October 8, 2026
Student housing landlord near USC used CEQA to stall a competitor’s project for two years, adding $56 million in costs and delaying needed housing for more than 1,600 students
Prop 45 establishes firm timelines for legal challenges to essential housing projects while maintaining environmental review and public input
Sacramento, CA — Students near the University of Southern California (USC) paid the price when a competing student housing landlord used CEQA to block new competition, filing a frivolous lawsuit that stalled housing for more than 1,600 students for two years and added $56 million in costs.
Under Prop 45, the Building an Affordable California Act, legal challenges must be resolved within 270 days for essential projects– bringing predictability to California’s broken permitting process so the state can build the homes it needs faster and more affordably.
“Conquest’s destructive campaign has caused harm to USC and our students, who face a limited supply of area housing, by preventing the development of additional student housing near campus. Conquest’s anti-competitive and abusive conduct has also wasted the time and resources of public agencies and the courts,” said Michael L. Jackson, Vice President of Student Affairs for USC.
University Gateway was designed to house more than 1,600 students within walking distance of campus and a regional transit station. But a large competitor filed a series of frivolous CEQA challenges to block the project. Every challenge was rejected, but the litigation still tied up the project for two years.
The delays came at a steep price for students. Frivolous CEQA litigation added $56 million to the project, roughly $35,000 for every student bed, driving up the price of desperately needed student housing.
University Gateway is not an isolated case. A new Holland & Knight study finds that competitors often use CEQA lawsuits to delay or derail rival projects, and that anyone can sue for any reason– including to leverage cash settlements. Filing a lawsuit costs as little as a few hundred dollars, challengers can sue anonymously, and repeat filers face no consequences for meritless claims, even after filing more than a dozen lawsuits against the same project.
California’s affordability crisis is tied directly to how long and how much it costs to build essential projects. Years of unnecessary delays drive up the cost of housing, energy, water, transportation and other essentials. These costs are ultimately passed on to families, ratepayers and taxpayers. Experts estimate Prop 45 could cut costly delays by 2 to 10+ years, lowering costs, getting critical projects built sooner, and improving quality of life for Californians.
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