New CEQA Exemptions in California (AB 130 & SB 131): A 2026 Developer Guide

CEQA has a reputation for slowing projects down, draining budgets, and complicating even the most straightforward development plans. But with California’s new 2026 CEQA exemptions, that might finally be changing.

AB 130 and SB 131 introduce faster pathways for infill housing and public infrastructure, offering developers a chance to move projects forward with fewer delays, less paperwork, and clearer expectations. But before we get into the new laws, it’s worth knowing that a key exemption, the Categorical Exemption, already exists and is the most commonly used tool by permit consultants for infill development. This guide covers all three, so you know exactly which path fits your project.

What Is CEQA? A Quick Background

The California Environmental Quality Act, or CEQA, as it’s known, requires agencies at the state and local level to let the public and decision makers know about any potential environmental impact resulting from a project or business operations in their area. 

The prime goal is to minimize those effects as much as possible. While this goal might seem like a win-win for all parties involved, it does pose a challenge if you’re looking to develop a piece of land. 

In some cases, projects have been severely delayed, thus driving up the cost. And for this reason, you might explore the California CEQA exemptions that have come about as a result of recent legislation.

Overview of the New 2026 CEQA Exemptions

To address housing shortages and infrastructure needs, California lawmakers have passed new exemptions to CEQA. The rationale behind the changes relates to streamlining the approval process for certain project types. 

Ultimately, the goal is to accelerate housing and critical infrastructure development while maintaining environmental safeguards for sensitive projects. Hence, you might see shorter timelines and a simpler pathway towards getting your permits. 

Exemption	What It Covers
AB 130	Exempts qualifying infill housing projects in urban and suburban areas from full CEQA review, helping developers move faster on residential development.
SB 131	Exempts public infrastructure projects such as transit, water, and energy facilities from CEQA review when they demonstrate a clear public benefit.

Hence, you might see shorter timelines and a simpler pathway towards getting your permits. But first, let’s look at the exemption permit consultants rely on most: the Categorical Exemption.

Understanding Categorical Exemptions: The Foundation You Need to Know First

Before diving into the new 2026 legislation, it’s essential to understand the most widely used CEQA exemption in practice: the Categorical Exemption. For permit consultants and developers working on infill projects, this is typically the first tool to evaluate, as it can provide the fastest and most straightforward path to project approval.

What Is a Categorical Exemption?

A Categorical Exemption allows certain classes of projects to bypass CEQA environmental review entirely, without requiring an Environmental Impact Report (EIR) or a Negative Declaration. The State of California has pre-determined that these project categories cause little to no significant environmental harm under normal circumstances.

Unlike AB 130 or SB 131, Categorical Exemptions are not new legislation. They are existing, established CEQA tools codified in the California Code of Regulations (CCR), Title 14, Sections 15300–15333. They are commonly used, legally tested, and well understood by local agencies, making them a reliable first option for many infill development projects.

Class 32: The Infill Exemption (Most Relevant for Developers)

For infill housing and mixed-use development, Class 32 is the most important Categorical Exemption. It was specifically designed to streamline approvals for urban infill projects that meet defined criteria.

• The project is consistent with the applicable General Plan designation and all applicable General Plan policies, as well as applicable zoning designation and regulations.
• The proposed development occurs within city limits on a project site of no more than 5 acres substantially surrounded by urban uses.
• The project site has no value as habitat for endangered, rare, or threatened species.
• Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality.
•  The site can be adequately served by all required utilities and public services.

 

If your project checks all five boxes, you can file a Notice of Exemption (NOE) with the county clerk and the State Clearinghouse and proceed to permitting without further CEQA review. This is why permit consultants rely on Class 32 as their go-to exemption for infill work.

Other Commonly Used Categorical Exemptions

While Class 32 is the primary tool for infill development, other categories may also apply depending on your project scope:

• Class 1 (Existing Facilities): Minor alterations or additions to existing structures.
• Class 3 (New Construction): Small structures such as duplexes, small commercial buildings under 10,000 sq ft, or accessory structures.
• Class 15 (Minor Land Divisions): Dividing land into four or fewer parcels in urbanized areas.

Categorical Exemption vs. AB 130 / SB 131: How They Relate

Think of it this way: Categorical Exemptions (especially Class 32) are your first line of defense. If your infill project qualifies, this is the fastest route with no new legislation required, and local agencies are already familiar with the process.

AB 130 and SB 131 (explained in detail below) expand on this by creating additional statutory exemptions for projects that may not meet the strict Class 32 criteria, particularly larger sites, suburban infill, or public infrastructure. They work alongside Categorical Exemptions, not in place of them.

Categorical Exemption (Class 32)	AB 130 / SB 131 (New 2026 Legislation)
Pre-existing CEQA tool (well-established)	New statutory exemptions effective Jan 1, 2026
Site must be 5 acres or less	Allows up to 20 acres
Urban infill only (within city limits)	Covers urban and suburban areas
Fastest route when all 5 criteria are met	Broader eligibility, but more documentation
No public benefit requirement needed	AB 130 favors affordable/mixed-income housing
Private and public projects eligible	SB 131 is limited to public infrastructure only

AB 130 Explained: Infill Housing CEQA Exemptions

AB 130, which was passed in June of 2025, primarily pertains to housing developments located in urban areas that are surrounded by established infrastructure and in close proximity to transit. At the same time, it does address suburban areas as well. 

Basically, your residential project must meet the following criteria:

• minimum density requirements – 10 units per acre in suburban areas; 15 units per acre in urban areas
• proximity to public transportation – this comes in the form of mitigation fees as opposed to specifying distance
• adherence to local zoning and general plan standards  

The exemption process involves submitting your application, outlining your project’s compliance with specific thresholds (ie: high-risk environmental zones), and giving proof that your project fits the legal infill criteria.

Ideally, AB 130 is meant to encourage affordable and mixed-income housing, with additional benefits for projects that incorporate eco-friendly building practices or serve low-income populations. 

The exemption, however, does not apply to projects in environmentally sensitive areas, such as wetlands or the habitats of protected species. And you may have to rethink developing property in an area that’s considered to be “historically significant.”

SB 131 Explained: Infrastructure & Public Project Exemptions

SB 131 goes hand-in-hand with AB130 by focusing on public infrastructure improvements, such as:

• transit upgrades
• water systems
• facilities that provide electricity and other energy sources. 

For your project to be eligible for this exemption, your plan must demonstrate a clear benefit for the local population. It also has to comply with local and state regulations and avoid significant impacts on vulnerable habitats or other sensitive resources. 

The qualifying process involves detailing the project’s public purpose, submitting technical documentation, and confirming compliance with all relevant health and safety codes.

On the other hand, SB 131 differs from AB 130 since it does not extend to private residential or commercial developments. Instead, this exemption paves the way for the expedited delivery of essential infrastructure and public services. 

Another caveat that you’ll need to remember is that any project that’s located in a high-risk environmental area or one that triggers a federal environmental review still requires additional scrutiny by the decision-making body.

AB 130 vs. SB 131: Key Differences

While both AB 130 and SB 131 streamline the CEQA process, their purposes greatly differ. 

Who Qualifies for the 2026 CEQA Exemptions?