What Was in the Final State Budget? - LeSar Development Consultants

What Was in the Final State Budget?

The state budget for FY 2021-22 (covering the period July 1, 2021 through June 30, 2022) includes over $22 billion in funding for programs that address the state’s housing and homelessness needs. Included in this amount are regular programs administered by the state, like the Low-Income Housing Tax Credit Program and homebuyer programs administered by the Department of Veteran’s Affairs and the California Housing Finance Agency, but also new funds announced as a part of the Governor’s California Comeback Plan. According to the Governor’s Office, the $22 billion housing and homelessness investment will create more than 84,000 housing opportunities for homeless residents and lower-income families.

Highlights include:

$1.75 billion for the California Housing Accelerator Program, which will fund backlogged affordable developments that have been awarded HCD funding but were unable to secure tax credits. It is expected to finance more than 6,300 new homes.
$600 million in Regional Early Action Planning Grants to help local jurisdictions plan and implement projects that help address the state’s climate goals. Funding targets new housing development, particularly in infill areas near public transit, and the revitalization of existing communities and corridors.
An additional $500 million in State Low-Income Housing Tax Credits.
$500 million for the Higher Education Student Housing Grant Program, which will provide one-time grants for new affordable student housing, with half of the funds dedicated to planning and feasibility studies and the other half for housing development, including acquisition/ rehabilitation. Another $750 million may be available in FY 2022-23 and FY 2023-24 upon appropriation by the Legislature.
$300 million for the preservation of deed-restricted housing to ensure that HCD-funded projects continue to be affordable after affordability covenants expire.
$2.75 billion over two years for Project Homekey grants to buy and rehabilitate buildings to provide interim or permanent housing for people experiencing homelessness. These funds are expected to finance more than 42,000 hotel and motel rooms into new homes for homeless residents. NOFA applications for the first year of funding have been released, with the final day for the Application Bonus Award and Geographic Pools being January 31, 2022. The application period for the Statewide pool opens Feb 1, 2022 with a deadline of May 2, 2022, or whenever funds are exhausted.
$100 million to expand the Homebuyer Assistance Program to reach lower-income families
$100 million in Accessory Dwelling Unit financing to provide $25,000 in assistance to households wishing to build ADUs
$5.2 billion for rental assistance to families impacted by the pandemic to help them with outstanding or prospective rent payments, cover utility and home energy costs, and pay for other housing costs related to the pandemic.
$1 billion for mortgage assistance to help homeowners impacted by the pandemic to help ensure housing stability.
$500 million for loans and grants that preserve affordable housing and promote resident or nonprofit ownership of housing at risk of foreclosure.

The Legislative Analyst’s Office is projecting a $31 billion surplus in 2022, with anticipated operating surpluses of between $3 and $8 billion through 2026. The Governor has indicated that some of these additional funds will be used to increase investments in infrastructure. This is giving affordable housing advocates hope that more investment will be coming in future years. The Governor and his Department of Finance will release the administration’s budget proposal next month, and the Assembly leadership released its budget priorities on Dec 12.