FOR IMMEDIATE RELEASE

Sacramento, CA
May 13, 2022

Contact: Unai Montes-Irueste I Director of Narrative and Strategic Communications
umontes@housingca.org I (310) 962-7369 (cell)

 

Response to Governor Newsom’s 2022-23 State Budget Proposal

In response to Governor Newsom’s May Revise, Housing California Policy Director Christopher Martin issued the following statement:

Governor Newsom’s May Revise is a down payment on our collective vision of a California with homes, health, and wealth for all in thriving, sustainable communities. The Governor’s May revision of his proposed 2022-23 State Budget demonstrates a continued commitment to housing affordability and homelessness, and Housing California extends our gratitude to his administration for their partnership and commitment to these issues. Yet, with the State enjoying a nearly $100 billion surplus, limiting new investments in housing to $2.5 billion is a missed opportunity. We look forward to working with the Governor and the Legislature to meet the moment and seize the future.

As of today, the Governor’s proposed state budget allocates resources for housing and homelessness over the next two fiscal years and includes the following highlights: 

• $300 million in supplementary funding for the Affordable Housing and Sustainable Communities Program ($75 million in FY 2022-23, $225 million in FY 2023-24) in addition to the annual 20 percent of continuous appropriations through the Greenhouse Gas Reduction Fund.
• $500 million for the Infill Infrastructure Grant Program ($225 million in FY 2022-23, $275 million in FY 2023-24), which funds much of the complementary infrastructure needed for affordable housing developments.

• $500 million in state low-income housing tax credit program for the coming fiscal year.

• $200 million for the Portfolio Reinvestment Program to preserve existing affordable homes ($50 million in FY 2022-23, $150 million in FY 2023-24).

• $500 million for adaptive re-use of underutilized buildings.

• $500 million for Encampment Resolution Efforts for the coming fiscal year.

• $500 million for interim housing for unhoused individuals on State owned land.

• $1.5 billion for Behavioral Health Bridge Housing.

• $150 million for Homekey.

• $10.6 million in short-term transitional housing for returning residents through the Returning Home Well Program. 

In addition to the investments included in the Governor’s proposal, we will be working with our partners to advocate for the following additional budget commitments that focus on building a balanced system with significant expansions of resources that quickly and permanently house Californians experiencing homelessness and housing insecurity:

• Invest $1 billion per year in direct rental assistance to house over 50,000 people experiencing homelessness. (AB 2817, Reyes)
  
• Invest $500 million in the Community Anti-Displacement and Preservation Program (CAPP) to acquire unsubsidized affordable housing, make them permanently affordable, and prevent future displacement, while expanding the stock of affordable housing quickly and cost effectively.    
• Invest $200 million in the Reentry Housing and Workforce Development Program to provide stable housing and supportive services to formerly incarcerated people. (AB 1816, Bryan)
• Invest in operations and services for permanent supportive housing, including Homekey sites, that serve many of California’s most vulnerable residents. 
• Remove barriers to low-income Californians searching for deed-restricted affordable housing by investing in the Department of Housing and Community Development’s implementation of a statewide affordable housing database. (AB 1961, Gabriel)

The administration has made tremendous progress through Homekey, which has funded over 10,000 new homes for people experiencing homelessness or who are very low-income, over the past two years. Housing California is deeply supportive of this unprecedented initiative to get people into permanent and stable housing. We are supportive of continued investment in this program that has become a national model for success.

Housing California expresses concern that most of the new resources to address homelessness in the May Revise budget are focused on interim shelter and other temporary solutions. Homelessness will not end without sufficient investment in housing and services as well. We must expand our efforts to meet the needs of unhoused people across California with more sustained resources. Communities around the State and country have shown that rental assistance and services can immediately house an individual and keep them stably housed for the long term while they access services to achieve stability. We look forward to working with the Administration and Legislature to advance proposals that meet individuals where they are with a permanent housing focus, like those in AB 1816 (Bryan) and AB 2817 (Reyes). 

Housing California commends the Administration for their leadership in promoting affordable housing as a climate strategy, elevating the importance of the intersection of housing and climate and emphasizing the need for infill development. This priority is reflected by the housing investments in the proposed budget, proposing significant funding for the Affordable Housing and Sustainable Communities Program (AHSC), the Infill Infrastructure Grant Program (IIG), and an investment in adaptive reuse. We’ve seen how investing in producing and preserving affordable housing in transit- and opportunity-rich communities provides stability and opportunity to lower-income Californians – who are disproportionately people of color – while also reducing greenhouse gas emissions. 

While the Governor includes new resources to develop new affordable housing, Housing California is concerned we do not address the crisis at scale. The Multifamily Housing Program (MHP), most recently funded in 2018 with the allocation of $1.5 billion in Proposition 1 bonds, has become the State’s premier affordable housing development program. The last of these critical dollars will be awarded by the end of 2022. We remain deeply concerned about the risks of lost funding to California’s affordable housing development pipeline. Funding MHP directly through General Fund revenue, rather than publicly financed bonds, would provide significant cost-savings to the State. We urge the Administration and Legislature to make a critical $5 billion investment, over three years, to finance the development of critically needed affordable housing. This $5 billion in MHP funding would also provide allowable uses for Capitalized Operating Subsidy Reserves in MHP, and the California Housing Accelerator, to free up the backlog of shovel-ready housing developments awaiting tax credit allocations.  

In sum, while the proposed investments in Governor Newsom’s May Revise are a step in the right direction, additional ongoing investments are necessary to both meet the immediate and ongoing needs of low-income Californians. The housing affordability crisis is not going away until we provide permanent resources that truly match the scale of need. The Roadmap HOME 2030 calls for an annual investment of $17.9 billion over the next decade, in order to provide affordable, stable homes for every Californian. California’s housing and affordability crises have compounded over many years, and this year’s budget surplus is a prime opportunity to substantially invest in the affordable housing development and preservation, programs, and services that house Californians. 

Housing California looks forward to working closely with the Governor, the Legislature, and our partners across the Golden State in advocating for more robust funding for affordable housing to address the needs of low-income Californians across the State.

About Housing California

Housing California brings together a diverse, multi-sector network to prevent and end homelessness, increase the supply of safe, stable, affordable housing options, and reverse the legacy of racial and economic injustice by building power among the people most impacted by housing injustice, shaping the narrative, and advocating for statewide policy solutions.

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