Comparing California’s Housing Environmental Impact Assessment Regime with Japan’s
The United States desperately needs to build more housing, especially in its high-demand urban areas. What can we learn from comparing the environmental review law in one of the nation’s most unaffordable states with its counterpart in the developed world’s housing success story?
The dense Tokyo skyline. Photo: Wikimedia Commons.
By: Satyen Gupta, Staff Member
We need to build more housing. This is a fact accepted by land use experts, public intellectuals, and economists. The justifications are manifold: building more dense housing is more environmentally sustainable, lowers rents, unlocks productivity lost to commutes, greatly boosts economic growth, and creates a case for high-quality public transit—which, aside from being better for the environment and more efficient at moving people, is also just really cool!
Unfortunately, as any NYC resident paying rent might have noticed, housing supply is nowhere close to keeping up with population and job growth, especially in high-demand areas. In this post, I will analyze the impact environmental impact assessment (EIA) statutes play in limiting housing construction. I will focus on the California Environmental Quality Act (CEQA), which has recently come under scrutiny as a result of California’s worst-in-the-nation housing crisis and recent abuse of CEQA at UC Berkeley, before comparing CEQA with its counterpart in Japan.
Conservation, Environmentalism, and CEQA
The environmental movement of the mid-twentieth century was founded on principles of conservation. That meant saying no to growth or new infrastructure projects because these might affect natural habitats like wetlands. In an era when “the government was building too much, with too little environmental analysis,” EIA statutes were revolutionary. One of the strongest of these, CEQA, was passed in 1970. CEQA originally mandated that the state conduct an environmental study for all public projects, considering the project’s effects on air quality, noise, and protected natural areas. If a project crossed certain thresholds, the state then had to conduct an EIA, which involved documenting harms and organizing public hearings for feedback. Agencies and local legislatures were always free to go ahead with a project, but they had to acknowledge, disclose, and mitigate its impacts.
In the 1972 case Friends of Mammoth v. Board of Supervisors, the California Supreme Court interpreted CEQA to apply beyond its original confines. The CEQA statute read that “[t]he legislative bodies of all cities and counties which have an officially adopted conservation element of a general plan shall make a finding that any project they intend to carry out . . . is in accord with the conservation element of the general plan. All other local governmental agencies shall make an environmental impact report on any project they intend to carry out.” Despite the plain text interpretation clearly limiting the statute to projects carried out by state entities, the Court held that the legislative intent of the bill was to regulate all activities for which a permit is required, even those conducted by private developers. In California’s major cities, where a permit is required for virtually all construction and where housing supply is most needed, this effectively applied CEQA to every single housing and commercial development.
Because CEQA is a “self-executing” statute—meaning that it is enforced by plaintiffs bringing lawsuits to force projects to undergo full environmental review or force revisions to an existing EIA—CEQA has become the primary weapon NIMBYs (Not-in-my-backyard activists) use to stop housing construction, in the name of “preserving neighborhood character” and maintaining their own property values. While these actions may be in line with the conservation principles of an earlier era, today they are blatantly anti-environmental.
Studies demonstrate that residents of dense metros like NYC, LA, and the San Francisco Bay Area emit far less carbon than people in suburban or rural areas, thanks to dense housing and the ability to walk or take energy-efficient public transit to commitments. Reduced supply and high rent in these areas hurt the environment by forcing workers in the urban core to commute in from far-flung exurban areas, driving up carbon emissions while also ensuring that the poor have a harder time accessing the advantages of America’s cities.
Attorneys at Holland & Knight estimate that 80 percent of CEQA lawsuits target infill development, the development of under-used parcels of land within already-developed urban areas, while lawsuits against truly anti-environmental developments (like mining projects) make up less than 20 percent of CEQA suits. Ironically, CEQA only seems to be lowering environmental quality.
Environmental Impact Assessments in Japan
Comparing CEQA with Japan’s EIA law is useful for one main reason: contrasting the laws in an area which has one of the world’s worst housing crises (California) with a country that is famous for its housing success (Japan) could yield insight on how best to reform our EIA laws. In addition, Japan’s location on the Pacific Ring means its environmental laws must account for many of the same challenges, like earthquakes, as California.
Japan’s EIA Law, initially passed in 1997 and updated in 2011, applies to the whole country uniformly. It applies to 13 types of projects, most of which are major industrial projects like roads, dams, railways, airports, and power plants. Unlike in California, Japan’s EIA law does not apply to the vast majority of housing. The law separates housing into two categories: class 1 and class 2. Class 1 projects—which are those that develop new or existing residential areas larger than 100 hectares—always require EIA, while class 2 projects require it on a case-by-case basis. Because there are very few housing developments larger than 100 hectares, EIA does not apply to the majority of housing construction, including in large cities like Tokyo and Osaka. (It is important to note here that in Tokyo specifically, environmental review does apply to complexes with 1,500 units or more but that complexes of this size are not typical.) In fact, most apartment buildings do not even meet the class 2 requirements, which require that a residential site be between 75 and 100 hectares. As a result, new construction is mostly free from bureaucracy, helping to make Tokyo the largest producer of housing in the developed world.
Even when the EIA does apply, the process is much more straightforward. To begin with, developers implement EIA by themselves, making reports before, during, and after a project. The developer is charged with holding meetings with the public to make the public aware of the project’s environmental impact, but members of the public cannot lengthen or otherwise stall the environmental review process on their own. Moreover, while the EIA report includes opinions from citizens, prefectural governors, municipal governments, and the national government, these groups cannot sue to stop the project and their opinions are taken at specified times in the EIA drafting process.
Once the EIA is drafted, governments at various levels can stop the project from going through. However, this is exceedingly unlikely thanks to the fact that governments and citizens were able to provide their input during the entirety of the EIA drafting process, at both the scoping and the drafting stages. As a result, if citizens want to stop a project from going through, they cannot sue and require that a project take into account yet another environmental concern. Instead, they are forced to turn to the political process and vote for or against the local, prefectural, and national government that allowed a project to sail through. Using political pressure instead of the courts as the primary way for citizens to defend against controversial projects leads to much faster approvals and raises the threshold for stopping a project, enabling developers to build with more confidence than in California or most places in the United States.
Conclusion
Pointing out the inefficiency and litigiousness of American legal bureaucracy is nothing new. But the contrast between the CEQA’s impact on housing construction and that of its Japanese counterpart is especially striking. Japan’s environmental review laws are simpler and allow developers to take into account popular input without letting NIMBYs shut down housing construction. Perhaps the larger truth is that Japan’s (and other countries’) preference for using political, rather than judicial, means to resolve questions might be something our government could learn from when it comes to fulfilling its basic functions—like providing housing for all its citizens.
Satyen Gupta is a second-year student at Columbia Law School and a Staff member of the Columbia Journal of Transnational Law. He graduated from the University of Chicago in 2020.