Reflecting on the accomplishments of the past year, we celebrate the strides made towards more stable, safe, and affordable housing in California. At the same time, there are fresh reminders that our work is not done, and we must continue innovating and identifying ways to ensure California remains a place for all.
In 2023, the Governor and Legislature continued to prioritize housing and homelessness, passing numerous laws to streamline housing development, explore innovative approaches, and increase funding sources for housing production.
Two high-profile bills by Senator Scott Wiener (D-San Francisco) continue the yearlong trend of land use streamlining: SB 4, the “Yes in God’s Backyard” bill, streamlines the development of new affordable homes on land owned by faith-based institutions and nonprofit colleges, and SB 423 extends and strengthens SB 35 to further streamline and accelerate housing permits in certain localities.
As the concept of social housing continues to stoke interest both in California and nationally, SB 555 (Wahab, D-Fremont) created the Stable Affordable Housing Act of 2023 to create opportunities for social housing through a mix of acquisition and new construction and requires the state’s Housing and Community Development department to develop, adopt, and submit to the legislature a Social Housing Study by December 31, 2026.
Several ballot initiatives were approved to provide more funding for housing production and supportive housing, and other resources for people experiencing homelessness. AB 531 (Irwin, D-Thousand Oaks) and SB 326 (Eggman, D-Stockton) together comprise Proposition 1, which will be on the March 2024 ballot. AB 531 places a $6.38B bond on the ballot to fund the development of supportive housing units and treatment beds, and SB 326 modernizes the Mental Health Services Act (MHSA) to provide ongoing resources for chronically homeless persons. Meanwhile, taking aim at a longstanding barrier to funding affordable housing, ACA 1 (Aguiar-Curry, D-Davis) will be voted on in November 2024. ACA 1 lowers the voter threshold from two-thirds to 55% for affordable housing bond measures, the same bar required to pass bonds for school renovations.
These actions were paired with a 2023-24 budget that largely maintained prior authorized spending actions and provided $3.3B for housing and homelessness programs despite a fall in revenue estimates.
Even as these achievements spur us on, we know there is more work to be done. The latest Annual Homelessness Assessment Report, based on the annual Point-in-Time Count in January 2023, reported a 12% increase in people experiencing homelessness on a single night in January, with California counting 181,339 homeless people, the most of any state. The State is anticipating a $30 – $60B+ budget deficit for FY 2024-25, with the Governor’s budget proposing substantial cuts and/or delays to housing and homelessness programs. These challenges may be slightly offset by the previous two years’ work on housing and homelessness, as prior program funding and legislation continue to be implemented at the local level into greater affordable housing and homelessness support, and regional solutions like BAHFA and LACAHSA continue to progress in their execution.
As we look forward to 2024, we continue to track a number of trends at the Federal and State levels.
Nationally, the 2024 election is approaching, and we will be tracking its potential impact on the Federal approach towards housing and homelessness. Funds approved through the Inflation Reduction Act are still being disbursed, and our team continues to track specific programs that support housing and homelessness through our capital mapping services. Please reach out to us here if you wish to learn more. Lastly, the Federal Reserve has penciled in three rate cuts in 2024, which may provide some relief to construction costs.
At the State level, the Legislature will begin the session with two new leaders, both from Northern California: Senator Mike McGuire (D-Santa Rosa) as the incoming Senate Pro Tempore, and Assemblymember Robert Rivas (D-Salinas) as Speaker of the House. In March, Proposition 1, authorized by SB 326 and AB 531, will be placed on the ballot; its approval would direct more resources towards housing and shelter. Lastly, we will be tracking the budget, the continuation of 2-year bills, and negotiations around November ballot measures, including ACA 1.
This year will be busy and eventful, and we look forward to our continued partnership to address housing and homelessness issues. Happy New Year!