California May Budget Revision and Federal Covid-19 Response Updates
On Thursday, May 14, Gov. Gavin Newsom released the May revised budget for the state of California. While the state faces a significant projected budget deficit, the revised budget put forward by the administration maintains a strong commitment to addressing California’s housing and homelessness crises.
While the revised budget did eliminate several allocations for affordable housing and infrastructure originally proposed in the January budget proposal, many significant investments remain, including:
- $500 million in state Low-Income Housing Tax Credits
- Maintaining the Affordable Housing and Sustainable Communities (AHSC) program at 20 percent of continuous appropriations for the Greenhouse Gas Reduction Fund, which if funded through cap-and-trade
- $331 million from the National Mortgage Settlement funds for housing counseling, mortgage assistance and renter legal aid services
The revision also proposes directing $600 million in additional federal funding to purchase hotels and motels secured through Project Roomkey, the state effort to provide safe isolation hotel and motel rooms for 15,000 vulnerable individuals experiencing homelessness. If purchased, these hotels and motel would be owned and operated by local governments or non-profit providers as permanent affordable housing.
Beyond these budget allocations, we were also encouraged that the May Revision outlines a holistic framework for addressing our State's housing crisis through future legislation and new revenues, highlighting preservation, protection, and production of housing, as well as the high-road workforce development opportunities that the housing sector offers.
Finally, in his press conference and subsequent communications, the governor also made a strong endorsement for H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), which was passed by the U.S. House of Representatives on Friday, May 15.
If enacted, this bill would provide funding for numerous housing and community development programs, including $100 billion for Emergency Rental Assistance, $11.5 billion for Homeless Assistance Grants, $5 billion for the Community Development Block Grant (CDBG) program, and $75 billion for a Homeowner Assistance Fund. It would also extend the CARES Act’s eviction and foreclosure moratoria for another year and expand the provision to include all dwelling units, regardless of whether they are subsidized or backed by a federal mortgage program, and regardless of whether a signed lease is in place. It would also extend the multifamily property forbearance allowances.