September 30, 2026
Expert economic analysis finds Prop 45 will generate $11 billion in new state and local tax revenue, save public agencies nearly $4 billion on essential infrastructure and save California electricity ratepayers $2.5 billion over ten years
Prop 45 would cut average environmental review timelines roughly in half, reducing costly delays that drive up housing and infrastructure costs for families and taxpayers
Sacramento, CA — A major new economic analysis from Blue Sky Consulting Group finds Proposition 45, the Building an Affordable California Act, would deliver significant economic benefits for California — adding 20,000 homes a year, generating nearly $1.5 billion annually in new revenue and savings for state and local governments, and saving California electricity ratepayers another $250 million every year.
Over the next decade, those benefits will add up: Prop 45 will add nearly 200,000 additional homes, approximately $11 billion in new state and local tax revenue from increased housing construction, and nearly $3.9 billion in savings for public agencies on essential infrastructure, including roads, water systems and schools. California electricity customers would save an additional $2.5 billion from lower clean energy project costs.
And those estimates are conservative. The report only quantifies the economic benefits of Prop 45’s deadlines for environmental review. It does not account for savings from the measure’s other reforms, including deadlines for discretionary approvals and judicial review and procedural reforms designed to reduce other sources of costly delay. Experts estimate that Prop 45 could cut costly project delays by 2 to 10+ years. As a result, the report likely understates the full economic benefits Prop 45 would deliver.
The savings come largely from reducing the delays that make housing and essential infrastructure more expensive to build.
Prop 45 streamlines reviews of essential projects and sets clear, enforceable timelines so California can build housing, clean energy, water systems, roads and wildfire prevention faster and more affordably. Under current law, environmental reviews for major housing projects take an average of 3.1 years to complete, and roughly one in six takes longer than five years. By setting a firm deadline for those reviews, Prop 45 would cut that average roughly in half.
“Unnecessary delays are driving up the cost of housing, infrastructure and energy, and those costs land squarely on families and taxpayers,” said CalChamber President & CEO Jennifer Barrera. “This report shows what Prop 45 would deliver – nearly 200,000 more homes, lower costs for roads, water systems and schools, and billions in savings for electricity customers. Prop 45 is about making California more affordable by cutting unnecessary delays in building the essential projects our communities need faster and more affordably.”
Key Findings:
- Nearly 20,000 additional homes annually. Faster approvals under Prop 45 would increase annual housing permitting by 18.1%, adding nearly 200,000 homes over ten years.
- Review timelines cut in half. Prop 45 would reduce the average environmental review for major housing projects by 639 days.
- Generate $1.5 billion annually for state and local governments. Over the first ten years, Prop 45 would generate $1.1 billion a year in state and local tax revenue from new housing construction and $386 million a year in savings on public works.
- $250 million in annual savings for California electricity customers from lower clean energy project costs.
- $774 million in annual savings on construction of essential infrastructure, including roads, water systems, schools and clean energy projects.
The bottom line: years of delay come with a real price tag. According to the report, each additional year of delay adds 1.34% to 1.95% to the cost of public works projects — costs ultimately borne by taxpayers and ratepayers. By cutting those costly delays, Prop 45 would result in more homes, lower costs for essential infrastructure, and savings for taxpayers and ratepayers.
[Read the Full Report Here]
The report was authored by Matthew Newman and James Paci of Blue Sky Consulting Group, a firm with two decades of experience analyzing California’s fiscal and economic policy for government agencies and private sector clients. Newman, a co founder of Blue Sky and a former Policy Analyst at California’s Legislative Analyst’s Office, is one of the state’s most experienced experts in public finance and economic forecasting.
BACKGROUND: Prop 45, the Building an Affordable California Act, modernizes California’s project approval and permitting process for essential projects — including housing, water infrastructure, clean energy, transportation infrastructure, hospitals and health care facilities, schools, broadband, and wildfire prevention projects — by establishing clear timelines, improving accountability, and reducing unnecessary delays, while preserving strong environmental, labor, and tribal cultural resource protections. Prop 45 is supported by a broad and growing coalition of 160+ organizations, including affordable housing advocates, civil rights leaders, clean energy builders, water providers, agricultural groups, and business organizations statewide.
Learn More: YESonProp45.com