State Budget and Mid-Session Legislative Progress

The Governor and Legislature announced a final budget agreement this week, and after the Senate approved the spending plan yesterday, the Assembly will vote to approve the budget this afternoon. A summary of major affordable housing provisions included in the budget are highlighted below.

The Assembly and Senate will both adjourn today after final budget votes for their respective summer recesses. When they return, they will have less than two months to move bills through policy and fiscal committees and for floor and concurrence votes. They have also created a shortlist of bills each house will be advancing after the summer recess as this year’s “housing package.” Our CHC-sponsored bill, AB 3107 (Bloom), is included in the Assembly package, along with several other bills CHC supports. More detail on the Assembly and Senate packages can be found below.

State budget progress on affordable housing

The final state budget includes several important ongoing investments in affordable housing, including the following:

• $500 million continuing allocation of last year’s expanded Low Income Housing Tax Credit program
• $277 million for affordable housing through the real estate transaction fee created in 2017 through SB 2 (Atkins)
• $452 million for infill housing development through two programs funded by cap and trade: the Affordable Housing and Sustainable Communities Program and Transformative Climate Communities Program 
• Continuing allocation of $4 billion in Proposition 1 bonds for veterans and affordable housing programs 

The final budget eliminates funding for two other major affordable housing programs, but the Governor and Legislature agreed to restore these funds if federal stimulus legislation passes later this year:

• $250 million in mixed-income development funds over the next three years
• $200 million in infill infrastructure grant funds

Assembly and Senate housing packages

Senate President Pro Tem Toni Atkins announced the Senate’s “housing production” package with the following bills earlier this spring, and all of this legislation continues to advance:

• SB 899 (Wiener) – Authorizes affordable housing developments by right on land owned by religious or educational institutions (CHC-supported bill)
• SB 902 (Wiener) – Allows local governments to pass a zoning ordinance that is not subject to CEQA for projects of up to 10 units in certain transit-rich, jobs-rich, or infill sites
• SB 995 (Atkins) – Expands the application of existing CEQA streamlining smaller housing projects that include at least 15 percent affordable housing
• SB 1085 (Skinner) – Enhances existing Density Bonus Law to student housing and middle-income housing
• SB 1120 (Atkins) – Streamlines the process for a homeowner to create a duplex or subdivide an existing lot in all residential areas
• SB 1385 (Caballero) – Extends existing ministerial housing approval process (through SB 35) to office and retail sites that have been vacant or underutilized for at least three years

Assembly Democrats also unveiled their own housing package in June with the following bills. All of these bills have passed through the Assembly and are awaiting hearing in Senate policy committees:

• AB 2323 (Friedman) – Expands the application of existing CEQA exemptions for housing by permitting community plans to serve as the basis for exemption of residential, mixed-use and employment center projects near transit
• AB 3279 (Friedman) – Shortens the timeline of CEQA litigation procedures
• AB 1851 (Wicks) – Reduces parking requirements for affordable housing developed on church parking lots
• AB 725 (Wicks) – Requires jurisdictions to zone for multi-family moderate and above-moderate income housing
• AB 1279 (Bloom) – Allows denser and taller housing developments in areas that have good jobs and schools and are not at risk of gentrification
• AB 3107 (Bloom) – Allows housing to be developed on commercially-zoned land on projects where at least 20 percent of the units are affordable to low-income households(CHC-sponsored bill)
• AB 2345 (Gonzalez) – Enhances Density Bonus Law to allow developers to seek increased concessions and density for projects with larger percentages of units affordable to low-income households (CHC-supported bill)
• AB 3040 (Chiu) – Allows cities and counties to receive a specified credit towards meeting their Regional Housing Needs Allocation (RHNA) for rezoning single-family neighborhoods to allow four units per parcel