California Proposition 45 and the Abundance Debate

A recent Wall Street Journal editorial supporting Proposition 45, linked below, has got me to take a look at this upcoming ballot question. I have written a bit about the book “Abundance” and this ballot question cuts right to the heart of that policy argument. Klein and Thompson have asked questions that should make liberal government deeply uncomfortable: Why has government become so much better at establishing procedures than producing results? The Journal editorial is heavy on politics and scores Governor Newsom for not taking a position on it but still makes some points that from my vantage point are difficult to refute. I have not seen Ezra Klein or Derek Thompson take a position on this Proposition.

Why has government become so much better at establishing procedures than producing results? That question is especially relevant in California. The state desperately needs more housing, water infrastructure, clean-energy facilities, schools, transportation projects and wildfire protection. California has the financial resources, technical expertise and political desire to address these needs. What it frequently lacks is the governmental capacity to turn those ambitions into completed projects.

On November 3, California voters will consider Proposition 45, an initiative that would change the environmental review and permitting process for projects the measure defines as “essential.” Those include housing, water systems, clean energy, health facilities, police and fire stations, wildfire prevention, broadband, schools and transportation.

The proposition may be the clearest test yet of the political argument made in Abundance.

The Purpose of Environmental Review

The California Environmental Quality Act, commonly known as CEQA, was enacted in 1970. Its underlying purpose remains legitimate. Before approving a major development, government should understand its likely effects on air, water, wildlife, traffic and surrounding communities. Project sponsors should be required to disclose those effects and, where possible, reduce them.

The public should also have an opportunity to participate. People living near a proposed development may possess important information that is not immediately apparent to a developer or reviewing agency. Environmental review can uncover genuine problems and produce better projects.

But acknowledging the value of environmental review does not require accepting a process without an endpoint.

A government capable of governing must be capable of reaching a decision.

What Proposition 45 Would Do

Proposition 45 would allow applicants for designated essential projects to select a new expedited review process. It would establish firmer deadlines for environmental reviews, permits and court challenges.

Among its major provisions, Proposition 45 would establish a 365-business-day deadline for completing an environmental impact report. If an agency failed to meet that deadline, the applicant could request a hearing and potentially seek relief in court. Courts would generally be required to resolve CEQA challenges within 270 calendar days.

The proposition would also require agencies to identify application requirements in advance, limiting the ability to prolong consideration through repeated requests for additional information. Courts finding a CEQA violation generally could stop the noncompliant portion of a project rather than automatically stopping the entire project.

These provisions are directed at a familiar California problem: a project can satisfy the formal requirements for approval and still spend years trapped in environmental review, administrative proceedings and litigation.

That delay is not neutral.

Every additional year increases financing and construction costs. Investors move their capital elsewhere. Government appropriations lose purchasing power. Contractors and materials become more expensive. Public projects exceed their budgets. Housing that might have been financially feasible becomes uneconomical.

Eventually, a project may disappear without anyone having formally rejected it.

Deadlines Are Not Capitulation

The central argument for Proposition 45 is not that every project should be approved. It is that every project deserves a decision.

Deadlines are not capitulation. They do not require an agency to approve a poorly designed project or disregard serious environmental consequences. They require the agency to gather the relevant information, hear from the public, evaluate the evidence and reach a conclusion.

That conclusion may be yes. It may be yes with substantial conditions. It may require the applicant to redesign the project. It may be no.

Any of those outcomes would be an exercise of governmental authority. Endless delay is not.

Applicants should not be entitled to approval, but they should be entitled to an answer. Critics should have a meaningful opportunity to be heard, but they should not possess an unlimited procedural veto.

A process without an endpoint is not deliberation. It is a veto by delay.

Gridlock Is Also a Policy Choice

Defenders of the existing system often describe delay as caution. But refusing to decide has consequences just as surely as approving a project.

When housing is not built, scarcity increases and prices rise. When clean-energy infrastructure is delayed, California remains dependent upon existing energy sources for longer. When water projects stall, reliability problems remain unresolved. When wildfire-prevention work is postponed, the danger does not wait for the litigation to end.

Maintaining the status quo is therefore not the absence of a policy choice. It is a choice in favor of existing homeowners, existing infrastructure and existing patterns of energy use and development.

The costs are simply less visible because government never issues a formal document accepting responsibility for them.

This is one of the most important points made in Abundance. Government is often judged by the rules it adopts, the money it appropriates and the aspirations it announces. Citizens experience government differently. They judge whether homes, roads, power lines, water systems and schools actually get built.

Passing legislation is not the same as producing results.

Proposition 45 Is Not Merely a Deadline Measure

Support for timely decisions does not require ignoring legitimate concerns about the proposition.

As the Legislative Analyst’s Office explains, Proposition 45 would do more than impose deadlines. It would change the balance of authority among applicants, government agencies, courts and members of the public.

For qualifying projects, an applicant could present only one alternative for consideration rather than having the reviewing agency develop and evaluate several alternatives. Environmental effects would generally be judged under standards in place when the application was submitted. Public comments would face a firm time limit. The measure would also narrow the Native American tribes with which formal consultation is required.

Those are substantive changes and should not be dismissed as mere administrative housekeeping. They explain why some people who strongly support CEQA reform nevertheless have reservations about Proposition 45. The measure could accelerate desirable infill housing and clean-energy infrastructure, but it might also expedite development on the urban fringe that contributes to sprawl. CalMatters offers a useful examination of that transfer of authority.

The proper response is to evaluate those objections honestly. It is not to pretend that the current system is working.

If Proposition 45 is too broad, its opponents should explain what enforceable deadlines they would accept. If 365 business days is too short, what period is reasonable? If 270 days is insufficient for resolving litigation, how many years should a court challenge be allowed to continue?

Simply defending the existing process is not an adequate answer.

The Hard Part of Abundance

It is easy to support abundance as an abstraction. Almost everyone favors affordable housing, reliable water, clean energy, modern schools and protection from wildfires.

The difficulty begins when building those things requires changing a process that gives numerous interests the ability to delay them.

Klein and Thompson acknowledge this trade-off directly. The regulatory system did not arise accidentally. It was constructed in response to genuine abuses, including destructive projects that displaced communities and damaged the environment. Many of its protections remain necessary.

But rules designed to prevent reckless construction can eventually make almost all construction slow, expensive or impossible. Correcting that problem will require more than additional appropriations and new government programs. It will require taking authority away from some of the procedural chokepoints that have accumulated over decades.

That is the difficult part of the abundance agenda. Everyone supports building until a specific project is proposed in a specific location and government is required to make an actual choice.

Government Must Decide

Proposition 45 is not perfect. Few initiatives containing this many changes could be. But it places an essential principle before California voters: governmental review must have a conclusion.

Environmental protection and public participation are compatible with deadlines. In fact, deadlines can strengthen the legitimacy of both. A transparent process in which evidence is presented, objections are heard and a decision is issued commands more public confidence than a system in which projects languish indefinitely.

A government capable of building is not a government without rules. It is a government whose rules produce decisions.

If a project is environmentally destructive, reject it. If its problems can be addressed, impose conditions. If it meets the required standards, approve it and allow construction to begin.

California does not need to stop listening. It needs to listen, decide and act.

Gridlock is not the correct answer to the problem.

The Legislative Analysis of Proposition 45.

The Legislative text of Proposition 45.

The CalMatters Analysis referenced above.

The SPUR analysis of Proposition 45. No recommendation issued.

The Wall Street Journal Editorial supporting Proposition 45.

Governor Newsom stays silent on Proposition 45.

The Sierra Club Opposes Proposition 45.