is redirected inwards, intensifying the conflict between those advocating for density and those seeking to preserve the character of their existing neighborhoods. The argument is that if new suburbs could be built more readily, similar to the pre-1980s era, the pressure on existing communities would decrease, potentially lowering housing prices and easing political tensions.
The proposed solution from some quarters involves a significant overhaul of NEPA, the Clean Water Act, the Endangered Species Act, and CEQA, which are seen as the primary gatekeepers of land use in America. The focus of housing reform, according to this perspective, should be on these foundational environmental laws rather than on federal grant programs or zoning within existing urban areas.