Class 32 and the AB 130 infill exemption: clearing CEQA on urban sites

On a qualifying urban site, the fastest way through CEQA is an exemption — no comment period, no EIR, and a 35-day challenge window once the Notice of Exemption is filed. The workhorse has long been the Class 32 infill exemption in CEQA Guidelines § 15332: five site criteria that most well-located urban housing projects can meet with disciplined documentation.

Since June 2025 there is a second, structurally stronger route: AB 130's statutory infill housing exemption, written directly into the Public Resources Code as part of the budget package. The choice between them — evidence-driven Class 32 versus condition-driven AB 130 — is now the first CEQA decision on any urban housing site.

Guidelines § 15332 exempts infill development meeting all five criteria: (a) consistency with the general plan designation and policies and with zoning; (b) a site of no more than five acres within city limits, substantially surrounded by urban uses; (c) no value as habitat for endangered, rare or threatened species; (d) no significant effects relating to traffic, noise, air quality or water quality; and (e) adequate utilities and public services. Every criterion is a finding the agency must be able to support with substantial evidence — the exemption is only as strong as the weakest memo behind it.

• Underwriting watch-outs:
• Build the record criterion by criterion: short traffic, noise and air-quality screening memos sized to the exemption — substantial evidence, not an EIR-lite.
• Consistency (criterion (a)) is where density-bonus waivers get attacked; paper the statutory-consistency chain expressly in the findings.
• "Substantially surrounded by urban uses" needs an exhibit on edge and corner sites — an aerial with adjacent-use labels; the HCD sites-inventory guidebook conventions help document urban context.
• Criterion (d) is a significance conclusion, not a vibe — a project that genuinely can't support it belongs on another path.

Class 32 is a categorical exemption, so it can be defeated by the exceptions in Guidelines § 15300.2 even when all five criteria are met. Two do nearly all the work in infill fights: the historical-resources exception — no categorical exemption for a project that may impact a historical resource — and the unusual-circumstances exception, the all-purpose attack that tries to turn any site quirk into claimed error. The agency's findings on the exceptions, decided on the record, are what a court ultimately reviews.

• Underwriting watch-outs:
• Older buildings and potential district contributors need a professional historic evaluation before the exemption is noticed — see the historic and coastal overlays guide for the survey-and-eligibility mechanics.
• Address plausible "unusual circumstances" candidly in the exemption memo (slope, contamination, an odd adjacency) — silence reads as concealment in the record.
• A defeated exemption doesn't just delay; it reroutes the project into an MND or EIR with the clock restarted — price that asymmetry when deciding how hard to lean on Class 32.

AB 130 — a June 2025 budget trailer bill — added a statutory infill housing exemption to the Public Resources Code for qualifying urban infill housing developments that meet objective site and size conditions, with labor standards attaching to taller projects. Because it is statutory rather than categorical, the § 15300.2 exception doctrine — unusual circumstances included — simply does not apply: a project that meets the conditions is exempt, full stop. That is the structural advantage over Class 32, and it is why the statutory route should be analyzed first on any urban housing site. The conditions are objective and specific, so verify them against the current CEQA statute text rather than secondary summaries.

• Underwriting watch-outs:
• The conditions are binary — one missed condition forfeits the statutory route, so audit qualification at site acquisition, not at application.
• Labor standards on taller projects are a real cost input; price the wage and workforce obligations into the stack before choosing height.
• Staff are still catching up to the 2025 statutes — bring the exemption analysis to the counter, and keep Class 32 as the adopted-in-the-alternative backup (the 2025 reforms guide covers the SB 131 near-miss fallback).
• File the Notice of Exemption the day of approval — it starts the 35-day statute of limitations; without it, challengers get 180 days.