CEQA Reform Opens Doors for Developers

California’s most controversial development law just got its biggest shake-up in years.

Two budget trailer bills, AB 130 and SB 131, rolled back parts of CEQA for the first time in a meaningful way in years, and the impact could be huge for housing developers.

The new rules give infill housing projects under 85 feet a fast track, exempting them from CEQA review — no environmental impact statements, no prevailing wage requirements and no years of litigation hanging over approvals. It’s a gift for small to midsize multifamily builders in urban and suburban markets who’ve long been stymied by NIMBY lawsuits and costly delays.

But it’s hardly a free-for-all. High-rise commercial projects, single-family subdivisions and anything along the coast still face the usual bureaucratic gauntlet.

Housing advocates and urban infill developers are celebrating, while the state’s powerful Building Industry Association, representing giants like Lennar and D.R. Horton, is fuming. Large-scale builders argue the reforms add unnecessary transportation-related costs and leave greenfield development (and by extension, California’s homebuilding deficit) largely untouched.

Commercial developers are still on the outside looking in, though SB 131 carved out exemptions for some uses like childcare centers and high-speed rail. But as one land use attorney put it, these changes feel like “glimmerings” of a bigger shift, and maybe even the first crack in CEQA’s decades-long stranglehold on development.

It’s worth noting just how politically seismic this is. For years, CEQA has been treated like a third rail in Sacramento — a sacred cow for environmentalists and a reliable weapon for opponents of new development. Gov. Gavin Newsom muscled the exemptions through by tying them to the state budget, and the coalition behind them — a mix of YIMBYs, environmental activists and even labor groups like the Carpenters union — suggests more tweaks could follow if this experiment proves successful.

Over on the East Coast, New York remains bogged down in its own environmental review maze. SEQRA and the city’s CEQR process continue to stall projects, with downstate casino bids now at risk of disqualification as state regulators struggle to launch environmental reviews ahead of looming deadlines.

Developers are openly frustrated, but any rollback in New York would likely favor affordable and mid-market rental housing while keeping tight labor and affordability requirements intact — likely leaving luxury condo developers and mega-projects like casinos unaffected. The city’s “Green Fast Track,” which went into effect last year, is a baby step, cutting timelines for some mid-sized all-electric housing projects, but it’s nowhere near the seismic shift now underway on the West Coast.

California’s reforms may be limited, but they’re the clearest sign yet that the politics of environmental review are shifting. If they succeed in getting housing built faster, pressure could mount in New York and elsewhere.

There was plenty of other news this week. Chaos ensued at a Miami condo complex over the condo association’s leadership, Bally’s casino hopes crapped out at the eleventh hour and a $700 million CMBS loan sparked a feud between Nitya Capital’s co-founders.

Turmoil at Brickell condo complex over money and power

Chaos at 1060 Brickell reached a breaking point this week after Florida regulators ordered the removal of the condo board following months of legal battles and allegations of mismanagement. The fight centers on a $21 million special assessment — averaging more than $35,000 per unit — that owners say was pushed through without transparency, sparking nonstop construction and threats of foreclosure for late payments.

City Council kills Bally’s casino dreams at 11th hour

Bally’s $4 billion plan to turn its Bronx golf course into a casino and entertainment complex collapsed Monday after the City Council voted down crucial zoning changes. The 29-9 vote upheld member deference to local Council member Kristy Marmorato, who argued the casino would bring “no sustainable growth” and said her community was firmly against it.

Syndicator’s $700M lifeline stokes feud between co-founders

A $700 million refinancing deal meant to stabilize Nitya Capital has reignited a bitter feud between co-founders Swapnil Agarwal and Vivek Shah. Shah filed in federal court to enforce an arbitration ruling granting him 40 percent ownership of Nitya, significant stakes in affiliated companies, veto power over major business decisions and access to the firm’s financial records.

Berkadia lost over $24M from Mordechai Weiss’ alleged fraud: lawsuit

Berkadia claims it lost over $24 million in Mordechai Weiss’ alleged fraudulent apartment deal in Houston. The firm filed an explosive lawsuit alleging Weiss, Howell, New Jersey-based Cross Bridge Title and Elya Kahn of Greenrock Funding worked together to create a document trail for a “sham transaction” showing a sales price of $97.8 million to Berkadia. The fake documents paved the way for Berkadia to make a $69 million loan to Weiss and his affiliated company.

Ex-Nussbaum Lowinger partner details final days of dissolved law firm

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FiDi condo glut drags down sales at 125 Greenwich

It’s been a slow burn at 125 Greenwich Street, the Rafael Viñolay-designed tower in the Financial District. The 272-unit tower has begun closing on its first residences, 11 years after the original development team — several of whom are no longer with the project — bought the site.

Netflix founder saddled with $76M in EB-5 debt at North America’s biggest ski resort: lawsuit

Netflix founder Reed Hastings may need to dig himself out of a $75.9 million crevasse at North America’s biggest ski resort. The streaming giant’s former CEO is wrangling with a group of EB-5 investors who say he’s on the hook for unpaid debt tied to Utah’s Powder Mountain, according to a lawsuit filed in Manhattan Supreme Court in April.

Zillow strikes back in Compass lawsuit, disses “Hidden Listing Scheme”

Zillow issued its first response to the lawsuit from residential giant Compass alleging anticompetitive behavior by the listing platform. Compass last month filed a motion for a preliminary injunction to halt Zillow’s policy, which requires listings to be submitted to the multiple listing service and Zillow within 24 hours of being publicly marketed.