Governor’s Reorganization of the Business, Consumer Services, and Housing Agency Moves Forward

Article Contributor: Jacqueline Woo, Senior Associate, Research & Policy

As California grapples with persistent challenges around housing, homelessness, and consumer trust, Governor Newsom unveiled his vision for change earlier this year. His proposal would split the California Business, Consumer Services, and Housing Agency (BCSH) into two separate agencies. Under the plan, a new California Housing and Homelessness Agency (CHHA) would be established, focusing entirely on addressing the state’s deep-rooted housing crisis. Meanwhile, a separate agency would take charge of consumer services and business oversight, aiming to create more efficient, transparent government interactions for Californians.

These current agencies will be housed in CHHA:

• Department of Housing and Community Development
• California Housing Finance Agency
• California Interagency Council on Homelessness
• Civil Rights Department

The plan also proposes the creation of a new Housing Development and Finance Committee (HDFC) within the CHHA, aimed at becoming a “one-stop shop” to help align timelines for funding project applications and awards. The Governor’s May Revise included ongoing funding for the new agency.

On May 13th, the Governor’s reorganization plan was reviewed by the Legislature in a Joint Informational between the Assembly Committees on Business and Professions and Housing and Community Development. The plan has also been scrutinized by the Little Hoover Commission through a series of public hearings.

The Commission’s report recommends that the Legislature allow the plan to go into effect, but also that it pursues five additional steps that would help ensure the reorganization achieves its stated goals:

• Consider whether any additional homelessness programs should be overseen by the new California Housing and Homelessness Agency.
• Streamline and align program, reporting, and application requirements across the state’s homeless programs.
• Require progress reports from each of the new agencies.
• Establish a formal mechanism for stakeholder feedback on implementation.
• Enact a Memorandum of Understanding between the Governor and Treasurer to better coordinate across the state’s affordable housing finance programs.

Unlike other major policy proposals, the legislature has a very limited role to play in shaping the details of the Governor’s “reorganization plan.”  They are allowed by law to simply conduct public hearings and to approve or disapprove the plan presented to them.