August Legislative Issues

Legislative Summary – Governor’s Budget

The following is the final breakdown of the $2.7 billion in resources Governor Newsom allocated to affordable housing and homelessness in this year’s budget.  This is the largest General Fund allocation for housing and homelessness in California’s history.

  • $500 million for Infill Infrastructure Grant Program
  • $500 million for Low Income Housing Tax Credit Program
  • $650 million for Homeless, Housing, Assistance, and Prevention program.
  • $500 million for CalHFA’s new Mixed Income Program
  • $250 million for Local Planning and Assistance Grants
  • $300 million for Other ongoing programs, including Whole Person Care; CalWorks Housing Support Program; Bringing Families Home family reunification program; and by-right development of low barrier shelters.

Infill Infrastructure Grant Program

The budget allocates $500 million for the Infill Infrastructure Grant Program administered by the Department of Housing and Community Development (HCD). This program provides assistance, available as gap funding to infrastructure improvements required for specific residential or mixed-use infill development. All of the funds are allocated through a competitive process.

  • To be eligible for funding, a Capital Improvement Project[2] must be an integral part of, or necessary for the development of a “Qualifying Infill Project,” which is generally a discrete residential or mixed-use residential project in an urban area seeking to include least 15% affordable units in the project.[3] Eligible activities include new construction, rehabilitation, acquisition, demolition, relocation, and physical improvements.
  • Projects can receive a minimum of $500,000 and up to $5 million for eligible costs.
  • Non-profit or for-profit developers may be applicants, either solely or as a jointly with a local government or public housing authority.
  • Application here:

Funding for Housing Tax Credits and Moderate-Income Housing Production

The budget allocates $500 million in 2020, and up to $500 million in 2021, for new low income housing tax credits. At least $300 million is to be available for new construction projects that pair with the underutilized 4% federal tax credit program, and up to $200 million may be awarded to projects receiving assistance from the California Housing Finance Agency’s Mixed-Income Loan Program, which provides a lower subsidy than traditional state housing programs. The legislation also lifts the annual $75,000 cap on state housing credits previously allowed to be claimed by each individual. Additionally, it permits permanent developers to sell state credits to unrelated investors who are not also buying federal credits.

General Fund One-Time Funding for Homelessness

The budget allocates $650 million in one-time funding for emergency shelters, navigation centers or supportive housing. An applicant, which can be a city, county, or “Continuum of Care,”[4] must submit a grant proposal to newly-created The Homeless Aid for Planning and Shelter Program through the Department of Finance. The applicant can partner with developers for these projects. Under the budget, $100 million is available to existing Continuums of Care and $275 million to cities and counties with more than 300,000 people.

  • Application portal pending – update coming soon

CalHFA’s new Mixed Income Program

The California Housing Finance Agency (CalHFA) provides loans to developers for mixed-income developments that include housing for moderate-income households at a lower subsidy level than traditional state programs. The Budget makes a sizable investment of $500 million one-time General Fund to bolster further development of low- and moderate-income housing throughout the state.

Local Planning and Assistance Grants

The Budget establishes the Local Government Planning Supports Grant Program to provide $250 million to regional jurisdictions for technical assistance, preparation of planning documents, and process improvements to meet ambitious housing goals in the next regional housing needs assessment.

Ongoing Health and Human Services Programs

In addition to the aid provided above, the Budget includes investments in wraparound services to assist individuals with their housing needs and to mitigate the factors that may be contributing to individuals’ homelessness, or to keep people from becoming homeless.

And Lastly, in January 2019, the Governor issued Executive order N-06-19[5] requiring departments to identify excess state properties for developing affordable housing units. The budget allocates $3.4 million (one-time) and $782,000 (ongoing) to solicit affordable housing developers to build projects that use creative and streamlined approaches to building affordable and mixed-income housing. Affordable housing developers selected through a competitive process will receive low-cost, long-term ground leases of excess state property. As they will not need upfront capital to purchase the land and will not need to wait for local review processes, affordable housing developers will have greater flexibility to use innovative techniques to produce units more quickly and cost-efficiently than a traditional project.

The Legislature comes back into session on August 12 and has a month to work through remaining details on all things housing before they adjourn for the fall recess on September 13th.