.How an Environmental Law Is Harming the Environment

California's signature environmental law needs to be reformed because NIMBYs are using it to block smart growth.

Ali Kashani thought he had a sure thing. In 2008, the longtime Berkeley developer proposed to build one of the greenest housing projects in East Bay history. Kashani has long been an advocate for smart-growth development — dense housing and mixed-use projects built on major transit corridors in urban areas. And the architect that he commissioned for his smart-growth project in Berkeley designed it to meet LEED Platinum standards.

Located on Shattuck Avenue, Kashani’s proposed Parker Place development sits on a major AC Transit bus line and is just a short walk from the downtown Berkeley and Ashby BART stations. Residents are to receive free transit passes and have access to car sharing. Plus, there will be 120 bike parking spots, an onsite bicycle repair shop, and electrical plug-in stations for electric cars and plug-in hybrids.

The 155-unit project also includes adaptive reuse of the existing architecture, drought-tolerant landscaping, rainwater reuse, and an onsite retention pond for irrigation. Thirty-one of the units will be affordable housing, and there will be a medical clinic for the homeless onsite.

In other words, the Parker Place project is a liberal environmentalist’s dream. It has won the endorsement of the Greenbelt Alliance, an environmental group that advocates for smart growth, and TransForm, a progressive organization that backs public transit. Both groups recognize that Parker Place will help Berkeley meet its climate-change goals, because it will provide much-needed urban housing near jobs and mass transit, thereby helping lessen the need for suburban sprawl and greenhouse-gas-belching commutes.

But nothing’s ever a sure thing in Berkeley, a city that is home to some of the most vocal and stubborn anti-growth activists in the state. In November 2010, after the Berkeley City Council approved Parker Place, a small group of these activists sued to block the project, using the California Environmental Quality Act (CEQA) to do it. And now, more than four years after Kashani unveiled his proposal, it’s still tied up in litigation. “They really don’t like infill projects,” Kashani said, referring to how anti-growth activists view urban development. “And they’re holding up good projects that could be on the market.”

The suit against Parker Place is all too common. The state legislature adopted CEQA (pronounced see-kwa) more than forty years ago as part of a comprehensive effort to protect the environment. But anti-growth activists are now using the landmark environmental law to stymie projects that would help fight climate change.

In the past few years, a consortium of business and some labor groups in California has pushed for sweeping reforms of the law. And this year, they hope to convince legislators in Sacramento to overhaul it. They already have a powerful ally in Democratic Governor Jerry Brown. As mayor of Oakland, Brown witnessed first-hand the use of CEQA to block smart growth, and has called reforming the law “the Lord’s work.”

Although many environmental groups recognize that CEQA is sometimes misused, they staunchly oppose the most recent calls for reform out of fear that the law will be gutted. They correctly note that CEQA still plays a vital role in protecting California’s numerous endangered and threatened species, and provides an important check on suburban and rural growth projects, highway expansions, and proposals for new refineries and fossil-fuel power plants. Over the years, CEQA also has helped protect low-income communities from toxic incinerators and landfills.

From that perspective, the law does not need to be overhauled. But there is ample evidence that it does need reforming, particularly when it comes to smart growth and transit-oriented development. “It has gotten in the way of projects that arguably should be considered environmentally sustainable,” noted Jeremy Madsen, executive director of Greenbelt Alliance. “Climate change has changed the whole game.”

Indeed, the numerous threats posed by climate change prove definitively that aspects of California’s signature environmental law are woefully out of date.

By the late 1960s, there was widespread, bipartisan agreement in Sacramento that state government needed to do more to protect the environment from polluters. There also was a recognition that California residents needed a powerful tool to fight against unwanted development. And so in 1970, then-Governor Ronald Reagan signed the California Environmental Quality Act. Ever since, the comprehensive law has required public agencies throughout the state to examine dozens of environmental issues related to virtually every development proposal in California.

But a lot has changed since 1970. Back then, no one was talking about global warming. And no one realized that the biggest threat to the environment in the 21st century would be greenhouse-gas emissions, and that a major contributor to this problem would be commuters who live in suburban and rural regions of the state and drive long hours to work in urban areas.

According to a 2009 report from the US Environmental Protection Agency, the nation’s transportation sector produces 28 percent of all greenhouse-gas emissions in the country, and that figure rises to as much as 40 percent in some states, including California. According to a 2010 UC Irvine study, rural and suburban residents in California consume up to nearly three times as many gallons of fossil fuel each year as city dwellers.

The problem is especially acute in the Bay Area. The US Census recently reported that the region leads the nation in so-called “mega-commuters” — people who drive more than fifty miles and ninety minutes both to and from work each day. The Bay Area also ranks eighth nationwide in carbon emissions per capita, according to a 2008 report from the Brookings Institution.

And while many Republicans still claim that climate change is a hoax, a new study released last week revealed that global temperatures are higher now than at any time in the past 4,000 years. Even Wall Street is betting on the fact that climate change is going to unleash serious impacts on the environment. Last week, Bloomberg Businessweek reported that Wall Street hedge funds and other firms are pumping loads of cash into financial ventures that hope to profit from the severe effects of global warming.

Locally, Berkeley has played a role in making climate change worse. The city historically has been plagued by a housing shortage, and so the overwhelming majority of people who work in Berkeley must commute from somewhere else. According to recent research conducted at UC Berkeley, only 17 percent of the jobs in the city are filled by Berkeley residents. And if you exclude employment on the Cal campus, the percentage of people who live and work in the city drops below 10 percent, said Dave Fogarty of the city’s economic development division. Many UC Berkeley faculty members, he noted, prefer to live close to the university.

But CEQA, because it was adopted more than four decades ago, is not designed to adequately address the multiple threats on the environment posed by climate change. The Parker Place project, for example, does not receive proper credit for supplying housing close to jobs so that people can walk, bike, or take mass transit to work. Instead, the law, and the anti-growth activists who use it to block smart growth, still treat all development — be it urban, suburban, or rural — as essentially the same.

“The fact that development can be done that is environmentally beneficial is a new paradigm,” noted Madsen of Greenbelt Alliance, which supports modest reforms to CEQA to encourage more smart growth.

Over the years, CEQA has become perhaps the most important law in California. State and local public agencies must adhere to it when making nearly every type of decision — even when cutting bus service, building bike lanes, or changing the configuration of city streets. For development, CEQA requires a comprehensive review that analyzes numerous potential environmental impacts for each project and proposes offsets, or mitigations, for impacts found to be “significant.”

CEQA also provides opponents of a project with a smorgasbord of opportunities to file lawsuits, challenging nearly every aspect of it. From an environmental perspective, that makes sense if the project in question threatens endangered species or would worsen carbon emissions. But many anti-growth activists in urban areas are still using CEQA as they would have in 1970, blocking all development they don’t want for their communities.

According to a recent study by the law firm Holland & Knight, 59 percent of the development projects challenged under CEQA in state appellate courts or the California Supreme Court from 1997 to 2012 involved infill development. In addition, the prospect of spending years in litigation sometimes prompts developers to just give up on their projects — which is exactly what people often referred to as NIMBYs (for Not In My Backyard) want to happen.

Compounding the problem is that many CEQA regulations are legally vague and open to varying judicial interpretations. As a result, smart-growth developers and city officials can’t know for sure whether they’ll win or lose when they walk into court. Since CEQA became law, development opponents have won 43 percent of the CEQA lawsuits that resulted in published appellate or Supreme Court decisions, according to a 2011 study conducted by the law firm Shute, Mihaly & Weinberger.

“The law has become so dysfunctional,” said Jennifer Hernandez, an attorney for the Holland & Knight firm and a Berkeley resident who advocates for broad reforms of CEQA. “To call this environmental protection anymore … it’s really about quality-of-life” issues.

Indeed, according to several East Bay city officials interviewed for this report, anti-growth activists in Berkeley and Oakland most often challenge transit-oriented development for reasons that have much more to do with protecting their quality of life than the environment. Take so-called “traffic impacts.” NIMBYs often contend that adding new city residents will worsen traffic in their neighborhoods, but ignore the fact that urban dwellers tend to have a substantially smaller carbon footprint than people who live in suburban or rural areas.

And in an equally Orwellian argument, smart growth is now sometimes attacked for supposedly producing too many greenhouse-gas emissions, officials say. Anti-growth activists use CEQA to object to the number of “truck trips” that will occur during construction of a smart-growth project, while failing to acknowledge that suburban sprawl results in far more car trips in aggregate, and thus is much worse for the environment.

The California Legislature has approved minor reforms to CEQA during the past decade in an effort to spur smart growth. But CEQA still allows anti-growth activists to pervert environmental law. For example, the group that sued to block Parker Place contended that the city’s environmental study was “inadequate,” essentially because the project involves the cleaning up of polluted soil and groundwater.

Yes, you read that right. A project that would not only help fight climate change, but also would clean up contaminated soil and groundwater in downtown Berkeley has been blocked in court thanks to a law that’s supposed to protect the environment.

Last August, Alameda Superior Court Judge Evelio Grillo ruled in favor of Parker Place and dismissed the opponents’ suit. But the opponents, who call themselves Parker Shattuck Neighbors and include Berkeley Planning Commissioner Patti Dacey, are not giving up. They have appealed the judge’s decision. An appellate court ruling could come this May, but the opponents may then appeal all the way to the state Supreme Court.

Andrew Sabey, a land-use attorney who represents Kashani, said the Parker Place litigation provides a case study in how CEQA could be reformed to help expedite smart growth. He noted that it’s not unusual for transit-oriented projects to be built on former urban brownfields. This is yet another advantage of smart-growth development: It can provide the needed incentive to clean up polluted areas with private capital.

In the case of Parker Place, there was an underground storage tank underneath the longtime Honda dealership and repair shop. In 2006, California regulators placed the site on a state register, known as the Cortese List, because the tank had previously released pollution into the nearby soil. Evidence in the case revealed that there are 33 Cortese List sites in downtown Berkeley within one-half-mile of Parker Place.

Under CEQA, the opponents of the project were allowed to hire their own expert hydrologist who then contended that the property was “significantly contaminated” and needed a more thorough environmental study, known as an Environmental Impact Report (EIR). The city had completed a less comprehensive study known as a Mitigated Negative Declaration. Sabey pointed out that the city’s own expert had investigated the site in 2006 and determined that it was not significantly contaminated.

Such disagreements among dueling experts are common in lawsuits involving infill projects. They fall under what is known as the “fair argument standard,” an aspect of CEQA that gives anti-growth activists a potent weapon with which to challenge smart-growth development. “It creates a very easy opportunity to take a case to court,” Sabey explained. “It creates an incredibly low threshold for NIMBYs to find someone with some initials after their name” to contradict a city’s expert in court.

Making matters worse is the fact that a site can never get off the Cortese List — even after it’s been cleaned up, Sabey noted. In this case, the San Francisco Regional Water Quality Control Board determined in 2011 that the Parker Place location was a “closed” site and thus not a hazard. But the site is still on the Cortese List.

Sabey and East Bay city officials interviewed for this story contend that both the fair argument standard and the Cortese List rules should be reformed for smart-growth projects. “That would be a big step for a lot of urban infill development sites,” Sabey said.

But is it enough?

Although CEQA was patterned after the National Environmental Policy Act, it has unique characteristics. Similar environmental laws in other states only allow bona fide environmental groups to sue to block development, said Hernandez of the Holland & Knight law firm. But that’s not the case in California. Here, virtually anyone can file a lawsuit under the state’s primary environmental law.

California also does not require transparency. Groups who sue to block development do not have to disclose the identities of their members or who funds them, Hernandez noted. As a result, it’s possible in California that corporations are financing CEQA lawsuits through front groups in order to block their competitors’ development projects.

And sometimes businesses just do it openly. The CEQA Working Group, a coalition of business and labor organizations that wants to broadly reform the law, has been chronicling instances in which CEQA has been misused. One example involves the owner of a San Jose gas station, Andy’s BP, who filed a CEQA lawsuit in 2010 against his competitor across the street, Moe’s Stop gas station, because the owner of Moe’s wanted to add three gas dispensers to his business. The owner of Andy’s BP cited “traffic impacts” — and won in court, forcing the owner of Moe’s to conduct a full-blown EIR.

Ultimately, the owner of Moe’s completed the EIR and installed his gas dispensers. But the whole process cost him $525,000 more than it would have had he not been sued.

“That’s not allowed in any other state,” Hernandez said of environmental lawsuits filed by one business to block a competitor’s project. “In all other states, the only parties that get to sue under environmental law … are environmental groups.”

California legislators, however, are unlikely to change the law to require transparency in CEQA lawsuits or limit the filing of them to environmental organizations. The reason, Hernandez explained, is that unions sometimes file CEQA litigation — or threaten to do so — when a project does not guarantee that it will employ union labor. As a result, there’s no appetite in the Democratic-controlled legislature “for even requiring disclosure,” Hernandez said.

Before he resigned last month to take a job with Chevron, Michael Rubio, a moderate Democratic state senator from Bakersfield, had been leading the charge for a sweeping overhaul of CEQA. But Rubio’s reform proposals were not limited to smart growth in cities, and likely would have paved the way for more suburban and rural projects as well. Understandably, many environmental groups responded with concern.

Senate President Pro Tem Darrell Steinberg, a Democrat who represents Sacramento, is an advocate for smart-growth and is expected to take a more cautious approach to reform now that Rubio is gone. Steinberg is the author of SB 375, a landmark climate-change law enacted in 2008 that is designed to increase urban density in California. Nonetheless, several prominent environmental groups, including the Sierra Club and the Center for Biological Diversity, still oppose the push for CEQA reform this year out of concern that the legislature will render the law toothless.

“They’re not really talking about making it easier for infill development in Oakland and Berkeley,” argued Kassie Siegel, senior counsel for the Center for Biological Diversity, which has used CEQA and other environmental laws to fight highway expansions and other projects in suburban and rural areas, and even in cities when developments threaten endangered species. “They’re talking about gutting CEQA.”

Siegel and other environmentalists also point out that CEQA lawsuits are not nearly as common as often portrayed. Some studies have shown that no more than 1.5 percent of all public agency decisions that involve CEQA result in lawsuits. And they note that a 2011 law, SB 226, helped streamline approvals for environmentally sustainable development. SB 226, for example, exempts solar power systems installed on existing roofs or over parking lots from CEQA lawsuits.

However, fears that the legislature will gut CEQA this year appear to be overblown — precisely because some environmental and labor groups (the labor community is divided over whether to reform the law) fervently oppose such a plan. It seems farfetched to believe that Democrats will vote for proposals that substantial portions of their two main constituencies don’t want.

And that’s a good thing. CEQA still has a vital role to play in protecting our environment — as it should. One would be hard-pressed to make a case for reforming an environmental law so as to green-light more suburban development or more pollution-causing projects.

We also still need environmental protections in urban areas for industrial projects that put people’s health at risk. Likewise, environmental protections in cities like Berkeley and Oakland remain critically important when it comes to open space areas, including the hills and the shoreline.

But for urban centers and areas on or near major transit corridors, there’s still plenty of room for reform. Changing the Cortese List rules and the “fair argument standard” is a good place to start. But that doesn’t go far enough. City dwellers who don’t want more traffic in their neighborhoods shouldn’t be able to use the state’s main environmental law to block projects that actually help the environment overall.

And this misuse of the law likely won’t stop as a result of incremental reform. Instead, the only sensible solution is to exempt all smart growth — urban transit-oriented development projects that are designed for housing or a mix of retail or commercial space and housing — from CEQA lawsuits.

Our primary environmental law should protect the environment against the greatest threat it faces — climate change — and not make it harder to implement solutions that help fight that threat.


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