The California Legislature has enacted new Public Resources Code § 21159.25, effective as of January 1, 2019 (Stats. 2018, c. 670 (A.B. 1804)), which extends much of the substance of the existing CEQA Guidelines’ Class 32 categorical exemption for “infill development” (14 Cal. Code Regs., § 15332) to certain multi-family housing projects in urbanized, unincorporated county areas. While largely patterned after the Class 32 exemption, the statute thus has a few unique and significant twists and limitations, as explained below.

Unlike the Class 32 categorical exemption, which broadly applies to all “in-fill development” projects meeting its criteria, new Public Resources Code § 21159.25’s statutory exemption applies only to a “residential or mixed-use housing project” meeting its criteria. Such a project is defined as “consisting of multifamily residential uses only or a mix of multifamily residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential use.” (§ 21159.25(a)(1).)

Unlike the Class 32 exemption, which applies only to infill developments “within city limits on a project site of no more than five acres substantially surrounded by urban uses” (Guidelines § 15332(b)), the new statutory exemption applies to residential or mixed-use housing projects “within an unincorporated area of a county on a project site of no more than five acres substantially surrounded by qualified urban uses” (Pub. Resources Code, § 21159.25(b)(3), emph. added), where the site is “wholly within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.” (Id., § 21159.25(b)(7)). “Substantially surrounded” for purposes of the new statute “means at least 75 percent of the [project site’s] perimeter… adjoins, or is separated only by an improved right-of-way from, parcels… developed with qualified urban uses” and the remainder of the perimeter bears the same relationship to “parcels… designated for qualified urban uses in a zoning, community plan, or general plan for which an [EIR] was certified.” (§ 21159.25(a)(2), emph. added.)

Similar to the Class 32 exemption, the project must be consistent with the applicable general plan and zoning (§ 21159.25(b)(1)); the project site must have no value as habitat for special status species (§ 21159.25(b)(4)); the project must not result in significant effects relating to transportation, noise, air quality, GHG emissions, or water quality (§ 21159.25(b)(5)); and the project site must be able to “be adequately served by all required utilities and public services.” (§ 21159.25(b)(6).) Also like the Class 32 exemption (see 14 Cal. Code Regs., § 15300.2), the new statutory exemption is subject to familiar exceptions where the project could have a significant effect due to cumulative impacts, or unusual circumstances, or would damage scenic resources, be located on a site listed pursuant to Government Code § 65962.5, or could cause a substantial adverse change in the significance of a historical resource. (Pub. Resources Code, § 21159.25(c)(1)-(5).)

A further limitation on use of the new statutory exemption is its minimum housing density requirements, which provide that the density of the residential portion of the project must not be less than the greater of: (i) the average density of the residential properties proximate to the site’s perimeter; (ii) the average density of residential properties within 1500 feet of the site; or (iii) 6 dwelling units per acre. (§ 21159.25(b)(2)(A)(i)-(iii).)

Unlike CEQA’s existing provisions, which make the filing of a notice of exemption (NOE) optional in other contexts, the new statute provides that if the lead agency determines to approve or carry out a project based on the new exemption, it “shall” file an NOE with OPR and the relevant county clerk in the manner specified in Public Resources Code section 21152 (b) and (c). (§ 21159.25(d).) The new statute will sunset by its own terms (unless extended) on January 1, 2015. (§ 21159.25(e).)