September 16, 2022


The 2022-23 California Spending Plan

Housing and Homelessness


Significant Funding Largely Continues Existing Efforts. The 2022-23 budget authorizes an additional $7.2 billion over three years to 20 major housing and homelessness programs within the Housing and Community Development Department (HCD), the California Housing Finance Agency (CalHFA), the California Tax Credit Allocation Committee, and the California Interagency Council on Homelessness (Cal ICH). The vast majority of funding is one time or temporary. However, the budget does provide $34 million in ongoing funding beginning in 2022-23 for housing assistance for foster youth and former foster youth. Most of the funding—$5.4 billion—is primarily for housing-related proposals, while $1.9 billion is allocated primarily towards homelessness-related programs. The vast majority of spending is General Fund, including $2 billion in emergency spending related to rental assistance that is funded through the California Emergency Relief Fund and $500 million is in the form of tax credit authority.

Some of the major uses of housing and homelessness funding in the budget would support encampment resolutions, provide flexible aid to local governments to help address homelessness in their communities, fund affordable housing development, and establish a new homeownership program. The budget also provides funding that could be used to help address homelessness and/or housing affordability in other program areas, including the behavioral health, courts, and higher education areas. Figure 1 provides a summary of the major housing and homelessness augmentations in the 2022-23 budget. Some of the key augmentations in the 2022-23 budget package are described below.

Figure 1

Major Housing and Homelessness Augmentations
in the 2022‑23 Budget

(In Millions)

Department

Proposal

2021‑22

2022‑23

2023‑24

Total

Major Housing‑Related Augmentations

HCD

Emergency Rental Assistance

$1,950

$1,950

HCD

California Dream for All Program

$500

500

CTCAC

State Low‑Income Housing Tax Credit Program

500

500

HCD

Infill Infrastructure Grant Program

200

$225

425

HCD

Adaptive Reuse

150

250

400

HCD

CalHome

250

100

350

HCD

Multifamily Housing Program

100

225

325

HCD

Housing Accelerator Program

250

250

HCD

Portfolio Reinvestment Program

50

100

150

HCD

State Excess Sites Development

25

75

100

HCD

Manufactured Housing Opportunity and Revitalization Program

25

75

100

HCD

Veteran Housing and Homeless Prevention Program

50

50

100

HCD

Transitional Housing Programa

25

25

51

CalHFA

Accessory Dwelling Unit Financing

50

50

HCD

Joe Serna Jr. Farmworker Housing Grant Program

50

50

HCD

Los Angeles County/USC General Hospital Campus Reuse

50

50

HCD

Housing Navigators Programa

9

9

17

Subtotals

($1,950)

($2,284)

($1,134)

($5,368)

Major Homelessness‑Related Augmentations

Cal ICH

Homeless Housing, Assistance, and Prevention Program

$1,000

$1,000

Cal ICH

Encampment Resolution Grants

$300

400

700

HCD

Homekey Program

$150

150

Subtotals

($150)

($300)

($1,400)

($1,850)

Grand Totals

$2,100

$2,584

$2,534

$7,218

aFunding is ongoing.

HCD = Housing and Community Development; CTCAC = California Tax Credit Allocation Committee; CalHFA = California Housing Finance Agency; and Cal ICH California Interagency Council on Homelessness.

These budget actions add to major recent discretionary housing and homelessness spending in recent years aimed at addressing housing affordability and homelessness. We provide a summary of these previous budget actions in Appendix Figure 1.

Below, we provide a brief summary of some of these key housing-related augmentations.

Incentives and Support to Increase Housing Development

Continues State Low-Income Housing Tax Credits. The 2022-23 budget provides HCD additional state housing tax credits. In addition to the $100 million annually that the state makes available for housing tax credits, the budget makes available an additional $500 million one time for tax credits to builders of rental housing affordable to low-income households. This is the fourth consecutive year in which the Governor has proposed a one-time expansion of the state’s housing tax credit, for a total of $2 billion in tax credits. As with the prior one-time expansions of the state tax credit program, up to $200 million would be available for the development of mixed-income housing projects.

Continues Infill Infrastructure Grant (IIG) Program. The 2022-23 budget provides HCD $425 million General Fund over two years ($200 million in 2022-23 and $225 million in 2023-24) for the IIG Program. The IIG Program provides funding for infrastructure that supports higher-density affordable and mixed-use housing in locations designated as infill. Under the program, developers and local governments can partner to apply for infrastructure funding for the construction, rehabilitation, demolition, relocation, preservation, acquisition, or other physical improvements that are necessary to facilitate the development of an infill project. For example, development or rehabilitation of parks or open space; water, sewer, or other utility service improvements; streets; roads; sidewalks; and environmental remediation. Budget-related legislation also expands the definition of eligible applicants to include specified governing bodies of Indian reservations or rancherias and tribally designated housing entities. This funding continues recent one-time discretionary General Fund augmentations for the program, for a total of $975 million. However, historically, the program has been supported through bond funding.

Establishes Adaptive Reuse Program. The 2022-23 budget provides HCD with $400 million General Fund over two years ($150 million in 2022-23 and $250 million in 2023-24) for a new adaptive reuse incentive grant program. Adaptive reuse is the process of adapting and rehabilitating unutilized or under-utilized, generally commercial, buildings for housing. According to the administration, the program would prioritize projects located in infill and low-Vehicle Miles Traveled areas.

Continues CalHome Program. The 2022-23 budget provides HCD an additional $350 million General Fund over two years ($250 million in 2022-23 and $100 million in 2023-24) for CalHome. The program provides grants to local public agencies and nonprofit corporations for first-time homebuyer and housing rehabilitation assistance, homebuyer counseling, and technical assistance activities to enable low- and very-low-income individuals to become or remain homeowners. Historically, the program has been supported through bond funding.

Extends Housing Accelerator Program. The 2022-23 budget provides HCD an additional $250 million General Fund one time to expand the Housing Accelerator Program. The 2021-22 budget established the program with $1.75 billion one-time American Rescue Plan (ARP) fiscal relief funds. The program is intended to alleviate the backlog in affordable housing construction. Specifically, to expedite construction of projects that have successfully acquired some state funding, this program provides accelerated funding in lieu of waiting for state tax credits.

Provides General Fund Support for Multifamily Housing Program (MHP). The 2022-23 budget provides HCD with an augmentation of $325 million General Fund over two years ($100 million in 2022-23 and $225 million in 2023-24) for MHP. MHP provides financing for affordable multifamily rental housing developments. Historically, the program has been supported through bond funding. Most recently, the Veterans and Affordable Housing Bond Act of 2018 (Proposition 1) authorized the issuance of bonds in the amount of $1.5 billion for the program.

Extends Portfolio Reinvestment Program. The 2022-23 budget provides HCD $150 million General Fund over two years ($50 million in 2022-23 and $100 million in 2023-24) for the Portfolio Reinvestment Program. This program was established in 2021-22 with $300 million one-time federal ARP fiscal relief funds. Similar to last year, the funding would support capital improvements to affordable housing developments with covenants that are due to expire, which would transition housing units to market-rate housing, in order to preserve the state’s affordable housing stock. However, the funding provided in the 2021-22 budget was intended to support developments with covenants expiring within five years, while this new funding would support developments with covenants expiring within ten years. The funding would provide HCD the flexibility necessary to maintain the supply and quality of the affordable rental housing units for which there has already been a significant public investment.

Continues State Excess Sites Program. The 2022-23 budget provides HCD $100 million General Fund over two years ($25 million in 2022-23 and $75 million in 2023-24) for affordable housing on state excess land sites. This funding builds on $45 million provided for the program in 2021-22.

Direct Housing Assistance

Funds Local Cashflow Loans for Emergency Rental Assistance. Chapter 2 of 2021 (SB 115, Skinner) authorized the Department of Finance to provide local governments with cashflow loans in 2021-22 in order to more expeditiously administer qualifying applications seeking assistance through the federal emergency rental assistance programs established as a response to the COVID-19 public health emergency. While the state anticipates some additional federal funding could be available to offset the cashflow loans, the budget provides HCD up to $1.95 billion using emergency spending that is routed from the General Fund through the California Emergency Relief Fund to cover the cashflow loans.

Establishes California Dream for All Program. The 2022-23 budget provides $500 million General Fund one time to establish the California Dream for All Program to help first-time homebuyers purchase a home. Specifically, the program assists low- and moderate-income homebuyers in the purchase of owner-occupied homes. By January 10, 2023, and annually thereafter, HCD is required to provide a report to the Legislature with details of program implementation, including, but not limited to, the number of loans made and the characteristics of the borrowers.

Manufactured Housing Opportunity and Revitalization (MORE) Program. Legislation related to the 2022-23 budget renames the Mobilehome Park Rehabilitation and Resident Ownership Program to the MORE Program. The budget provides HCD $100 million General Fund over two years ($25 million in 2022-23 and $75 million in 2023-24) for the program. The program makes loans or grants available to mobilehome park resident organizations, nonprofit entities, and local public agencies for the reconstruction and replacement of mobilehome parks, including to address health and safety deficiencies.

Continues Accessory Dwelling Unit (ADU)Financial Assistance Program. The 2022-23 budget provides CalHFA $50 million General Fund one time to provide financial assistance with ADU development to homeowners with qualifying incomes. Additionally, budget related legislation requires CalHFA to convene a working group to develop recommendations to help bolster the ADU program.

Farmworker Housing

Joe Serna Jr. Farmworker Housing Grant Program. The 2022-23 budget provides an increase of $50 million General Fund one time for the Joe Serna, Jr. Farmworker Housing Grant Program, which helps finance the new construction, rehabilitation, and acquisition of owner-occupied and rental units for agricultural workers, with a priority for lower-income households. Historically, the program has been supported through bond funding.

The 2022-23 budget provides augmentations of $1.9 billion to three major homelessness-related programs within Cal ICH (formerly the Homelessness Coordinating and Financing Council) and HCD. The funding is entirely one time or temporary. Below, we provide a brief summary of some of these key housing-related augmentations.

Continues Homeless Housing, Assistance, and Prevention Program (HHAPP). The 2021-22 budget provided Cal ICH $1 billion General Fund for HHAPP for two consecutive years. The 2022-23 budget continues this practice by providing $1 billion General Fund in 2023-24 for HHAPP. The program provides flexible funding to local entities and tribes to help address homelessness in their communities. Prior budgets have provided one-time and temporary discretionary augmentations for this program since 2019-20 for a total of $3.95 billion over five years.

Expands Encampment Resolution Grants. The 2022-23 budget provides Cal ICH $700 million over two years ($300 million in 2022-23 and $400 million in 2023-24) for competitive grant program for cities, counties, and continuums of care to support encampment resolution and the transition of individuals into housing. This is a significant expansion of the program, which was established in the 2021-22 budget with a $50 million appropriation.

Continues Homekey Program. Amendments to the 2021-22 budget provide HCD an additional $150 million General Fund for the Homekey program. This is in addition to $3.55 billion (all funds) authorized previously since 2020-21 to Homekey. Homekey allows properties, such as hotels and motels, to be converted and rehabilitated to provide permanent housing for persons experiencing homelessness and who are also at risk of COVID-19 or other communicable diseases.

Appendix

Appendix Figure 1

Major Discretionary Housing and Homelessness Spending Augmentations Since 2018‑19a

(In Millions)

Program

2018‑19

2019‑20

2020‑21

2021‑22

2022‑23

2023‑24b

Program Total

Housing and Community Development

Homekey Program

$800

$1,600

$1,300

$3,700

Housing Accelerator Program

1,750

250

2,000

Emergency Rental Assistance

1,950

1,950

IIG Programc

$300

250

200

$225

975

Local Planning Grants

250

600

850

California Dream for All Program

500

500

Foreclosure Prevention and Preservation

500

500

Portfolio Reinvestment Program

300

50

100

450

Adaptive Reuse

150

250

400

CalHome

250

100

350

Multifamily Housing Program

100

225

325

State Excess Sites Development

3

45

25

75

148

Transitional Housing Programe

8

8

17

43

43

118

Joe Serna Jr. Farmworker Housing Grant Programd

50

50

100

Manufactured Housing Opportunity and Revitalization Program

25

75

100

Veteran Housing and Homeless Prevention Program

50

50

100

Golden State Acquisition Fund

50

50

Migrant Farmworker Housing Deferred Maintenance

30

30

Housing Navigators Programe

5

5

14

14

37

Subtotals

­(—)

($566)

($808)

($7,147)

($3,006)

($1,156)

($12,684)

California Interagency Council on Homelessnessf

Homeless Housing, Assistance, and Prevention Program

$650

$300

$1,000

$1,000

$1,000

$3,950

Encampment Resolution Grants

50

300

400

750

Homeless Emergency Aid Program

$500

500

COVID‑19 Emergency Funding

100

100

Family Homelessness Challenge Grants

40

40

Homeless Landscape Assessment

6

6

Homeless Data Integration System

4

4

Subtotals

($500)

($750)

($300 )

($1,100)

($1,300)

($1,400)

($5,350)

California Tax Credit Allocation Committee

State LIHTCg

$500

$500

$500

$500

$2,000

Subtotals

(—)

($500)

($500)

($500)

($500)

(—)

($2,000)

California Housing Finance Agency

Mixed‑Income Program (MIP)h

$200

$50

$45

$ 295

Accessory Dwelling Unit Financing

81

$50

131

Homebuyer Assistance

100

100

Subtotals

(—)

($200)

($50 )

($226)

($50)

(—)

($526)

Grand Totals

$500

$2,016

$1,658

$8,973

$4,856

$2,556

$20,560

aThis table generally captures the major discretionary spending actions within the state entities principally responsible for administering housing and homelessness programs. The table does not include augmentations within departments that have other primary missions, for example, health and human services. The table also does not include the No Place Like Home Program Act of 2018 and the Veterans and Affordable Housing Bond Act of 2018, which were authorized by voters. The table reflects all fund sources.

bThe 2022‑23 budget authorized some spending actions in 2023‑24.

cBond proceeds have also supported the Infill Infrastructure Grant (IIG) Program—$850 million from Proposition 1C (2006) and $300 million from Proposition 1 (2018).

dBond proceeds from Proposition 1 (2018)—$300 million—have also supported farmworker housing.

eThe 2022‑23 funding is ongoing.

fFormerly the Homeless Coordinating and Financing Council.

gDoes not include the annual $100 million available for Low‑Income Housing Tax Credit (LIHTC) from the state.

hRevenue from Chapter 91 of 2017 (SB 2, Atkins) also supports MIP, $87 million in 2021.