California to create new housing agency to meet shortage crisis

California is poised to get a new state agency focused exclusively on housing issues. 

Legislators in the Golden State, which has become the nation’s housing shortage hotbed over the years, had until July 4 to veto Gov. Gavin Newsom’s proposal to split up the California Business, Consumer Services and Housing Agency, though they let the deadline pass, CalMatters reported. 

As a result, the state is on track to create an agency dedicated just to housing and homelessness-related issues and another for everything else the Business, Consumer Services and Housing Agency deals with. The current BCSH agency addresses everything from affordable housing grantmakers, lenders and urban planning regulators to cannabis and alcohol industry overseers, professional licensors, car mechanic watchdogs and the California Horse Racing Board. 

It’s “just the first step” in solving a crisis that has continued to worsen over the past decade, Ray Pearl, executive director at California Housing Consortium, told CalMatters. “A cabinet-level secretary who will sit with other cabinet secretaries, whose purview will be housing… That is elevating the agenda to the highest level.” 

A notable change to the system would be streamlining the state’s many affordable housing financing systems into one place. As it stands, there are separate state organizations where affordable housing developers can find funds for their projects. 

Affordable developers can apply for loans from the California Housing Finance Agency; look for grants from the Department of Housing and Community Development; find federal tax credits from the Treasurer’s California Tax Credit Allocation Committee; and get bonds needed to secure many of those credits from the Treasurer’s California Debt Limit Allocation Committee. Those are in addition to separate programs for veterans, transit-oriented development and short-term housing that are found throughout the state government.  

The new agency setup is the brainchild of Newsom as part of the governor’s push to facilitate local governments to plan for more housing and for lawmakers to pass legislation enabling quicker construction and funding approvals to accelerate groundbreaking. It comes as the governor proposed $101 million in funding for affordable housing projects on July 8 that would aid victims of the Los Angeles wildfires in January. 

“This is the first administration to make this a part of our everyday conversation — putting a magnifying glass on the issue of homelessness and finding ways to effectively address it,” Newsom spokesperson Tara Gallegos told CalMatters of the effort. “These structural and policy changes are going to create a generational impact.” 

Newsom previously set the goal of planning for 2.5 million new homes across the state by 2030. 

— Chris Malone Méndez