It’s taken over 50 years, but state legislators have finally repealed parts of the California Environmental Quality Act. It has stymied development in the state, exacerbated homelessness and made rents and home prices among the highest in the nation.

The original CEQD passed in 1970 and required an environmental impact report for every public project. But in 1972, state courts interpreted a “public” project as anything that needed government approval.  No other state has adopted that view.

One reason is that they have seen how California’s law has been “Frankensteined” into a tool to force developers to wait years to get project approvals only to face lengthy lawsuits that were so easy they could even be filed anonymously.

Governor Gavin Newsom has now signed bills to allow many development projects to avoid rigorous environmental review and cost-inflating lawsuits.

“We’ve got to get out of our own damn way,” he says.

But reform will come at the price of giving California’s unions unprecedented control. Housing projects will become exempt from some environmental reviews but only if they use union labor at union-negotiated wages.  This will exclude many small and medium-sized developers who cannot afford the cost and gives the government the power to pick winners and losers in the construction industry.

That said, California’s move will embolden regulatory reform campaigns in Blue States such as Massachusetts, New York, and Minnesota that have similar laws to those in California.  For once, the anti-housing lobby is on its backfoot and is being forced to make concessions to reality.