By David M. Greenwald
Executive Editor
Sacramento, CA – The Governor this week unveiled the May Revision. Overall, the League noted, “The budget includes a few wins for cities, but on the homelessness and housing front, a few disappointments as well.”
The May Revision largely “maintains commitments made earlier this year for homelessness, adding no new investments.”
However, it makes additional reductions and deferments for affordable housing.
“(We) appreciate the Governor’s efforts to date to provide short-term funding to California’s cities to address homelessness,” said League of California Cities Executive Director and CEO Carolyn Coleman. “However, given that California faces unprecedented and growing affordable housing and homelessness crises, we are disappointed that this budget will bring no new hope to the many Californians who need a home.”
She said, “Together, the state and local governments are accountable for preventing a deepening of both crises. Cities are making progress planning for 2.5 million new homes, but these plans will not produce enough homes unless the state does its part and invests in affordable housing.”
But she warned that “this budget proposal does the opposite and calls for $712 million in delays or cuts to housing programs.”
While aware that the budget deficit forces difficult decisions, Coleman noted that “local governments, homelessness service providers, housing advocates, business leaders, and lawmakers alike agree that ongoing funding is a key part of the solution to ensuring an end to this state’s homelessness crisis.”
As such, “Cities are calling on the state to find a permanent home in the budget, $3 billion annually, to prevent and reduce homelessness and boost the supply of affordable housing.”
Among the critical homeless funding:
- Homelessness Funding: Maintains $3.4 billion in one-time funds to address homelessness as committed in prior budgets. This includes $1 billion for the HHAP program.
- Homelessness Funding Prioritization: Proposes statutory changes to the HHAP program to prioritize spending on supporting permanent housing, Homekey operating sustainability, Community Assistance, Recovery and Empowerment Act (CARE) housing supports, and other activities.
- Homelessness Accountability: Reinforces the Governor’s continued effort to work with the Legislature to enhance local accountability around homeless services and regional coordination on homelessness strategies. This includes proposed trailer bill language that signals the intent to link state homelessness funding to having submitted a compliant housing element.
- CARE Act Funding: Provides an annual increase between $43 million and $54.5 million for county behavioral health departments to implement the CARE Court program. The May Revision also includes an additional one-time $15 million for Los Angeles County. This is due to Los Angeles County’s announcement that it will implement the CARE Act one year early.
However, “Instead of providing essential funding to jumpstart affordable housing construction, the May Revision takes the opposite approach and proposes additional reductions and deferments.”
The Governor proposed $367.5 million in reductions and $345 million in deferments in much-needed housing funding, for a total of $712.5 million.
Said the league: “Delaying or eliminating nearly three-quarters of a billion dollars will only exacerbate the housing crisis. Cal Cities will continue to call on the Governor and lawmakers to include a $3 billion annual investment in the state budget to help cities prevent and reduce homelessness and spur affordable housing development.”
They added, “Targeted, ongoing funding is the only way cities can find community-based solutions that get residents off the streets and keep them in their homes.”
The answer lies in returning the tax increment financing. Give communities the property tax increment from building new housing and cities will drop much of their resistance to new developments. Add strings to how that increment is spent, such as a proportion on Affordable housing.