California voters on Saturday rejected Proposition 45, a ballot measure that would have weakened the state's landmark environmental review law by fast-tracking reviews for certain housing and infrastructure projects. With about 76% of votes counted, the measure failed by a margin of 55.7% to 44.3%, keeping the California Environmental Quality Act (CEQA) intact.
The measure, backed by the California Chamber of Commerce and known as the Building an Affordable California Act, would have limited environmental reviews for projects deemed "essential" to 365 business days and required courts to resolve litigation in 270 calendar days. Eligible projects included housing, water, broadband and transit developments.
CEQA, signed in 1970, requires public agencies to review developments for potential harmful environmental impacts and to mitigate those harms. Over decades, developers have argued that litigation and bureaucracy slow down construction. State legislators have tried to address the issue by exempting or streamlining certain projects from full review, including laws signed by Gov. Gavin Newsom in 2025 that exempt many urban housing projects. But some supporters of Prop. 45 said those changes have not gone far enough.
Supporters argued the changes would reduce building costs and said savings would pass to consumers. Proponents spent $41 million campaigning for the measure, including $10 million from the Building a Better California political action committee, which is funded partly by current and former Google executives Sergey Brin and Eric Schmidt. Two of the largest investor-owned utilities, Pacific Gas & Electric Company and Southern California Edison, together donated $4.4 million.
Opponents, including a coalition of environmental, health and union organizations, spent $30 million trying to stop it. Wendy Schmidt, a Democratic philanthropist, was the largest donor, giving $10 million to the campaign. The political action committee Clean and Healthy California Sponsored by Environmental Organizations contributed $7 million. The California Democratic Party opposed the measure, while the California Republican Party supported it and county Republican groups were split.
"Californians have sent a clear message to corporate developers, utilities and data center builders that they will not stand for a broad assault at the ballot box on state law protecting our air, water and natural resources," said Woody Little of the No on 45 campaign. "We were outspent but not outgunned."
Deborah Sivas, an environmental law professor at Stanford University, said Prop. 45 would radically change current law by shifting power "away from local governments and to developers by giving them some new tools … and limiting what courts can do in terms of reviewing decisions that agencies and local governments make."
Pro-housing groups were divided on the measure. East Bay for Everyone and the Greenbelt Alliance opposed it, while Abundant Housing Los Angeles, California YIMBY and YIMBY Action remained neutral. Public agencies were also split, with the California Municipal Utilities Association opposing the measure and most other local government groups, including the League of California Cities and the California State Association of Counties, remaining neutral.
An analysis by Blue Sky Consulting Group, commissioned by the California Chamber of Commerce, estimated the measure would produce $1.5 billion in savings and additional revenues for public agencies over 10 years, which would reduce overall housing costs. But according to the Legislative Analyst's Office, the measure would initially cost local governments and public agencies more as they adjust to its rules.
Analysis
Why This Matters
- The defeat preserves CEQA, a law that has shaped California's development for over 50 years, requiring environmental review for thousands of projects.
- The outcome shows that even with high housing costs, California voters are unwilling to trade environmental protections for streamlined building, particularly when the measure applied broadly and not just to urban infill.
- The division among pro-housing groups signals ongoing tension between building more housing quickly and ensuring it is built in ways that address climate change.
Background
The California Environmental Quality Act (CEQA) was signed in 1970, requiring state and local agencies to assess the environmental impacts of developments and mitigate them. Developers have long criticised the law for raising costs and enabling litigation that delays projects. In recent years, the state legislature has passed targeted exemptions and streamlining measures, including laws signed by Gov. Gavin Newsom in 2025 that exempt many urban housing projects from full CEQA review. Proposition 45 was the most ambitious attempt yet to change the law by ballot initiative, funded heavily by corporate interests and opposed by environmental groups.
Key Perspectives
No on 45 campaign (Woody Little): Californians have sent a clear message rejecting a "broad assault at the ballot box on state law protecting our air, water and natural resources."
Deborah Sivas, environmental law professor at Stanford: The measure would radically change current law by shifting power away from local governments to developers.
Jennifer Hernandez, attorney who helped write the measure: Existing changes by the legislature "does not produce quickly or at scale" and the state needs quicker, at-scale affordable housing.
Max Dubler of California YIMBY (neutral): It is possible to solve the housing and climate crises simultaneously by building denser housing with alternatives to automobile dependence.
What to Watch
- Whether Governor Newsom or the legislature introduce further CEQA reform bills in the next session, and whether those proposals incorporate lessons from the campaign.
- The campaign finance records will be scrutinized for implications about future ballot initiatives on similar topics.
- How the split among pro-housing groups affects their ability to advocate for other housing bills in the state capitol.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- SupportedCalifornians rejected a ballot measure that would have weakened the state’s environmental review law.LAist: “Voters on Saturday rejected a measure that would have weakened California’s landmark environmental law by fast-tracking reviews for some projects.”
- SupportedProp. 45 lost by 55.7% to 44.3%.LAist: “With about 76% of votes counted, voters rejected Prop. 45 by 55.7% to 44.3%.”
- SupportedThe vote maintained the status quo under the state’s environmental law.LAist: “The vote maintains the status quo under the state’s Environmental Quality Act”
- SupportedThe measure had failed with about 76% of votes counted.LAist: “With about 76% of votes counted, voters rejected Prop. 45 by 55.7% to 44.3%.”
- SupportedNo on 45’s Woody Little said Californians had sent a clear message to corporate developers, utilities and data center builders, and said, “We were outspent but not outgunned.”LAist: ““Californians have sent a clear message to corporate developers, utilities and data center builders that they will not stand for a broad assault at the ballot box on state law protecting our air, water and natural resources,” No on 45’s Woody Little said. “We were outspent but not outgunned.””
- SupportedDeborah Sivas said the measure would shift power “away from local governments and to developers” and limit what courts could review.LAist: “It would shift power “away from local governments and to developers by giving them some new tools … and limiting what courts can do in terms of reviewing decisions that agencies and local governments make,” she said.”
- Partly supportedThe law is named the California Environmental Quality Act (CEQA), was signed in 1970, and requires public agencies to review developments for potential harmful environmental impacts and mitigate those harms.LAist: “The vote maintains the status quo under the state’s Environmental Quality Act, which since 1970 has required public agencies to review project developments that could have harmful environmental impacts, and mitigate those harms.”
- SupportedThe measure would have capped environmental reviews for projects deemed “essential” at 365 business days and required courts to resolve litigation in 270 calendar days.LAist: “which would limit the length of environmental reviews for projects deemed “essential” to 365 business days and require courts to resolve litigation in 270 calendar days.”
- SupportedProponents spent $41 million campaigning for the measure.LAist: “Proponents said the savings from building more quickly would pass to consumers and spent $41 million campaigning for the measure.”
- SupportedThe Building a Better California political action committee gave $10 million to the campaign and was partly funded by current and former Google executives Sergey Brin and Eric Schmidt.LAist: “The Building a Better California political action committee was the largest donor, giving $10 million to the campaign. The organization is funded partly by current and former Google executives Sergey Brin and Eric Schmidt.”
- SupportedAn analysis commissioned by the California Chamber of Commerce estimated $1.5 billion in savings and additional public-agency revenues over 10 years, which would reduce overall housing costs.LAist: “An analysis by Blue Sky Consulting Group, commissioned by the California Chamber of Commerce, estimated the measure would produce $1.5 billion in savings and additional revenues for public agencies over 10 years that would reduce overall housing costs.”
- SupportedOpponents spent $30 million trying to stop the measure.LAist: “Opponents, including a coalition of environmental, health and union organizations, spent $30 million trying to stop it.”