Facing wildfires and droughts, California is passing increasingly stringent climate regulations – and others will likely follow


California steers development towards density, away from cars

Alongside a 2045 net neutrality target and tens of billions in spending on green initiatives, the Golden State has passed rules that could lead to cleaner, denser cities.

As the final recess in California’s state legislature approached on 31 August, the state’s lawmakers passed a raft of climate-relate bills.

The state – whose regulations often set standards for the rest of the country – codified its ambition to achieve carbon neutrality no later than 2045 and approved $54bn in funding to help it meet that commitment.

While the four headline-grabbing climate bills (see box below) are not specifically about real estate, several others touch on urban development, aiming to reel in a famously car-dependent, sprawling state.

One bill (AB-2097) prohibits public agencies from imposing a minimum parking requirement on residential or commercial developments that are within half a mile of public transport. Although it sets out exceptions, the bill effectively encourages the creation of spaces that reduce the need for cars.

Less parking space could also open up more land for the development of other uses.

Meanwhile, another bill (SB-457) gives households without any registered vehicles $1,000 in tax credits, creating an incentive to go car-free, or at least making not owning one easier.

These bills come alongside AB-2334, which allows for higher and denser development in “very low vehicle travel areas” – urban areas where people travel 85% fewer miles than in the wider region.

At a glance: California’s four climate bills

The California Climate Crisis Act (AB-1279) requires the state to reach net zero greenhouse gas emissions “as soon as possible, but no later than 2045”. After this, California will have to achieve net negative greenhouse gas emissions. Greenhouse gas emissions will have to be reduced to at least 85% below 1990 levels by 2045.

The agenda-setting bill says that California will work with state agencies to recommend measures to achieve its policy goals. That will undoubtedly mean greater regulation around emissions and energy in coming years.

Clean Energy, Jobs and Affordability Act of 2022 (SB-1020) states that by December 2035, renewable energy will have to supply 90% of all retail sales (rising to 95% in 2040 and 100% in 2045) and 100% of all energy procured by state agencies.

Carbon sequestration (SB-905) requires the California Air Resources Board to start a “carbon capture, removal, utilisation and storage programme” to evaluate the viability of technology that removes carbon from the air.

Oil and gas operations (SB-1137) prohibits any new oil and gas wells within 3,200 feet of homes, schools, community centres, healthcare facilities or any building housing a business open to the public.

Where California leads, the US follows

Lawmakers passed these bills less than a week after California became the first state to ban the sale of new fossil fuel-powered cars by 2035.

Together, these regulations are part of a wider shift to reshape urban areas in the state – and beyond.

Given the devastation caused by wildfires and droughts in California, the state is at the forefront of climate regulation that goes beyond what the federal government – or other states – require.

But rather than settling for more stringent rules for itself, California openly admits it wants other states to follow its lead. Indeed, when it announced the car ban, the California Air Resources Board noted that 17 states had adopted its emissions regulations. Governor Gavin Newsom later told ABC News he expects others to follow its lead on the ban as well.

As California starts to put policy in place to meet its 2045 net zero target, we can expect further rules that will reconfigure its urban areas. And as those emerge, developers in other parts of the US can expect the same from their own states.

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