California Gov. Gavin Newsom has unveiled his January budget proposal for 2023-2024, marking the official start of the state's annual budget process. The early budget projections for this year estimated a $22.5 billion budget deficit due to declining general fund revenues — a stark contrast to the two previous years when California saw historic budget surpluses.
The proposed budget addresses the projected budget deficit by reverting some prior multi-year investment and deferring new one-time investments, rather than utilizing reserves. We are encouraged that the Governor’s proposal maintains all prior homelessness and most affordable housing investments committed last year for FY23-24 and extend our gratitude to the Newsom Administration for continuing to elevate housing and homelessness as top issues for our state. Additional investments are needed, however, to meet the state’s growing need.
In response to this need, Enterprise is proud to join a united coalition of California’s leading affordable housing, homelessness, and housing justice organizations to advocate for a set of investments that should serve as a blueprint for housing investment in the 2023-24 budget. Join us in signing on to this letter.
The Governor’s budget proposal included a proposed $350 million in reversions related to housing programs that were included as part of the 2022 Budget Act. Housing programs facing reductions include:
- Dream for All Program — $200 million of $500 million proposed to be reverted
- CalHome — $250 million committed in 2022; $100 million committed for 23-24 proposed to be reverted
- Accessory Dwelling Unit Program — all $50 million proposed to be reverted
Despite the less-than-ideal fiscal landscape, we are grateful to see Gov. Newsom maintain all prior homelessness investments and a significant majority of prior affordable housing investments, including:
- $500 million in state tax credits
- $225 million for the Multifamily Housing Program
- $225 million for the Infill Infrastructure Grant Program
- $250 million for adaptive reuse
- $100 million for the Portfolio Reinvestment Program
- $50 million for affordable housing on excess sites
- $1 billion for the Homeless Housing, Assistance, and Prevention (HHAP) Program Round 5
- $400 million for Encampment Resolution Grants
- $50 million for the Veterans Housing and Homelessness Prevention Program
While this is only the beginning of what will be a months-long negotiation process with the State Legislature, the proposal indicates the administration’s priorities for the next fiscal year. A revised budget will be released in May and a final budget approved by the end of June.
While we recognize the challenges of the new fiscal environment, we must also recognize that the affordable housing and homelessness needs of Californians have also grown. In addition to the maintained investments in the Governor’s proposal, we will be working with our partners to secure the following budget commitments. To support these budget priorities, sign on to the coalition letter.
- $4 billion to accelerate affordable housing production through state tax credits ($500 million), the Multifamily Housing Program ($2 billion), and the California Housing Accelerator Program ($1.5 billion)
- $2 billion for the Homeless Housing, Assistance, and Prevention (HHAP) Program
- $500 million for the Community Anti-Displacement and Preservation Program (CAPP) (SB 225)
- $500 million for rental assistance for older adults and people with disabilities (SB 37)
- $500 million for affordable homeownership production through CalHome
- $200 million for farmworker and tribal communities through the Joe Serna Farmworker Housing Grant Program ($100 million) and a new Tribal Housing Grant Program ($100 million)
- $500,000 for California Civil Rights Department staffing for Source of Income enforcement
- $200 million to help tenants utilize federal Housing Choice Vouchers through landlord recruitment, services, and resources to connect landlords and tenants
- Support the augmentation of funding for the Civil Rights Department included in the Governor’s January budget proposal to support the investigation and enforcement of complaints related to SB 329 (Mitchell, Chapter 600, Statutes of 2019), which prohibited landlords from discriminating against prospective tenants with housing vouchers and other forms of public rental assistance
We look forward to working closely with our partners in advocating for more robust funding for affordable housing to address the needs of low-income Californians across the state.
