Extracted from Law360
On Jan. 12, in response to the devastating fires in Southern California, Gov. Gavin Newsom issued Executive Order N-4-25 to expedite the reconstruction of homes and businesses by suspending some environmental review and permitting requirements under the California Environmental Quality Act and the California Coastal Act.
The order seeks to promote rapid recovery by cutting red tape for communities, developers and project proponents. It may create an opening for streamlined and accelerated rebuilding efforts.
But to take full advantage of the relief provided under the executive order, stakeholders must make sure to proactively address compliance considerations and stay informed about future policy developments.
Overview of CEQA and the California Coastal Act in Development Projects
CEQA generally requires state and local agencies to inform decision-makers and the public about the potential environmental impacts of proposed discretionary projects, and reduce those effects to the extent feasible.
Intended to ensure that environmental considerations are integrated into public decision-making, the CEQA review process, however, can be lengthy and contentious, and has been used by project opponents to stall development.
Administered by the California Coastal Commission, the state's Coastal Act establishes policies for conserving and developing coastal resources, requiring that any development within the designated coastal zone obtain a coastal development permit. This aligns projects with statewide objectives, such as protecting coastal access, preserving marine habitats and maintaining scenic vistas.
Summary of Executive Order N-4-25
In the wake of the recent fires, Newsom's order suspends CEQA and Coastal Act requirements for the reconstruction of properties substantially damaged or destroyed by the fires.
Specifically, it allows for the repair, restoration, demolition or replacement of such properties without undergoing the standard environmental review and permitting processes under CEQA and the Coastal Act, provided the new structures are in the same location and do not exceed 110% of the original footprint and height.
Additionally, the order directs state agencies to identify other permitting requirements, including provisions of the state's building code, that can be safely suspended or streamlined to accelerate rebuilding efforts and reduce costs. It also extends protections against price-gouging on building materials, construction services and other essential goods until Jan. 7, 2026, in Los Angeles County.
Implications for Project Applicants and Proponents
The suspension of CEQA and Coastal Act requirements under Executive Order N-4-25 has several implications.
Accelerated Project Timelines
By waiving the lengthy environmental review and permitting processes, applicants and developers can expedite reconstruction projects, leading to faster project completion and reduced holding costs.
Project applicants will be exempt from obtaining a coastal development permit or undergoing related reviews under the Coastal Act if their rebuilding project is within the designated coastal zone and meets the executive order's requirements. They can also cut through the lengthy environmental review process under CEQA.
Regulatory Uncertainty
While the suspension aims to streamline rebuilding, the temporary executive order may create uncertainty over the long-term regulatory expectations.
Project applicants and proponents must stay informed about potential reinstatements of standard procedures, and be prepared to adapt.
Community Considerations
The expedited processes may raise concerns among environmental activist groups about what they perceive as insufficient environmental review and oversight. For larger-scale projects, applicants should proactively engage with stakeholders.
Scope of Application
The order applies specifically to properties substantially damaged or destroyed by the recent fires, and limits reconstruction to a slight increase — up to 110% — in original footprint and height.
Applicants should compile building plans, permits and other documentation to establish the pre-disaster footprint and height of the property, and create detailed records to ensure smooth verification during permitting or inspections.
Applicants planning significant modifications or new developments beyond these guidelines will still be subject to standard CEQA and Coastal Act requirements.
Engaging Early With Local Authorities
Local jurisdictions may interpret and implement the executive order differently. Some areas may still require additional documentation or approvals for compliance with local policies or ordinances.
Consider reaching out to local agencies to confirm local permitting requirements, coordinating with officials and making sure project time frames will be met.
Other Considerations
While CEQA and Coastal Act requirements are suspended under the executive order, developers and property owners must still adhere to applicable building and fire code requirements, including applicable structural, safety and fire prevention requirements to ensure safe reconstruction.
Property owners using federal disaster relief funds must also comply with conditions set by the Federal Emergency Management Agency and other relief programs.
Future Policy Developments
The executive order signals a growing trend in California policy to balance environmental review requirements with the need for emergency reconstruction and disaster resilience. Key future policy developments may include the following.
Legislative Action to Streamline Post-Disaster Rebuilding
The order reflects an ongoing discussion about permanently expediting environmental review for disaster recovery efforts.
Future legislation could codify streamlined CEQA and Coastal Act exemptions and waivers for rebuilding after wildfires, earthquakes, flooding, landslides and other natural disasters. Lawmakers could also introduce further regulatory exemptions to prevent reconstruction delays in future emergencies.
Beyond rebuilding after natural disasters, the order could add momentum to broader efforts to reform CEQA. Some policymakers and businesses have long advocated for changes to CEQA to reduce litigation and prevent project delays.
The order could influence legislative action on CEQA exemptions for housing development projects to address California's housing shortage.
Expansion of Emergency Response Permitting and Approval Reforms
The state's Department of Housing and Community Development, Office of Land Use and Climate Innovation, Office of Emergency Services and Department of General Services will soon identify other state permitting requirements that may impede efforts to rebuild property or facilities destroyed by the fires, recommending how such requirements could be suspended to facilitate rapid, safe and cost-effective rebuilding and recovery.
Their recommendations could influence future actions or legislative reforms to make rebuilding after natural disasters more streamlined. Developers and property owners should monitor these developments, because they may lead to permanent changes in regulatory frameworks affecting future projects.
Amendments to Incorporate Fire Resiliency
State and local jurisdictions may consider amending building codes to incorporate further provisions to create fire-resilient homes in California.
The California Building Code focuses on ensuring that roofing systems, gutters and vents are constructed using fire-resistant materials and advanced designs to reduce the risk of ignition and fire spread, and further mandates resistant siding, tempered glass and vents for attics and crawlspaces designed to resist embers and flames.
Further amendments to improve fire resiliency, especially for new construction, could be on the horizon.
Conclusion
Newsom's order represents a decisive effort to facilitate the swift recovery of communities devastated by the Southern California fires. For communities and applicants, the suspension of CEQA and Coastal Act requirements offers an opportunity to participate in rebuilding efforts with reduced bureaucratic hurdles.
But doing so will require carefully navigating the evolving regulatory landscape, proactively engaging with stakeholders and considering enhancements for future resiliency and safety.
Given the potential for future policy changes, stakeholders should monitor legislative developments that could shape long-term regulatory approaches to disaster recovery.