Governor Releases May Revise with Additional Funding for Housing and Homelessness
On Friday, Governor Newsom released his May Revise, which updates his January budget proposal and accounts for the latest revenue projections. The Governor announced an unprecedented $97.5 billion surplus, which he proposes to use for largely one-time projects and programs. The total budget for FY 2022-23 is a record $300 billion. Due to spending limits, a large part of the surplus must be directed to education and other dedicated funds, leaving around $49 billion that can be directed to other program priorities.
This updated proposal will now be forwarded to the Legislature, which will have until midnight on June 15th to get a budget package to the Governor. By State law, the Governor has twelve working days to sign the budget bill. The bill becomes law upon his signature.
In the proposal released in January, $4 billion was included for housing and homelessness programs to be spent over a two-year period. Of the total, $2 billion is targeted to homelessness and $2 billion to affordable housing, with key investments that include:
$1.5 billion for quick and interim solutions that help people move from the streets into behavioral health shelter and treatment ($1 billion in FY 2022-23 and $500 million in FY 2023-24).
$500 million for the Infill Infrastructure Grant Program ($225 million in FY 2022-23 and $275 million in 2023-24).
$300 million for the Affordable Housing and Sustainable Communities Program ($75 million in FY 2022-23 and $225 million in FY 2023-24).
$500 million in funding to expand the State Low Income Housing Tax Credit Program.
An additional $2 billion in funding for affordable housing for college students was included in the January proposal.
Today’s announcement added $2.7 billion in rental assistance funding to help renters impacted by the pandemic (who submitted applications by the end of March), resulting in total State funding for this program of $8.1 billion. It is projected that 300,000 families will be assisted with these funds, with an estimated 86% that fall into the Very Low-Income bracket (50% or below of Area Median Income adjusted by county and household size). Additional funding will be directed to efforts that help families pay their utility bills and provide health care subsidies.
Additionally, the Governor announced an additional $1.2 billion for housing and homelessness, including:
$500 million for the conversion of malls and office buildings to affordable housing
$700 million for crisis response/interim housing ($500 million), Homekey expansion ($150 million), and the CARE Court ($65 million), which is the Governor’s proposal for responding to severe mental health needs of the population
The four State housing agencies—the California Department of Housing and Community Development, the California Housing Finance Agency, the California Tax Credit Allocation Committee, and the California Debt Limit Allocation Committee—have existing funding as well. The total funding for housing in 2022-23 is projected at $9.1 billion, with $9.4 billion available for programs serving the homeless and those at risk of homelessness. This is a total of $18.5 billion committed to housing and homelessness spending. See the list of programs and allocations here.
In his presentation, the Governor stressed accountability and streamlining, emphasizing the new housing accountability goals and the requirement that jurisdictions seeking funding through the Homeless Housing, Assistance and Prevention (HHAP) Program submit a local homeless action plan to the California Interagency Council on Homelessness prior to June 30, 2022. He also talked about CEQA and the need to think about process and streamlining differently than what has been done in the past though no specifics were provided.
Affordable housing supporters are likely to be disappointed with the Governor’s announcement. A variety of groups have proposed spending allocations that dwarf what is included in the May announcement. Asks include:
$5 billion over three years for the Multifamily Housing Program and the California Housing Accelerator Program
$5 billion over five years to prevent and end homelessness
$5 billion for an expanded Infill Infrastructure Grant Program
$600 million for owner-occupied home production and down payment assistance for first-time homebuyers
$500 million for a permanent extension of the State’s Low Income Housing Tax Credit (LIHTC) program
$500 million for the Community Anti-Displacement and Preservation Program (CAPP) to acquire and preserve privately-owned housing to make it permanent affordable.
$500 million in one-time funding for a new Bay Area fund to address Black housing needs and create inter-generational wealth and health for Black families.
While it is doubtful that all of these asks will make their way into the final budget, advocates will be working over the next month to ensure that the State’s housing and homelessness needs receive additional funding in this year of historic budget surpluses. The Senate released its budget proposal, which spells out additional funding for housing, and the Assembly mentioned housing in its budget presentation, but did not put a price tag on it.
Much can change between now and June 15th. Stay tuned!
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