Gov. Gavin Newsom released his January budget proposal for 2024-2025 earlier this month, marking the official start of California’s annual budget process. The proposal aims to balance the budget with a projected $38 billion deficit through a combination of cuts, deferrals, and the use of reserves.
While we are grateful that Gov. Newsom did not propose any cuts to funding for the Homeless Housing Assistance and Prevention Program (HHAP), the proposed budget included significant cuts to affordable housing production and preservation programs.
We understand state leaders need to make trade-offs when addressing the significant budget deficit; however, the proposed cuts to core affordable housing programs are a step back that California cannot afford. We are committed to working closely with the Governor and the Legislature to achieve a budget outcome that balances the fiscal reality facing California’s budget, as well as the reality in communities across the state facing severe housing affordability and homelessness crisis.
Enterprise is proud to work with a broad coalition of affordable housing, housing justice, and homelessness partners in our budget advocacy. Join us by adding your organization’s name to our coalition budget letter today!
The Budget Details
The proposed budget cuts, in addition to not continuing funding for these programs in the budget year at the FY 2023-24 level, will reduce the annual construction of new affordable homes by one-third – stalling an estimated 6,400 affordable homes. With these affordable homes unable to move forward, tens of thousands of Californians will remain without homes, our communities will lose jobs and economic opportunity, and the state will forgo over $1.6 billion in federal housing resources.
The Governor's budget would cut funding for core housing production and preservation programs by $900 million, specifically:
- $250 million from the state's flagship program for building affordable apartments, Multifamily Housing Program
- $247.5 million out of the Foreclosure Intervention Housing Preservation Program
- $200 million from the Infill Infrastructure Grants Program
- $152.5 million from the CalHome homeownership program
- $50 million out of the Veteran Housing and Homelessness Prevention Program
Gov. Newsom also proposes cutting $300 million from the Regional Early Action Planning 2.0 program, which funds integrated projects at the intersection of housing, transportation, and climate.
Furthermore, the proposal does not renew the $500 million annual investment state LIHTC program for FY 2024-25.
In his proposal, the Governor outlines delaying an additional $830 million in other housing and homelessness programs:
- Homeless Housing, Assistance and Prevention Program (HHAP) — $260 million
- Behavioral Health Bridge Housing — $235 million
- Behavioral Health Continuum Infrastructure Program — $140.4 million
- Bringing Families Home — $80 million
- Home Safe — $65 million
- Housing and Disability Advocacy — $50 million
This is only the beginning of what will be a months-long negotiation with the state Legislature, thus it is essential to advocate for a California state budget that reflects housing as a priority. A revised budget will be released in May, and a final budget approved by the end of June.
We look forward to working closely with the Governor, the Legislature, and our broad multi-sector coalition of affordable housing, homelessness, and housing justice advocates to urge for the restoration of investments for affordable housing and adopt a state budget that responds to the urgent housing needs of Californians.