CA AB2656

Expands the definition of "disapproval" under the Housing Accountability Act to include a local agency's failure to make a CEQA exemption determination or to adopt/certify environmental review documents for qualifying housing projects.

Applies only to housing projects located in urbanized areas with density of at least 15 dwelling units per acre that meet specified site requirements from Section 65913.4.

Requires local agencies to issue CEQA exemptions or environmental clearances within 90 days of written applicant notice or be deemed to have disapproved the project, subject to enforcement and penalties.

Establishes that if an agency fails to act on CEQA clearance within 90 days of notice, the applicant may file enforcement actions within 90 days of the agency's inaction, with courts able to award attorney's fees and impose fines of at least $10,000 per housing unit.

Clarifies that disputes over CEQA application procedures may shield agencies from attorney's fees if they acted in good faith with reasonable cause and there was substantial legal disagreement at the time of disapproval.