Newsletter | April 2023 | What are Governor Newsom’s Housing Priorities for 2023-24?

Federal News

President Biden Highlights Housing in FY 2024 Budget Proposal

Natalie Donlin-Zappella, Principal

When President Biden unveiled his budget proposal last month, he highlighted the need for substantial increased investment in affordable housing. The budget proposal is the first step in a months-long process to approve a spending plan for Fiscal Year 2024 that begins in October 2023.

The President is proposing a $1.1 billion increase in the Department of Housing and Urban Development’s budget, a 1.6% increase over the Fiscal Year 2023 budget of $73.3 billion. Increases include a $300 million bump in HOME Investment Partnerships Program funding (to $1.8 billion), a $330 million increase in funding for public housing, and the addition of 180,000 Housing Choice Vouchers funded through new appropriations and reserves. This chart from the National Low Income Housing Coalition details the proposed appropriations.

State News

Governor Newsom Goes on Tour - Makes Several Key Announcements About Housing

Jacqueline Woo, Senior Associate

Instead of a traditional State of the State presentation, Governor Newsom went on tour in March to present his budget plan for Fiscal Year 2023-24, with several important announcements about housing and homelessness. The tour included a stop on March 16th in Sacramento to announce proposals that focus on reducing homelessness and a stop in San Diego on March 19, where the Governor focused on Mental Health Care Reform.

The Governor made several announcements at his first stop, including a new target for a 15% reduction in homelessness by 2025.

Huntington Beach Fights State Housing Laws

Jacqueline Woo, Senior Associate

In March, State Attorney General Rob Bonta filed suit against the City of Huntington Beach to require that the city comply with State housing laws that require cities to plan for and approve housing and provide new affordable options. The lawsuit challenges the city's action to circumvent Senate Bill 9, which allows for modest-density housing on single-family lots, and to stop processing any applications for Accessory Dwelling Units (ADUs).

Legislators Oppose Delay in Housing Funding for Colleges and Universities

Chul Gugich, Principal

When the Governor released his budget message in January, he proposed delaying funding for housing projects on land owned by the state’s colleges and universities that was included in last year’s budget. Specifically, the Governor’s proposal would delay $1.2 billion in loans and grants for student housing, deferring $250 million of the $750 million appropriation for the Higher Education Student Housing Grant Program until FY 2024-25 and pushing out $900 million in funding for a new interest-free student housing revolving loan program until FY 2024-25, with the remaining $900 million available in FY 2025-26.

SVB Collapse

Natalie Donlin-Zappella, Principal

In the wake of the sudden failure of Silicon Valley Bank (SVB), affordable housing developers are scrambling to shore up financing for developments in both the planning and construction stages. SVB was a major player in the affordable housing finance space, investing in Low-Income Housing Tax Credits and providing grants and loans for new development and acquisition/rehabilitation projects. The impact is especially felt in the Bay Area, and its loss has both immediate and long-term impact. SVB also had a big presence in Massachusetts from its acquisition of Boston Private in 2021.

Reports and Tools

National Low Income Housing Coalition Report Highlights Housing Gap

The National Low Income Housing Coalition (NLIHC) released its annual report on the Housing Gap, which shows the availability of affordable rental housing in all 50 states. This year’s report found that the affordability challenge continued to worsen even as rent prices have flattened in recent months, citing a drop in housing affordable to Extremely Low-Income (ELI) families of 500,000, or 8% nationwide.

Terner Center Report Highlights Lessons from Emergency Voucher Program

The Terner Center for Housing Innovation released a report that highlights the successes and challenges of the Emergency Housing Voucher (EHV) program, which provided 70,000 vouchers during the pandemic to subsidize housing for people who were homeless or at imminent risk of homelessness. The EHV program was funded as part of the American Rescue Plan Act of 2021.

The report found that the roll out of the program was hampered by pandemic-related disruptions and the concurrent implementation of other emergency response programs.

UC Berkeley’s Othering and Belonging Institute Unveils New Zoning Reform Tracker

The Othering and Belonging Institute out of UC Berkeley released a great new interactive tool - a Zoning Reform Tracker - that serves as a hub for documenting zoning reform efforts in the country. The first version released focuses on municipal zoning reform. Future versions will be expanded to also look at State reforms.

SPUR Issues Report on the Impact of the Housing Crisis on Middle-Income Households

SPUR (the San Francisco Bay Area Planning and Urban Research Association) unveiled a report called Losing Ground - What the Bay Area’s Housing Crisis Means for Middle-Income Households and Racial Inequality. While focused on the Bay Area, the report’s findings are helpful in understanding the challenges faced by middle income households in finding housing they can afford and in offering policy ideas for elected officials in response.

Niskanen Center Releases an Agenda for Abundant Housing

The Niskanen Center released an Agenda for Abundant Housing. The Niskanen Center is a unique Washington DC public policy think tank that calls itself ”transpartisan” as it makes recommendations for policy change that tackles challenging problems – climate change, immigration reform, and criminal justice reform.

In the Agenda for Abundant Housing, the Center takes on the challenge of affordable housing, considering the reasons for the current situation, describing how supply restrictions work, looking at economic and political considerations, and ending with three specific policy recommendations for action.

Articles

What’s Homelessness Really Like? - New York Times - 2/21/2023

Nonprofit Hospitals Can Improve Community Health Through Housing Investments - Center for American Progress (CAP) - 2/21/2023

The Big Neglected Problem that Should be Biden’s Top Priority - It’s Time to Take on the NIMBYs - Vox - 3/1/2023

Why Poverty Persists in America (Adapted from Mathew Desmond’s book Poverty, by America) - New York Times - 3/9/2023

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