SACRAMENTO, Calif. (AP) — Gov. Gavin Newsom on Monday signed into law a bill that will remake California's landmark environmental protection rules, an overhaul that he says is essential to address the state’s housing shortage and resulting homelessness crisis.

Newsom had threatened to reject the state budget passed last Friday unless lawmakers overhauled the California Environmental Quality Act, or CEQA, a 1970s law that requires strict examination of any new development for its impact on the environment.

The governor and housing advocates maintain that CEQA, while well-intentioned at the time, put up bureaucratic roadblocks that have made it increasingly difficult to build housing in the most populous state in the country.

Lawmakers passed the transformative measure despite opposition from environmental groups. Newsom called it a step toward solving the state's housing affordability problem.

“This was too urgent, too important, to allow the process to unfold as it has for the last generation,” he told reporters at a news conference after signing the bill.

Earlier this year, Newsom waived some CEQA rules for victims of wildfires in Southern California, creating an opening for the state to reexamine the law that critics say hampers development and drives up building costs.

The state budget passed last week pares back a number of progressive priorities, including a landmark health care expansion for low-income adult immigrants without legal status, to close a $12 billion deficit.