California state leaders have reached a “nearly final” 2022-23 budget agreement proposed in early January by Gov. Gavin Newsom; However, the California Association of Realtors (CAR) took issue with the nearly finalized budget, stating that the development of homeownership should be an integral part of the other initiatives included within the budget.
CAR issued the following statement: “The CALIFORNIA ASSOCIATION OF REALTORS, while encouraged by Gov. Newsom’s proposed budget for funding of CalHFA’s efforts to assist Californians become homeowners, we believe that the development of homeownership should be an integral part of the other initiatives included within the budget. For example, higher density residential development provides prospects for greater homeownership opportunities, as does adaptive reuse. California’s need for housing exists at every level and allocating funding to facilitate and expand homeownership housing should be of greater focus within this budget.”
The 2022-23 Governor’s Budget proposed spending $286.4 billion in total state funds, with only 1.7% dedicated towards businesses, customer services, and housing.
Still, the proposed budget lends a helping hand to the overwhelming homeless population in California by dedicating an additional $2 billion to address homelessness over the next two years. Part of these funds ($500 million) will address homeless encampments, specifically “for jurisdictions to invest in short- and long-term rehousing strategies for people experiencing homelessness in encampments.”
The Governor also proposed $2 billion in new one-time resources to increase affordable housing. According to the budget’s report, 1 in 5 California adult renters with household incomes below $50,000 reported being behind on rent payments in December 2021. A partial $500 million will go towards the Infill Infrastructure Grant program; $300 million for the Affordable Housing and Sustainable Communities program; $100 million for affordable housing development and adaptive reuse on excess state land; $100 million for per-unit adaptive reuse incentive grants; $200 million for loans to develop mixed-income rental housing; $200 million for the Portfolio Reinvestment Program to preserve at-risk affordable housing in downtown areas; and $100 million for the Mobilehome Park Rehabilitation and Resident Ownership Program.
The proposed budget also allocates an additional $500 million for Low-Income Housing Tax Credits (LIHTC).
Not included in the Governor’s proposal, though, is any funding for emergency rental assistance for struggling renters. Meanwhile, requests for help from California’s COVID-19 Emergency Rental Assistance Program now total more than the $5.2 billion in federal funds initially provided to the state. Although federal funding may be coming in but not enough to close the gap, and many renters with low incomes will be at risk of losing their housing.
