Sacramento Milestones: Budget Agreement Reached, Constitutional Amendment Headed to Ballot

Last month, Sacramento leaders made key decisions regarding affordable housing and homelessness funding at the state and local levels. The final state budget was passed by the California State Legislature and signed by Gov. Gavin Newsom. The Legislature also passed Assembly Constitutional Amendment (ACA 10), which would set the threshold for passing local housing and infrastructure bonds at 55% if passed by voters this November.

California State Budget Enacted

Gov. Newsom and the Legislature reached a final agreement on the fiscal year (FY) 2024-25 state budget, bringing California’s budget process to a close. We extend our appreciation to the Legislature and the Governor for maintaining prior year commitments to the Multifamily Housing Program (MHP) and the Regional Early Action Planning Grants 2.0 (REAP 2.0), and additional one-time investments of $500 million in the State Low-Income Housing Tax Credit (LIHTC) Program and $1 billion in the Homeless Housing, Assistance and Prevention Program (HAPP). We thank Gov. Newsom and the Legislature for maintaining these important housing and homelessness investments. Every dollar committed to these proven programs will result in more affordable homes being built and one step closer to solving homelessness in California.

Unfortunately, in response to the significant deficit, the final budget also included over $1 billion in cuts to critical affordable housing and homelessness programs. These one-time investments and significant cuts fall short of meeting the significant need as we work to address our affordable housing and homelessness challenges.

Enterprise, alongside our partners, will continue to work with state leaders, local governments, and community partners to develop a long-term investment strategy that prioritizes significant ongoing funding to address our state’s urgent homelessness and housing needs. Together, we will continue to urge for long-term solutions to move toward a future where all Californians have a safe, stable, affordable place to call home.

Budget Investments and Cuts

The 2024 budget agreement between the Governor and the Legislature draws heavily from the Legislature’s proposal released on May 29, which sought to restore several of the cuts proposed by the Governor in his May Revision. The final budget includes the following.

Investments and Restorations

State Low-Income Housing Tax Credit program (LIHTC): $500 million additional allocation
Multifamily Housing Program (MHP): $315 million restored
Regional Early Action Planning (REAP) 2.0 Program: $260 million restored
Round 6 of the Homeless Housing, Assistance, and Prevention (HHAP): $1 billion additional allocation

Reductions

Adaptive Reuse Program from 2022 and 2023: A $127.5 million reduction
Foreclosure Intervention and Housing Preservation Program (FIHPP): A $484.4 million reduction, leaving the program unfunded
Infill Infrastructure Grant (IIG) Program: A $235 million reduction
CalHome Affordable Housing Retention and Rehabilitation Program: A $152.5 million reduction

Constitutional Amendment Heads to November Ballot

The Legislature also took a momentous step closer to empowering local communities to unlock local resources to meet their housing and infrastructure needs by passing Assembly Constitutional Amendment (ACA) 10. If approved by voters on the November ballot, this measure would set the threshold for passing local housing and infrastructure bonds at 55%.

Through the steadfast leadership of Assembly Majority Leader Cecilia Aguiar-Curry, last year, we celebrated the legislative passage of ACA 1 – a Constitutional Amendment on the November 2024 ballot that would set the threshold for passing local housing and infrastructure bonds and special taxes at 55%. This year, the Majority Leader introduced ACA 10 to revise the ballot measure – specifically to remove the special tax provisions. This means the ballot measure will now only apply to local housing and infrastructure bonds. At the end of June, ACA 10 passed out of the Legislature and is heading to the November ballot.

With the passage of ACA 10, we are one step closer to empowering local communities to meet their housing and infrastructure needs. This measure is critical for all local affordable housing bonds in 2024 and into the future, including the $20 billion affordable housing bond set for this year’s ballot in the Bay Area.