Although the Governor did not focus on the Administration’s housing funding proposals in his public presentation of the May Revise, notable modifications to the January housing proposal and policy statements were included in the written summary. Legislative leaders and advocates should pay very close attention to the policy statements made within the May Revise. It echoed the Governor’s previous references to “the three Ps,” referring to the need to adopt policies (not just funding solutions) aimed at preservation, protection, and production of housing in order to implement a comprehensive strategy to increase housing supply overall.
The May Revise re-emphasized the magnitude of the housing crisis in California, that preceded the COVID-19 pandemic. It is a reminder to the public of the Governor’s commitment to addressing a “decades-in-the-making housing shortage that has resulted in skyrocketing housing costs, making homeownership an impossibility for many Californians.” Insulating these housing programs from the draconian cuts that plagued other aspects of the state budget demonstrates his steadfast commitment to simultaneously address the housing crisis in California by also seeking meaningful housing policy reforms.
In order to maintain existing funding levels for housing programs and increase housing supply, the Revise proposes leveraging federal funds, maintaining existing state programs and properties, and reforming government planning and processes to ensure efficient and more effective distribution of resources. Another important nuance to acknowledge was his reference to “housing affordability” instead of “affordable housing” in the section on Job Creation, Economic Recovery and Opportunity, demonstrating a commitment to providing decent housing opportunities for Californians at ALL income levels.
The details of the May Revise are still forthcoming, but here is an overview of the housing-related proposals and policy priorities:
OVERVIEW OF PRIORITIES:
- Preserving existing subsidized affordable housing stock by stabilizing existing deed-restricted affordable housing and guarding against private sector actors buying up distressed assets;
- Seeking strategies to stabilize tenants in existing units;
- Significantly streamlining, upzoning and producing new housing units, especially on excess and surplus lands, in transit-oriented infill areas and on public land; and
- Building a workforce development strategy to support a skilled and trained housing workforce pipeline with high-road wage rates and promoting innovative alternative construction methods.
LEVERAGING FEDERAL FUNDS:
- $1.1 billion in available federal funds through the Community Development Block Grant Program for critical infrastructure and disaster relief related to the 2017 and 2018 wildfires.
- $331 million in National Mortgage Settlement funds for housing counseling, mortgage assistance and renter legal aid services as follows: the California Housing Financing Agency will administer $300 million for housing counseling and mortgage assistance, and the remaining $31 million to the Judicial Council to provide grants to legal aid services organizations.
- California is estimated to receive a total of $532 million in federal funds for housing and homeless programs under the CARES Act. These funds will assist the state and local jurisdictions in acquiring housing for people experiencing homelessness, as well as securing low- and moderate-income housing in response to the COVID-19 pandemic. “The state intends to utilize these funds to continue bolstering necessary housing production in the aftermath of the COVID-19 pandemic.”
- Given the increased federal funds and anticipated future actions to support jobs and infrastructure, as well as the effects of the COVID-19 Recession, the following funds are proposed for reversion:
- $250 million in mixed-income development funds over the next three years.
- $200 million in infill infrastructure grant funds.
- $115 million in other housing program funds.
Note: These funds have not been allocated or dedicated to specific projects.
UNTOUCHED STATE HOUSING FUNDING PROPOSALS
- $500 million in low-income housing state tax credits in the Governor’s Budget. This program will continue to expedite housing development throughout the state by leveraging federal bonding capacity to create more opportunities for tax-exempt building of affordable housing.
- The state also continues ongoing investments including a real estate transaction fee (estimated at $277 million for 2020-21) for affordable housing
- Ongoing revenue from cap and trade auction proceeds (estimated at $452 million for 2020-21) for infill development that also reduces vehicle miles traveled and greenhouse gas emissions
- $4 billion in Proposition 1 bonds for veterans and affordable housing programs. The Administration intends to expedite allocation of these bond funds.
IMPROVING STATE HOUSING PROCESSES AND PROCEDURES
The Administration attempts to continue its commitment to implement and identify process improvements to streamline housing programs to remove barriers to increase housing production.
- Creating a joint application for tax credits between the Tax Credit Allocation Committee and California Debt Limit Allocation Committee
- Realigning Housing and Community Development program award schedules to expedite funding awards and have a greater impact on the ground
- Working on improvements to revamp the state’s housing planning process with input from key stakeholders and local governments. These efforts will facilitate more effective distribution of state resources and ultimately valuable housing production.
For additional details, click here for the May Revise summary