Budget and Policy Post
October 17, 2019

The 2019‑20 Budget: California Spending Plan

Housing and Homelessness

The 2019-20 Budget Act includes several major actions in the area of housing and homelessness.

Grants to Local Governments to Address Homelessness. The budget includes $650 million for one-time grants to local governments to fund a variety of programs and services that address homelessness. This funding is divided among the state’s 13 most populous cities ($275 million), counties ($175 million), and Continuums of Care ($190 million)—local entities that administer housing assistance programs within a particular area, often covering a county or group of counties. Allocations to each local entity are based on the entity’s share of the statewide homeless population in 2019, however, entities must apply for funding by describing their current efforts to address homelessness and how the state funds would be used. Entities have two years to expend the funds.

Funding for Mixed-Income Housing. The budget allocates $500 million to the California Housing Finance Agency’s Mixed-Income Loan Program, which provides loans to builders of housing targeted at low- and middle-income households.

Funding for Housing-Related Infrastructure Funding. The budget allocates $500 million to the Infill Infrastructure Grant program administered by the California Department of Housing and Community Development (HCD). This program helps to fund infrastructure needed to support higher-density housing built on infill sites—that is, sites within already developed communities. Of this amount, $410 million is available to projects in all communities through a competitive grant process. The remaining $90 million is reserved for projects in counties with populations less than 250,000 or cities within those counties.

Funding to Support Local Planning for Housing. The budget provides $250 million for planning grants to local governments, with $125 million going to regional planning entities and $125 million to cities and counties. These grants are to be used for planning for the sixth cycle regional housing need assessment process and other planning activities that facilitate the development of housing. Funding is made available through HCD by application.

Expanded Low-Income Housing Tax Credit. The budget package increases by $500 million the state’s low-income housing tax credit program which provides tax credits to builders of rental housing affordable to low-income households. Of this amount, $200 million is set aside for developments that include affordable units for both low- and lower-middle-income households. This increase in the low-income housing tax credit has no budgetary costs in 2019-20 because the credits will be claimed on future tax returns.

New Process for Housing Element Compliance. The budget package creates a new judicial process by which cities and counties can be fined for failing to comply with housing element law. Moreover, the courts can appoint an agent of the court to bring the jurisdiction’s housing element into compliance.

Creates New Incentives for Adopting “Pro-Housing” Policies. The budget package creates new incentives for cities and counties to adopt pro-housing policies. Cities and counties that adopt these policies would receive additional points in the scoring of their applications for certain state grant programs. The budget package tasks HCD with creating criteria to identify pro-housing policies that reflect differences between rural, urban, and suburban jurisdictions.